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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
Louis Dreyfus Natural Gas Corp.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- --------------------------------------------------------------------------------
(Title of Class of Securities)
546011 10 7
- --------------------------------------------------------------------------------
(CUSIP Number)
Andrew J. Connelly, Esq., General Counsel, Louis Dreyfus Holding Company Inc.
10 Westport Road, Wilton, CT 06897-0810 (203) 761-8444
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 16, 1998
- --------------------------------------------------------------------------------
(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 [ ].
Note: Six copies of 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> 2
SCHEDULE 13D
CUSIP NO. 546011 10 7
---------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
S.A. Louis Dreyfus et Cie.
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
Not Applicable
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
WC/AF
---------------------------------------------------------------------
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
---------------------------------------------------------------------
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
France
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF None
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 20,750,000 shares
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH None
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
20,750,000 shares
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,750,000 shares
---------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
Not Applicable
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.7%
---------------------------------------------------------------------
(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> 3
SCHEDULE 13D
CUSIP NO. 546011 10 7
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Louis Dreyfus Holding Company Inc.
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
Not Applicable
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
WC/AF
---------------------------------------------------------------------
(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
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF
SHARES None
BENEFICIALLY --------------------------------------------------------
OWNED BY (8) SHARED VOTING POWER
EACH
REPORTING 20,750,000 shares
PERSON WITH --------------------------------------------------------
(9) SOLE DISPOSITIVE POWER
None
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
20,750,000 shares
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,750,000 shares
---------------------------------------------------------------------
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
Not Applicable
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.7%
---------------------------------------------------------------------
(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> 4
SCHEDULE 13D
CUSIP NO. 546011 10 7
---------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Louis Dreyfus Commercial Activities Inc.
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
Not Applicable
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
WC/AF
---------------------------------------------------------------------
(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
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF None
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY
EACH 20,750,000 shares
REPORTING --------------------------------------------------------
PERSON WITH (9) SOLE DISPOSITIVE POWER
None
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
20,750,000 shares
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,750,000 shares
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
Not Applicable
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
51.7%
---------------------------------------------------------------------
(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> 5
SCHEDULE 13D
CUSIP NO. 546011 10 7
---------------------
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Louis Dreyfus Natural Gas Holdings Corp.
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
Not Applicable
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
WC/AF
---------------------------------------------------------------------
(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
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF None
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 11,000,000 shares
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH None
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
11,000,000 shares
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,000,000 shares
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
Not Applicable
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
27.4%
---------------------------------------------------------------------
(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> 6
SCHEDULE 13D
CUSIP NO. 546011 10 7
- ---------------------
---------------------------------------------------------------------
(1) NAMES OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
L.D. Fashions Holdings Corp.
---------------------------------------------------------------------
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
Not Applicable
---------------------------------------------------------------------
(3) SEC USE ONLY
---------------------------------------------------------------------
(4) SOURCE OF FUNDS*
WC/AF
---------------------------------------------------------------------
(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
---------------------------------------------------------------------
(7) SOLE VOTING POWER
NUMBER OF None
SHARES --------------------------------------------------------
BENEFICIALLY (8) SHARED VOTING POWER
OWNED BY 9,000,000 shares
EACH --------------------------------------------------------
REPORTING (9) SOLE DISPOSITIVE POWER
PERSON WITH None
--------------------------------------------------------
(10) SHARED DISPOSITIVE POWER
9,000,000 shares
--------------------------------------------------------
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
9,000,000 shares
---------------------------------------------------------------------
(12) CHECK BOX IF AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
Not Applicable
---------------------------------------------------------------------
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
22.4%
---------------------------------------------------------------------
(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> 7
This Amendment No. 4 to the Schedule 13D of the Louis Dreyfus Group
(as defined below), dated December 6, 1994, as amended (the "Schedule 13D"), in
respect of shares of Common Stock, par value $.01 per share, of Louis Dreyfus
Natural Gas Corp., amends and restates the Schedule 13D to read in its entirety
as set forth below.
ITEM 1. SECURITY AND ISSUER
- ------ -------------------
This statement relates to the Common Stock, par value $.01 per share
(the "Common Stock"), of Louis Dreyfus Natural Gas Corp., an Oklahoma
corporation (the "Issuer"), which has its principal executive offices at 14000
Quail Springs Parkway, Suite 600, Oklahoma City, Oklahoma 73134.
ITEM 2. IDENTITY AND BACKGROUND
- ------ -----------------------
This Statement is filed by S.A. Louis Dreyfus et Cie., a corporation
organized under the laws of France ("SALD"), Louis Dreyfus Holding Company
Inc., a Delaware corporation ("LDHC"), Louis Dreyfus Commercial Activities
Inc., a Delaware corporation ("LDCA"), Louis Dreyfus Natural Gas Holdings
Corp., a Delaware corporation ("NGHC"), and L.D. Fashions Holdings Corp., a
Delaware corporation ("LDFHC"). (SALD, LDHC, LDCA, NGHC and LDFHC,
collectively, are sometimes referred to herein as the "Louis Dreyfus Group.")
SALD is a privately-held corporation engaged in various businesses,
including international merchandising and exporting of various commodities,
ownership and management of ocean vessels, real estate ownership, development
and management, manufacturing, and natural gas and petroleum product marketing.
SALD's principal business and office address is 87 Avenue de la Grande Armee,
75782 Paris, France.
LDHC is a wholly-owned subsidiary of SALD and is itself a holding
company of subsidiaries which engage principally in commodities trading and
merchandising and real estate activities. The principal business and office
address of LDHC is 10 Westport Road, Wilton, Connecticut 06897-0810.
LDCA is a wholly-owned subsidiary of LDHC and is a company which
holds interests in various other corporations. The principal business and
office address of LDCA is 10 Westport Road, Wilton, Connecticut 06897-0810.
NGHC is a wholly-owned subsidiary of LDCA and is engaged in the
business of holding certain of the shares of the Common Stock owned by the
Louis Dreyfus Group. The principal business and office address of NGHC is 3411
Silverside Road, Baynard Building, Suite 210E, Wilmington, Delaware 19810.
LDFHC is a wholly-owned subsidiary of LDCA and is engaged in the
business of holding shares of an operating subsidiary which is a licensor of
intangibles. The principal business and office address of LDFHC is 3411
Silverside Road, Baynard Building, Suite 210E, Wilmington, Delaware 19801.
7
<PAGE> 8
Information with respect to the executive officers and directors of
SALD, LDHC, LDCA, NGHC and LDFHC, including (a) name, (b) business address, (c)
present principal occupation or employment and the name, principal business and
address of any corporation or other organization in which such employment is
conducted and (d) citizenship, is listed on the Schedules attached hereto as
Annexes A, B, C, D and E, respectively, which are incorporated herein by
reference.
None of SALD, LDHC, LDCA, NGHC or LDFHC, nor, to the best of their
knowledge, any executive officer or director of any of them, has during the
last five years been convicted in any 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 violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
- ------ -------------------------------------------------
The Issuer's predecessor was acquired by the Louis Dreyfus Group on
July 18, 1990, for $46.6 million provided from the Louis Dreyfus Group's
general corporate funds. Subsequent to 1990, the Louis Dreyfus Group acquired
or established other subsidiaries or affiliates to conduct various related oil
and gas acquisition and marketing activities. In November 1993, through various
intercompany mergers, the Issuer succeeded to certain of these businesses, with
NGHC owning 20,000,000 shares of the Common Stock, representing all of the
issued and outstanding shares of such Stock. In November 1993, the Issuer
completed an initial public offering of 7,800,000 shares of the Common Stock
(the "IPO") at a price of $18.00 per share. During the period from June 29,
1994 through November 21, 1994, NGHC purchased 590,500 additional shares of the
Common Stock on the open market for an aggregate of $8,344,725. The funds for
these purchases were provided from the general corporate funds of the Louis
Dreyfus Group.
On December 22, 1994, NGHC declared a dividend of 590,500 shares of
the Common Stock to its immediate parent corporation, LDCA. On December 29,
1994, 5,000 of these shares were transferred from NGHC to LDCA, and on January
1, 1995, the remaining 585,500 such shares were transferred from NGHC to LDCA.
During the period from December 27, 1994 through February 23, 1995,
LDCA purchased 39,500 additional shares of the Common Stock on the open market
for an aggregate of $462,875.00, and during the period from December 10, 1997
through December 16, 1997, LDCA purchased 21,000 additional shares of the Common
Stock on the open market for an aggregate of $408,812.50 bringing the total
number of shares of the Common Stock owned directly by LDCA to 651,000. In
addition, during the period from December 18, 1997 through January 7, 1998, LDHC
purchased 59,000 additional shares of the Common Stock on the open market for an
aggregate of $1,096,650.00. The funds for the above purchases were provided from
the general corporate funds of the Louis Dreyfus Group.
On March 3, 1998, NGHC declared a dividend of 9,000,000 shares of the
Common Stock to its immediate parent corporation, LDCA, effective March 3,
1998. On March
8
<PAGE> 9
5, 1998. LDCA contributed such 9,000,000 shares to its subsidiary, LDFHC, as a
capital contribution. On March 9, 1998, LDCA transferred all of the issued and
outstanding shares of LDFHC to LDCA's subsidiary, L.D. Fashions Services Inc.,
a Connecticut corporation ("LDFS"), as a capital contribution. During the
period from May 22, 1998 through May 26, 1998, LDHC purchased 12,600 additional
shares of the Common Stock on the open market for an aggregate of $222,075.00.
The funds for these purchases were provided from the general corporate funds of
the Louis Dreyfus Group.
On June 5, 1998, LDHC contributed 71,600 shares of the Common Stock to its
subsidiary, LDCA, as a capital contribution. On July 16, 1998, LDFS merged with
and into LDCA, with LDCA being the surviving corporation. On August 3, 1998 and
August 4, 1998, LDCA purchased 27,400 additional shares of the Common Stock on
the open market for an aggregate of $364,275.00. The funds for these purchases
were provided from the general corporate funds of the Louis Dreyfus Group. As a
result of these transactions, LDCA owns 750,000 shares of the Common Stock
directly, 11,000,000 shares of the Common Stock through NGHC and 9,000,000
shares of the Common Stock through LDFHC; LDHC owns 20,750,000 shares of the
Common Stock through LDCA; and SALD owns such shares of Common Stock through
LDHC.
ITEM 4. PURPOSE OF TRANSACTION
- ------ ----------------------
Until the IPO in November 1993, the Issuer was an indirect wholly-owned
subsidiary of SALD, and the Louis Dreyfus Group had the ability to exercise
control over the management and operations of the Issuer. The IPO reduced the
Louis Dreyfus Group's percentage ownership in the Issuer to approximately
71.9%. During the period from June 29, 1994 through February 23, 1995, through
the purchase of 630,000 additional shares of the Common Stock on the open
market, the Louis Dreyfus Group increased its percentage ownership to
approximately 74.2%.
In October 1997, in connection with the acquisition (the "American
Acquisition") by the Issuer of American Exploration Company ("American"), the
Issuer issued approximately 11,300,000 shares of the Common Stock to American's
shareholders. Such issuance reduced the Louis Dreyfus Group's percentage
ownership in the Issuer to approximately 52.7%. In addition, the Issuer issued
depository shares representing an interest in convertible preferred stock (the
"Convertible Stock") to certain of American's shareholders in connection with
the American Acquisition.
During the period from December 10, 1997 through December 30, 1997, through
the purchase of 70,000 additional shares of the Common Stock on the open market,
the Louis Dreyfus Group increased its percentage ownership in the Issuer to
approximately 52.9%. Effective December 31, 1997, 940,649 shares of the Common
Stock were issued upon conversion of shares of the Convertible Stock, reducing
the Louis Dreyfus Group's percentage ownership in the Issuer to approximately
51.6%. The remaining shares of Convertible Stock have been redeemed by the
Issuer. During the period from January 5, 1998 through August 4, 1998, the Louis
Dreyfus Group purchased 50,000 additional shares of the Common Stock on the open
market, increasing its percentage ownership in the Issuer equal to approximately
51.6%.
9
<PAGE> 10
During the period from May 22, 1998 through August 4, 1998, through the purchase
of 40,000 additional shares of the Common Stock on the open market, the Louis
Dreyfus Group increased its percentage ownership in the Issuer to approximately
51.7%.
Four of the eleven directors of the Issuer are present or former employees
of SALD or its subsidiaries, and the Louis Dreyfus Group has maintained the
ability to control the outcome of matters upon which stockholders of the Issuer
vote.
In a press release dated February 7, 1997, the Issuer announced that it
had filed a registration statement (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the primary offering
by the Company of 2,750,000 shares of the Common Stock and the secondary
offering by the Louis Dreyfus Group of up to 3,575,000 shares of the Common
Stock. The Registration Statement has not been declared effective by the SEC,
and the Issuer and the Louis Dreyfus Group are not at this time pursuing the
offerings of Common Stock described in the Registration Statement.
Subject to the arrangements described in Item 6 below, there is no
agreement between any member of the Louis Dreyfus Group and any other party,
including the Issuer, that would prevent the Louis Dreyfus Group from acquiring
or disposing of shares of the Common Stock. Depending upon market conditions,
financial considerations and other factors, the Louis Dreyfus Group may purchase
or sell additional shares of Common Stock, if appropriate opportunities to do so
are available, at such times as the Louis Dreyfus Group considers advisable.
Subject to the foregoing, none of SALD, LDHC, LDCA, NGHC or LDFHC has any
present plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities of the Issuer,
or the disposition of securities of the Issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Issuer or any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of the Issuer or any
of its subsidiaries;
(d) Any change in the present board of directors or management of the
Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board;
10
<PAGE> 11
(e) Any material change in the present capitalization or dividend policy
of the Issuer;
(f) Any other material change in the Issuer's business or corporate
structure;
(g) Changes in the Issuer's charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person;
(h) Causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) A class of equity securities of the Issuer becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934; or
(j) Any action similar to any of those enumerated above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
- --------------------------------------------
(a) As of the date hereof and subject to the arrangements described in
Item 6 below, NGHC is the direct beneficial owner of 11,000,000 shares of the
Common Stock, representing approximately 27.4% of the issued and outstanding
shares of the Common Stock. LDFHC is the direct beneficial owner of 9,000,000
shares of the Common Stock, representing approximately 22.4% of the issued and
outstanding shares of the Common Stock. LDCA is the direct beneficial owner of
750,000 shares of the Common Stock and the indirect beneficial owner of the
11,000,000 shares held by NGHC and the 9,000,000 shares beneficially owned by
LDFHC, for a total of 20,750,000 shares of the Common Stock, representing
approximately 51.7% of the issued and outstanding shares of Common Stock. LDHC
is the indirect beneficial owner of the 20,750,000 shares beneficially owned by
LDCA, representing approximately 51.7% of the issued and outstanding shares of
the Common Stock. SALD is the indirect beneficial owner of the 20,750,000 shares
of Common Stock beneficially owned by LDHC, representing approximately 51.7% of
the issued and outstanding shares of the Common Stock.
Except as listed on the Schedule attached hereto as Annex F, which is
incorporated herein by reference, to the best knowledge of SALD, LDHC, LDCA,
NGHC and LDFHC, none of their respective executive officers or directors (i)
beneficially owns any Common Stock (other than in his or her capacity as an
executive officer or director of such corporations) or (ii) has the right to
acquire any Common Stock.
(b) SALD, LDHC and LDCA share the power to vote or to direct the vote
and the power to dispose or to direct the disposition of the 20,750,000 shares
of the Common Stock which they beneficially own. In addition, NGHC shares with
SALD, LDHC and LDCA power to vote or to direct the vote and power to dispose or
to direct the disposition of 11,000,000 of such shares; and LDFHC shares with
SALD, LDHC and LDCA power to vote or to direct the vote and power to dispose or
direct the disposition of 9,000,000 of such shares.
To the best knowledge of SALD, LDHC, LDCA, NGHC and LDFHC, none of their
respective executive officers or directors has the power to vote or to direct
the vote or to
11
<PAGE> 12
dispose or to direct the disposition of any shares of the Common Stock
beneficially owned by such corporations (other than in his or her capacity as an
executive officer or director of such corporations).
Except as indicated in the footnotes to the Schedule attached hereto as
Annex F, which is incorporated herein by reference, to the best knowledge of
SALD, LDHC, LDCA, NGHC and LDFHC, each of their respective executive officers
and directors has sole power to vote or to direct the vote or to dispose or to
direct the disposition of any shares of the Common Stock beneficially owned by
such executive officer or director.
(c) During the period from August 3, 1998 through August 4, 1998, LDCA
purchased 27,400 additional shares of the Common Stock on the open market for an
aggregate of $364,275.00. The funds for these purchases were provided from the
general corporate funds of the Louis Dreyfus Group.
Except as listed on the schedule attached hereto as Annex F, to the
best knowledge of SALD, LDHC, LDCA, NGHC and LDFHC, none of their respective
executive officers or directors has effected any transactions in shares of the
Common Stock during the past 60 days.
(d) Subject to the arrangements described in Item 6 below, to the best
knowledge of SALD, LDHC, LDCA, NGHC and LDFHC, no other person has the right to
receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the shares of the Common Stock beneficially owned by such
corporations.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
- ------- -------------------------------------------------------------
RESPECT TO SECURITIES OF THE ISSUER
-----------------------------------
Except as described below and except for the Issuer's Stock Option Plan,
there are no contracts, arrangements, understandings or relationships (legal or
otherwise) among any of SALD, LDHC, LDCA, NGHC or LDFHC or, to the best of their
knowledge, any executive officer or director of any of them and any other person
with respect to any securities of the Issuer, including any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Issuer, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or loss,
or the giving or withholding of proxies.
In December 1994, 20,000,000 of the shares of the Common Stock then
owned by NGHC were pledged to a syndicate of French banks (the "Banks") to
secure loans made by the Banks to a member of the Louis Dreyfus Group. During
the period from April 1997 through January 1998, 9,000,000 of such shares were
released from such pledge. However, a default by the borrower under the terms of
the loans could result in the sale of all or a portion of the remaining
11,000,000 pledged shares and a change of control of the Issuer.
