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EXHIBIT 13
GRANT OF SECURITY INTERESTS
GRANT OF SECURITY INTERESTS (the "Grant"), dated as of September
8, 1999, from LOUIS DREYFUS NATURAL GAS HOLDINGS CORP., a Delaware corporation
("Pledgor") to ANATOLY SVERDLIN, individually and derivatively on behalf of
Automated Marine Propulsion Systems, Inc. (collectively, the "Secured Party).
WHEREAS, the Secured Party obtained a judgment dated January 25,
1999 against Pledgor in the 215th Judicial District Court, Harris County,
Texas in the action entitled ANATOLY SVERDLIN V. AUTOMATED MARINE PROPULSION
SYSTEMS, INC. AND L.D.E. ASSOCIATES, L.L.C., ET. AL., Cause No. 97-02103 (the
"Action"), which judgment was subsequently reformed (as reformed, the
"Judgment") by order of the Court in the 295th Judicial District Court, Harris
County, Texas (the "Court") dated April 29, 1999.
WHEREAS, on May 25, 1999 the Court issued an order in the
Action, which order has been modified subsequently (as modified, the "Order"),
suspending the Judgment on condition that Pledgor provide to the Secured Party
certain security interests in the Collateral (as defined below in Section 1)
by September 10, 1999.
WHEREAS, the Grant is intended to provide to the Secured Party
the security interests in the Collateral required by the Order.
NOW, THEREFORE, Pledgor hereby grants certain security interests
to the Secured Party on the following terms and conditions:
1. As used herein, each of the terms set forth below shall
have the following meanings:
"AGENT" means Societe Generate, as agent for and representative
(within the meaning of Section 9-105(m) of the Uniform Commercial Code
as in effect from time to time in the State of New York) of Societe
Generale and Banque Nationale de Paris (the "Banks"), listed on the
signature pages of the Convention de Pret en Devises dated December 27,
1995, as amended, (the "Credit Agreement") among S.A. Louis Dreyfus et
Cie ("SALD", as defined below), the Banks and Societe Generale, as
Agent, as amended and the respective successors and assigns of such
Banks, and any successor Agent appointed pursuant to the provisions of
the Credit Agreement.
"A SHARES" means the 5,500,000 shares of common stock, par value
$0.01 per share, of Issuer (as defined below), and the 11 stock
certificates, each representing 500,000 of such shares, each registered
in Pledgor's name and accompanied by a blank Stock Power signed by
Pledgor, numbered as follows:
C-017267 C-017287 C-017291 C-017295
C-017275 C-017289 C-017293 C-017300
C-017276 C-017290 C-017294
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"ADDITIONAL RIGHTS means:
(a) all dividends including the Pledged Dividends (as defined
below) and other distributions in respect of the Pledged Shares (as defined
below), any instruments, securities or other property issued in substitution
therefor or replacement thereof or with respect thereto and any distribution
with respect thereto;
(b) all other instruments, securities and other property
issued with respect to or in exchange for the Pledged Shares, or any
instruments, securities or other property issued in substitution therefor or
replacement thereof or with respect thereto (whether, in either case, upon
conversion of convertible securities included therein or through stock split,
spin-off, reclassification, merger, consolidation, sale of assets, combination
of shares or otherwise);
(c) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software (owned by
Pledgor or in which it has an interest) that at any time evidence or contain
information relating to the Pledged Shares or are otherwise necessary or
helpful in the collection thereof or realization thereupon;
(d) all rights (contractual and otherwise and whether
constituting accounts, contract rights or general intangibles) arising under,
connected with or in any way related to the Collateral described in clauses
(a) or (b) of this definition other than Pledgor's right to receive payments
from SALD under the Transfer Agreement dated December 20, 1996 between SALD
and Pledgor, as the same may be amended from time to time;
(e) all claims (including the right to sue or otherwise
recover on such claims) (i) to items covered under the definition of
Collateral and (ii) against third parties that in any way arise under or out
of or are related to or connected with any or all of the Collateral;
(f) all products and proceeds of the Collateral in whatever
form;
(g) the Registration Rights Assignment (as defined below); and
(h) the Equity Assignment (as defined below).
