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EXECUTION COPY
4,000,000 SHARES
LOUIS DREYFUS NATURAL GAS CORP.
COMMON STOCK
UNDERWRITING AGREEMENT
June 28, 2000
LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
DAIN RAUSCHER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
Louis Dreyfus Natural Gas Corp., a corporation organized
under the laws of Oklahoma (the "COMPANY") and L.D. Fashions Holdings Corp., a
corporation organized under the laws of Delaware (the "SELLING STOCKHOLDER"),
which is an indirect subsidiary of S.A. Louis Dreyfus et Cie (the "PARENT"),
propose to sell an aggregate of 4,000,000 shares (the "FIRM STOCK") of the
Company's Common Stock, par value $.01 per share (the "COMMON STOCK"). Of the
4,000,000 shares of Firm Stock, 2,400,000 are being sold by the Company and
1,600,000 by the Selling Stockholder. In addition, the Company proposes to
grant to the Underwriters named in Schedule 1 hereto (the "UNDERWRITERS") an
option to purchase up to an aggregate of 600,000 additional shares of the
Common Stock on the terms and for the purposes set forth in Section 3 (the
"OPTION STOCK"). The Firm Stock and the Option Stock, if purchased, are
hereinafter collectively called the "STOCK". This is to confirm the agreement
concerning the purchase of the Stock from the Company and the Selling
Stockholder by the Underwriters.
SECTION 1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
COMPANY. The Company represents, warrants and agrees that:
(a) A registration statement on Form S-3
with respect to the Stock has (i) been prepared by the
Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "SECURITIES ACT"),
and the rules and regulations (the "RULES AND REGULATIONS")
of the Securities and Exchange Commission (the "COMMISSION")
thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the
Securities Act. Copies of such registration statement and
each of the amendments thereto have been delivered by the
Company to you as the representatives (the "REPRESENTATIVES")
of the Underwriters. As used in this Agreement, "EFFECTIVE
TIME" means the date and
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the time as of which such registration statement, or the most
recent post-effective amendment thereto, if any, was declared
effective by the Commission; "EFFECTIVE DATE" means the date
of the Effective Time; "PRELIMINARY PROSPECTUS" means each
prospectus included in such registration statement, or
amendments thereof, before it became effective under the
Securities Act and any prospectus filed with the Commission
by the Company with the consent of the Representatives
pursuant to Rule 424(a) of the Rules and Regulations;
"REGISTRATION STATEMENT" means such registration statement,
as amended at the Effective Time, including any documents
incorporated by reference therein at such time and all
information contained in the final prospectus filed with the
Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration
statement as of the Effective Time pursuant to Rule 430A of
the Rules and Regulations; and "PROSPECTUS" means such final
prospectus, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Reference made herein to any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as
of the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and any reference to any
amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any
document filed under the United States Securities Exchange
Act of 1934 (the "EXCHANGE ACT") after the date of such
Preliminary Prospectus or the Prospectus, as the case may
be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement
shall be deemed to include any annual report of the Company
filed with the Commission pursuant to Section 13(a) or 15(d)
of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. If
the Company has filed an abbreviated registration statement
to register additional shares of Common Stock pursuant to
Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the
term Registration Statement shall be deemed to include such
Rule 462 Registration Statement. The Commission has not
issued any order preventing or suspending the use of any
Preliminary Prospectus.
(b) The Registration Statement conforms,
and the Prospectus and any further amendments or supplements
to the Registration Statement or the Prospectus will, when
they become effective or are filed with the Commission, as
the case may be, conform in all respects to the requirements
of the Securities Act and the Rules and Regulations and do
not and will not, as of the applicable effective date (as to
the Registration Statement and any amendment thereto) and as
of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading; provided that no representation or
warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in
reliance upon and in conformity with written information
furnished to the Company through the Representatives by or
on behalf of any Underwriter specifically for inclusion
therein.
(c) The documents incorporated by reference
in the Prospectus, when they were filed with the Commission,
conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to
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make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the
Prospectus, when such documents are filed with Commission
will conform in all material respects to the requirements of
the Exchange Act and the rules and regulations of the
Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
(d) The Company has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of Oklahoma, is duly qualified to do business
and is in good standing as a foreign corporation in each
jurisdiction in which its ownership or lease of property or
the conduct of its business requires such qualification, and
has all power and authority necessary to own or hold its
properties and to conduct the businesses in which it is
engaged; and none of the subsidiaries of the Company other
than Louis Dreyfus Natural Gas I, L.P. is a significant
subsidiary, as such term is defined in Rule 405 of the Rules
and Regulations.
(e) The Company has an authorized
capitalization as set forth in the Prospectus, and all of the
issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof
contained in the Prospectus; and Louis Dreyfus Natural Gas I,
L.P. is a duly organized and validly existing limited
partnership under the laws of the state of Texas and all of
its interests are owned directly or indirectly by the
Company.
(f) The unissued shares of the Stock to be
issued and sold by the Company to the Underwriters hereunder
have been duly and validly authorized and, when issued and
delivered against payment therefor in accordance with this
Agreement, will be duly and validly issued, fully paid and
non-assessable; and the Stock will conform to the
descriptions thereof contained in the Prospectus.
(g) This Agreement has been duly
authorized, executed and delivered by the Company.
(h) The execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries
or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the
Stock under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent,
approval, authorization or order of, or filing or
registration with, any such court or governmental agency or
body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
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(i) Except as described in the Prospectus
and except for the registration rights agreement between the
Company and Louis Dreyfus Natural Gas Holdings Corp.
("LDNGHC"), a Delaware corporation and a subsidiary of the
Parent, as amended, under which amendments LDNGHC's rights
have been assigned in part to the banks referred to below in
Section 7(a)(i), in part to the Selling Stockholder and in
part under an escrow arrangement to the judgment creditor
referred to below in Section 7(a)(ii), there are no
contracts, agreements or understandings between the Company
and any person granting such person the right to require the
Company to file a registration statement under the
Securities Act with respect to any securities of the Company
owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other
registration statement filed by the Company under the
Securities Act. Except as provided herein, all parties with
registration rights applicable to this Agreement have waived
such rights in connection with the offering of the Firm
Stock and the Option Stock.
(j) The financial statements (including the
related notes and supporting schedules) filed as part of the
Registration Statement or included in the Prospectus present
fairly the financial condition and results of operations of
the entities purported to be shown thereby, at the dates and
for the periods indicated, and have been prepared in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
involved.
(k) Ernst & Young, who have certified
certain financial statements of the Company, whose report
appears in the Prospectus or is incorporated by reference
therein and who have delivered the initial letter referred to
in Section 9(f) hereof, are independent public accountants as
required by the Securities Act and the Rules and Regulations.