Pursuant to a Registration Rights Agreement dated as of November 9,
1993 between the Issuer and NGHC, the Louis Dreyfus Group is entitled to certain
rights to register 20,000,000 shares of the Common Stock. However, pursuant to
the Assignment and Assumption Agreement dated as of December 20, 1994 among SALD
and the Banks and the Subordinate
12
<PAGE> 13
Assignment and Assumption Agreement dated as of December 27, 1995 among SALD and
certain of the Banks, the Banks, as pledgees, may become entitled to certain
rights to register the pledged shares of the Common Stock under certain
circumstances.
Pursuant to a Note Purchase Agreement dated as of May 5, 1998 (the "Note
Purchase Agreement"), LDFHC agreed to certain restrictions on its ability to
sell or otherwise dispose of the 9,000,000 shares of the Common Stock that it
beneficially owns. Further, under certain circumstances involving a default
under the Note Purchase Agreement, LDFHC will be obligated to exercise its
rights under the Registration Rights Agreement described above upon request by
the Required Holders (as defined in the Note Purchase Agreement).
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
- ------- --------------------------------
1. Written Agreement of SALD, LDHC, LDCA, NGHC and LDFHC relating to the
filing of this Amendment as required by Rule 13d-1(f).
2. Pledge Agreement dated as of December 23, 1994 among SALD, Societe
Generale, Banque Nationale de Paris, Credit Lyonnais, Caisse Centrale des
Banques Populaires, Banque Francaise du Commerce Exterieur, Caisse Nationale de
Credit Agricole, Credit Industriel et Commercial, Banque Indosuez and Credit
National.*
3. Subordinate Pledge Agreement dated as of December 27, 1995 among
SALD, Societe Generale and Banque Nationale de Paris.**
4. Registration Rights Agreement dated as of November 9, 1993 (the
"Registration Rights Agreement") between the Issuer and NGHC.**
5. Assignment and Assumption Agreement dated as of December 20, 1994
among SALD, Societe Generale, Banque Nationale de Paris, Credit Lyonnais, Caisse
Centrale des Banques Populaires, Banque Francaise du Commerce Exterieur, Caisse
Nationale de Credit Agricole, Credit Industriel et Commercial, Banque Indosuez
and Credit National.**
6. Subordinate Assignment and Assumption Agreement dated as of December
27, 1995 among SALD, Societe General and Banque Nationale de Paris.**
- -------------------
* Filed as an exhibit to Amendment No. 1 to the Schedule 13D of the Louis
Dreyfus Group dated January 1, 1995.
** Filed as an exhibit to Amendment No. 2 to the Schedule 13D of the Louis
Dreyfus Group dated February 18, 1997.
13
<PAGE> 14
7. Note Purchase Agreement dated as of May 5, 1998 (the "Note Purchase
Agreement") among LDFHC and the Purchasers listed therein.
8. Amendment No. 1 dated as of May 5, 1998 to the Note Purchase
Agreement.
9. Amendment dated as of December 22, 1993 to the Registration Rights
Agreement.
10. Amendment dated as of December 20, 1994 to the Registration Rights
Agreement.
11. Amendment dated as of December 27, 1995 to the Registration Rights
Agreement.
12. Amendment dated as of May 1, 1998 to the Registration Rights
Agreement.
14
<PAGE> 15
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief, we
certify that the information set forth in this statement is true, correct and
complete.
S.A. Louis Dreyfus et Cie.
August 27, 1998 By: /s/ Gerard Louis-Dreyfus
------------------------------------
Gerard Louis-Dreyfus
President
Louis Dreyfus Holding Company Inc.
August 27, 1998 By: /s/ Ernest F. Steiner
------------------------------------
Ernest F. Steiner
Executive Vice President
Louis Dreyfus Commercial Activities Inc.
August 27, 1998 By: /s/ Ernest F. Steiner
------------------------------------
Ernest F. Steiner
President
Louis Dreyfus Natural Gas Holdings Corp.
August 27, 1998 By: /s/ Connie S. Linhart
------------------------------------
Connie S. Linhart
President and Treasurer
L.D. Fashions Holdings Corp.
August 27, 1998 By: /s/ Connie S. Linhart
------------------------------------
Connie S. Linhart
President and Treasurer
15
<PAGE> 16
ANNEX A
-------
S.A. LOUIS DREYFUS ET CIE. ("SALD")
Name and Business Address
(all business addresses are:
S.A. Louis Dreyfus et Cie.
87 Avenue de la Grande Armee
75782 Paris, France Present Principal Occupation or
unless otherwise indicated) Employment Citizenship
- --------------------------- -------------------------------- -----------
DIRECTORS
- ---------
Bernard Baldensperger Directeur General of SALD France
Claude Boquin Retired France
Jean Louis-Dreyfus Vice President/ France
Directeur General of SALD
Gerard Louis-Dreyfus Chairman/President/ U.S.A.
Louis Dreyfus Corporation Directeur General of SALD
405 Lexington Avenue
New York, New York 10174
Pierre Louis-Dreyfus Vice President/ France
Directeur General of SALD
Jean-Hubert Pietra Retired France
Jean Pinchon Retired France
Philippe Poirier D'Orsay Directeur General of Groupe France
Louis Dreyfus
Ernest F. Steiner Chief Financial Officer of Groupe U.S.A.
Louis Dreyfus Holding Louis Dreyfus
Company Inc.
10 Westport Road
P.O. Box 810
Wilton, Connecticut 06897
EXECUTIVE OFFICERS
(who are not Directors)
- -----------------------
Georges Gateff Directeur of SALD France
16
<PAGE> 17
ANNEX B
-------
LOUIS DREYFUS HOLDING COMPANY INC. ("LDHC")
<TABLE>
<CAPTION>
Name and Business Address
(all business addresses are:
Louis Dreyfus Holding Company Inc.
10 Westport Road
P.O. Box 810
Wilton, Connecticut 06897 Present Principal Occupation or
unless otherwise indicated) Employment Citizenship
- ---------------------------------- ------------------------------- -----------
<S> <C> <C>
DIRECTORS
- ---------
Daniel R. Finn, Jr. Chairman and Chief Executive U.S.A.
Officer of Louis Dreyfus Energy
Corp.
Gerard Louis-Dreyfus*
Simon B. Rich Vice Chairman and President of U.S.A.
LDHC
Ernest F. Steiner*
EXECUTIVE OFFICERS
(who are not Directors)
- -----------------------
Robert L. Aiken Vice President of LDHC U.S.A.
Andrew J. Connelly Vice President and General U.S.A.
Counsel of LDHC
Jerome F. Dubrowski Treasurer of LDHC U.S.A.
Jeffrey R. Gilman Vice President of LDHC U.S.A.
Deborah J. Neff Vice President and Associate U.S.A.
Counsel of LDHC
Hal Wolkin Vice President of LDHC U.S.A.
</TABLE>
___________________
* Individual's business address, present principal occupation and citizenship
are set forth in Annex A (SALD).
17
<PAGE> 18
ANNEX C
-------
LOUIS DREYFUS COMMERCIAL ACTIVITIES INC. ("LDCA")
<TABLE>
<CAPTION>
Name and Business Address
(all business addresses are:
Louis Dreyfus Commercial Activities Inc.
10 Westport Road
P.O. Box 810
Wilton, Connecticut 06897 Present Principal Occupation or
unless otherwise indicated) Employment Citizenship
- ---------------------------------- ------------------------------- -----------
<S> <C> <C>
DIRECTORS
- ---------
None-Louis Dreyfus
Holding Company Inc. acts as Management
EXECUTIVE OFFICERS
- ------------------
Jeffrey R. Gilman*
Peter B. Griffin President of Louis Dreyfus U.S.A.
Louis Dreyfus Corporation Corporation
10 Westport Road
P.O. Box 810
Wilton, Connecticut 06897
Ernest F. Steiner**
Hal Wolkin*
</TABLE>
___________________
* Individual's business address, present principal occupation and citizenship
are set forth in Annex B (LDHC).
** Individual's business address, present principal occupation and citizenship
are set forth in Annex A (SALD).
18
<PAGE> 19
ANNEX D
-------
LOUIS DREYFUS NATURAL GAS HOLDINGS CORP. ("NGHC")
Name and Business Address
(all business addresses are:
Louis Dreyfus Natural Gas
Holdings Corp.
3411 Silverside Road
Baynard Building, Suite 210E
Wilmington, Delaware 19810 Present Principal Occupation or
unless otherwise indicated) Employment Citizenship
- --------------------------- ------------------------------- -----------
DIRECTORS
- ---------
Robert L. Bryant Business Consultant U.S.A.
2203 West 11th Street
Wilmington, Delaware 19805
Connie S. Linhart President and Treasurer of U.S.A.
NGHC
Fil E. Spizzirro Business Consultant U.S.A.
Daniel F. Lindley Attorney, Duane, Morris & U.S.A.
Duane, Morris & Heckscher Heckscher LLP, a law firm
LLP
1201 Market Street
Suite 1500
Wilmington, Delaware 19801
EXECUTIVE OFFICERS
(who are not Directors)
- -----------------------
None
19
<PAGE> 20
ANNEX E
-------
L.D. FASHIONS HOLDINGS CORP. ("LDFHC")
Name and Business Address
(all business addresses are:
L.D. Fashions Holdings Corp.
3411 Silverside Road
Baynard Building, Suite 210E
Wilmington, Delaware 19810 Present Principal Occupation or
unless otherwise indicated) Employment Citizenship
- --------------------------- ------------------------------- -----------
DIRECTORS
- ---------
Robert L. Bryant*
Connie S. Linhart*
Fil E. Spizzirro*
EXECUTIVE OFFICERS
(who are not Directors)
- -----------------------
None
- -------------------------
* Individual's business address, present principal occupation and citizenship
are set forth in Annex D (NGHC).
20
<PAGE> 21
Annex F
-------
OWNERSHIP OF COMMON STOCK
-------------------------
<TABLE>
<CAPTION>
Percentage of Issued Transactions in the
and Outstanding Common Stock
Executive Officer Number of Shares Shares of Common During the Past 60
or Director Beneficially Owned* Stock Days
- -------------------- ------------------- -------------------- -------------------
<S> <C> <C> <C>
Daniel R. Finn, Jr. 17,000 shares** less than 0.1% None
Jeffrey R. Gilman 1,000 shares less than 0.1% None
Gerard Louis-Dreyfus 20,000 shares** less than 0.1% (1)
Simon B. Rich 141,600 shares*** Approximately 0.35% None
Ernest F. Steiner 23,500 shares**** less than 0.1% (2)
</TABLE>
(1) On August 6, 1998, Mr. Louis-Dreyfus purchased 5,000 shares of the Common
Stock on the open market for an aggregate price of $65,000.00.
(2) On August 5, 1998, Lodgepole Inc., a corporation wholly-owned by Mr.
Steiner and his wife, purchased 500 shares of the Common Stock on the open
market for an aggregate price of $6,468.75. On August 7, 1998, Mr. Steiner
purchased 600 shares of the Common Stock on the open market for an
aggregate price of $8,250.00. On August 10, 1998, Mr. Steiner purchased
4,400 shares of the Common Stock on the open market for an aggregate price
of $60,500.00.
- --------------------------------------------
* Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, each of the executive officers and
directors named in this table has sole voting and investment power with respect
to the shares indicated as beneficially owned. Shares a person is deemed to
beneficially own by having a right to acquire by exercise of any option are
considered outstanding solely for purposes of calculating such person's
percentage ownership.
** Includes 12,000 shares which the named individual has the right to
acquire by exercise of currently exercisable stock options granted under the
Issuer's Stock Option Plan.
*** Includes 129,000 shares which Mr. Rich has the right to acquire by
exercise of currently exercisable stock options granted under the Issuer's
Stock Option Plan; includes 400 shares owned by Mr. Rich as custodian for two
of his children; includes 200 shares owned by one of Mr. Rich's children;
includes 1,000 shares owned by Mr. Rich's wife.
**** Includes 8,000 shares which Mr. Steiner has the right to acquire by
exercise of currently exercisable stock options granted under the Issuer's
Stock Option Plan; includes 500 shares owned by Lodgepole Inc., a corporation
wholly-owned by Mr. Steiner and his wife.
21
<PAGE> 22
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
No. Document Page
- ------- -------------------------------------------------------- ----------
<S> <C> <C>
1 Written Agreement of SALD, LDHC, LDCA, NGHC and 24
LDFHC relating to the filing of this Amendment as
required by Rule 13d-1(f).
2 Pledge Agreement dated as of December 23, 1994 among *
SALD, Societe Generale, Banque Nationale de Paris,
Credit Lyonnais, Caisse Centrale des Banques Populaires,
Banque Francaise du Commerce Exterieur, Caisse
Nationale de Credit Agricole, Credit Industriel et
Commercial, Banque Indosuez and Credit National.
3 Subordinate Pledge Agreement dated as of December 27, **
1995 among SALD, Societe Generale and Banque
Nationale de Paris.
4 Registration Rights Agreement dated as of November 9, **
1993 (the "Registration Rights Agreement") between the
Issuer and NGHC.
5 Assignment and Assumption Agreement dated as of **
December 20, 1994 among SALD, Societe Generale,
Banque Nationale de Paris, Credit Lyonnais, Caisse
Centrale des Banques Populaires, Banque Francaise du
Commerce Exterieur, Caisse Nationale de Credit Agricole,
Credit Industriel et Commercial, Banque Indosuez and
Credit National.
6 Subordinate Assignment and Assumption Agreement dated **
as of December 27, 1995 among SALD, Societe General
and Banque Nationale de Paris.
7 Note Purchase Agreement dated as of May 5, 1998 (the 25
"Note Purrchase Agreement") among LDFHC ands the
Purchasers listed therein.
</TABLE>
- ----------------------------------------
* Filed as an exhibit to Amendment No. 1 to the Schedule 13D of the Louis
Dreyfus Group dated January 1, 1995.
** Filed as an exhibit to Amendment No. 2 to the Schedule 13D of the Louis
Dreyfus Group dated February 18, 1997.
22
<PAGE> 23
8 Amendment No. 1 dated as of May 5, 1998 to the Note Purchase 89
Agreement.
9 Amendment dated as of December 22, 1993 to the Registration 125
Rights Agreement.
10 Amendment dated as of December 20, 1994 to the Registration 128
Rights Agreement.
11 Amendment dated as of December 27, 1995 to the Registration 131
Rights Agreement.
12 Amendment dated as of May 1, 1998 to the Registration Rights 136
Agreement.
23
<PAGE> 1
EXHIBIT 1
---------
The undersigned agree that the foregoing Amendment to Schedule 13D
dated July 16, 1998, is being filed with the Securities and Exchange Commission
on behalf of each of S.A. Louis Dreyfus et Cie., a corporation organized under
the laws of France, Louis Dreyfus Holding Company Inc., a Delaware corporation,
Louis Dreyfus Commercial Activities Inc., a Delaware corporation, Louis Dreyfus
Natural Gas Holdings Corp., a Delaware corporation, and L.D. Fashions Holdings
Corp., a Delaware corporation.
S.A. Louis Dreyfus et Cie.
August 27, 1998 By: /s/ Gerard Louis-Dreyfus
-----------------------------------
Gerard Louis-Dreyfus
President
Louis Dreyfus Holding Company Inc.
August 27, 1998 By: /s/ Ernest F. Steiner
-----------------------------------
Ernest F. Steiner
Executive Vice President
Louis Dreyfus Commercial Activities, Inc.
August 27, 1998 By: /s/ Ernest F. Steiner
-----------------------------------
Ernest F. Steiner
President
Louis Dreyfus Natural Gas Holdings Corp.
August 27, 1998 By: /s/ Connie S. Linhart
-----------------------------------
Connie S. Linhart
President and Treasurer
L.D. Fashions Holding Corp.
August 27, 1998 By: /s/ Connie S. Linhart
-----------------------------------
Connie S. Linhart
President and Treasurer
24
<PAGE> 1
Exhibit 7
---------
EXECUTION COPY
L.D. FASHIONS HOLDINGS CORP.