"B SHARES" means 5,500,000 shares of common stock, par value
$0.01 per share, of Issuer, and the 11 stock certificates, each representing
500,000 of such shares, each registered in Pledgor's name and accompanied by a
blank Stock Power signed by Pledgor, numbered as follows and which are subject
to a first lien pursuant to the French Pledge Agreement (as defined below)
that is senior to the lien created by the Grant:
C-017270 C-017279 C-017282 C-017285
C-017277 C-017280 C-017283 C-017286
C-017278 C-017281 C-017284
"COLLATERAL" means Pledgor's interests (whatever it may be at
any time and from time to time) in the Pledged Shares and the Additional
Rights, in each case whether now or hereafter existing or now owned or
hereafter acquired by Pledgor and whether or not the same is now contemplated,
anticipated or foreseeable, and wherever the same may be located.
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"EQUITY ASSIGNMENT" means the Assignment of Equity Interest in
Shares, dated as of September 8, 1999, by Pledgor to the Secured Party
attached hereto as Exhibit A.
"ESCROW AGENT" means Bank One, Texas, N.A. ("Bank One") in its
limited capacity as escrow agent for Pledgor and the Secured Party to hold the
Collateral pursuant to the terms of the Escrow Agreement, and any successor to
Bank One that is serving as the Escrow Agent under the Escrow Agreement.
"ESCROW AGREEMENT" means the agreement between Pledgor and the
Escrow Agent attached hereto as Exhibit B.
"FINAL APPELLATE DETERMINATION DATE" shall mean the date when,
upon conclusion of all appeals taken by Pledgor, the Clerk of the Court in the
295 th Judicial District Court, Harris County, Texas receives a valid mandate
from an appellate court that has rendered the Final Appellate Judgment (as
defined below) which is either not appealed by Pledgor or from which an appeal
is not available.
"FINAL APPELLATE JUDGMENT" shall mean the judgment of the
appellate court that concludes all appeals taken by Pledgor in the Action.
"FRENCH PLEDGE AGREEMENT" means the Pledge Agreement dated as of
December 27, 1995 among SALD, the Banks and the Agent, as it may have been or
may in the future be modified or amended in accordance with the terms thereof.
"ISSUER" means Louis Dreyfus Natural Gas Corp., an Oklahoma
corporation.
"PLEDGED DIVIDENDS" means the dividends paid in respect of (i)
the A Shares and (ii) the B Shares on which the Senior Lien (as defined below)
is released from time to time pursuant to the terms of the French Pledge
Agreement.
"PLEDGED SHARES" means the A Shares and the B Shares together.
"REGISTRATION RIGHTS ASSIGNMENT" means the Assignment, dated as
of September 8, 1999, from Pledgor to the Secured Party, attached hereto as
Exhibit C, of all of Pledgor's rights, title and interests in and to the
Registration Rights Agreement dated as of November 9, 1993 by and between
Issuer and Pledgor, as amended by a letter agreement dated December 27, 1995
among SALD, Pledgor and Issuer and a letter agreement dated May 1, 1998 among
L.D. Fashions Holdings Corp., Pledgor and Issuer, and as it may be further
amended or modified from time to time, as it relates to the Collateral.
"SALD" means S.A. Louis Dreyfus et Cie, a French corporation,
and the ultimate parent corporation of Pledgor.
"SECURED OBLIGATION" means Pledgor's obligation pursuant to the
Final Appellate Judgment to pay to the Secured Party the amount due from
Pledgor under the Final Appellate Judgment.
"SECURITY INTERESTS" means the security interests in the
Collateral created under the Grant.
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"SENIOR LIEN" means the senior lien on the B Shares granted by
Pledgor to the Banks pursuant to the French Pledge Agreement.
2. To secure the payment by Pledgor of the Secured
Obligation, Pledgor pledges the Collateral to the Secured Party and grants to
the Secured Party certain continuing security interests in the Collateral.
3. The Security Interests shall at all times be valid,
perfected and enforceable against Pledgor in accordance with the terms of the
Grant, and the Collateral shall not at any time be subject to any lien, other
than the Senior Lien.
4. Pledgor shall take all action that may be necessary or
desirable to maintain the validity, perfection, enforceability and priority
(subject to the Senior Lien) of the Security Interests in the Collateral and
to protect and preserve the Collateral.
5. Pledgor shall file a financing statement in Delaware in
the form attached hereto as Exhibit D.
6. Pledgor shall use its best efforts to cause the Banks to
cause any of the B Shares on which the Senior Lien is released from time to
time pursuant to the teams of the French Pledge Agreement to be delivered
directly to the Escrow Agent and, in that connection will (i) request that
SALD send a notice to the Agent substantially as set forth in Exhibit E
attached hereto; and (ii) send a notice to Citibank, N.A. substantially in the
form set forth in Exhibit F attached hereto.