(l) The Company and each of its
subsidiaries carry, or are covered by, insurance in such
amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of
their respective properties and as is customary for
companies engaged in similar businesses in similar
industries.
(m) The Company and each of its
subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the
conduct of their respective businesses and have no reason to
believe that the conduct of their respective businesses will
conflict with, and have not received any notice of any claim
of conflict with, any such rights of others.
(n) Except as described in the Prospectus,
there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its
subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, might have a material
adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or
prospects of the Company and its subsidiaries; and to the
best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
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(o) The conditions for use of Form S-3, as
set forth in the General Instructions thereto, have been
satisfied.
(p) No labor disturbance by the employees
of the Company exists or, to the knowledge of the Company, is
imminent, which might be expected to have a material adverse
effect on the general affairs, management, consolidated
financial position, stockholders' equity, results of
operations, business or prospects of the Company and its
subsidiaries.
(q) The Company is in compliance in all
material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published
interpretations thereunder ("ERISA"); no "REPORTABLE EVENT"
(as defined in ERISA) has occurred with respect to any
"PENSION PLAN" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and
does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any
"PENSION PLAN" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "CODE"); and
each "PENSION PLAN" for which the Company would have any
liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects
and nothing has occurred, whether by action or by failure to
act, which would cause the loss of such qualification.
(r) Since the date as of which information
is given in the Prospectus through the date hereof, and
except as may otherwise be disclosed in the Prospectus, the
Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent,
other than liabilities and obligations which were incurred
in the ordinary course of business, (iii) entered into any
transaction not in the ordinary course of business or (iv)
declared or paid any dividend on its capital stock.
(s) The Company (i) makes and keeps
accurate books and records and (ii) maintains internal
accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with
management's authorization, (B) transactions are recorded as
necessary to permit preparation of its financial statements
and to maintain accountability for its assets, (C) access to
its assets is permitted only in accordance with management's
authorization and (D) the reported accountability for its
assets is compared with existing assets at reasonable
intervals.
(t) Neither the Company nor any of its
subsidiaries (i) is in violation of its charter or by-laws,
(ii) is in default in any material respect, and no event has
occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or
observance of any term, covenant or condition contained in
any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a
party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in
any material respect of any law, ordinance, governmental
rule, regulation or court decree to which it or its property
or assets may be subject or has failed to obtain any
material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business.
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(u) Neither the Company nor any of its
subsidiaries, nor any director, officer, agent, employee or
other person associated with or acting on behalf of the
Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; made
any direct or indirect unlawful payment to any foreign or
domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate,
payoff, influence payment, kickback or other unlawful payment.
(v) There has been no storage, disposal,
generation, manufacture, refinement, transportation, handling
or treatment of toxic wastes, medical wastes, hazardous wastes
or hazardous substances by the Company or any of its
subsidiaries (or, to the knowledge of the Company, any of
their predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company or
its subsidiaries in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit
or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which
would not have, or could not be reasonably likely to have,
singularly or in the aggregate with all such violations and
remedial actions, a material adverse effect on the general
affairs, management, consolidated financial position,
stockholders' equity or results of operations of the Company
and its subsidiaries; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or
release of any kind onto such property or into the environment
surrounding such property of any toxic wastes, medical wastes,
solid wastes, hazardous wastes or hazardous substances due to
or caused by the Company or any of its subsidiaries or with
respect to which the Company or any of its subsidiaries have
knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would
not have or would not be reasonably likely to have, singularly
or in the aggregate with all such spills, discharges, leaks,
emissions, injections, escapes, dumpings and releases, a
material adverse effect on the general affairs, management,
consolidated financial position, stockholders' equity or
results of operations of the Company and its subsidiaries; and
the terms "HAZARDOUS WASTES," "TOXIC WASTES," "HAZARDOUS
SUBSTANCES" and "MEDICAL WASTES" shall have the meanings
specified in any applicable local, state, federal and foreign
laws or regulations with respect to environmental protection.
(w) Neither the Company nor any subsidiary
is an investment company as defined in the Investment Company
Act of 1940, as amended.
(x) The Company has acquired all of the oil
and gas assets it was required to acquire pursuant to the
terms of the Asset Purchase Agreement dated as of April 20,
2000, between Costilla Energy, Inc. and the Company and the
related order of the United States Bankruptcy Court for the
Western District of Texas, Midland Division, dated June 9,
2000.
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE
SELLING STOCKHOLDER AND LOUIS DREYFUS HOLDING COMPANY INC., A CORPORATION
ORGANIZED UNDER THE LAWS OF DELAWARE, LOUIS DREYFUS COMMERCIAL ACTIVITIES INC.,
A CORPORATION ORGANIZED UNDER THE LAWS OF DELAWARE AND LDNGHC, (COLLECTIVELY,
THE "AFFILIATES"). The Selling Stockholder and the Affiliates represent, warrant
and agree that:
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(a) The Selling Stockholder has, and immediately
prior to First Delivery Date (as defined in Section 5 hereof)
the Selling Stockholder will have, good and valid title to the
Shares of Stock to be sold by the Selling Stockholder
hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such
shares and payment therefor pursuant hereto, good and valid
title to such shares, free and clear of all liens,
encumbrances, equities or claims, will pass to the several
Underwriters.
(b) The Selling Stockholder and the Affiliates have
full right, power and authority to enter into this Agreement;
the execution, delivery and performance of this Agreement by
the Selling Stockholder and the Affiliates and the
consummation by the Selling Stockholder and the Affiliates of
the transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Selling Stockholder or the Affiliates
is a party or by which the Selling Stockholder or the
Affiliates is bound or to which any of the property of assets
of the Selling Stockholder or the Affiliates is subject, nor
will such actions result in any violation of the provisions of
the charter or by-laws of the Selling Stockholder or the
Affiliates or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction
over the Selling Stockholder or the Affiliates or the property
or assets of the Selling Stockholder or the Affiliates; and,
except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Selling
Stockholder or the Affiliates and the consummation by the
Selling Stockholder and the Affiliates of the transactions
contemplated hereby.
(c) The Registration Statement and the Prospectus and
any further amendments or supplements to the Registration
Statement or the Prospectus will, when they become effective
or are filed with the Commission, as the case may be, do not
and will not, as of the applicable effective date (as to the
Registration Statement and any amendment thereto) and as of
the applicable filing date (as to the Prospectus and any
amendment or supplement thereto) contain an untrue statement
of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading; PROVIDED that no representation or
warranty is made as to information contained in or omitted
from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to
the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(d) The Selling Stockholder and the Affiliates have
not taken and will not take, directly or indirectly, any
action which is designed to or which has constituted or which
might be reasonably be expected to cause or result in the
stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the shares of
the Stock.