$85,000,000
7.13% Senior Notes due May 1, 2005
------------------------------------
NOTE PURCHASE AGREEMENT
------------------------------------
Dated May 5, 1998
25
<PAGE> 2
TABLE OF CONTENTS
----------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 1
AUTHORIZATION OF NOTES
ARTICLE 2
SALE AND PURCHASE OF NOTES
ARTICLE 3
CLOSING
ARTICLE 4
CONDITIONS TO CLOSING
SECTION 4.01. Representations and Warranties...................................................3
SECTION 4.02. Performance; No Default..........................................................3
SECTION 4.03. Compliance Certificates..........................................................3
SECTION 4.04. Opinions of Counsel..............................................................3
SECTION 4.05. Purchase Permitted by Applicable Law, Etc........................................4
SECTION 4.06. Sale of Other Notes..............................................................4
SECTION 4.07. Payment of Special Counsel Fees..................................................4
SECTION 4.08. Private Placement Number.........................................................4
SECTION 4.09. Changes in Corporate Structure...................................................4
SECTION 4.10. Proceedings and Documents........................................................4
SECTION 4.11. Form FR G-3......................................................................5
SECTION 4.12. Poloco Sublicense................................................................5
SECTION 4.13. Hedging..........................................................................5
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 5.01. Organization; Power and Authority................................................5
SECTION 5.02. Authorization, Etc...............................................................5
SECTION 5.03. Disclosure.......................................................................6
SECTION 5.04. Organization and Ownership of Shares of Subsidiaries.............................6
SECTION 5.05. Financial Statements.............................................................7
SECTION 5.06. Compliance with Laws, Other Instruments, Etc.....................................8
SECTION 5.07. Governmental Authorizations, Etc.................................................8
SECTION 5.08. Litigation; Observance of Agreements, Statutes and Orders........................8
SECTION 5.09. Taxes............................................................................8
SECTION 5.10. Title to Property................................................................9
SECTION 5.11. Licenses, Permits, Etc...........................................................9
</TABLE>
26
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 5.12. Compliance with ERISA...........................................................10
SECTION 5.13. Private Offering by the Company.................................................11
SECTION 5.14. Use of Proceeds; Margin Regulations.............................................11
SECTION 5.15. Existing Indebtedness; Future Liens.............................................11
SECTION 5.16. Foreign Assets Control Regulations, Etc.........................................12
SECTION 5.17. Status under Certain Statutes...................................................12
SECTION 5.18. Licenses........................................................................12
ARTICLE 6
REPRESENTATIONS OF THE PURCHASER
SECTION 6.01. Accredited Investor.............................................................13
SECTION 6.02. Purchase For Investment.........................................................13
SECTION 6.03. Source of Funds.................................................................13
SECTION 6.04. Investment Company Act Representations..........................................15
SECTION 6.05. Competing Person................................................................15
ARTICLE 7
INFORMATION AS TO COMPANY
SECTION 7.01. Financial and Business Information..............................................16
SECTION 7.02. Officer's Certificate...........................................................19
SECTION 7.03. Inspection......................................................................19
ARTICLE 8
7 REPAYMENT OF THE NOTES
SECTION 8.01. Required Repayments.............................................................20
SECTION 8.02. Optional Prepayments with Make-Whole Amount.....................................21
SECTION 8.03. Allocation of Partial Prepayments...............................................21
SECTION 8.04. Maturity; Surrender, Etc........................................................21
SECTION 8.05. Purchase of Notes...............................................................22
SECTION 8.06. Make-Whole Amount and Modified Make-Whole Amount................................22
ARTICLE 9
AFFIRMATIVE COVENANTS
SECTION 9.01. Compliance with Law.............................................................24
SECTION 9.02. Insurance.......................................................................24
SECTION 9.03. Maintenance of Properties.......................................................25
SECTION 9.04. Payment of Taxes and Claims.....................................................25
SECTION 9.05. Corporate Existence, Etc........................................................25
ARTICLE 10
NEGATIVE COVENANTS
SECTION 10.01. Transactions with Affiliates...................................................26
</TABLE>
27
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 10.02. Merger, Consolidation, Etc.....................................................26
SECTION 10.03. Sale of Assets.................................................................27
SECTION 10.04. Liens..........................................................................28
SECTION 10.05. Limitation on Company Indebtedness.............................................29
SECTION 10.06. Interest Cover Test............................................................29
SECTION 10.07. Maintenance of Consolidated Net Worth..........................................29
SECTION 10.08. Limitation on Subsidiary Debt..................................................30
SECTION 10.09. Limitation on Restricted Payments and Restricted
Investments....................................................................30
SECTION 10.10. Restriction on Certain Amendments..............................................30
SECTION 10.11. Restriction on Sale of LDNG Shares.............................................31
SECTION 10.12. Protection of Interest under the License.......................................31
ARTICLE 11
EVENTS OF DEFAULT
SECTION 11.01. Events of Default..............................................................31
ARTICLE 12
REMEDIES ON DEFAULT, ETC.
SECTION 12.01. Acceleration...................................................................34
SECTION 12.02. Other Remedies.................................................................35
SECTION 12.03. Rescission.....................................................................35
SECTION 12.04. No Waivers or Election of Remedies, Expenses, Etc..............................35
ARTICLE 13
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
SECTION 13.01. Registration of Notes..........................................................36
SECTION 13.02. Transfer of Notes..............................................................36
SECTION 13.03. Replacement of Notes...........................................................37
ARTICLE 14
PAYMENTS ON NOTES
SECTION 14.01. Place of Payment...............................................................37
SECTION 14.02. Home Office Payment............................................................38
ARTICLE 15
EXPENSES
SECTION 15.01. Transaction Expenses...........................................................38
SECTION 15.02. Survival.......................................................................39
ARTICLE 16
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
</TABLE>
28
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE 17
AMENDMENT AND WAIVER
SECTION 17.01. Requirements...................................................................39
SECTION 17.02. Solicitation of Holders of Notes...............................................40
SECTION 17.03. Binding Effect, Etc............................................................40
SECTION 17.04. Notes Held by Company, Etc.....................................................41
ARTICLE 18
NOTICES
ARTICLE 19
REPRODUCTION OF DOCUMENTS
ARTICLE 20
CONFIDENTIAL INFORMATION
ARTICLE 21
SUBSTITUTION OF PURCHASER
ARTICLE 22
MISCELLANEOUS
SECTION 22.01. Successors and Assigns.........................................................44
SECTION 22.02. Payments Due on Non-Business Days..............................................44
SECTION 22.03. Severability...................................................................44
SECTION 22.04. Construction...................................................................44
SECTION 22.05. Counterparts...................................................................44
SECTION 22.06. Governing Law..................................................................45
</TABLE>
29
<PAGE> 6
SCHEDULES AND EXHIBITS
<TABLE>
<CAPTION>
<S> <C> <C>
SCHEDULE A -- Information Relating to Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 4.09 -- Changes in Corporate Structure
SCHEDULE 5.03 -- Disclosure Materials
SCHEDULE 5.04 -- Subsidiaries of the Company and Ownership of
Subsidiary Stock
SCHEDULE 5.05 -- Financial Statements
SCHEDULE 5.08 -- Certain Litigation
SCHEDULE 5.11 -- Licenses, Etc.
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 6.04 -- Beneficial Owners
EXHIBIT 1 -- Form of Note
EXHIBIT 2 -- Competing Persons
EXHIBIT 3 -- Form of Transferee Letter
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel to the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel to the
Purchasers
</TABLE>
30
<PAGE> 7
7.13% Senior Notes due May 1, 2005
May 5, 1998
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
L.D. Fashions Holdings Corp., a Delaware corporation (the "COMPANY"),
agrees with you as follows:
ARTICLE 1
AUTHORIZATION OF NOTES
The Company will authorize the issue and sale of $85,000,000 aggregate
principal amount of its 7.13% Senior Notes due May 1, 2005 (the "NOTES", such
term to include any such notes issued in substitution therefor pursuant to
Article 13 of this Agreement or the Other Agreements (as hereinafter defined)).
The Notes shall be substantially in the form set out in Exhibit 1, with such
changes therefrom, if any, as may be approved by you and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
ARTICLE 2
SALE AND PURCHASE OF NOTES
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Article 3, Notes in the principal amount specified opposite your
name in Schedule A at the purchase price of 100% of the principal amount
thereof. Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "OTHER AGREEMENTS")
identical with this Agreement with each of the other purchasers named in
31
<PAGE> 8
Schedule A (the "OTHER PURCHASERS"), providing for the sale at such Closing to
each of the Other Purchasers of Notes in the principal amount specified opposite
its name in Schedule A. Your obligation hereunder and the obligations of the
Other Purchasers under the Other Agreements are several and not joint
obligations and you shall have no obligation under any Other Agreement and no
liability to any Person for the performance or non-performance by any Other
Purchaser thereunder.
ARTICLE 3
CLOSING
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, NY 10017, at 10:00 a.m., New York City time, at a closing (the
"CLOSING") on May 5, 1998 or on such other Business Day thereafter on or prior
to May 15, 1998 as may be agreed upon by the Company and you and the Other
Purchasers. At the Closing the Company will deliver to you, as specified in
Schedule A, the Notes to be purchased by you in the form of a single Note (or
such greater number of Notes in denominations of at least $100,000 as you may
request) dated the date of the Closing in your name (or in the name of your nomi
nee), against delivery by you to the Company or its order of immediately
available federal funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 5600807687 at PNC Bank, Delaware, 222 Delaware Avenue,
Wilmington, DE 19899, ABA#031100089. If at the Closing the Company shall fail to
tender such Notes to you as provided above in this Article 3, or any of the
conditions specified in Article 4 shall not have been fulfilled to your
satisfaction, you shall, at your election, be relieved of all further
obligations under this Agreement, without thereby waiving any rights you may
have by reason of such failure or such nonfulfillment.
ARTICLE 4
CONDITIONS TO CLOSING
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
32
<PAGE> 9
SECTION 4.01. Representations and Warranties. The representations and
warranties of the Company in this Agreement shall be correct when made and at
the time of the Closing.
SECTION 4.02. Performance; No Default. The Company shall have performed
and complied with all agreements and conditions contained in this Agreement
required to be performed or complied with by it prior to or at the Closing and
after giving effect to the issue and sale of the Notes (and the application of
the proceeds thereof as contemplated by Schedule 5.14) no Default or Event of
Default shall have occurred and be continuing. Neither the Company nor any
Subsidiary shall have entered into any transaction since the date of the
Memorandum that would have been prohibited by Article 9 or 10 hereof had such
Article applied since such date.
SECTION 4.03. Compliance Certificates. (a) Officer's Certificate. The
Company shall have delivered to you an Officer's Certificate, dated the date of
the Closing, certifying that the conditions specified in Sections 4.01, 4.02,
4.09 and 4.13 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you a
certificate certifying as to the constituent documents, by-laws and resolutions
of the Board of Directors attached thereto, incumbency of officers of the
Company and other corporate proceedings relating to the authorization, execution
and delivery of the Notes and the Agreements.
SECTION 4.04. Opinions of Counsel. You shall have received opinions in
form and substance satisfactory to you, dated the date of the Closing (a) from
Duane, Morris & Heckscher LLP, counsel for the Company, covering the matters set
forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as you or your counsel may reasonably request
(and the Company hereby instructs its counsel to deliver such opinion to you)
and (b) from Davis Polk & Wardwell, your special counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as you may reasonably request.
SECTION 4.05. Purchase Permitted by Applicable Law, Etc. On the date of
the Closing your purchase of Notes shall (i) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
pro visions (such as Section 1405(a)(8) of the New York Insurance Law)
permitting limited investments by insurance companies without restriction as to
the character of the particular investment, (ii) not violate any applicable law
or regulation (including, without limitation, Regulation T, U or X of the Board
of Governors of the Federal Reserve System) and (iii) not subject you to any
tax, penalty or
33
<PAGE> 10
liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. If requested by you, you shall
have received an Officer's Certificate certifying as to such matters of fact as
you may reasonably specify to enable you to determine whether such purchase is
so permitted.
SECTION 4.06. Sale of Other Notes. Contemporaneously with the Closing
the Company shall sell to the Other Purchasers and the Other Purchasers shall
purchase the Notes to be purchased by them at the Closing as specified in
Schedule A.
SECTION 4.07. Payment of Special Counsel Fees. Without limiting the
provisions of Section 15.01, the Company shall have paid on or before the
Closing the reasonable fees and disbursements of your special counsel referred
to in Section 4.04 to the extent reflected in a statement of such counsel
rendered to the Company at least one Business Day prior to the Closing which
statement shall also include wire transfer instructions for the Company to use
if it chooses to make payment by wire transfer.
SECTION 4.08. Private Placement Number. A Private Placement number
issued by Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners) shall have been obtained for the Notes by your special counsel.
SECTION 4.09. Changes in Corporate Structure. Except as specified in
Schedule 4.09, the Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other entity,
at any time following the date of the most recent financial statements referred
to in Schedule 5.05.
SECTION 4.10. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request in connection therewith.
SECTION 4.11. Form FR G-3. The Company shall have duly completed,
executed and delivered to the Purchaser a purpose statement on Form FR G-3
complying with the requirements of Regulation U of the Board of Governors of the
Federal Reserve System.
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SECTION 4.12. Poloco Sublicense. The Licensee shall have entered into
the Poloco Sublicense with Poloco as required under the Assignment.
SECTION 4.13. Hedging. The Company shall have entered into a hedging
arrangement relating to the projected royalty revenues from the License.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to you that:
SECTION 5.01. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the full corporate power and authority to own or hold under lease the
properties it purports to own or hold under lease, to transact the business it
transacts and proposes to transact, to execute and deliver this Agreement and
the Other Agreements and the Notes and to perform the provisions hereof and
thereof.
SECTION 5.02. Authorization, Etc. This Agreement and the Other
Agreements and the Notes have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement constitutes, and upon
execution and delivery thereof each Note will constitute, a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 5.03. Disclosure. The Company, through Chase Securities Inc.,
acting as its placement agent, has delivered to you and each Other Purchaser a
copy of a Private Placement Memorandum, dated March 1998 (the "MEMORANDUM"),
relating to the transactions contemplated hereby. The Memorandum fairly
describes, in all material respects, the general nature of the business and
principal properties of the Company and its Subsidiaries. Except as disclosed in
Schedule 5.03, this Agreement, the Memorandum, the documents,
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<PAGE> 12
certificates or other writings delivered to you by or on behalf of the Company
in connection with the transactions contemplated hereby and the financial
statements listed in Schedule 5.05, taken as a whole, do not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made. Except as disclosed in the Memorandum or as expressly
described in Schedule 5.03, or in one of the documents, certificates or other
writings identified therein, or in the financial statements listed in Schedule
5.05, since February 28, 1998, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company specifically for use in connection with the transactions
contemplated hereby.
SECTION 5.04. Organization and Ownership of Shares of Subsidiaries. (a)
Schedule 5.04 contains (except as noted therein) complete and correct lists (i)
of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization, and the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by
the Company and each other Subsidiary, (ii) of the Company's Affiliates, other
than Subsidiaries, and (iii) of the Company's directors and senior officers. For
purposes of this Section 5.04(a) only, "AFFILIATE" means, at any time, and with
respect to the Company, (a) any other Person that at such time directly or
indirectly through one or more intermediaries is Controlled by the Company, and
(b) any corporation of which the Company and its Subsidiaries beneficially own
or hold, in the aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "CONTROL" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.04 as being owned by the
Company and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Company or another Subsidiary free and clear
of any Lien (except as otherwise disclosed in Schedule 5.04).
(c) Each Subsidiary identified in Schedule 5.04 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or
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other legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each such
Subsidiary has the corporate or other power and authority to own or hold under
lease the properties it purports to own or hold under lease and to transact the
business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.04 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
SECTION 5.05. Financial Statements. (a) The Company has delivered to
each Purchaser copies of the Prescribed Accounts listed on Schedule 5.05. All of
said Prescribed Accounts (including in each case the related schedules and
notes) fairly present the financial position of the business that was conducted
by Poloco, S.A. as of the respective dates specified in such Schedule and its
results of operations and cash flows for the respective periods so specified and
have been prepared in all material respects in accordance with French GAAP
consistently applied throughout the periods involved except as set forth in said
Prescribed Accounts and the notes thereto (subject, in the case of any interim
financial statements, to normal year-end adjustments).
(b) The Company has delivered to each Purchaser copies of the audited
financial statements of the Company and its Subsidiaries listed on Schedule
5.05. Such financial statements (including the related schedules and notes) have
been audited by Ernst & Young LLP, fairly present the consolidated financial
position of the Company and its Subsidiaries as of the date specified in such
Schedule and have been prepared in all material respects in accordance with
GAAP.
SECTION 5.06. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement and the
Notes will not (i) contravene, result in any breach of, or constitute a default
under, or result in the creation of any Lien in respect of any property of the
Company or any Subsidiary under, any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or any other
Material agreement or instrument to which the Company or any Subsidiary is bound
or by which the Company or any Subsidiary or any of their respective properties
may be bound or affected, (ii) conflict with or result in a breach of any of the
terms,
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conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
SECTION 5.07. Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company of this Agreement or the Notes other than such consents,
registrations and filings that may be required in connection with the
registration of the LDNG shares as contemplated by Section 12.02(b) of this
Agreement.
SECTION 5.08. Litigation; Observance of Agreements, Statutes and
Orders. (a) Except as disclosed in Schedule 5.08, there are no actions, suits or
proceedings pending or, to the Knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(c) No event has occurred and no condition exists which would
constitute an Event of Default hereunder or would with the giving of notice
and/or the lapse of time, as provided in Article 11 hereof, constitute an Event
of Default.
SECTION 5.09. Taxes. The Company and its Subsidiaries have filed all
tax returns that are required to have been filed in any jurisdiction, and have
paid all taxes shown to be due and payable on such returns and all other taxes
and assessments levied upon them or their properties, assets, income or
franchises, to the extent such taxes and assessments have become due and payable
and before they have become delinquent, except for any taxes and assessments (i)
the amount of which could not individually or in the aggregate reasonably be
expected to have a Material Adverse Effect or (ii) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis
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for any other tax or assessment that could reasonably be expected to have a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Company and its Subsidiaries in respect of Federal, state or other taxes for all
fiscal periods are adequate.
SECTION 5.10. Title to Property. The Company and its Subsidiaries have
good and sufficient title to their respective properties that individually or in
the aggregate are Material, including all such properties reflected in the most
recent audited balance sheet referred to in Section 5.05 or purported to have
been acquired by the Company or any Subsidiary after said date (except as sold
or otherwise disposed of in the ordinary course of business), in each case free
and clear of Liens prohibited by this Agreement.
SECTION 5.11. Licenses, Permits, Etc. Except as disclosed in Schedule
5.11,
(a) the Company and its Subsidiaries, as applicable, own or possess or
have the rights to use all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and
trade names, that individually or in the aggregate are Material,
including, without limitation, the License, and such rights are not
subject to any judgment, injunction, order, decree, pledge or
encumbrance restricting the use thereof;
(b) to the best Knowledge of the Company, there are no existing or
threatened claims or proceedings challenging the ownership of any
registration in any jurisdiction or alleging infringement on any third
party's rights by the use of any licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks and
trade names, including without limitation, the License, by the Company
or its Affiliates that individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect, and the
Company is not aware of any grounds for any such claims or proceedings;
and
(c) to the best Knowledge of the Company, there is no violation by any
Person of any right of the Company or any of its Affiliates with
respect to any license, permit, franchise, authorization patent,
copyright, service mark, trademark, trade name or other right owned or
used by the Company or any of its Affiliates, including, without
limitation, the License, that individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.