7. Pledgor shall (i) receive in trust all Pledged Dividends
received by Pledgor until termination of the Security Interests or delivery of
the Collateral by the Escrow Agent to Sverdlin under the Escrow Agreement, as
the case may be, and (ii) promptly deliver such Pledged Dividends received by
it to the Escrow Agent, to be held by the Escrow Agent pursuant to the terms
of the Escrow Agreement.
8. If any monetary portion of the Judgment against Pledgor
is affirmed in whole or in part in the Final Appellate Judgment and if Pledgor
fails to pay such amount within 21 days following the Final Appellate
Determination Date, then the Secured Party shall be entitled to receive the
Collateral in full or partial satisfaction of the Judgment, as the case may
be, upon entry of an order of the Court authorizing its release to the Secured
Party. The Secured Party shall thereupon be authorized to transfer into or
register in its name or the name of its nominee any or all of the Pledged
Shares constituting the Collateral and any of the other Collateral, and may,
from time to time, by notice to Pledgor, in its own or Pledgor's name,
exercise any and all rights, powers and privileges with respect to the
Collateral, and with the same force and effect, as could Pledgor. The
reference herein to "the Judgment against Pledgor" shall not, for any purpose
whatsoever, be deemed to include a judgment against any other parry to the
Action.
9. Until the Secured Parry becomes entitled to receive the
Collateral as provided in Section 8 hereof, Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral and associated Registration Rights or the B Shares or any part
thereof for any purpose not inconsistent with the terms of the Grant or the
Order.
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10. Notwithstanding that the Pledged Shares are pledged to
the Secured Party, until the certificates for the Pledged Shares and
accompanying Stock Powers are delivered to the Secured Party under Section 8
hereof, neither the certificates for the Pledged Shares and accompanying Stock
Powers, the Registration Rights Assignment, the Equity Assignment nor the
Pledged Dividends shall be delivered to the Secured Party, but shall be
delivered only to the Escrow Agent to be held by the Escrow Agent pursuant to
the terms of the Escrow Agreement.
11. The Security Interests and all of Pledgor's obligations
under the Grant shall terminate upon the earliest to occur of (a) the issuance
of the Final Appellate Judgment if the Final Appellate Judgment does not
require that Pledgor make any payment to the Secured Parry, (b) if the Final
Appellate Judgment has provided for such a payment by Pledgor, then upon
payment by Pledgor of the payment required by the Final Appellate Judgment
before the Collateral has been delivered to the Secured Party pursuant to
Section 8, and (c) the issuance of an order from the Court terminating the
Security Interests provided for under the Grant.
12. Upon the termination in accordance with the Grant of all
or part of the Security Interests and the receipt of an order of the Court in
connection therewith terminating the Security Interests in accordance with the
Grant or directing the Escrow Agent to deliver the Collateral to Pledgor, the
Secured Patty shall promptly execute and deliver to Pledgor (i) a UCC-3 form
in the form attached hereto as Exhibit G, or any form which may have replaced
or is similar to the UCC-3 form, and (ii) any other documents which the
Secured Party is required under mandate of the Court to execute and deliver to
Pledgor for the release of the liens on the Collateral corresponding to any
such termination.
13. No rights of the Secured Party under the Grant may be
assigned without the prior approval of the Court.
14. THE GRANT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. PLEDGOR SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURT, THAT IS, THE 295TH JUDICIAL DISTRICT
COURT SITUATED IN HARRIS COUNTY, TEXAS. ALL DISPUTES AND CONTROVERSIES
RELATING TO THE GRANT OR TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THE GRANT
SHALL BE DETERMINED BY THE COURT.
IN WITNESS WHEREOF, the undersigned has caused this instrument
setting forth this Grant of Security Interests to be executed as of the date
first above written.
PLEDGOR:
LOUIS DREYFUS NATURAL GAS HOLDINGS
CORP.
By:
------------------------------
Name: Connie S. Linhart
Title: President & Treasurer
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ASSIGNMENT OF EQUITY INTEREST IN SHARES
Louis Dreyfus Natural Gas Holdings Corp. ("Pledgor") is the
registered and beneficial owner of 5,500,000 shares of Louis Dreyfus Natural
Gas Corp. (the "Pledged Shares") that, pursuant to a Pledge Agreement dated
December 27, 1995 (the "Pledge Agreement"), have been pledged to Societe
Generale, as Agent for certain banks and are subject to the security interest
created by the Pledge Agreement.