Section 3. PURCHASE OF THE STOCK BY THE UNDERWRITERS. On the
basis of the representations and warranties contained in, and subject to the
terms and conditions of, this
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Agreement, the Company agrees to sell 2,400,000 shares of the Firm Stock and the
Selling Stockholder hereby agrees to sell 1,600,000 shares of the Firm Stock to
the several Underwriters and each of the Underwriters, severally and not
jointly, agrees to purchase the number of shares of the Firm Stock set forth
opposite that Underwriter's name in Schedule 1 hereto. The respective purchase
obligations of the Underwriters with respect to the Firm Stock shall be rounded
among the Underwriters to avoid fractional shares, as the Representatives may
determine.
In addition, the Company grants to the Underwriters an option
to purchase up to 600,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 5 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
amounts.
The price of both the Firm Stock and any Option Stock shall be
$29.53 per share.
The Company and the Selling Stockholder shall not be obligated
to deliver any of the Stock to be delivered on any Delivery Date (as hereinafter
defined), except upon payment for all the Stock to be purchased on such Delivery
Date as provided herein.
SECTION 4. OFFERING OF STOCK BY THE UNDERWRITERS. Upon
authorization by the Representatives of the release of the Firm Stock, the
several Underwriters propose to offer the Firm Stock for sale upon the terms and
conditions set forth in the Prospectus.
SECTION 5. DELIVERY OF AND PAYMENT FOR THE STOCK. The Closing
shall be held at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New
York, New York 10019, at 10:00 A.M., New York City time, on the fourth full
business day following the date of this Agreement or at such other date or place
as shall be determined by agreement between the Representatives and the Company.
This date and time are sometimes referred to as the "FIRST DELIVERY DATE". On
the First Delivery Date, the Company and the Selling Stockholder shall deliver
or cause to be delivered certificates representing the Firm Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company and the Selling Stockholder of the purchase price by
wire transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing to the Company and the Selling
Stockholder not less than two full business days prior to the First Delivery
Date. For the purpose of expediting the checking and packaging of the
certificates for the Firm Stock, the Company and the Selling Stockholder shall
make the certificates representing the Firm Stock available for inspection by
the Representatives in New York, New York, not later than 2:00 P.M., New York
City time, on the business day prior to the First Delivery Date.
The option granted in Section 3 will expire 30 days after the
date of this Agreement and may be exercised in whole or in part from time to
time by written notice being given to the Company by the Representatives. Such
notice shall set forth the aggregate number of shares of Option Stock as to
which the option is being exercised, the names in which the shares of Option
Stock are to be registered, the denominations in which the shares of Option
Stock are to be issued and the date and time, as determined by the
Representatives, when the shares of Option Stock are to be delivered; provided,
however, that this date and time shall not be earlier than the First Delivery
Date nor earlier than the second business day after the date on which the option
shall have been
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exercised nor later than the fifth business day after the date on which the
option shall have been exercised. The date and time the shares of Option Stock
are delivered are sometimes referred to as a "SECOND DELIVERY DATE" and the
First Delivery Date and any Second Delivery Date are sometimes each referred to
as a "DELIVERY DATE."
Delivery of and payment for the Option Stock shall be made at
the place specified in the first sentence of the first paragraph of this Section
5 (or at such other place as shall be determined by agreement between the
Representatives and the Company) at 10:00 A.M., New York City time, on such
Second Delivery Date. On such Second Delivery Date, the Company shall deliver or
cause to be delivered the certificates representing the Option Stock to the
Representatives for the account of each Underwriter against payment to or upon
the order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Option Stock shall
be registered in such names and in such denominations as the Representatives
shall request in the aforesaid written notice. For the purpose of expediting the
checking and packaging of the certificates for the Option Stock, the Company
shall make the certificates representing the Option Stock available for
inspection by the Representatives in New York, New York, not later than 2:00
P.M., New York City time, on the business day prior to such Second Delivery
Date.
SECTION 6. FURTHER AGREEMENTS OF THE COMPANY. The Company
agrees:
(a) To prepare the Prospectus in a form
approved by the Representatives and to file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later
than Commission's close of business on the second business day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule
430A(a)(3) under the Securities Act; to make no further
amendment or any supplement to the Registration Statement or
to the Prospectus prior to the last Delivery Date except as
permitted herein; to advise the Representatives, promptly
after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the
Representatives with copies thereof; to file promptly all
reports and any definitive proxy or information statements
required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long
as the delivery of a prospectus is required in connection with
the offering or sale of the Stock; to advise the
Representatives, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the
qualification of the Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any
such qualification, to use promptly its best efforts to obtain
its withdrawal;
(b) To furnish promptly to each of the
Representatives and to counsel for the Underwriters a signed
copy of the Registration Statement as originally filed with
the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed
therewith;
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(c) To deliver promptly to the
Representatives such number of the following documents as the
Representatives shall reasonably request: (i) conformed copies
of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding
exhibits) and (ii) each Preliminary Prospectus, the Prospectus
and any amended or supplemented Prospectus; and, if the
delivery of a prospectus is required at any time after the
Effective Time in connection with the offering or sale of the
Stock or any other securities relating thereto and if at such
time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the
Securities Act, to notify the Representatives and, upon their
request, to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as
the Representatives may from time to time reasonably request
of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance;
(d) To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment of
the Company or the Representatives, be required by the
Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any
amendment to the Registration Statement or supplement to the
Prospectus, any document incorporated by reference in the
Prospectus or any Prospectus pursuant to Rule 424 of the Rules
and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain
the consent of the Representatives to the filing;
(f) As soon as practicable after the
Effective Date, to make generally available to the Company's
security holders and to deliver to the Representatives an
earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158);
(g) Promptly from time to time to take such
action as the Representatives may reasonably request to
qualify the Stock for offering and sale under the securities
laws of such jurisdictions as the Representatives may request
and to comply with such laws so as to permit the continuance
of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the
Stock; provided that in connection therewith the Company shall
not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(h) For a period of 90 days from the date of
the Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock
(other than the Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee
compensation plans existing on the date hereof or
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pursuant to currently outstanding options, warrants or
rights), or sell or grant options, rights or warrants with
respect to any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than
the grant of options pursuant to option plans existing on the
date hereof), or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described
in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, in
each case without the prior written consent of Lehman Brothers
Inc. on behalf of the Underwriters; and to cause each
executive officer and director of the Company to furnish to
the Representatives, prior to the First Delivery Date, a
letter or letters, substantially in the form of Exhibit A
hereto, pursuant to which each such person shall agree not to,
directly or indirectly, (1) offer for sale, sell, pledge or
otherwise dispose of (or enter into any transaction or device
which is designed to, or could be expected to, result in the
disposition by any person at any time in the future of) any
shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the sale of shares
of Common Stock pursuant to an arrangement with a
broker-dealer that provides the equivalent of a cashless
exercise of options) or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case for a period of 90 days from the date
of the Prospectus, without the prior written consent of Lehman
Brothers Inc. on behalf of the Underwriters;
(i) To apply for the listing of the unissued
Stock on the New York Stock Exchange, and to use its best
efforts to complete that listing, subject only to official
notice of issuance, prior to the First Delivery Date;
(j) To apply the net proceeds from the sale
of the Stock being sold by the Company as set forth in the
Prospectus; and
(k) To take such steps as shall be necessary
to ensure that neither the Company nor any subsidiary shall
become an investment company as defined in the Investment
Company Act of 1940, as amended.