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SECTION 5.12. Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by an amount which would cause a failure
to satisfy Section 10.07 if such amount were taken into account as a charge to
the Company. The term "BENEFIT LIABILITIES" has the meaning specified in sec-
tion 4001(a)(16) of ERISA and the terms "CURRENT VALUE" and "PRESENT VALUE" have
the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under sec
tion 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually
or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to (i) the accuracy of your representation in Section 6.03 as
to
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<PAGE> 17
the sources of the funds used to pay the purchase price of the Notes to be
purchased by you and (ii) the assumption, made solely for the purpose of making
such representation, that Department of Labor Interpretive Bulletin 75-2 with
respect to prohibited transactions remains valid in the circumstances of the
transactions contemplated herein.
SECTION 5.13. Private Offering by the Company. Neither the Company nor
any of its Subsidiaries nor anyone acting on its behalf has offered the Notes or
any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
person other than you, the Other Purchasers and not more than 37 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor any of its Subsidiaries nor anyone
acting on its behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of Section 5 of
the Securities Act.
SECTION 5.14. Use of Proceeds; Margin Regulations. The Company will
apply the proceeds of the sale of the Notes to pay the note issued in connection
with the purchase of the License under the Assignment no later than 60 days
after the date of the Closing. No part of the proceeds from the sale of the
Notes hereunder will be used, directly or indirectly, for the purpose of buying
or carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). As used in this Section, the terms "MARGIN STOCK" and "PURPOSE OF
BUYING OR CARRYING" shall have the meanings assigned to them in said Regulation
U.
SECTION 5.15. Existing Indebtedness; Future Liens. (a) Except as
described therein, Schedule 5.15 sets forth a complete and correct list of all
outstanding Indebtedness of the Company and its Subsidiaries as of the Closing
date (before giving effect to the sale of the Notes), since which date there has
been no Material change (except for the sale of the Notes) in the amounts,
interest rates, sinking funds, installment payments or maturities of the
Indebtedness of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the Company or such
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Indebtedness to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
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(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 10.04.
SECTION 5.16. Foreign Assets Control Regulations, Etc. Neither the sale
of the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
SECTION 5.17. Status under Certain Statutes. The Company is not, and
after the sale of Notes contemplated herein, will not be, an "investment
company" within the meaning of the Investment Company Act of 1940, as amended
(the "1940 ACT"). Neither the Company nor any Subsidiary is subject to
regulation under the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
SECTION 5.18. Licenses. The Company has delivered to you and each
Other Purchaser true and correct copies of the License Documents listed in
Schedule 5.11 hereto as of the date of this Agreement.
ARTICLE 6
REPRESENTATIONS OF THE PURCHASER
SECTION 6.01. Accredited Investor. Each of you and any Additional
Purchaser(s) is an institutional accredited investor, as defined in Rule
501(a)(1), (2), (3) or (7) under the U.S. Securities Act of 1933, as amended
(the "SECURITIES ACT"). You (either alone or together with advisors retained by
you) have sufficient knowledge and experience in financial and business affairs
so as to be capable of evaluating the merits and risks of purchasing Notes. You
understand that the Notes have not been registered under the Securities Act. You
have received and read a copy of the Private Placement Memorandum dated March
1998, relating to the Notes. In addition, you have been given the opportunity to
ask questions and receive answers from representatives of the Company or Chase
Securities Inc. concerning the Company and its affairs, and to obtain any
additional information you consider necessary to evaluate the merits and risks
of the investment.
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SECTION 6.02. Purchase For Investment. You represent that you and any
Additional Purchaser(s) are purchasing the Notes for investment. You understand
that the Notes have not been registered under the Securities Act and may be
resold only if registered pursuant to the provisions of the Securities Act or if
an exemption from registration is available, except under circumstances where
neither such registration nor such an exemption is required by law, and that the
Company is not required to register the Notes. You understand that this
Agreement places additional restrictions on transfers of the Notes, as provided
in Section 13.02.
SECTION 6.03. Source of Funds. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"SOURCE") to be used by you and any Additional Purchasers to pay the purchase
price of the Notes to be purchased by you hereunder:
(a) if you are an insurance company authorized to do business under
the laws of one or more states, (i) the Source is an "insurance company general
account", within the meaning of Section V(e) of the Department of Labor
Prohibited Transaction Class Exemption ("PTE") 95-60 (issued July 12, 1995), and
(ii) the amount of reserves and liabilities (as defined by the annual statement
for life insurance companies approved by the National Association of Insurance
Commissioners ("NAIC ANNUAL STATEMENT") and before reduction for credits on
account of any reinsurance ceded on a coinsurance basis (the "RESERVES AND
LIABILITIES")) for your general account contract(s) held by or on behalf of any
employee benefit plan subject to Title I of ERISA or any plan or individual
retirement account subject to Section 4975 of the Code ("ERISA PLAN"), together
with the amount of the Reserves and Liabilities for your general account
contract(s) held by or on behalf of any other ERISA Plans maintained by the same
employer (or any "affiliate" thereof, within the meaning of Section V(a)(1) of
PTE 95-60) or by the same employee organization, does not exceed 10% of the
total Reserves and Liabilities of your general account (exclusive of separate
account liabilities) plus surplus, as set forth in the NAIC Annual Statement
filed with the state of your domicile; or
(b) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the Company in writing
pursuant to this paragraph (b), no employee benefit plan or group of plans
maintained by the same employer or employee organization beneficially owns more
than 10% of all assets allocated to such pooled separate account or collective
investment fund; or
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(c) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (c); or
(d) the Source is a governmental plan; or
(e) the Source is itself, or is acquiring the Notes with the assets
of, an ERISA Plan managed by an "in-house asset manager" (within the meaning of
Part IV(a) of PTE 96-23 (issued March 24, 1995)) which has made or properly
authorized the decision for such ERISA Plan to purchase the Notes under
circumstances such that PTE 96-23 is applicable to the purchase and holding of
such Notes; or
(f) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this paragraph
(f); or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.03, the terms "EMPLOYEE BENEFIT PLAN",
"GOVERNMENTAL PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
SECTION 6.04. Investment Company Act Representations. You understand
that the Company has not been registered under the 1940 Act in reliance on
Section 3(c)(1) of the 1940 Act, and as a result the Company may have no more
than 100 beneficial owners. Furthermore, you represent that:
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<PAGE> 21
(a) you are acquiring the Notes (x) for your own account as principal
or (y) for the account of the number of additional purchasers (each an
"ADDITIONAL PURCHASER") listed in Schedule 6.04, and each of you and any
Additional Purchaser(s) may be considered one beneficial owner for the purpose
of Section 3(c)(1) of the 1940 Act;
(b) if you or any Additional Purchaser(s) will own more than 10% of
the outstanding voting securities of the Company, you or such Additional
Purchaser are not (i) an "investment company" (as defined in the 1940 Act) or
(ii) an entity that, but for the exception provided in Section 3(c)(1) or
3(c)(7) of the 1940 Act, would be an investment company;
(c) neither you nor any Additional Purchaser is a defined contribution
plan, or a partnership or other investment vehicle in which the partners or
participants have any discretion to determine the investments made by the
entity, including an investment in interests; and
(d) neither you nor any Additional Purchaser was formed for the
purpose of investing in the Company, and at the time you or any Additional
Purchaser purchase(s) any Notes you or it will have less than 40% of your or its
committed capital invested in the Company.
SECTION 6.05. Competing Person. You represent that neither you nor any
Additional Purchaser is a Competing Person.
ARTICLE 7
INFORMATION AS TO COMPANY
SECTION 7.01. Financial and Business Information. The Company shall
deliver to each holder of Notes:
(a) Interim Period Statements -- within 90 days after the end of each
Interim Period in each fiscal year of the Company (other than the last Interim
Period of each such fiscal year), a copy of,
(i) an unaudited consolidated balance sheet of the Company and
its Subsidiaries as at the end of such Interim Period, and
(ii) unaudited consolidated statements of income, retained earnings and
cash flows of the Company and its Subsidiaries, for such Interim Period
and (in the case of the second and third Interim Periods) for the
portion of the fiscal year ending with such Interim Period and,
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<PAGE> 22
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to interim financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments;
(b) Annual Statements -- within 120 days after the end of each fiscal
year of the Company, a copy of,
(i) the consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, retained earnings, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by
(A) an opinion thereon of Ernst & Young LLP or other
independent certified public accountants of recognized
national standing, which opinion shall state that such
financial statements present fairly, in all material respects,
the financial position of the companies being reported upon
and their results of operations and cash flows and have been
prepared in conformity with GAAP, and that the examination of
such accountants in connection with such financial statements
has been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for
such opinion in the circumstances, and
(B) a certificate of such accountants stating that they
have reviewed this Agreement and the Other Agreements and
stating further whether, in making their audit, they have
become aware of any condition or event that then constitutes a
Default or an Event of Default, and, if they are aware that
any such condition or event then exists, specifying the nature
and period of the existence thereof (it being understood that
such accountants shall not be liable, directly or indirectly,
for any failure to obtain knowledge of any Default or Event of
Default unless such accountants should have obtained knowledge
thereof in making an audit in accordance
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with generally accepted auditing standards or did not make
such an audit);
(c) SEC and Other Reports -- if the Company or any Subsidiary issues
its securities to the public pursuant to a registration under the Securities
Act, promptly upon their becoming available, one copy of any registration
statement (without exhibits except as expressly requested by such holder), and
any prospectus and any amendments thereto filed by the Company or any Subsidiary
with the Securities and Exchange Commission and of all press releases and other
statements made available generally by the Company or any Subsidiary to the
public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
event within five Business Days after a Senior Officer obtained Knowledge of the
existence of any Default or Event of Default or that any Person has given any
notice or taken any action with respect to a claimed default hereunder or that
any Person has given any notice or taken any action with respect to a claimed
default of the type referred to in Section 11.01(f), a written notice specifying
the nature and period of existence thereof and what action the Company is taking
or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within ten days after
a Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in
section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening
by the PBGC of the institution of, proceedings under section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has
been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the
incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any
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ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or
excise tax provisions, if such liability or Lien, taken together with
any other such liabilities or Liens then existing, could reasonably be
expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
within 30 days of receipt thereof, copies of any notice to the Company or any
Subsidiary from any Federal or state Governmental Authority relating to any
order, ruling, statute or other law or regulation that could reasonably be
expected to have a Material Adverse Effect;
(g) LDNG and Poloco -- (i) with respect to LDNG, one copy of each Form
10-K and Form 10-Q filed with the SEC, by arranging for LDNG to mail such Forms
in its usual course of business, to each such holder of Notes and (ii) with
respect to Poloco, audited annual financial statements in English within 180
days after the end of each fiscal year of Poloco and unaudited semi-annual
financial statements within 120 days after the end of the first six months of
each fiscal year of Poloco;
(h) Royalty Payments -- with respect to Poloco, the quarterly and
annual statements of operations described in Article 8 of the Poloco Sublicense
accounting for each product category in each country and the royalties owed
thereon; such quarterly and annual statements shall be certified by the chief
financial officer of Poloco and, at any time such certification is required by
The Polo/Lauren Company, L.P. pursuant to the License Agreement, such annual
statements shall also be certified by the independent public accountants for
Poloco; and
(i) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Company or any of its Subsidiaries or
relating to the ability of the Company to perform its obligations hereunder and
under the Notes as from time to time may be reasonably requested by any such
holder of Notes.
SECTION 7.02. Officer's Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to Section 7.01(a) or Section 7.01(b)
hereof shall be accompanied by a certificate of a Senior Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Articles 9 and 10, during the period covered
by the statements then being furnished (including with respect to each such
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<PAGE> 25
Section, where applicable, the calculations of the maximum or minimum amount,
ratio or percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amount, ratio or percentage then in
existence);
(b) Event of Default -- a statement that such officers have reviewed
the relevant terms hereof and have made, or caused to be made, under their
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the period covered by the statements then
being furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or event that
constitutes a Default or an Event of Default or, if any such condition or event
existed or exists (including, without limitation, any such event or condition
resulting from the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof and
what action the Company shall have taken or proposes to take with respect
thereto; and
(c) GAAP Compliance -- a statement that such financial statements have
been prepared in accordance with GAAP consistently applied and present fairly
(in conjunction with the notes thereto) the financial condition of the Company
and its Subsidiaries as at the end of the period at which they relate and of the
results of the operations during such subject period and, in the case of the
statements for each Interim Period, subject to normal year-end audit
adjustments.
SECTION 7.03. Inspection. The Company shall permit the representatives
of each holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
the expense of such holder and upon reasonable prior notice to the Company, to
visit the principal executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with the Company's
Senior Officers, and (with the consent of the Company, which consent will not be
unreasonably withheld) its independent public accountants, and (with the consent
of the Company, which consent will not be unreasonably withheld) to visit the
other offices and properties of the Company and each Subsidiary, all at such
reasonable times and as often as may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at the
expense of the Company to visit and inspect any of the offices or properties of
the Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants (and by this provision the Company
authorizes said accountants to discuss the affairs, finances and accounts of
the
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Company and its Subsidiaries), all at such reasonable times and as often as may
be reasonably requested under the circumstances upon notice to the Company.
ARTICLE 8
REPAYMENT OF THE NOTES
SECTION 8.01. Required Repayments. (a) On May 1, 2001 and on each May 1
thereafter to and including May 1, 2005 the Company will repay $17,000,000
principal amount (or such lesser principal amount as shall then be outstanding)
of the Notes at par and without payment of the Make-Whole Amount or the Modified
Make-Whole Amount or any premium; provided that upon any partial prepayment of
the Notes pursuant to Section 8.02 or purchase of the Notes permitted by Section
8.05 the principal amount of each required repayment of the Notes becoming due
under this Section 8.01(a) on and after the date of such prepayment or purchase
shall be reduced in the same proportion as the aggregate unpaid principal amount
of the Notes is reduced as a result of such prepayment or purchase.
(b) Upon the exercise of the PRL Fixed Price Buy-Out Option, the
Company will prepay in full the then outstanding principal amount of the Notes,
together with accrued interest thereon to the date of prepayment and the
Modified Make-Whole Amount, if any, in accordance with the Prepayment Procedure.
(c) Upon the exercise of the PRL Purchase Option 2002, the Company
will offer to prepay in full the then outstanding principal amount of the Notes,
together with accrued interest thereon to the date of prepayment and the Make-
Whole Amount, if any, in accordance with the Prepayment Procedure.
(d) In the event that PRL reclaims the License as a result of a
failure to reach the Sales Threshold, the Company will offer to prepay in full
the then outstanding principal amount of the Notes, together with accrued
interest thereon to the date of prepayment and the Make-Whole Amount, if any, in
accordance with the Prepayment Procedure.
SECTION 8.02. Optional Prepayments with Make-Whole Amount. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than $5,000,000
of the aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, plus the
Make-Whole Amount, if any, determined for the prepayment date with respect to
such principal amount then being prepaid, together with the interest on such
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<PAGE> 27
principal amount accrued to the prepayment date. The Company will give each
holder of Notes written notice of each optional prepayment under this Section
8.02 not less than 30 days and not more than 60 days prior to the date fixed for
such prepayment. Each such notice shall specify such date, the aggregate
principal amount of the Notes to be prepaid on such date, the principal amount
of each Note held by such holder to be prepaid (determined in accordance with
Section 8.03), and the interest to be paid on the prepayment date with respect
to such principal amount being prepaid accrued to the date fixed for payment,
and shall be accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.
SECTION 8.03. Allocation of Partial Prepayments. In the case of each
partial prepayment of the Notes, the aggregate principal amount of the Notes to
be prepaid shall be allocated among all of the Notes at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal amounts
thereof not theretofore called for prepayment.
SECTION 8.04. Maturity; Surrender, Etc. In the case of each prepayment
of Notes pursuant to this Article 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount or Modified Make-Whole Amount,
as the case may be, as aforesaid, interest on such principal amount shall cease
to accrue. Any Note paid or prepaid in full shall be surrendered to the Company
and canceled and shall not be reissued, and no Note shall be issued in lieu of
any prepaid principal amount of any Note.
SECTION 8.05. Purchase of Notes. The Company will not and will not
permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly
or indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this Agreement and the
Notes. The Company will promptly cancel all Notes acquired by it or any
Affiliate pursuant to any payment, prepayment or purchase of Notes pursuant to
any provision of this Agreement and no Notes may be issued in substitution or
exchange for any such Notes.
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SECTION 8.06. Make-Whole Amount and Modified Make-Whole Amount. (a) The
term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments with
respect to the Called Principal of such Note over the amount of such Called
Principal, provided that the Make-Whole Amount may in no event be less than
zero. For the purposes of determining the Make-Whole Amount, the following terms
have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.01(c) or (d) or 8.02 or
has become or is declared to be immediately due and payable pursuant to Section
12.01, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of any
Note, 0.50% over the yield to maturity implied by (i) the yields reported, as of
10:00 a.m. (New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page USD" on the Bloomberg Financial Markets System (or such other display
as may replace Page USD on the Bloomberg Financial Markets System) for actively
traded U.S. Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or (ii) if such yields
are not reported as of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported, for the
latest day for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called Principal, in
Federal Reserve Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a constant
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by (a)
converting U.S. Treasury bill quotations to bond-equivalent yields in accordance
with accepted financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the maturity closest to and greater
than the Remaining Average Life and (2) the actively traded U.S. Treasury
security with the maturity closest to and less than the Remaining Average Life.
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"REMAINING AVERAGE LIFE" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained
by multiplying (a) the principal component of each Remaining Scheduled Payment
with respect to such Called Principal by (b) the number of years (calculated to
the nearest one-twelfth year) that will elapse between the Settlement Date with
respect to such Called Principal and the scheduled due date of such Remaining
Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is not a date on which
interest payments are due to be made under the terms of the Notes, then the
amount of the next succeeding scheduled interest payment will be reduced by the
amount of interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.01(c) or (d), 8.02 or 12.01.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.01 or 8.02 or has become or is declared to be immediately due and
payable pursuant to Section 12.01, as the context requires.