By an order, dated May 25, 1999 (the "Order"), of the Court in
the 295 th Judicial District Court, Harris County, Texas (the "Court"), in the
action entitled ANATOLY SVERDLIN V. AUTOMATED MARINE PROPULSION SYSTEMS, INC.
AND L.D.E. ASSOCIATES, L.L.G, ET AL., the Court suspended the judgment in that
action on condition, among others, that Pledgor assign to Anatoly Sverdlin,
individually and derivatively on behalf of Automated Marine Propulsion
Systems, Inc. (collectively, the "Secured Party"), Pledgor's equity interest
in the Pledged Shares.
In order to comply with that portion of the Order that directs
Pledgor to assign to the Secured Party Pledgor's equity interest in the
Pledged Shares and as additional collateral under the terms of the Grant of
Security Interests dated the date of this Assignment (the "Grant of Security
Interests"), Pledgor assigns to the Secured Party all of Pledgor's right and
title to and interest in the Pledged Shares as that interest may exist under
and after satisfaction of all of the obligations for which the Pledged Shares
were pledged under the Pledge Agreement.
As provided in the Grant of Security Interests, this Assignment
will be delivered to and held by the Escrow Agent (as that term is defined in
the Grant of Security Interests) under the terms of the Escrow Agreement (as
that term is defined in the Grant of Security Interests) and shall become
effective only if and when it is delivered to the Secured Party by the Escrow
Agent pursuant to the terms of the Escrow Agreement.
This Assignment may not be assigned by the Secured Party.
THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS. PLEDGOR SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE COURT, THAT IS, THE 295TH JUDICIAL DISTRICT COURT SITUATED
IN HARRIS COUNTY, TEXAS. ALL DISPUTES AND CONTROVERSIES RELATING TO THIS
ASSIGNMENT OR TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS ASSIGNMENT SHALL
BE DETERMINED BY THE COURT.
Signed by Pledgor as of September 8, 1999.
LOUIS DREYFUS NATURAL GAS HOLDINGS
CORP.
By:
------------------------------
Name: Connie S. Linhart
Title: President & Treasurer
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ESCROW AGREEMENT BANK ONE, TEXAS, N.A.
THIS ESCROW AGREEMENT (the "Escrow Agreement") dated and
effective as of the 8th day of September, 1999 between LOUIS DREYFUS NATURAL
GAS HOLDINGS CORP., a Delaware corporation (the "Depositor"), and BANK ONE,
TEXAS, N.A., as escrow agent hereunder (in such capacity, the "Escrow Agent"),
each being duly authorized to execute and deliver this Escrow Agreement.
RECITALS
WHEREAS, Anatoly Sverdlin, individually and derivatively on
behalf of Automated Marine Propulsion Systems, Inc. (collectively, "Sverdlin")
obtained a judgment dated January 25, 1999 against the Depositor in the 215 th
Judicial District Court, Harris County, Texas in the action entitled ANATOLY
SVERDLIN V. AUTOMATED MARINE PROPULSION SYSTEMS, INC. AND L.D.E. ASSOCIATES,
L.L.C., ET AL., Cause No. 97-02103 (the "Action"), which judgment was
subsequently reformed (as reformed, the "Judgment") by order of the Court in
the 295th Judicial District Court, Harris County, Texas (the "Court") dated
April 29, 1999.
WHEREAS, on May 25, 1999 the Court issued an order in the
Action, which order has been modified subsequently (as modified, the "Order"),
suspending the Judgment on condition that by September 10, 1999 the Depositor
shall have placed in escrow, under arrangements approved by the Court, certain
security interests provided to Sverdlin.
WHEREAS, in order to comply with the terms of the Order, the
Depositor desires that, and has requested the Escrow Agent to be engaged as
agent in accordance with the terms and conditions hereof, and
WHEREAS, the Escrow Agent is willing to perform such services in
accordance with the terms and conditions hereof and has established the Escrow
Account hereunder.
WITNESSETH:
NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, and for other good, fair and valuable considerations and
reasonably equivalent value, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Escrow Agent and the Depositor do
agree as follows, intending to be legally bound:
Section 1. CERTAIN RULES OF CONSTRUCTION AND DEFINED TERMS.