Section 7. FURTHER AGREEMENTS OF THE SELLING STOCKHOLDER AND
THE AFFILIATES. The Selling Stockholder and the Affiliates agree:
(a) For a period of 90 days from the date of
the Prospectus, not to, directly or indirectly, (1) offer for
sale, sell, pledge or otherwise dispose of (or enter into any
transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or
securities convertible into or exchangeable for Common Stock
(other than the Stock) or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction
described in clause (1) or (2) above is to be settled by
delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of
Lehman Brothers Inc., except sales or other dispositions
relating to:
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(i) sales or other dispositions pursuant to
existing pledges of 3,000,000 shares (out of a total
amount held of 11,000,000) of the Company's Common
Stock pledged by LDNGHC to certain banks in
connection with a loan to the Parent; and
(ii) the 11,000,000 shares of the Company's
Common Stock pledged by LDNGHC to a judgment creditor
of LDNGHC pending the outcome of an appeal of such
judgment.
(b) With respect to the Selling Stockholder,
to deliver to the Representatives prior to the First Delivery
Date a properly completed and executed United States Treasury
Department Form W-8 (if the Selling Stockholder is a nonUnited
States person) or Form W-9 (if the Selling Stockholder is a
United States person.)
SECTION 8 EXPENSES. The Company agrees to pay (a) the costs
incident to the authorization, issuance, sale and delivery of the Stock and any
taxes payable in that connection; (b) the costs incident to the preparation,
printing and filing under the Securities Act of the Registration Statement and
any amendments and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the costs of producing and distributing this Agreement and
any other related documents in connection with the offering, purchase, sale and
delivery of the Stock; (e) any applicable listing or other fees; (f) the fees
and expenses of qualifying the Stock under the securities laws of the several
jurisdictions as provided in Section 6(g) and of preparing, printing and
distributing a Blue Sky Memorandum (including related fees and expenses of
counsel to the Underwriters); (g) the costs and expenses of the Company relating
to investor presentations on any "ROAD SHOW" undertaken in connection with the
marketing of the offering of the Stock, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations with the prior approval of the Company, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and one half of the cost of any aircraft chartered in connection
with the road show and (h) all other costs and expenses incident to the
performance of the obligations of the Company under this Agreement; provided
that, except as provided in this Section 8 and in Section 13 the Underwriters
shall pay their own costs and expenses, including the costs and expenses of
their counsel, any transfer taxes on the Stock which they may sell and the
expenses of advertising any offering of the Stock made by the Underwriters.
SECTION 9. Conditions of Underwriters' Obligations. The
respective obligations of the Underwriters hereunder are subject to the
accuracy, when made and on each Delivery Date, of the representations and
warranties of the Company and the Selling Stockholder contained herein, to the
performance by the Company and the Selling Stockholder of their respective
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely
filed with the Commission in accordance with Section 6(a); no
stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or
threatened by the Commission; and any request of the
Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall
have been complied with;
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(b) All corporate proceedings and other
legal matters incident to the authorization, form and validity
of this Agreement, the Stock, the Registration Statement and
the Prospectus, and all other legal matters relating to this
Agreement, the transactions contemplated hereby shall be
reasonably satisfactory in all material respects to counsel
for the Underwriters, and the Company shall have furnished to
such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters;
(c) Crowe & Dunlevy shall have furnished to
the Representatives their written opinion, as counsel to the
Company, addressed to the Underwriters and dated such Delivery
Date, in form and substance reasonably satisfactory to the
Representatives, to the effect that:
(i) The Company has been duly
incorporated and is validly existing as a corporation
in good standing under the laws of Oklahoma, is duly
qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its
ownership or lease of property or the conduct of its
business requires such qualification and has all
power and authority necessary to own or hold its
properties and conduct the business in which it is
engaged;
(ii) The Company has an authorized
capitalization as set forth in the Prospectus, and
all of the issued shares of capital stock of the
Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform
to the description thereof contained in the
Prospectus;
(iii) Except as described in the
Prospectus, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any shares of the
Stock pursuant to the Company's charter or by-laws or
any agreement or other instrument known to such
counsel;
(iv) To the best of such counsel's
knowledge and other than as set forth in the
Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries
is the subject which, if determined adversely to the
Company or any of its subsidiaries, might have a
material adverse effect on the consolidated financial
position, stockholders' equity, results of
operations, business or prospects of the Company and
its subsidiaries; and, to the best of such counsel's
knowledge, no such proceedings are threatened or
contemplated by governmental authorities or
threatened by others;
(v) The Registration Statement was
declared effective under the Securities Act as of the
date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and no stop order suspending the
effectiveness of the Registration Statement has been
issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened
by the Commission;
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(vi) The Registration Statement and
the Prospectus and any further amendments or
supplements thereto made by the Company prior to such
Delivery Date (except for the financial statements
and financial schedules and other financial and
statistical data included therein, as to which such
counsel need express no belief) comply as to form in
all material respects with the requirements of the
Securities Act and the Rules and Regulations; and the
documents incorporated by reference in the Prospectus
(other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion), when they were filed with the
Commission, complied as to form in all material
respects with the requirements of the Exchange Act,
and the rules and regulations of the Commission
thereunder;
(vii) To the best of such counsel's
knowledge, there are no contracts or other documents
which are required to be described in the Prospectus
or filed as exhibits to the Registration Statement by
the Securities Act or by the Rules and Regulations
which have not been described or filed as exhibits to
the Registration Statement or incorporated therein by
reference as permitted by the Rules and Regulations;
(viii) This Agreement has been duly
authorized, executed and delivered by the Company;
(ix) The issue and sale of the
shares of Stock being delivered on such Delivery Date
by the Company pursuant to this Agreement, and the
execution, delivery and compliance by the Company
with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby
will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company
or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to
which any of the property or assets of the Company or
any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of
the charter or by-laws of the Company or any of its
subsidiaries or any statute or any order, rule or
regulation known to such counsel of any court or
governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of
their properties or assets; and, except for the
registration of the Stock under the Securities Act
and such consents, approvals, authorizations,
registrations or qualifications as may be required
under the Exchange Act and applicable state
securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any such court or
governmental agency or body is required for the
execution, delivery and performance of this Agreement
by the Company and the consummation of the
transactions contemplated hereby, except for such
consents, approvals, authorizations, orders, filings
or registrations as have been obtained or made;
(x) Except as described in the
Prospectus and except for the registration rights
agreement between the Company and LDNGHC, as amended,
under which amendments LDNGHC's rights have been
assigned
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in part to the banks referred to above in Section
7(a)(i), in part to the Selling Stockholder and in
part under an escrow arrangement to the judgment
creditor referred to above in Section 7(a)(ii), to
the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the
Company and any person granting such person the right
to require the Company to file a registration
statement under the Securities Act with respect to
any securities of the Company owned or to be owned by
such person or to require the Company to include such
securities in the securities registered pursuant to
the Registration Statement or in any securities being
registered pursuant to any other registration
statement filed by the Company under the Securities
Act; and
(xi) Neither the Company nor any
subsidiary is an investment company as defined in the
Investment Company Act of 1940, as amended.