(b) The term "MODIFIED MAKE-WHOLE AMOUNT" has the same meaning as that
given to the term "Make-Whole Amount" in Section 8.06(a); provided that
references in such Section to (i) "Section 8.01(c) or (d)" shall read "Section
8.01(b)", (ii) "Section 8.02" or "Section 12.01" shall be disregarded and (iii)
"0.50% over the yield to maturity" shall read "0.65% over the yield to
maturity."
ARTICLE 9
AFFIRMATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
SECTION 9.01. Compliance with Law. The Company will and will cause each
of its Subsidiaries to comply with all laws, ordinances or governmental rules or
regulations to which each of them is subject, including, without limitation,
Environmental Laws, and in connection therewith will obtain and maintain in
effect all licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the
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conduct of their respective businesses, in each case to the extent necessary to
ensure that non-compliance with such laws, ordinances or governmental rules or
regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect; provided that neither the Company nor any Subsidiary need comply
with any such law, ordinance or governmental rule or regulation or obtain or
maintain in effect any such license, certificate, permit, franchise or other
governmental authorization if the applicability or validity thereof is contested
by the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accordance with GAAP on the books of the Company
or such Subsidiary.
SECTION 9.02. Insurance. The Company will and will cause each of its
Subsidiaries to maintain in full force and effect, with financially sound and
reputable insurers, adequate insurance with respect to their respective
properties and businesses against such casualties and contingencies, of such
types, on such terms and in such amounts (including deductibles, co-insurance
and self-insurance, if adequate reserves are maintained with respect thereto) as
is customary in the case of entities of established reputations engaged in the
same or a similar business and similarly situated, except where the failure to
maintain such insurance could not in the aggregate reasonably be expected to
have a Material Adverse Effect.
SECTION 9.03. Maintenance of Properties. The Company will and will
cause each of its Subsidiaries to maintain and keep, or cause to be maintained
and kept, their respective properties in good repair, working order and
condition (other than ordinary wear and tear), so that the business carried on
in connection therewith may be properly conducted at all times, provided that
this Section shall not prevent the Company or any Subsidiary from discontinuing
the operation and the maintenance of any of its properties if such
discontinuance is desirable in the conduct of its business and the Company has
concluded that such discontinuance could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
SECTION 9.04. Payment of Taxes and Claims. The Company will and will
cause each of its Subsidiaries to file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
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or any Subsidiary, provided that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
SECTION 9.05. Corporate Existence, Etc. Subject to Sections 10.02 and
10.03, the Company will at all times preserve and keep in full force and effect
its corporate existence. Subject to Sections 10.02 and 10.03, the Company will
at all times preserve and keep in full force and effect the corporate existence
of each of its Subsidiaries (unless merged into the Company or a Subsidiary) and
all rights and franchises of the Company and its Subsidiaries unless, in the
good faith judgment of the Company, the termination of or failure to preserve
and keep in full force and effect such corporate existence, right or franchise
could not, individually or in the aggregate, have a Material Adverse Effect.
ARTICLE 10
NEGATIVE COVENANTS
The Company covenants that so long as any of the Notes are outstanding:
SECTION 10.01. Transactions with Affiliates. The Company will not and
will not permit any Subsidiary to enter into directly or indirectly any
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate, except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate; provided, however, that
nothing in this Section 10.01 shall (i) prevent the Company or any Subsidiary
from complying with all of the provisions contained in the License Documents or
(ii) restrict the consummation of any of the transactions contemplated thereby.
SECTION 10.02. Merger, Consolidation, Etc. The Company will not and
will not permit any Subsidiary to consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
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(a) in the case of the Company, (i) the successor formed by such
consolidation or the survivor of such merger or the Person that
acquires by conveyance, transfer or lease substantially all of the
assets of the Company as an entirety, as the case may be, shall be a
solvent corporation organized and existing under the laws of the United
States or any State thereof (including the District of Columbia), and,
if the Company is not such corporation, (x) such corporation shall have
executed and delivered to each holder of any Notes its assumption of
the due and punctual performance and observance of each covenant and
condition of this Agreement, the Other Agreements and the Notes and (y)
shall have caused to be delivered to each holder of any Notes an
opinion of nationally recognized independent counsel, or other
independent counsel reasonably satisfactory to the Required Holders, to
the effect that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with the
terms hereof and (ii) the Company shall have caused to be delivered to
each holder of a Note an Officer's Certificate stating that such
transaction complies with the requirements set forth in this Section
10.02(a);
(b) in the case of a Subsidiary of the Company, the successor formed
by such consolidation or the survivor of such merger or the Person that
acquires by conveyance, transfer or lease substantially all of the
assets of such Subsidiary as an entirety, as the case may be, shall be
the Company or another Subsidiary of the Company; or
(c) in the case of a Subsidiary of the Company where the successor
formed by such consolidation or the survivor of such merger or the
Person that acquires by conveyance, transfer or lease substantially all
of the assets of such Subsidiary as an entirety, as the case may be, is
neither the Company nor another Subsidiary of the Company, such
transaction complies with the provisions of Section 10.03(b) or (d);
and
immediately prior to, and immediately after giving effect to any such
transaction contemplated in clause (a), (b) or (c) above, no Default or Event of
Default shall have occurred and be continuing.
No such conveyance, transfer or lease of substantially all of the
assets of the Company shall have the effect of releasing the Company or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 10.02 from its liability under this Agreement or the
Notes.
SECTION 10.03. Sale of Assets. Except for (a) any transaction permitted
by Section 10.02, (b) any sale or disposition of assets in the ordinary course
of
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business, (c) any sale or disposition of assets to the Company or any Wholly-
Owned Subsidiary, (d) PRL's acquisition of a 20% Equity Interest or the Transfer
of an Equity Interest (all as defined in the Master Agreement) pursuant,
respectively, to Article 4 or 5 of the Master Agreement or (e) any sale of
shares of LDNG provided that such sale is in compliance with Section 10.11 and
that the investment or distribution of the proceeds of such sale are in
compliance with Section 10.09, the Company will not, nor will it permit any
Subsidiary to sell or otherwise dispose of any of its assets, unless after
giving effect thereto (i) no Default or Event of Default shall have occurred and
be continuing and (ii) the aggregate net book value of all assets disposed of
(on a consolidated basis) in the then current fiscal year (other than
dispositions described in clauses (a), (b), (c), (d) and (e) above) would not
exceed 10% of the net book value of Consolidated Total Assets (as shown in the
latest reported consolidated balance sheet of the Company and its Subsidiaries),
provided, however, that any such sales shall be disregarded for the purposes of
this limitation if the proceeds from the sales, leases or dispositions
representing the excess of such 10% limitation on the sales, leases or other
dispositions are used within 365 days after they are received (x) to acquire
assets in connection with the business of the Company and its Subsidiaries
and/or (y) to reduce the outstanding principal amount of Indebtedness of the
Company and its Subsidiaries on a pro-rata basis with the outstanding principal
amount of the Notes (at the option of the Noteholders) at an amount equal to
100% of such principal amount of the Notes prepaid and accrued interest thereon
to the date of prepayment, in accordance with the Prepayment Procedure.
SECTION 10.04. Liens. Neither the Company nor any of its Subsidiaries
will create, incur, or assume any Lien to secure any Indebtedness of the Company
or any of its Subsidiaries without making provision for the Notes to be equally
and ratably secured, other than:
(i) Liens securing Indebtedness of the Company or any
Subsidiary outstanding at the date of the sale of the Notes;
(ii) Liens on goods and products or documents of title to goods and
products arising in the ordinary course of business and similar
transactions entered into in order to finance the payment of the
purchase price of such goods or products where such Lien secures only
Indebtedness incurred to pay the purchase price of such goods or
products (and amounts incidental thereto) which, by its terms, is
required to be, and in fact is, repaid within 180 days after the date
upon which such Indebtedness was incurred;
(iii) Liens incurred or deposits made in the ordinary course of business
(x) in connection with workers' compensation, unemployment
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insurance, social security and other like laws and (y) to secure the
reimbursement obligations in respect of letters of credit, or the
performance of bids, tenders, sales contracts, leases, statutory
obligations, surety and performance bonds and similar agreements to
purchase or sell goods or services and other similar obligations not
incurred in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of capital
assets, provided that any amounts secured by such Liens are not
overdue, or if overdue, the Company or a Subsidiary is contesting its
payment in good faith and by appropriate proceedings;
(iv) Liens securing taxes, assessments or governmental charges,
provided that the execution or other enforcement of such Liens is
effectively stayed;
(v) Liens in favor of issuers of appeal bonds or supersedeas bonds, or
arising in connection with pending court proceedings (including,
without limitation, surety bonds and letters of credit or any other
instrument serving a similar purpose), provided that the execution or
other enforcement of such Liens is effectively stayed and the claims
secured thereby are being contested in good faith and by appropriate
proceedings and the aggregate amount so secured does not exceed
$10,000,000;
(vi) Liens securing the claims or demands of carriers, warehousemen,
repairmen, materialmen, mechanics, vendors, landlords, lessors, and
other similar Liens arising in the ordinary course of business,
provided that the execution or other enforcement of such Liens is
effectively stayed; and
(vii) Liens in the nature of reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases
and other similar title exceptions or encumbrances affecting real
property, provided that such exceptions and encumbrances do not in the
aggregate materially detract from the value of any Material property or
materially interfere with the use of any property material to the
ordinary conduct of the business of the Company and its Subsidiaries;
taken as a whole.
SECTION 10.05. Limitation on Company Indebtedness. The Company will not
incur or be liable for any Indebtedness other than (i) the Notes and (ii) other
Indebtedness with a maturity not exceeding one year from the date of incurrence
of such Indebtedness and not exceeding $10,000,000 in aggregate principal amount
at any time outstanding.
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SECTION 10.06. Interest Cover Test. The ratio of Consolidated EBITDA to
Consolidated Interest Expense will not, at the end of any fiscal quarter, be
less than 2.5:1 for the period of two consecutive fiscal quarters then ended
(treated for this purpose as a single accounting period).
SECTION 10.07. Maintenance of Consolidated Net Worth. Consolidated Net
Worth will not be less than the Minimum Compliance Level. For this purpose,
"MINIMUM COMPLIANCE LEVEL" means the sum of (a) $100,000,000, plus (b) 100% of
cumulative Consolidated Net Income (without giving effect to any Consolidated
Net Losses) for each fiscal year ending subsequent to December 31, 1997, until
such time as the Minimum Compliance Level is equal to or greater than
$140,000,000 pursuant to the provisions of this Section, at which time the
percentage referenced in subclause (b) of this Section shall decrease to 25% of
Consolidated Net Income (without giving effect to Consolidated Net Losses) for
each fiscal year thereafter (subject to appropriate pro-rata adjustment for that
fiscal year during which the Minimum Compliance Level became equal to or greater
than $140,000,000 pursuant to this Section).
SECTION 10.08. Limitation on Subsidiary Debt. The Company will not
permit any Subsidiary to incur or be liable for any Indebtedness except for (a)
any Indebtedness of a Subsidiary owing to the Company or owing to a Wholly-Owned
Subsidiary and (b) the note dated as of December 12, 1997 issued by the Licensee
to Poloco in connection with the purchase of the License under the Assignment.
SECTION 10.09. Limitation on Restricted Payments and Restricted
Investments. Neither the Company nor any Subsidiary will make any Restricted
Investments or declare or make any dividend payments in respect of any capital
stock of the Company (except distributions payable in shares of capital stock)
or repurchase, redeem, retire or acquire any shares of capital stock of the
Company or warrants, rights or other options to purchase such shares of capital
stock of the Company (all such declarations, payments, purchases, redemptions,
retirements, and distributions being herein collectively referred to as
"RESTRICTED PAYMENTS"), except for dividends or other distributions from any
Subsidiary to the Company and payments that are made in the form of shares of
capital stock or from the net cash proceeds from the substantially concurrent
issue or sale of other shares of capital stock of the Company or a Subsidiary or
warrants, rights, or options to purchase or acquire any shares of its capital
stock; unless, immediately after giving effect to such Restricted Payments or
Restricted Investments, (a) no Default or Event of Default shall have occurred
and be continuing and (b) the sum of all Restricted Payments declared or made
after the date of the sale of the Notes, plus all Restricted Investments held at
such time does not exceed the sum of (i) if the Restricted Payment or the
Restricted Investment is made at a time at which Consolidated Net Worth is (A)
less than $140,000,000, 0% and (B) $140,000,000
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or more, 75%, in each case, of the excess of cumulative Consolidated Net Income
over cumulative Consolidated Net Losses subsequent to December 31, 1997 plus
(ii) the aggregate net cash proceeds received by the Company and its
Subsidiaries from the issue or sale of its capital stock or warrants, rights,
options, to purchase or acquire any shares of its capital stock and from any
capital contribution received subsequent to the date of the sale of the Notes
plus (iii) the aggregate net cash proceeds from the sale of any Restricted
Investment plus (iv) solely with respect to Restricted Investments, $5,000,000.
SECTION 10.10. Restriction on Certain Amendments. (a) Neither the
Company or any of its Subsidiaries will amend or waive, or suffer to be amended
or waived any of the License Documents from the respective forms thereof
delivered to the holders of the Notes pursuant to Section 5.18 if any such
amendment or waiver could have a Material Adverse Effect, except as disclosed in
Schedule 5.11 with respect to the Italian Sublicense.
(b) Notwithstanding anything to the contrary contained in subsection
(a) above, the Licensee shall not amend or waive, or suffer to be amended or
waived, Amendment No. 1 to the Poloco Sublicense except with prior written
consent of the Required Holders.
SECTION 10.11. Restriction on Sale of LDNG Shares. If an Event of
Default has occurred and is continuing, the Company will not and will not permit
any Subsidiary to sell any shares of LDNG without the consent of the Required
Holders; provided that such consent shall not be necessary if the amount paid
for all such shares is at least equal to the aggregate net book value of all
such shares (on a consolidated basis) in the then current fiscal year.
SECTION 10.12. Protection of Interest under the License. Except to the
extent resulting from the exercise by PRL of its rights under the License and
the Master Agreement as in effect on the date hereof, the Company will not
permit any diminution in its ownership of the Licensee or in the Licensee's
ownership of the License.
ARTICLE 11
EVENTS OF DEFAULT
SECTION 11.01. Events of Default. An "EVENT OF DEFAULT" shall exist if
any of the following conditions or events shall occur and be continuing:
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(a) the Company defaults in the payment of any principal or Make-
Whole Amount or Modified Make-Whole Amount, if any, on any Note for more than
one Business Day after the same becomes due and payable, whether at maturity or
at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
covenant contained in any of Sections 10.02, 10.03, 10.04, 10.05 (but only if
such default occurs with respect to Section 10.05 upon the incurrence of any
Indebtedness), 10.06, 10.08 or 10.09; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Section 11.01 and including those contained in Section 10.05 or
Section 10.08 to the extent not covered in paragraph (c) of Section 11.01) and
such default is not remedied within 15 days after the earlier of (i) the Company
obtaining Knowledge of such default and (ii) the Company receiving written
notice of such default from any holder of a Note (any such written notice to be
identified as a "notice of default" and to refer specifically to this paragraph
(d) of Section 11.01); or
(e) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this Agreement or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or misleading in any material respect on the date as of which made;
or
(f) (i) the Company or any Subsidiary is in default (as principal or
as guarantor or other surety) in the payment of any principal of or premium or
make- whole amount or interest on any Indebtedness that is outstanding, or (ii)
the Company or any Subsidiary is in default, other than the default specified in
clause (i) above, in the performance of or compliance with any term of any
evidence of any Indebtedness or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a consequence of such
default or condition such Indebtedness has become, or has been declared (or one
or more Persons are entitled to declare such Indebtedness to be), due and
payable before its stated maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or continuation of any
event or condition (other than the passage of time or the right of the holder of
Indebtedness to convert such Indebtedness into equity interests), (x) the
Company or any Subsidiary has become obligated to purchase or repay Indebtedness
before its regular maturity or before its regularly scheduled dates of payment,
or (y) one or more Persons have
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the right to require the Company or any Subsidiary so to purchase or repay such
Indebtedness; or
(g) the Company or any Major Subsidiary (i) is generally not paying,
or admits in writing its inability to pay, its debts as they become due, (ii)
files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction enters
an order appointing, without consent by the Company or any of its Major
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Company or any of its
Major Subsidiaries, or any such petition shall be filed against the Company or
any of its Major Subsidiaries and such petition shall not be dismissed or stayed
within 60 days; or
(i) a final judgment or judgments (not subject to appeal) for the
payment of money aggregating in excess of $5,000,000 (or the equivalent thereof
in any other currency, and net of available insurance coverage) are rendered
against one or more of the Company and its Subsidiaries and which judgments are
not, within 60 days after entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within 60 days after the expiration of such stay;
or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a waiver of
such standards or extension of any amortization period is sought or granted
under section 412 of the Code, (ii) a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed with the PBGC or the PBGC
shall have instituted proceedings under ERISA section 4042 to terminate or
appoint a trustee to administer any Plan or the PBGC shall have notified the
Company or any ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit liabilities" (as
determined pursuant to Section 5.12(b) hereof) under all Plans, determined in
accordance with Title IV of ERISA, shall exceed $5,000,000, (iv) the Company or
any ERISA Affiliate shall
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have incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from
any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or
amends any employee welfare benefit plan that provides post-employment welfare
benefits in a manner that would increase the liability of the Company or any
Subsidiary thereunder; and any such event or events described in clauses (i)
through (vi) above, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect; or
(k) the Company shall cease to be a Subsidiary of S.A. Louis Dreyfus
et Cie; or
(l) the right, title or interest of the Licensee in the License
Documents or of Poloco in the Poloco Sublicense shall at any time be, or
threatened to be, terminated, impaired, declared invalid or altered in any
Material respect, except as specifically contemplated by PRL's acquisition of a
20% Equity Interest (as defined in the Master Agreement) pursuant to Article 4
of the Master Agreement, Sections 8.01(b), (c), or (d) or as disclosed in
Schedule 5.11 with respect to the Italian Sublicense, or any of the License
Documents shall fail to constitute the valid and binding agreement of any of the
parties thereto or the enforceability thereof shall be contested by any of the
parties thereto, except as disclosed in Schedule 5.11 with respect to the
Italian Sublicense.