In rendering such opinion, such counsel may state that their opinion is limited
to matters governed by the Federal laws of the United States of America, the
laws of the State of Oklahoma and the General Corporation Law of the State of
Delaware. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead them to believe that (i) the Registration
Statement (except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such counsel need
express no belief) as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus (except as stated above) contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or (ii) any document incorporated by
reference in the Prospectus, when they were filed with the Commission, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The foregoing opinion and statement
may be qualified by a statement to the effect that such counsel does not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.
(d) The counsel for the Selling Stockholder shall
have furnished to the Representatives their written opinion, as counsel
to the Selling Stockholder for whom they are acting as counsel,
addressed to the Underwriters and dated the First Delivery Date, in
form and substance reasonably satisfactory to the Representatives, to
the effect that:
(i) The Selling Stockholder has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of Delaware, is duly qualified to do
business and is in good standing as a foreign corporation in
each jurisdiction in which its ownership or lease of property
or the conduct of its business requires such qualification and
has all power and authority necessary to own or hold its
properties and conduct the business in which it is engaged;
(ii) The Selling Stockholder and the Affiliates have
full right, power and authority to enter into this Agreement;
the execution, delivery and performance of this Agreement by
the Selling Stockholder and the Affiliates and the
consummation by the Selling Stockholder and the Affiliates of
the transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or
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<PAGE>
provisions of, or constitute a default under, any statute, any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the
Selling Stockholder or the Affiliates is a party or by which
the Selling Stockholder or the Affiliates is bound or to which
any of the property or assets of the Selling Stockholder or
the Affiliates is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the
Selling Stockholder or the Affiliates or any statute or any
order, rule or regulation known to such counsel of any court
or governmental agency or body having jurisdiction over the
Selling Stockholder or the Affiliates or the property or
assets of the Selling Stockholder or the Affiliates; and,
except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by
the Underwriters, no consent, approval, authorization or order
of, or filing or registration with, any such court or
governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Selling
Stockholder or the Affiliates and the consummation by the
Selling Stockholder and the Affiliates of the transactions
contemplated hereby;
(iii) This Agreement has been duly authorized,
executed and delivered by or on behalf of the Selling
Stockholder and the Affiliates;
(iv) Immediately prior to the First Delivery Date,
the Selling Stockholder had good and valid title to the shares
of Stock to be sold by the Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities
or claims, and full right, power and authority to sell,
assign, transfer and deliver such shares to be sold by the
Selling Stockholder hereunder; and
(v) Good and valid title to the shares of Stock to be
sold by the Selling Stockholder under this Agreement free and
clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters.
In rendering such opinion, such counsel may (i) state the their opinion
is limited to matters governed by the Federal laws of the United States
of America and the General Corporation Law of the State of Delaware and
(ii) in rendering the opinion in Section 9(d)(iv) above, rely upon a
certificate of the Selling Stockholder, in respect of matters of fact
as to ownership of and liens, encumbrances, equities or claims on the
shares of Stock sold by the Selling Stockholder, PROVIDED that such
counsel shall furnish copies thereof to the Representatives and state
that they believe that both the Underwriters and they are justified in
relying upon such certificate. Such counsel shall also have furnished
to the Representatives a written statement, addressed to the
Underwriters and dated the First Delivery Date, in form and substance
satisfactory to the Representatives, to the effect that (x) such
counsel has acted as counsel to the Selling Stockholder and the
Affiliates, in such counsel's capacity as General Counsel of Louis
Dreyfus Holding Company Inc., the Selling Stockholder's, LDNGHC's and
Louis Dreyfus Commercial Activities Inc.'s ultimate parent company in
the U.S. and has acted as counsel to the Selling Stockholder in
connection with the preparation of the Prospectus Supplement dated as
of the date hereof, as may be further supplemented or amended, and (y)
based on the foregoing, no facts have come to the attention of such
counsel which lead them to believe that the Registration Statement
(except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such
counsel need express no belief), as of the Effective Date, contained
any untrue statement of a material fact relating to the Selling
Stockholder or omitted to state such
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a material fact required to be stated therein or necessary in order
to make the statements therein not misleading, or that the
Prospectus (except for the financial statements and financial
schedules and other financial and statistical data included therein,
as to which such counsel need express no belief) contains any untrue
statement of a material fact relating to the Selling Stockholder or
omits to state such a material fact required to be stated therein or
necessary in order to make the statements therein, in lights of the
circumstances under which they were made, not misleading. The
foregoing opinion and statements may be qualified by a statement to
the effect that such counsel does not assume any responsibility for
the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus.
(e) The Representatives shall have received from
Cravath, Swaine & Moore, counsel for the Underwriters, such opinion or
opinions, dated such Delivery Date, with respect to the issuance and
sale of the Stock, the Registration Statement, the Prospectus and other
related matters as the Representatives may reasonably require, and the
Company shall have furnished to such counsel such documents as they
reasonably request for the purpose of enabling them to pass upon such
matters.
(f) At the time of execution of this Agreement, the
Representatives shall have received from Ernst & Young a letter, in
form and substance satisfactory to the Representatives, addressed to
the Underwriters and dated the date hereof (i) confirming that they are
independent public accountants within the meaning of the Securities Act
and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
Commission and (ii) stating, as of the date hereof (or, with respect to
matters involving changes or developments since the respective dates as
of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial
information and other matters ordinarily covered by accountants'
COMFORT LETTERS to underwriters in connection with registered public
offerings.
(g) With respect to the letter of Ernst & Young
referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"INITIAL LETTER"), the Company shall have furnished to the
Representatives a letter (the "BRING-DOWN LETTER") of such accountants,
addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the
meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule
2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus, as of a date not more
than five days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letter and (iii)
confirming in all material respects the conclusions and findings set
forth in the initial letter.
(h) The Company shall have furnished to the
Representatives a certificate, dated such Delivery Date, of its
Chairman of the Board, its President or a Vice President and its chief
financial officer stating that:
(i) The representations, warranties and agreements of
the Company in Section 1 are true and correct as of such
Delivery Date; the Company has complied with all its
agreements contained herein; and the conditions set forth in
Sections 9(a) and 9 (k) have been fulfilled; and
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(ii) They have carefully examined the Registration
Statement and the Prospectus and, in their opinion (A) as of
the Effective Date, the Registration Statement and Prospectus
did not include any untrue statement of a material fact and
did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and (B) since the Effective Date no event has
occurred which has not been set forth therein which should
have been set forth in a supplement or amendment to the
Registration Statement or the Prospectus.
(i) The Selling Stockholder shall have furnished to
the Representatives on the First Delivery Date a certificate, dated the
First Delivery Date, of its Chairman of the Board, its President or a
Vice President or its chief financial officer stating that the
representations and warranties of the Selling Stockholder contained in
Section 2 are true and correct as of the First Delivery Date and that
the Selling Stockholder has complied with all agreements contained
herein that are required to be performed by the Selling Stockholder at
or prior to the First Delivery Date.
(j) Neither the Company nor any of its subsidiaries
shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus (A)
any loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus or (B)
since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(A) or (B), is, in the judgment of the Representatives, so material and
adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(k) Subsequent to the execution and delivery of this
Agreement there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the
American Stock Exchange or in the over-the-counter market, or trading
in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum prices
shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets in
the United States shall be such) as to make it, in the judgment of the
Representatives, impracticable or inadvisable to proceed with the
public offering or delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.
(l) The New York Stock Exchange, Inc. shall have
approved the Stock for listing, subject only to official notice of
issuance.
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All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Underwriters.
SECTION 10. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold
harmless each Underwriter, its officers and employees and each
person, if any, who controls any Underwriter within the
meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and
sales of Stock), to which that Underwriter, officer, employee
or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material
fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment
or supplement thereto, or (B) in any materials or information
provided to investors by, or with the approval of, the Company
in connection with the marketing of the offering of the Stock
("MARKETING MATERIALS"), including any road show or investor
presentations made to investors by the Company (whether in
person or electronically), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment
or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not
misleading or (iii) any act or failure to act or any alleged
act or failure to act by any Underwriter in connection with,
or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action
arising out of or based upon matters covered by clause (i) or
(ii) above (provided that the Company shall not be liable
under this clause (iii) to the extent that it is determined in
a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each
Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any such
amendment or supplement, in reliance upon and in conformity
with written information concerning such Underwriter furnished
to the Company through the Representatives by or on behalf of
any Underwriter specifically for inclusion therein which
information consists solely of the information specified in
Section 10(f). The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have
to any Underwriter or to any officer, employee or controlling
person of that underwriter.
(b) The Selling Stockholder and the
Affiliates shall indemnify and hold harmless each Underwriter,
its officers and employees, and each person, if any, who
controls any Underwriter within the meaning of the Securities
Act, from and
19
<PAGE>
against any loss, claim, damage or liability, joint or
several, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that
Underwriter, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or in any amendment or supplement thereto or (ii)
the omission or alleged omission to state in any Preliminary
Prospectus, Registration Statement or the Prospectus, or in
any amendment or supplement thereto, any material fact
required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse each
Underwriter, its officers and employees and each such
controlling person for any legal or other expenses reasonably
incurred by that Underwriter, its officers and employees or
controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Selling Stockholder and the
Affiliates shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any
Preliminary Prospectus, the Registration Statement or the
Prospectus or in any such amendment or supplement in reliance
upon and in conformity with written information concerning
such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter
specifically for inclusion therein which information consists
solely of the information specified in Section 10(f). The
foregoing indemnity agreement is in addition to any liability
which the Selling Stockholder or the Affiliates may otherwise
have to any Underwriter or any officer, employee or
controlling person of that Underwriter. The indemnity provided
by LDNGHC pursuant to this Section 10(b) shall be subordinate
to the claims of the judgment creditor, to whom LDNGHC has
pledged shares of the Company's Common Stock, as provided for
in Section 7(a)(ii) above.
(c) Each Underwriter, severally and not
jointly, shall indemnify and hold harmless the Company, the
Selling Stockholder and the Affiliates, and each of their
respective officers, employees and directors, and each person,
if any, who controls the Company, the Selling Stockholder or
the Affiliates, within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the
Company, the Selling Stockholder or the Affiliates, or any
such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in
any amendment or supplement thereto, or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment
or supplement thereto, any material fact required to be stated
therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity
with written information concerning such Underwriter furnished
to the Company through the Representatives by or on behalf of
that Underwriter specifically for inclusion therein, and shall
reimburse the Company, the Selling Stockholder and the
Affiliates, and any such director, officer or controlling
person for any legal or other expenses reasonably incurred by
the
20
<PAGE>
Company, the Selling Stockholder or the Affiliates or any such
director, officer or controlling person in connection with
investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses
are incurred. The foregoing indemnity agreement is in addition
to any liability which any Underwriter may otherwise have to
the Company, the Selling Stockholder or the Affiliates, or any
such director, officer, employee or controlling person.