As used in Section 11.01(j), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
ARTICLE 12
REMEDIES ON DEFAULT, ETC.
SECTION 12.01. Acceleration. (a) If an Event of Default with respect to
the Company described in paragraph (g) or (h) of Section 11.01(other than an
Event of Default described in clause (i) of paragraph (g) or described in clause
(vi) of paragraph (g) by virtue of the fact that such clause encompasses clause
(i) of paragraph (g)) shall occur, all the Notes then outstanding shall
automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
Required Holder or Holder(s) may at any time at its or their option, by notice
or
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notices to the Company, declare all the Notes then outstanding to be immediately
due and payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11.01 has occurred and is continuing, any holder or holders of Notes at
the time outstanding affected by such Event of Default may at any time, at its
or their option, by notice or notices to the Company, declare all the Notes held
by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.01,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined at such time in
respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are hereby waived.
The Company acknowledges, and the parties hereto agree, that each holder of a
Note has the right to maintain its investment in the Notes free from repayment
by the Company (except as herein specifically provided for) and that the
provision for payment of a Make-Whole Amount by the Company in the event that
the Notes are prepaid or are accelerated as a result of an Event of Default, is
intended to provide compensation for the deprivation of such right under such
circumstances.
SECTION 12.02. Other Remedies. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.01, the holder
of any Note at the time outstanding may:
(a) proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise;
and
(b) upon request by the Required Holders, the Company will exercise
its rights under the Registration Rights Agreement to which it is a party to
effect the registration of the LDNG shares held by the Company that are not so
registered.
SECTION 12.03. Rescission. At any time after any Notes have been
declared due and payable pursuant to clause (b) or (c) of Section 12.01, the
holders of not less than 50% in principal amount of the Notes then outstanding,
by written notice to the Company, may rescind and annul any such declaration and
its consequences if (a) the Company has paid all overdue interest on the Notes,
all
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principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue interest in respect of the
Notes, at the Default Rate, (b) all Events of Default and Defaults, other than
non-payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to Article 17 and (c)
no judgment or decree has been entered for the payment of any monies due
pursuant hereto or to the Notes. No rescission and annulment under this Section
12.03 will extend to or affect any subsequent Event of Default or Default or
impair any right consequent thereon.
SECTION 12.04. No Waivers or Election of Remedies, Expenses, Etc. No
course of dealing and no delay on the part of any holder of any Note in
exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof shall
be exclusive of any other right, power or remedy referred to herein or therein
or now or hereafter available at law, in equity, by statute or otherwise.
Without limiting the obligations of the Company under Section 15, the Company
will pay to the holder of each Note on demand such further amount as shall be
sufficient to cover all reasonable out-of-pocket costs and expenses of such
holder incurred in any enforcement or collection under this Article 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.
ARTICLE 13
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
SECTION 13.01. Registration of Notes. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The Notes shall be in registered (not bearer) form only,
without coupons. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to a transfer of a Note in
accordance with Section 13.02, the Person in whose name such Note shall be
registered shall be deemed and treated as the owner and holder thereof for all
purposes hereof, and the Company shall not be affected by any notice or
Knowledge to the contrary. The Company shall give to any holder of a Note, it
being understood that each such holder is an Institutional Investor, promptly
upon request therefor, a complete and correct copy of the names and addresses of
all registered holders of Notes.
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SECTION 13.02. Transfer of Notes. Upon surrender of any Note at the
address of the Company set forth in Article 18 for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a (i) written instrument of transfer duly executed by
the registered holder of such Note or his attorney duly authorized in writing
and accompanied by the address for notices of each transferee of such Note or
part thereof and (ii) a Transferee Letter, substantially in the form of Exhibit
3, duly executed by such transferee), the Company shall execute and deliver, at
the Company's expense (except as provided below), one or more new Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate principal
amount equal to the unpaid principal amount of the surrendered Note. Each such
new Note shall be payable to such Person as such holder may request and shall be
substantially in the form of Exhibit 1; provided that the Company may refuse to
accept any transfer of Notes which it reasonably concludes would be in violation
of the Securities Act or would cause the Company to be required to register
under or to be in violation of the 1940 Act or would be to a Person which is a
Competing Person. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid there on. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes. Notes
shall not be transferred in denominations of less than $100,000, provided that
if necessary to enable the registration of transfer by a holder of its entire
holding of Notes, one Note may be in a denomination of less than $100,000. Any
transferee, by its acceptance of a Note registered in its name (or the name of
its nominee), shall be deemed to have made the representations set forth in
Section 6.02.
SECTION 13.03. Replacement of Notes. Upon receipt by the Company of
evidence reasonably satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any Note (which evidence shall be a certificate
from the holder of such Note of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a nominee
for, an original Purchaser or another holder of a Note with a minimum net worth
of at least $10,000,000, such Person's own unsecured agreement of indemnity
shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
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the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the most recent date to which interest
shall have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest shall
have been paid thereon.
ARTICLE 14
PAYMENTS ON NOTES
SECTION 14.01. Place of Payment. Subject to Section 14.02, payments of
principal, Make-Whole Amount or Modified Make-Whole Amount, if any, and interest
becoming due and payable on the Notes shall be made in Wilmington, Delaware at
the principal office of the Company in such jurisdiction. The Company may at any
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
SECTION 14.02. Home Office Payment. So long as you or your nominee
shall be the holder of any Note, and notwithstanding anything contained in
Section 14.01 or in such Note to the contrary, the Company will pay all sums
becoming due on such Note for principal, Make-Whole Amount or Modified
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.01. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.02. The Company will afford the
benefits of this Section 14.02 to any Institutional Investor that is a
transferee of any Note purchased by you under this Agreement and that has made
the same agreement relating to such Note as you have made in this Section 14.02.
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ARTICLE 15
EXPENSES
SECTION 15.01. Transaction Expenses. Whether or not the transactions
contemplated hereby are consummated, the Company will pay the reasonable
out-of-pocket costs and expenses (including reasonable attorneys' fees of a
special counsel and, if reasonably required, local or other counsel) incurred by
you and each Other Purchaser or holder of a Note in connection with such
transactions and in connection with any amendments, waivers or consents under or
in respect of this Agreement or the Notes (whether or not such amendment, waiver
or consent becomes effective), including, without limitation: (a) the reasonable
costs and expenses incurred in enforcing or defending (or determining whether or
how to enforce or defend) any rights under this Agreement or the Notes or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with this Agreement or the Notes, or by reason of
being a holder of any Note, and (b) the reasonable costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any work-out
or restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save you and each other holder of a Note harmless
from, all claims in respect of any fees, costs or expenses if any, of brokers
and finders (other than those retained by you).
SECTION 15.02. Survival. The obligations of the Company under this
Section 15.02 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the Notes, and the
termination of this Agreement.
ARTICLE 16
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes embody the
entire
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agreement and understanding between you and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
ARTICLE 17
AMENDMENT AND WAIVER
SECTION 17.01. Requirements. This Agreement and the Notes may be
amended, and the observance of any term hereof or of the Notes may be waived
(either retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no amendment or
waiver of any of the provisions of Article 1, 2, 3, 4, 5, 6 or 21 hereof, or any
defined term (as it is used therein), will be effective as to you unless
consented to by you in writing, and (b) no such amendment or waiver may, without
the written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Article 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount or Modified Make-Whole Amount on, the
Notes, (ii) change the percentage of the principal amount of the Notes the
holders of which are required to consent to any such amendment or waiver, or
(iii) amend any of Articles 8, 12, 17 or 20 or Sections 11.01(a) and 11.01(b).
SECTION 17.02. Solicitation of Holders of Notes. (a) Solicitation. The
Company will provide each holder of the Notes (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such holder to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The Company
will deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Article 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
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SECTION 17.03. Binding Effect, Etc. Any amendment or waiver consented
to as provided in this Article 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
without regard to whether such Note has been marked to indicate such amendment
or waiver. No such amendment or waiver will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or waived
or impair any right consequent thereon. No course of dealing between the Company
and the holder of any Note nor any delay in exercising any rights hereunder or
under any Note shall operate as a waiver of any rights of any holder of such
Note. As used herein, the term "THIS AGREEMENT" and references thereto shall
mean this Agreement as it may from time to time be amended or supplemented.
SECTION 17.04. Notes Held by Company, Etc. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
ARTICLE 18
NOTICES
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by hand delivery, or (c) by a recognized overnight
delivery service (with charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address specified
for such communications in Schedule A, or at such other address as you
or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such address
as such other holder shall have specified to the Company in writing, or
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(iii) if to the Company, to: L.D. Fashions Holdings Corp., 3411
Silverside Road, Suite 210E Baynard Building, Wilmington, DE
19810-4808, Attention: Treasurer, Fax: (302) 477-1561, or at such other
address as the Company shall have specified to the holder of each Note
in writing.
Notices under this Article 18 will be deemed given only when actually
received.
ARTICLE 19
REPRODUCTION OF DOCUMENTS
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by you at the Closing (except the Notes
themselves) and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Article 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
ARTICLE 20
CONFIDENTIAL INFORMATION
For the purposes of this Article 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
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no act or omission by you or any person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.01 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your financial
advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Article 20, (iii) any other holder of any Note, (iv) any Institutional Investor
which is not a Competing Person to which you sell or offer to sell such Note or
any part thereof or any participation therein (if such Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Article 20), (v) any Person from which you offer to purchase
any security of the Company (if such Person has agreed in writing prior to its
receipt of such Confidential Information to be bound by the provisions of this
Article 20), (vi) any federal or state regulatory authority having jurisdiction
over you, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about your investment portfolio or (viii) any other Person
to which such delivery or disclosure may be necessary or appropriate (w) to
effect compliance with any law, rule, regulation or order applicable to you, (x)
in response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Article 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Article 20.
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ARTICLE 21
SUBSTITUTION OF PURCHASER
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Article 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Article 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Article
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
ARTICLE 22
MISCELLANEOUS
SECTION 22.01. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the parties
hereto bind and inure to the benefit of their respective successors and assigns
(including, without limitation, any subsequent holder of a Note) whether so
expressed or not.
SECTION 22.02. Payments Due on Non-Business Days. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or Modified Make-Whole Amount or interest on any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day without including the additional days elapsed in the
computation of the interest payable on such next succeeding Business Day.
SECTION 22.03. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without in
validating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
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SECTION 22.04. Construction. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
SECTION 22.05. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies hereof, each signed by less than all, but together signed by
all, of the parties hereto.
SECTION 22.06. Governing Law. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of New York excluding choice-of-law principles of the law
of such State that would require the application of the laws of a jurisdiction
other than such State.
* * * * *
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If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
L.D. FASHIONS HOLDINGS CORP.
By:
--------------------------------
Name:
Title:
The foregoing is hereby agreed to as of
the date thereof.
[ADD PURCHASER SIGNATURE
BLOCKS]
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SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ADDITIONAL PURCHASER" is defined in Section 6.04.
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"ASSIGNMENT" means the Assignment and Assumption Agreement dated as of
December 12, 1997 among Poloco S.A., S.A. Louis Dreyfus et Cie. and the
Licensee.
"BUSINESS DAY" means (a) for the purposes of Section 8.06 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Wilmington, Delaware or New York, New York are
required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL RENTALS" means at the time of the determination thereof, the
amount at which the aggregate fixed rentals payable and to become payable under
all Capital Leases under which a Person is a lessee would, in accordance with
GAAP, be reflected as a liability on a balance sheet of such Person.
"CLOSING" is defined in Article 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
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"COMPANY" means L.D. Fashions Holdings Corp., a Delaware corporation.
"COMPETING PERSON" means, at any time,
(a) any Person that is engaged at such time in a principal line of
business
(i) which is substantially the same as, or substantially
similar to, any of the businesses in which the Company and its Subsidiaries are
then engaged, including without limitation, the Persons set forth in Exhibit 2
hereto (as such Exhibit may be supplemented from time to time by written notice
given to each holder of Notes pursuant to Section 10.01), or
(ii) in which the Company proposes to engage at such time if
the Company has taken substantial action to commence operations in such business
(including, without limitation, the retention of an independent consultant to
prepare a feasibility report with respect to such business or the retention of
an investment banking firm to find companies operating in such business that are
suitable acquisition candidates), provided that any such Person is listed in
Exhibit 2 hereto (as such Exhibit may be supplemented from time to time by
written notice given to each holder of Notes pursuant to Section 10.01),
(b) any Person whose ownership of Notes is deemed likely by the
Company, in its reasonable opinion, to have a Material Adverse Effect on the
conduct of any of the businesses referred to in the foregoing clause (a) or the
confidentiality of proprietary information related thereto, or
(c) any Person controlled by any Person referred to in the foregoing
clause (a) or (b) or from which information can be obtained, as a matter of
right, by any Person referred to in such clauses by virtue of an affiliate
relationship with such Person;
provided that the businesses referred to in the foregoing clause (a) shall not
include the business of trading or investing in fixed income securities.
Notwithstanding the foregoing, "Competing Person" shall not include any of the
Purchasers, or (A) any (1) Subsidiary or Affiliate of any Purchaser, (2)
insurance company, (3) bank or savings and loan association, (4) investment
company (unless such investment company is a Subsidiary of a Person identified
in any of the foregoing clauses (a) through (c), inclusive) or (5) pension plan
(unless such pension plan is managed by, or is primarily for the benefit of
employees of, a Person identified in any of the foregoing clauses (a) through
(c), inclusive) (collectively, the "INSTITUTIONAL INVESTORS"), the primary
businesses of which are any one or more of insurance, the investment of funds as
principal or on behalf of third parties, or the providing of other financial
services and (B) any broker, dealer or similar intermediary that has acquired
the Notes for resale to Institutional Investors.
"CONFIDENTIAL INFORMATION" is defined in Article 20.
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"CONSOLIDATED EBITDA" means for any period the sum of Consolidated Net
Income (Loss) for such period, plus, to the extent deducted in the determination
of such Consolidated Net Income (Loss), the consolidated amounts of
depreciation, amortization, provision for income taxes and Consolidated Interest
Expense, less, to the extent included in such Consolidated Net Income (Loss),
equity in the earnings of LDNG for such period (except to the extent paid in
dividends to the Company or a Subsidiary during such period).
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
expense (including interest expense attributable to Capital Leases) of the
Company and its Subsidiaries on a consolidated basis for such period.
"CONSOLIDATED NET INCOME/CONSOLIDATED NET LOSS" means, for any period,
the aggregate net income (or net loss) of the Company and its Subsidiaries,
taken as a whole, for such period, determined on a consolidated basis
eliminating intercompany items in accordance with GAAP, but excluding (a) any
extraordinary gains or losses, (b) any gains or losses arising from any
reappraisal of assets, (c) any earnings of any Person prior to its acquisition,
(d) any gain arising from the acquisition of any securities of any of the
Company or its Subsidiaries, and (e) any deferred or other credit representing
any excess of the equity in any Person acquired by the Company or any of its
Subsidiaries, at the date of the acquisition thereof, over the amount invested
in such Person.
"CONSOLIDATED NET WORTH" means the stockholders' equity as reflected on
the most recent consolidated balance sheet of the Company and its Subsidiaries,
taken as a whole, prepared in accordance with GAAP, as delivered pursuant to
Sections 7.01(a) and 7.01(b).
"CONSOLIDATED TOTAL ASSETS" means total consolidated assets of the
Company and its Subsidiaries, taken as a whole, as reported on the then most
recent annual or interim consolidated balance sheet of the Company and its
Subsidiaries, taken as a whole, prepared in accordance with GAAP, as delivered
pursuant to Section 7.01(a) and Section 7.01(b), and after deduction of
depreciation, amortization and all other properly deductible valuation reserves.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means that rate of interest that is 1% per annum above
the rate of interest stated in clause (a) of the first paragraph of the Notes.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materi-
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als into the environment, including but not limited to those related to
hazardous sub stances or wastes, air emissions and discharges to waste or public
systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"ERISA PLAN" is defined in Section 6.03.
"EVENT OF DEFAULT" is defined in Article 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FRENCH GAAP" means generally accepted accounting principles as in
effect from time to time in France.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means (a) the government of:
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GROUP" means S.A. Louis Dreyfus et Cie., together with its
Subsidiaries.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
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(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.01.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property), notwithstanding the fact that the
rights and remedies of the seller, lender or lessor under such
agreement in the event of default are limited to repossession or sale
of property;
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(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Rentals;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(f) Swaps of such Person other than the hedging arrangement
contemplated under Section 4.13; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof (other than trade
letters of credit, stand-by letters of credit, bid bonds, performance
bonds, or other Guaranties, none of which has been entered into or
delivered in connection with the borrowing of money or the obtaining of
advances).
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (g) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INSTITUTIONAL ACCREDITED INVESTOR" means any institution that is an
"accredited investor" within the meaning of Rule 501 of the Securities Act.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTERIM PERIOD" means each three-month period of the Company's fiscal
year.