(d) Promptly after receipt by an indemnified
party under this Section 10 of notice of any claim or the
commencement of any action, the indemnified party shall, if a
claim in respect thereof is to be made against the
indemnifying party under this Section 10, notify the
indemnifying party in writing of the claim or the commencement
of that action; PROVIDED, HOWEVER, that the failure to notify
the indemnifying party shall not relieve it from any liability
which it may have under this Section 10 except to the extent
it has been materially prejudiced by such failure and,
PROVIDED FURTHER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section
10. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section 10 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation;
PROVIDED, HOWEVER, that the Representatives shall have the
right to employ counsel to represent jointly the
Representatives and those other Underwriters and their
respective officers, employees and controlling persons who may
be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Underwriters against the
Company, the Selling Stockholder or the Affiliates under this
Section 10 if, in the reasonable judgment of the
Representatives, it is advisable for the Representatives and
those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel
shall be paid by the Company. No indemnifying party shall (i)
without the prior written consent of the indemnified parties
(which consent shall not be unreasonably withheld), settle or
compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified
parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such
action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with the
consent of the indemnifying party or if there be a final
judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such
settlement or judgment.
(e) If the indemnification provided for in
this Section 10 shall for any reason be unavailable to or
insufficient to hold harmless an indemnified party under
Section 10(a), 10(b) or 10(c) in respect of any loss, claim,
damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in
21
<PAGE>
lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company, the
Selling Stockholder and the Affiliates on the one hand and the
Underwriters on the other from the offering of the Stock or
(ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the
Company, the Selling Stockholder and the Affiliates on the one
hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative
benefits received by the Company, the Selling Stockholder and
the Affiliates on the one hand and the Underwriters on the
other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before
deducting expenses) received by the Company, the Selling
Stockholder and the Affiliates, on the one hand, and the total
underwriting discounts and commissions received by the
Underwriters with respect to the shares of the Stock purchased
under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the shares of the Stock
under this Agreement, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall
be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information
supplied by the Company, the Selling Stockholder, the
Affiliates or the Underwriters, the intent of the parties and
their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Company, the Selling Stockholder, the Affiliates and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section were to be determined
by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above
in this Section shall be deemed to include, for purposes of
this Section 10(e), any legal or other expenses reasonably
incurred by such indemnified party in connection with
investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
Stock underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute
as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.
(f) The Underwriters severally confirm and
the Company acknowledges that the statements with respect to
the public offering of the Stock by the Underwriters set forth
on the cover page of, the legend concerning over-allotments on
the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting"
in, the Prospectus are correct and
22
<PAGE>
constitute the only information concerning such Underwriters
furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION 11. DEFAULTING UNDERWRITERS. If, on either Delivery
Date, any Underwriter defaults in the performance of its obligations under
this Agreement, the remaining non-defaulting Underwriters shall be obligated
to purchase the Stock which the defaulting Underwriter agreed but failed to
purchase on such Delivery Date in the respective proportions which the number
of shares of the Firm Stock set opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the total number of
shares of the Firm Stock set opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; PROVIDED, HOWEVER, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any
of the Stock on such Delivery Date if the total number of shares of the Stock
which the defaulting Underwriter or Underwriters agreed but failed to purchase
on such date exceeds 9.09% of the total number of shares of the Stock to be
purchased on such Delivery Date, and any remaining non-defaulting Underwriter
shall not be obligated to purchase more than 110% of the number of shares of
the Stock which it agreed to purchase on such Delivery Date pursuant to the
terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be
obligated, to purchase, in such proportion as may be agreed upon among them,
all the Stock to be purchased on such Delivery Date. If the remaining
Underwriters or other underwriters satisfactory to the Representatives do not
elect to purchase the shares which the defaulting Underwriter or Underwriters
agreed but failed to purchase on such Delivery Date, this Agreement (or, with
respect to the Second Delivery Date, the obligation of the Underwriters to
purchase, and of the Company to sell, the Option Stock) shall terminate
without liability on the part of any non-defaulting Underwriter or the Company
or the Selling Stockholder, except that the Company will continue to be liable
for the payment of expenses to the extent set forth in Sections 8 and 13. As
used in this Agreement, the term "UNDERWRITER" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Stock which
a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting
Underwriter of any liability it may have to the Company and the Selling
Stockholder for damages caused by its default. If other underwriters are
obligated or agree to purchase the Stock of a defaulting or withdrawing
Underwriter, either the Representatives or the Company may postpone the
Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 12. TERMINATION. The obligations of the Underwriters
hereunder may be terminated by the Representatives by notice given to and
received by the Company and the Selling Stockholder prior to delivery of and
payment for the Firm Stock if, prior to that time, any of the events described
in Sections 9(j) or 9(k), shall have occurred or if the Underwriters shall
decline to purchase the Stock for any reason permitted under this Agreement.
SECTION 13. REIMBURSEMENT OF UNDERWRITERS' EXPENSE. If the
Company or the Selling Stockholder shall fail to tender the Stock for delivery
to the Underwriters by reason of any failure, refusal or inability on the part
of the Company or the Selling Stockholder to perform any agreement on its part
to be performed, or because any other condition of the Underwriters'
obligations hereunder required to be fulfilled by the Company or the Selling
Stockholder (including, without limitation, with respect to the transactions)
is not fulfilled, the Company and the Selling Stockholder will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
23
<PAGE>
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Selling Stockholder shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 12 by
reason of the default of one or more Underwriters, neither the Company nor the
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.
SECTION 14. Notices, Etc. All statements, requests, notices
and agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be
delivered or sent by mail, telex or facsimile transmission to
Lehman Brothers Inc., Three World Financial Center, New York,
New York 10285, Attention: Syndicate Department (Fax:
212-526-6588), with a copy, in the case of any notice pursuant
to Section 10(d), to the Director of Litigation, Office of the
General Counsel, Lehman Brothers Inc., 3 World Financial
Center, 10th Floor, New York, NY 10285; provided, however,
that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in
its acceptance telex to the Representatives, which address
will be supplied to any other party hereto by the
Representatives upon request;
(b) if to the Company, shall be delivered or
sent by mail, telex or facsimile transmission to the address
of the Company set forth in the Registration Statement,
Attention: Chief Financial Officer (Fax: (405) 749-6661). Any
such statements, requests, notices or agreements shall take
effect at the time of receipt thereof. The Company shall be
entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by
Lehman Brothers Inc. on behalf of the Representatives;
(c) if to the Selling Stockholder, shall be
delivered or sent by overnight courier service or facsimile
transmission to: L.D. Fashions Holdings Corp., 3411 Silverside
Road, Suite 210E, Baynard Building, Wilmington, DE 19810-4808,
Attention: President (Fax: (302) 477-1561).
SECTION 15. Persons Entitled to Benefit of Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters,
the Company, the Selling Stockholder, the Affiliates and their respective
successors. This Agreement and the terms and provisions hereof are for the
sole benefit of only those persons, except that (A) the representations,
warranties, indemnities and agreements of the Company and the Selling
Stockholder contained in this Agreement shall also be deemed to be for the
benefit of the person or persons, if any, who control any Underwriter within
the meaning of Section 15 of the Securities Act and (B) the indemnity
agreement of the Underwriters contained in Section 10(c) of this Agreement
shall be deemed to be for the benefit of directors of the Company, the Selling
Stockholder, the Affiliates, officers of the Company who have signed the
Registration Statement and any person controlling the Company, the Selling
Stockholder or the Affiliates within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section 15, any
legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
SECTION 16. Survival. The respective indemnities,
representations, warranties and agreements of the Company, the Selling
Stockholder, the Affiliates and the Underwriters contained in this Agreement
or made by or on behalf on them, respectively, pursuant to this Agreement,
shall
24
<PAGE>
survive the delivery of and payment for the Stock and shall remain in full
force and effect, regardless of any investigation made by or on behalf of any
of them or any person controlling any of them.
SECTION 17. Definition of the Terms "BUSINESS DAY" and
"SUBSIDIARY". For purposes of this Agreement, (a) "BUSINESS DAY" means each
Monday, Tuesday, Wednesday, Thursday or Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law
or executive order to close and (b) "SUBSIDIARY" has the meaning set forth in
Rule 405 of the Rules and Regulations.
SECTION 18. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of New York.
SECTION 19. COUNTERPARTS. This Agreement may be executed in
one or more counterparts and, if executed in more than one counterpart, the
executed counterparts shall each be deemed to be an original but all such
counterparts shall together constitute one and the same instrument.
SECTION 20. HEADINGS. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
25
<PAGE>
If the foregoing correctly sets forth the agreement among the Company, the
Selling Stockholder, the Affiliates and the Underwriters, please indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
LOUIS DREYFUS NATURAL GAS CORP.
By: /s/ Jeffrey A. Bonney
------------------------------------
Name: Jeffrey A. Bonney
Title: Executive Vice President and
Chief Financial Officer
L.D. FASHIONS HOLDINGS CORP.
By: /s/ Connie S. Linhart
------------------------------------
Name: Connie S. Linhart
Title: President & Treasurer
LOUIS DREYFUS HOLDING COMPANY INC.
By: /s/ Peter B. Griffin
------------------------------------
Name: Peter B. Griffin
Title: Executive Vice President
LOUIS DREYFUS COMMERCIAL
ACTIVITIES INC.
By: /s/ Peter B. Griffin
------------------------------------
Name: Peter B. Griffin
Title: Vice President
LOUIS DREYFUS NATURAL GAS
HOLDINGS CORP.
By: /s/ Connie S. Linhart
------------------------------------
Name: Connie S. Linhart
Title: President & Treasurer
27
<PAGE>
Accepted:
LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
DAIN RAUSCHER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By: LEHMAN BROTHERS INC.
By: /s/ Arlene Salmonson
----------------------------
AUTHORIZED REPRESENTATIVE
28
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Number of Shares
of Firm Stock to
U.S. UNDERWRITERS be Purchased
-----------------
<S> <C>
Lehman Brothers Inc.......................................................................... 980,000
Salomon Smith Barney Inc..................................................................... 650,000
Banc of America Securities LLC............................................................... 540,000
Dain Rauscher Incorporated................................................................... 540,000
Prudential Securities Incorporated........................................................... 540,000
Fidelity Capital Markets
a division of National Financial Services Corp...................................... 50,000
BMO Nesbitt Burns Corp....................................................................... 50,000
Credit Suisse First Boston Corporation....................................................... 50,000
Friedman, Billings, Ramsey & Co., Inc........................................................ 50,000
Goldman, Sachs & Co.......................................................................... 50,000
Jefferies & Company, Inc..................................................................... 50,000
J. P. Morgan Securities Inc.................................................................. 50,000
Morgan Keegan & Company, Inc................................................................. 50,000
Morgan Stanley & Co. Incorporated............................................................ 50,000
Petrie Parkman & Co., Inc.................................................................... 50,000
RBC Dominion Securities Corp................................................................. 50,000
Raymond James & Associates, Inc.............................................................. 50,000
Sanders Morris Harris Inc.................................................................... 50,000
Southwest Securities, Inc.................................................................... 50,000
UBS Warburg LLC.............................................................................. 50,000
Total 4,000,000
</TABLE>
<PAGE>
EXHIBIT A
LOCK-UP LETTER AGREEMENT
LOUIS DREYFUS NATURAL GAS CORP.
PUBLIC OFFERING OF COMMON STOCK
LEHMAN BROTHERS INC.
SALOMON SMITH BARNEY INC.
BANC OF AMERICA SECURITIES LLC
DAIN RAUSCHER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285
Dear Sirs:
The undersigned understands that you and certain other firms propose to
enter into an Underwriting Agreement (the "UNDERWRITING AGREEMENT") providing
for the purchase by you and such other firms (the "UNDERWRITERS") of shares (the
"SHARES") of Common Stock, par value $.01 per share (the "COMMON STOCK"), of
Louis Dreyfus Natural Gas Corp., an Oklahoma corporation (the "COMPANY"), and
that the Underwriters propose to reoffer the Shares to the public (the
"OFFERING").
<PAGE>
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of Lehman
Brothers Inc., on behalf of the Underwriters, the undersigned will not, directly
or indirectly, (1) offer for sale, sell, pledge, or otherwise dispose of (or
enter into any transaction or device that is designed to, or could be expected
to, result in the disposition by any person at any time in the future of) any
shares of Common Stock (including, without limitation, shares of Common Stock
that may be deemed to be beneficially owned by the undersigned in accordance
with the rules and regulations of the Securities and Exchange Commission and
shares of Common Stock that may be issued upon exercise of any option or warrant
(other than the sale of shares of Common Stock pursuant to an agreement with a
broker-dealer that provides the equivalent of a cashless exercise of options))
or securities convertible into or exchangeable for Common Stock (other than the
Shares) owned by the undersigned on the date of execution of this Lock-Up Letter
Agreement or on the date of the completion of the Offering, or (2) enter into
any swap or other derivatives transaction that transfers to another, in whole or
in part, any of the economic benefits or risks of ownership of such shares of
Common Stock, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or other securities, in cash or
otherwise, for a period of 90 days after the date of the final Prospectus
relating to the Offering.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company notifies you that it does not
intend to proceed with the Offering, if the Underwriting Agreement does not
become effective, or if the Underwriting Agreement (other than the provisions
thereof which survive termination) shall terminate or be terminated prior to
payment for and delivery of the Shares, we will be released from our obligations
under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
2
<PAGE>
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
By:
--------------------------------
Name:
Title:
Dated:
---------------
3