"INVESTMENTS" means all investments, in cash or by transfer of property
made, directly or indirectly in any Person, whether by acquisition of shares of
capital stock, Indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
"ITALIAN SUBLICENSE" means the sublicense agreement granted by Poloco
to PRL Fashions of Europe/Italy Srl. currently under the Poloco Sublicense and,
as more fully
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described in Schedule 5.11., under which Poloco and PRL Fashions of Europe/Italy
Srl. are operating and the terms and conditions of which are essentially
reflected in a written Distribution Agreement dated as of January 1, 1988, as
amended by Amendment No. 1 dated October 6, 1992 (as amended, the "DISTRIBUTION
AGREEMENT") and executed by Poloco (or its predecessor) and PRL Fashions of
Europe/Italy Srl (or its predecessor).
"KNOWLEDGE" means in respect of any Person actual knowledge and in
respect of the Company or any of its Subsidiaries shall mean actual knowledge of
the Senior Officers of the Company.
"LDNG" means Louis Dreyfus Natural Gas Corp., an Oklahoma corporation.
"LICENSE" means the License Agreement, together with the Assignment,
together with the Poloco Sublicense, together with the Italian Sublicense,
together with the portions of the 2002 Wholesale License assigned to Louis
Dreyfus Fashions Corp.
under the Assignment.
"LICENSE AGREEMENT" means the Second Amended and Restated License
Agreement dated as of October 1, 1996 between The Polo/Lauren Company, L.P. and
Poloco S.A.
"LICENSE DOCUMENTS" means the Master Agreement, the License Agreement,
the Assignment, the Poloco Sublicense, the Italian Sublicense and the portions
of the 2002 Wholesale License assigned to Louis Dreyfus Fashions Corp. under the
Assignment.
"LICENSEE" means Louis Dreyfus Fashions Corp.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAJOR SUBSIDIARY" means the Licensee and any other Subsidiary of the
Company the contribution of which to Consolidated Net Worth equals or exceeds
10% or more thereof.
"MAKE-WHOLE AMOUNT" is defined in Section 8.06.
"MASTER AGREEMENT" means the Master Agreement dated as of March 25,
1997 between PRL and S.A. Louis Dreyfus et Cie.
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"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, condition (financial or otherwise), assets or
properties of the Company and its Subsidiaries taken as a whole, or (b) the
ability of the Company to perform its obligations under this Agreement and the
Notes, or (c) the validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.03.
"MODIFIED MAKE-WHOLE AMOUNT" is defined in Section 8.06.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NAIC ANNUAL STATEMENT" is defined in Section 6.03.
"NOTES" is defined in Article 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Article 2.
"OTHER PURCHASERS" is defined in Article 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"POLOCO, S.A." means Poloco, S.A., a French corporation.
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"POLOCO SUBLICENSE" means the License Agreement dated as of December
31, 1997 between Poloco, S.A. and Louis Dreyfus Fashions Corp., issued by Louis
Dreyfus Fashions Corp. to Poloco under the License and as amended by Amendment
No. 1 dated as of May 4, 1998.
"PREFERRED STOCK" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PREPAYMENT PROCEDURE" means, upon the occurrence of a prepayment event
pursuant to Section 8.01(b), (c) or (d) or Section 10.03(e) the following
procedure: upon the occurrence of any such event, the Company will, within two
(2) Business Days, send written notice thereof (together with a description
thereof in reasonable detail) to each holder of Notes by facsimile transmission
(confirmed by a copy thereof sent via an overnight courier of national
reputation on the date that the facsimile transmission is sent) and,
simultaneously with the sending of such written notice, give telephonic advice
of such event to an investment officer or other similar representative or agent
of each such holder listed in the Company's register at the telephone number
specified therein, or to such other Person at such other telephone number as any
holder of a Note may specify to the Company in writing. Such facsimile
transmission shall be made to all holders of Notes on the same day. Such written
notice shall contain, and such written notice shall constitute, an irrevocable
offer to prepay, at the election of each holder (except in the case of Section
8.01(b), in which case prepayment shall be mandatory and not subject to refusal
by any holder of a Note), all, or, if contemplated in the relevant Section, any
portion, of the principal amount of Notes held by such holder, together with
accrued interest thereon and any applicable Make-Whole Amount or Modified
Make-Whole Amount, on a date specified in such notice (the "PREPAYMENT DATE")
that is not less than thirty (30) days and not more than sixty (60) days after
the date of such notice. If the Prepayment Date shall not be specified in such
notice, the Prepayment Date shall be the thirtieth (30th) day after the date the
facsimile transmission is sent by the Company. Such notice shall include a
certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amount or Modified Make-Whole Amount as of the specified Prepayment
Date. If such notice constitutes an offer to prepay the then outstanding
principal amount of the Notes, together with accrued interest thereon and
together with the Make-Whole Amount, and if any holder of a Note does not
respond to such offer, such holder of a Note shall be deemed to have accepted
such offer. In any other case, if any holder of a Note does not respond to such
offer, such holder of a Note shall be deemed to have rejected such offer. Two
Business Days prior to such prepayment, the Company shall deliver to each holder
of Notes a certificate of a Senior Financial Officer specifying the calculation
of such Make-Whole Amount or Modified Make-Whole Amount as of the specified
prepayment date.
"PRESCRIBED ACCOUNTS" means the audited accounts of Poloco, S.A. for
the fiscal years ended December 31, 1994, 1995, 1996 and 1997.
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"PRL" means Polo Ralph Lauren, L.P., a Delaware limited partnership.
"PRL FIXED PRICE BUY-OUT OPTION" means the Fixed-Price Buy-Out Option,
as defined in the Master Agreement.
"PRL PURCHASE OPTION 2002" means the Final Buy-Out Option or the 2002
Buy-Out Option, each as defined in the Master Agreement.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"PTE" is defined in Section 6.03.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"RESERVES AND LIABILITIES" is defined in Section 6.03.
"REQUIRED HOLDERS" means, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means, at any time, any investment made by the
Company or any of its Subsidiaries other than the following:
(a) Investments of the Company or any of its Subsidiaries
owned on the date of the sale of the Notes;
(b) Investments in commercial paper of corporations maturing
within 270 days from the date of purchase thereof by the Company or any
of its Subsidiaries which, at the time of acquisition by the Company or
the relevant Subsidiary is accorded the highest rating by Fitch IBCA,
Inc., Duff & Phelps Credit Rating Co., Moody's Investors Service, Inc.,
Standard & Poor's Corporation or other nationally recognized credit
rating agency of similar standing;
(c) Investments in direct obligations of the governments of
the United States or any agency or instrumentality of the governments
of the United States maturing no later than the due date of the Notes
issued hereunder, the payment or guarantee of which constitutes a full
faith and credit obligation of the governments of the United States;
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(d) Investments in certificates of deposit maturing no later
than the due date of the Notes issued hereunder issued by a bank or
trust company organized under the laws of the United States or any
state or subdivision of either, having capital, surplus and undivided
profits aggregating at least $100,000,000 (or the equivalent thereof in
any other currency) and whose long-term unsecured debt obligations are
at the time of the Investment by the Company rated "A-" or better by
Fitch IBCA, Inc., "A-" or better by Duff & Phelps Credit Rating Co.,
"A3" or better by Moody's Investors Service, Inc. or "A-" or better by
Standard & Poor's Corporation;
(e) loans or advances, not exceeding $1,000,000 (or the
equivalent thereof in any other currency) in the aggregate, to present
or former officers, senior officers and employees of the Company or any
of its Subsidiaries (exclusive of any such loans or advances
outstanding on the date of the sale of the Notes);
(f) Investments by the Company or any of its Subsidiaries in
receivables arising from the sale of goods and services in the ordinary
course of business of the Company or the relevant Subsidiary or in
other property used or arising from the ordinary course of business of
the Company or the relevant Subsidiary;
(g) Investments maturing no later than the due date of the
Notes issued hereunder in mutual funds or investment companies whose
investments are limited to those permitted by paragraphs (b), (c) and
(d) above;
(h) Investments maturing no later than the due date of the
Notes issued hereunder in tax-exempt municipal bonds which at the time
of acquisition are accorded a rating of (1) "F-1" or better by Fitch
IBCA, Inc., "D-1" or better by Duff & Phelps Credit Rating Co., "MIG-1"
or better by Moody's Investors Service, Inc., "SAO PAULO-1" or better
by Standard and Poor's Corporation, or an equivalent rating by any
other nationally recognized credit rating agency or similar standing or
(2) "A" or better by Fitch IBCA, Inc., "A" or better by Duff & Phelps
Credit Rating Co., "A2" or better by Moody's Investors Service, Inc.,
"A" or better by Standard and Poor's Corporation or an equivalent
rating by any other nationally recognized credit rating agency of
similar standing;
(i) Investments in (1) publicly-traded debt securities, either
(a) accorded a rating of "F-2" or better by Fitch IBCA, Inc., "D-2" or
better by Duff & Phelps Credit Rating Co., "P-2" or better by Moody's
Investors Service, Inc., "A-2" or better by Standard and Poor's
Corporation. or an equivalent rating by any other nationally recognized
credit rating agency of similar standing or (b) accorded a rating of
"A" or better by Fitch IBCA, Inc., "A" or better by Duff & Phelps
Credit Rating Co., "A2" or better by Moody's Investors Service, Inc.,
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<PAGE> 63
"A" or better by Standard and Poor's Corporation, or an equivalent
rating by any other nationally recognized credit rating agency of
similar standing or (2) preferred stock, accorded a rating of "A" or
better by Fitch IBCA, Inc., "A" or better by Duff & Phelps Credit
Rating Co., "A2" or better by Moody's Investors Service, Inc., "A" or
better by Standard and Poor's Corporation, or an equivalent rating by
any other nationally recognized credit rating agency of similar
standing; provided that in the case of both clauses (1) and (2), such
investments must be in corporations organized under the laws of the
United States or any State thereof; provided, however, that at the time
of acquisition of any Investment permitted by this paragraph (i) and
after giving effect thereto, (1) the aggregate value for such
outstanding Investments in any one corporation shall not exceed the
greater of (a) $500,000 or (b) 5% of the aggregate value of all such
outstanding Investments described in this clause (i), and (2) the
aggregate value of all such then outstanding Investments permitted by
this clause (i) shall not exceed 30% of the aggregate value for all
Investments described in this clause (i) and in clauses (b), (c), (d),
(g) and (h) above; and
(j) Investments in additional shares of LDNG shares and
related repurchase contracts issued by a member of the Group.
For purposes of this definition (including, without limitation, the
references to value in the foregoing paragraphs (a) through (j) all Investments
shall be valued at the original cost thereof, without allowance for any
subsequent write-offs or market value appreciation or depreciation therein, but
less any amount repaid or recovered on account of capital or principal. At any
time when any Person becomes a Subsidiary of the Company, the original cost of
all Investments of such Person shall be deemed to be the fair market value
thereof on the date such Person becomes a Subsidiary of the Company.
"SALES THRESHOLD" means the sales thresholds for certain periods ending
on September 30, 2002 specified in the Master Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SENIOR OFFICER" means any member of the board of directors, the
president, the Senior Financial Officers and any vice president of the Company.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns more than 50% of the voting
stock or interests of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or
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such Person and one or more of its Subsidiaries (unless such partnership can and
does ordinarily take major business actions without the prior approval of such
Person or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Company.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"2002 WHOLESALE LICENSE" means the license which PRL is obligated under
the Master Agreement to grant subject to Poloco's satisfying the Sales
Threshold, and which will commence on October 1, 2002 and be substantially in
the form of Exhibit 2.3(b) to the Master Agreement, styled as a license
agreement between The Polo/Lauren Company, L.P. and Poloco dated as of October
1, 2002.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary 100% of
all of the equity interests (except directors' qualifying shares) and voting
interests of which are owned by any one or more of the Company and the Company's
other Wholly-Owned Subsidiaries at such time.
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<PAGE> 1
Exhibit 8
---------
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and General Electric Capital Life Assurance
Company of New York.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 2
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
GENERAL ELECTRIC CAPITAL LIFE
ASSURANCE COMPANY OF NEW
YORK
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
91
<PAGE> 4
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Allstate Life Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 5
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ALLSTATE LIFE INSURANCE
COMPANY
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
94
<PAGE> 7
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Allstate Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 8
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ALLSTATE INSURANCE COMPANY
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
97
<PAGE> 10
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Morgan Guaranty Trust Company of New York, as
Trustee for a Commingled Pension Trust Fund.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 11
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Trustee for a Commingled
Pension Trust Fund
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
100
<PAGE> 13
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and J. P. Morgan Investment Management Inc., as
Investment Manager for Various Institutional Investors.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 14
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
J.P. MORGAN INVESTMENT
MANAGEMENT INC., as Investment
Manager for Various Institutional
Investors
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
103
<PAGE> 16
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and The Lincoln National Life Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 17
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: Lincoln Investment Management, Inc.,
Its Attorney-in-Fact
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
106
<PAGE> 19
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Lincoln National Life Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE> 20
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: Lincoln Investment Management, Inc.,
Its Attorney-in-Fact
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
109
<PAGE> 22
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Lincoln Life & Annuity Company of New York.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
LINCOLN LIFE & ANNUITY COMPANY
OF NEW YORK
By: Lincoln Investment Management, Inc.,
Its Attorney-in-Fact
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
112
<PAGE> 25
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Lincoln National Health & Casualty Insurance
Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
113
<PAGE> 26
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
114
<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
LINCOLN NATIONAL HEALTH
CASUALTY INSURANCE COMPANY
By: Lincoln Investment Management, Inc.,
Its Attorney-in-Fact
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
115
<PAGE> 28
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and The Penn Mutual Life Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
116
<PAGE> 29
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
117
<PAGE> 30
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
THE PENN MUTUAL LIFE INSURANCE
COMPANY
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
118
<PAGE> 31
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and Anchor National Life Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
119
<PAGE> 32
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
120
<PAGE> 33
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
ANCHOR NATIONAL LIFE INSURANCE
COMPANY
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
121
<PAGE> 34
EXECUTION COPY
AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENT
AMENDMENT dated as of May 5, 1998 to the Note Purchase Agreement dated
as of May 5, 1996 (as may be amended from time to time, the "AGREEMENT") among
L. D. Fashions Holdings Corp. and SunAmerica Life Insurance Company.
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendments. (a) Schedule B of the Agreement is amended by
the addition of the following new defined term in appropriate alphabetical
order:
"HEDGING ARRANGEMENT" means the hedging transaction entered
into by the Company in accordance with Section 4.13 of this Agreement.
(b) The definition of "Consolidated Net Worth" in Schedule B is amended
by the addition of the following:
"Notwithstanding the foregoing, Consolidated Net Worth shall be
calculated to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
(c) The definition of "Consolidated EBITDA" in Schedule B is amended by
the addition of the following:
"Notwithstanding the foregoing, Consolidated EBITDA shall be calculated
to eliminate any unrealized gains and losses arising from the Hedging
Arrangement."
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
122
<PAGE> 35
SECTION 4. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
SECTION 5. Effectiveness. This Amendment shall become effective as of
the date hereof when the special counsel to the Purchasers shall have received
from each of the Company and the Required Holders a counterpart hereof signed by
such party or facsimile or other written confirmation (in form satisfactory to
the special counsel to the Purchasers) that such party has signed a counterpart
hereof.
123
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
SUNAMERICA LIFE INSURANCE
COMPANY
By:________________________
Name:
Title:
L. D. FASHIONS HOLDINGS CORP.
By:_______________________
Name:
Title:
124
<PAGE> 1
Exhibit 9
---------
LOUIS DREYFUS NATURAL GAS CORP.
14000 Quail Springs Parkway, Suite 600
Oklahoma City, Oklahoma 73134
December 22, 1993
S.A. Louis Dreyfus et Cie
87 Avenue de la Grande Armee
75782 Paris, France
Louis Dreyfus Natural Gas Holdings Corp.
10 Westport Road
Wilton, CT 06897
Re: Registration Rights Agreement dated as of November 9, 1993
by and between Louis Dreyfus Natural Gas Corp. and Louis
Dreyfus Natural Gas Holdings Corp. (the "Registration
Rights Agreement")
Gentlemen:
Louis Dreyfus Natural Gas Corp. (the "Company") has been
advised that Louis Dreyfus Natural Gas Holdings Corp. ("LDNGHC") desires to
transfer up to 20,000,000 shares of Common Stock of the Company (the "Shares")
to S.A. Louis Dreyfus et Cie ("S.A. Louis Dreyfus"). The Shares are covered by
the Registration Rights Agreement and are considered to be "Restricted Stock"
for purposes thereof. In connection with such transfer, LDNGHC desires to assign
to S.A. Louis Dreyfus its rights and responsibilities under the Registration
Rights Agreement with respect to the Shares.
The Company has also been advised that S.A. Louis Dreyfus
desires following such transfer to pledge all or a portion of the Shares to
Societe Generale and Banque Nationale de Paris (the "Pledgee") as security in
connection with a loan transaction and to assign to the Pledgee its rights and
responsibilities under the Registration Rights Agreement with respect to the
Shares.
The Company hereby consents to the above referenced
assignments of rights and responsibilities under the Registration Rights
Agreement and affirms that, following the respective assignments and subject to
the limitations set forth below, S.A. Louis Dreyfus and the Pledgee shall each
be considered a "Holder" for all purposes under the Registration Rights
Agreement with respect to such of the Shares as are owned by or pledged to them,
as the case may be. It is expressly understood that such consent is provided for
purposes of Section 10 of the Registration Rights Agreement only and that the
ability of S.A. Louis Dreyfus and the Pledgee to exercise any rights under the
Registration Rights Agreement that are assigned to either of them shall be
subject to any
125
<PAGE> 2
S.A. Louis Dreyfus et Cie
Louis Dreyfus National Gas
Holdings Corp.
December 22, 1993
Page 2
limitations or restrictions contained in any agreements entered into, or to be
entered into, between S.A. Louis Dreyfus and the Pledge.
Furthermore, LDNGHC desires to subordinate certain of its
rights under the Registration Rights Agreement to those of S.A. Louis Dreyfus
and the Pledgee. LDNGHC and the Company hereby agree that for purposes of any
demand or piggyback registration which excludes shares of "Restricted Stock" for
which registration is properly requested, the principle of pro rata allocation
among requesting Holders set forth in Sections 2(B) and 3 of the Registration
Rights Agreement shall be modified as follows: S.A. Louis Dreyfus and the
Pledgee shall be entitled to include any of the Shares owned by or pledged to
them (for which registration was properly requested and which would otherwise be
excluded from the proposed registration) in place of all or a portion of the
shares which LDNGHC would otherwise have been entitled to include in the
registration.
The agreements contained in the preceding paragraph shall have
the force and effect of, and shall constitute, an amendment to the Registration
Rights Agreement and shall be binding on the successors and assigns of LDNGHC
and the Company. However, the benefits conferred by the agreements contained in
the preceding paragraph shall be specific to S.A. Louis Dreyfus et Cie and the
Pledgee and may not be transferred or assigned by them without the prior written
consent of LDNGHC and the Company.
The agreements contained herein shall not be construed to
modify or effect the terms of that certain Lock Up Agreement dated November 11,
1993 executed by LDNGHC and S. A. Louis Dreyfus in favor of the underwriters in
connection with the initial public offering of the Company's common stock.
If the foregoing meets with the approval and agreement of
LDNGHC and S.A. Louis Dreyfus et Cie, please so indicate by signing in the space
provided below.
LOUIS DREYFUS NATURAL GAS CORP.
By:________________________________
Name:______________________________
Title:_____________________________
126
<PAGE> 3
S.A. Louis Dreyfus et Cie
Louis Dreyfus National Gas
Holdings Corp.
December 22, 1993
Page 3
Agreed to and accepted as of the
____ day of __________, 1993.
LOUIS DREYFUS NATURAL GAS HOLDINGS CORP.
S. A. LOUIS DREYFUS ET CIE
By:_______________________________
Name:_____________________________
Title:____________________________
127
<PAGE> 1
Exhibit 10
----------
LOUIS DREYFUS NATURAL GAS CORP.
14000 Quail Springs Parkway, Suite 600
Oklahoma City, Oklahoma 73134
December 20, 1994
S.A. Louis Dreyfus et Cie
87 Avenue de la Grande Armee
75782 Paris, France
Louis Dreyfus Natural Gas Holdings Corp.
Brandywood Office Plaza
2500 Grubb Road, Suite #232
Wilmington, DE 19810-4706
Re: Registration Rights Agreement dated as of November 9,
1993 by and between Louis Dreyfus Natural Gas Corp. and
Louis Dreyfus Natural Gas Holdings Corp. (the
"Registration Rights Agreement") Gentlemen:
Louis Dreyfus Natural Gas Corp. (the "Company") has been
advised that Louis Dreyfus Natural Gas Holdings Corp. ("LDNGHC") has transferred
20,000,000 shares of Common Stock of the Company (the "Shares") to S.A. Louis
Dreyfus et Cie ("SALD"). The Shares are covered by the Registration Rights
Agreement and are considered to be "Restricted Stock" for purposes thereof. In
connection with such transfer, LDNGHC desires to assign to SALD its rights and
responsibilities under the Registration Rights Agreement with respect to the
Shares.
The Company has also been advised that SALD desires following
such transfer to pledge all or a portion of the Shares to Societe Generale, as
Agent, for Societe Generale, Banque Nationale de Paris, Credit Lyonnais, Caisse
Centrale des Banques Populaires, Banque Francaise du Commerce Exterieur, Caisse
Nationale de Credit Agricole, Credit Industriel et Commercial Credit National
and Banque Indosuez (the "Pledgee") as security in connection with a loan
transaction and to assign to the Pledgee its rights and responsibilities under
the Registration Rights Agreement with respect to the Shares.
The Company hereby consents to the above referenced
assignments of rights and responsibilities under the Registration Rights
Agreement and affirms that, following the respective assignments and subject to
the limitations set forth below, SALD and the Pledgee shall each be considered a
"Holder" for all purposes under the Registration Rights Agreement with respect
to such of the Shares as are owned by or pledged to them, as the case may be. It
is expressly understood that such consent is provided for purposes of Section 10
of the Registration Rights Agreement only and that the ability of SALD and the
Pledgee to exercise any rights under the Registration Rights
128
<PAGE> 2
S.A. Louis Dreyfus et Cie
Louis Dreyfus National Gas Holdings Corp.
December 20, 1994
Page 2
Agreement that are assigned to either of them shall be subject to any
limitations or restrictions contain in any agreements entered into, or to be
entered into, between SALD and the Pledgee.
Furthermore, LDNGHC desires to subordinate certain of its
rights under the Registration Rights Agreement to those of SALD or any Pledgee
to which SALD has assigned its rights and responsibilities under the
Registration Rights Agreement. LDNGHC and the Company hereby agree that for
purposes of any demand or piggyback registration which excludes shares of
"Restricted Stock" for which registration is properly requested, the principle
of pro rata allocation among requesting Holders set forth in Section 2(b) and 3
of the Registration Rights Agreement shall be modified as follows: SALD and any
such pledgee shall be entitled to include any of the Shares owned by or pledged
by them (for which registration was properly requested and which would otherwise
be excluded from the proposed registration) in place of all or a portion of the
shares which LDNGHC would otherwise have been entitled to include in the
registration.
The Company agrees that (a) upon the effectiveness of the
registration referred to above or (b) an opinion of counsel for the Pledgee that
the Shares may be disposed of consistent with the provisions of Rule 144 under
the Securities Act of 1933, it will promptly instruct the Company's transfer
agent to process any transfer requested by the Pledgee and issue clean,
unlegended certificates to the Transferee or Transferees.
The agreements contained in the preceding paragraph shall have
the force and effect of, and shall constitute, an amendment to the Registration
Rights Agreement and shall be binding on the successors and assigns of LDNGHC
and the Company. However, the benefits conferred by the agreements contained in
the preceding paragraph shall be specific to SALD and the Pledgee and may not be
transferred or assigned by them without the prior written consent of LDNGHC and
the Company.
If the foregoing meets with the approval and agreement of
LDNGHC and SALD, please so indicate by signing in the space provided below.
LOUIS DREYFUS NATURAL GAS CORP.
By:________________________________
Name: Mark E. Monroe
______________________________
Title: Chief Operating Officer
_____________________________
129
<PAGE> 3
S.A. Louis Dreyfus et Cie
Louis Dreyfus National Gas Holdings Corp.
December 20, 1994
Page 3
Agreed to and accepted as of the
23rd day of December, 1994.
LOUIS DREYFUS NATURAL GAS HOLDINGS CORP.
By:_______________________________
Name:_____________________________
Title:____________________________
S.A. LOUIS DREYFUS ET CIE
By:_______________________________
Name: Jean-Hubert PIETRA
_____________________________
Title: Directeur General
____________________________
130
<PAGE> 1
Exhibit 11
----------
December 27, 1995
S.A. Louis Dreyfus et Cie
87 Avenue de la Grande Armee
75782 Paris
France
Louis Dreyfus Natural Gas Holdings Corp.
Baynard Bldg. Suite 210E
3411 Silverside Road
Wilmington, DE 19810-4808
Re: Registration Rights Agreement dated as of November 9,
1993 by and between Louis Dreyfus Natural Gas Corp. and
Louis Dreyfus Natural Gas Holdings Corp. (the
"Registration Rights Agreement")
Gentlemen:
Louis Dreyfus Natural Gas Corp. (the "Company") has been
advised that Louis Dreyfus Natural Gas Holdings Corp. ("LDNGHC") has transferred
20,000,000 shares of Common Stock of the Company (the "Shares") to S.A. Louis
Dreyfus et Cie ("SALD"). The Shares are covered by the Registration Rights
Agreement and are considered to be "Restricted Stock" for purposes thereof. In
connection with such transfer, LDNGHC desires to assign to SALD its rights and
responsibilities under the Registration Rights Agreement with respect to the
Shares.
The Company has also been advised that SALD (a) has pledged
all or a portion of the Shares to Societe Generale, as Agent for Societe
Generale, Banque Nationale de Paris, Credit Lyonnais, Caisse Centrale des
Banques Populaires, Banque Francaise du Commerce Exterieur, Caisse Nationale de
Credit Agricole, Credit Industriel et Commercial, Credit National and Banque
Indosuez (the "First Pledgee") as security in connection with a loan transaction
and has assigned to the First Pledgee its rights arid responsibilities under the
Registration Rights Agreement with respect to the Shares and (b) desires further
to pledge all or a portion of the Shares to Societe Generale, as Agent, for
Societe Generale and Banque Nationale de Paris (the "Second Pledgee") as
security in connection with an additional loan transaction and to assign to the
Second Pledgee, subject to the rights of the First Pledgee, its rights and
responsibilities under the Registration Rights Agreement with respect to the
Shares.
The Company, by letter dated December 20, 1994, consented to
the assignment to the First Pledgee of the rights and responsibilities under the
Registration Rights Agreement and hereby confirms that consent; and the Company
hereby consents to the above referenced assignments to the Second Pledgee of
rights and responsibilities under the Registration Rights Agreement and affirms
that, following the respective assignments and subject to the limitations set
forth below, SALD, the First Pledgee and the Second Pledgee each shall each be
considered a "Holder" for all purposes under the Registration Rights Agreement
with respect to such of the Shares as are owned by or
131
<PAGE> 2
pledged to them, as the case may be. It is expressly understood that such
consent is provided for purposes of Section 10 of the Registration Rights
Agreement only and that the ability of the SALD and the First Pledgee and the
Second Pledgee to exercise any rights under the Registration Rights Agreement
that are assigned to either of them shall be subject to any limitations or
restrictions contained in any agreements entered into, or to be entered into,
between SALD and the First Pledgee and between SALD and the Second Pledgee,
respectively.
Furthermore, LDNGHC desires to subordinate certain of its
rights under the Registration Rights Agreement to those of SALD or any Pledgee
or Pledgees to which SALD has assigned its rights and responsibilities under the
Registration Rights Agreement. LDNGHC and the Company hereby agree that for
purposes of any demand or piggyback registration which excludes shares of
"Restricted Stock" for which registration is properly requested, the principle
of pro rata allocation among requesting Holders set forth in Section 2(b) and 3
of the Registration Rights Agreement shall be modified as follows: SALD and each
such Pledgee shall be entitled to include any of the Shares owned by or pledged
to them (for which registration was properly requested and which would otherwise
be excluded from the proposed registration) in place of all or a portion of the
shares which LDNGHC would otherwise have been entitled to include in the
registration, except that SALD shall not be entitled to include any of the
Shares owned by it in any registration so long as any of the Shares remains
pledged to either the First Pledgee or the Second Pledgee.
The Company agrees that (a) upon the effectiveness of the
registration referred to above or (b) the receipt of an opinion of counsel for
the First Pledgee or the Second Pledgee, whichever is applicable, that the
Shares may be disposed of consistent with the provisions of Rule 144 under the
Securities Act of 1933, it will promptly instruct the Company's transfer agent
to process any transfer requested by the First Pledgee or the Second Pledgee,
whichever is applicable, and issue clean, unlegended certificates to the
Transferee or Transferees.
The agreements contained in the preceding paragraph shall have
the force and effect of, and shall constitute an amendment to the Registration
Rights Agreement and shall be binding on The successors and assigns of LDNGHC
and the Company. However, the benefits conferred by the agreements contained in
the preceding paragraph shall be specific to SALD and the First Pledgee and the
Second Pledgee and may not be transferred or assigned by them without the prior
written consent of LDNGHC and the Company
132
<PAGE> 3
If the foregoing meets with the approval and agreement of
LDNGHC and SALD, please so indicate by signing in the space provided below.
LOUIS DREYFUS NATURAL GAS CORP.
By:________________________________
Name: Mark E. Monroe
______________________________
Title: Chief Operating Officer
_____________________________
Agreed to and accepted as of the ____ day of December, 1995.
LOUIS DREYFUS NATURAL GAS HOLDINGS CORP.
By:_______________________________
Name: Connie S. Linhart
Title: President & Treasurer
S.A. LOUIS DREYFUS ET CIE
By:_______________________________
Name:_____________________________
Title:____________________________
133
<PAGE> 4
LOUIS DREYFUS NATURAL GAS CORP.
SECRETARY'S CERTIFICATE
I, Kevin R. White, Secretary of Louis Dreyfus Natural Gas
Corp., an Oklahoman corporation ("LDNGC"), certify:
1. That for the period December 20, 1995 through and including
the date of this Certificate, Mark E. Monroe was, and he
continues to be, the Chief Operating Officer of LDNGC;
2. That in his capacity as Chief Operating Officer of LDNGC,
Mark E. Monroe is authorized by the Bylaws of LDNGC to sign
documents on behalf of LDNGC and, in that connection, he
had full authority to sign each of (a) the consent to the
assignment of rights and responsibilities under the
Registration Rights Agreement and (b) the consent to the
Subordinate Assignment and Assumption Agreement; and
3. That the signature below is his signature:
_________________________________
Mark E. Monroe
IN WITNESS WHEREOF, I have set my signature and affixed the
seal of the Corporation at Oklahoma City, Oklahoma, as of the 27th day of
December, 1995
_________________________________
Kevin R. White, Secretary
(Corporate Seal)
134
<PAGE> 5
Louis Dreyfus Natural Gas Corp. hereby consents to the
foregoing assignment and agrees that, subject to the terms of the foregoing
assignment, Societe Generale and Banque Nationale de Paris have all the rights
of Louis Dreyfus Natural Gas Holdings Corp. and S.A. Louis Dreyfus et Cie under
the Registration Rights Agreement referred to above insofar as such rights
relate to such of the Securities as are or become Priority Collateral and that,
subject to the terms of the foregoing assignment, Societe Generale, as Agent, on
behalf of itself and the other Secured Parties, may exercise all of such rights
as fully as if the Agent and the other Secured Parties were named therein as
parties thereto.
LOUIS DREYFUS NATURAL GAS CORP.
By:________________________________
Name: Mark E. Monroe
Title: Chief Operating Officer
135
<PAGE> 1
Exhibit 12
----------
May 1, 1998
L.D. Fashions Holdings Corp.
Baynard Bldg., Suite 210E
3411 Silverside Road
Wilmington, DE 19810-4808
Louis Dreyfus Natural Gas Holdings Corp.
Baynard Bldg., Suite 210E
3411 Silverside Road
Wilmington, DE 19810-4808
Re: Registration Rights Agreement (the "Registration Rights Agreement") dated
as of November 9, 1993 by and between Louis Dreyfus Natural Gas Corp. (the
"Company") and Louis Dreyfus Natural Gas Holdings Corp. ("LDNGH"), as
amended by a letter agreement (the "Amendment") dated December 27, 1995
among S.A. Louis Dreyfus et Cie ("SALD"), LDNGH and the Company relating
to the Common Shares of the Company that have not been registered under
the Securities Act of 1933 (the "Unregistered Shares").
Gentlemen:
The Company has been advised that nine million of the Unregistered Shares that
formerly were registered in LDNGH's name (the "Subject Shares") have been
transferred to and are registered in the name of L.D. Fashions Holdings Corp.
("Fashions"). In connection with that transfer, there have been assigned to
Fashions rights and responsibilities under the Registration Rights Agreement, as
amended by the Amendment (the "Amended Agreement"), with respect to the Subject
Shares. Fashions is an indirectly wholly-owned subsidiary of SALD and,
accordingly, is a permitted transferee of LDNGH's rights and obligations under
the Amended Agreement. Certain of the Unregistered Shares, not including the
Subject Shares, are subject to pledges (the "Pledges") made to certain banks
(the "Pledgees") by SALD, in whose name the Subject Shares had been registered.
By the Amendment, the Company consented to the Pledges and to the assignment to
the Pledgees of the rights and responsibilities under the Registration Rights
Agreement insofar as they relate to the Unregistered Shares that are subject to
the Pledges (the "Pledged Shares"). The Company (a) acknowledges the assignment
to Fashions of the rights and responsibilities under the Amended Agreement
insofar as they relate to the Subject Shares, subject to the limitations set
forth below and (b) affirms that Fashions shall be considered a "Holder" for all
purposes under the Amended Agreement with respect to the Subject Shares. The
Company's acknowledgment and affirmation is provided for purposes of Section 10
of the Amended Agreement only and upon the condition that Fashions' rights to
exercise any rights under the Amended Agreement that are assigned to it shall be
subject to any limitations and restrictions contained in the Amended Agreement.
136
<PAGE> 2
L. D. Fashions Corp.
Louis Dreyfus National Gas Holdings Corp.
May 1, 1998
Page 2
Under the Amendment, certain of the rights of LDNGH (as the transferee from
SALD, subject to the Pledge, of the Pledged Shares) under the Registration
Rights Agreement are subordinated to those of the Pledgees in certain
circumstances and, accordingly, as the transferee of the Subject Shares from
LDNGH, Fashions' rights under the Amended Agreement are subordinated to the same
extent. LDNGH desires further to subordinate certain of its rights under the
Amended Agreement to those of Fashions' as follows: If and to the extent that
LDNGH has rights to request registration of any of the Unregistered Shares under
the Amended Agreement, Fashions shall be entitled to include any of the Subject
Shares (for which it requests registration and which would otherwise be excluded
from the proposed registration) in place of all or a portion of the shares which
LDNGH would otherwise have been entitled to include in the registration.
The agreements contained in the preceding paragraph shall be binding on the
successors and assigns of LDNGH, Fashions and the Company.
If the foregoing meets with the approval and agreement of LDNGH and Fashions,
please so indicate by signing in the space provided below.
LOUIS DREYFUS NATURAL GAS CORP.
By:________________________________
Name:______________________________
Title:_____________________________
Agreed to and accepted as of the
2nd day of May, 1998.
LOUIS DREYFUS NATURAL GAS HOLDINGS CORP.
By:_______________________________
Name: Connie S. Linhart
Title: President & Treasurer
L. D. FASHIONS HOLDINGS CORP.
By:_______________________________
Name:_____________________________
Title:____________________________
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