For all purposes of this Escrow Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) All Persons (as defined below) and entities defined or
mentioned herein as parties hereto or to the other agreements, instruments,
documents and the like mentioned herein shall include, as applicable, each and
all of their respective heirs, legal representatives, successors and assigns.
(b) All references to agreements, instruments, documents and
the like herein shall mean and include all amendments, supplements and
modifications thereto and restatements thereof and substitutions therefor, as
such agreements, instruments, documents and the like are so amended,
supplemented, modified or restated in accordance with their respective terms.
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(c) The words "herein," "hereof and "hereunder" and other
words of similar import refer to this Escrow Agreement as a whole and not to
any particular Section or other subdivision.
(d) All headings used in this Escrow Agreement are for the
convenience of the parties only and shall not be used in construing the
meaning or intent of the terms and provisions hereof.
(e) The following terms shall have the respective meanings
set forth or referred to below in this Section. Except where the context
otherwise requires, words importing the singular number shall include the
plural and vice versa.
"BUSINESS DAY" shall mean any day on which banks are open for
general banking business in the State of Texas, other than a Saturday, a
Sunday, a legal holiday or any other day on which banks in the State of Texas
are required or authorized by law or executive order to close. If any action
or time for performance pursuant to this Escrow Agreement is to occur on any
day that is not a Business Day, such time for action or performance shall be
extended to the next Business Day.
"CONDITION" or "CONDITIONS" shall mean the requirements set
forth in Exhibit A, subject to the receipt of written instructions in
compliance with such requirements by a Trust Officer of the Escrow Agent at
the Escrow Agent's Corporate Trust Offices, during the Escrow Agent's business
hours on a Business Day.
"COURT" shall mean the 295 th Judicial District Court, Harris
County, Texas.
"DEPOSITOR" shall have the meaning assigned to such term in the
preamble to this Escrow Agreement.
"ESCROW AGENT" shall have the meaning assigned to such term in
the preamble to this Escrow Agreement.
"INDEMNIFIED PARTY" shall mean the Escrow Agent and/or any of
its shareholders, directors, agents, officers and employees.
"PERSON" shall mean any individual, corporation, trust,
unincorporated organization, governmental authority or any other form of
entity.
"PERMITTED INVESTMENTS" shall mean The One Group U.S. Treasury
Money Market Fund or any successor fund thereto.
"PROPERTY" shall mean the items of property described on
Exhibit C.
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Section 2. DEPOSIT IN ESCROW. The Depositor will deliver to
the Escrow Agent the Property to be held by the Escrow Agent in escrow
pursuant to the provisions of this Escrow Agreement.
Section 3. ESCROW INSTRUCTIONS. The Escrow Agent is hereby
authorized and instructed to deliver the Property to Sverdlin or to the
Depositor, in either case upon strict compliance with the Condition(s); and
upon such delivery the Escrow Agent's duties and liabilities in connection
with this Escrow Agreement and the Property shall terminate.
Section 4. INVESTMENT OF FUNDS HELD BY ESCROW AGENT. Pending
distribution in accordance with the provisions of Section 3 hereof, all
collected and available funds held by the Escrow Agent pursuant to this Escrow
Agreement shall be invested in Permitted Investments. The parties hereby
acknowledge and agree that unless written instructions and collected and
available funds are delivered to the Escrow Agent by 11:00 a.m. Central Time
on a Business Day, the funds will remain uninvested until the next Business
Day. All interest earnings on Permitted Investments shall be credited upon
receipt to the Escrow Account hereunder and invested in Permitted Investments.
Section 5. AVAILABILITY OF FUNDS/DELIVERY OF PROPERTY. All
parties acknowledge and agree that delivery of the Property is subject to the
sale and final settlement of Permitted Investments. When funds are invested
in The One Group U.S. Treasury Money Market Fund, delivery of the Condition(s)
must be made to the Escrow Agent by 11:00 a.m. Central Tune if the Property is
to be delivered by the close of that Business Day. Otherwise, the Property
will be delivered on the next Business Day. With respect to the sale of any
other Permitted Investment, if the final settlement of that sale has not
occurred by 1:00 p.m. Central Time on the day the Condition(s) is delivered to
the Escrow Agent, all parties acknowledge and agree that the Property will be
delivered on the next Business Day.
Section 6. CONCERNING THE ESCROW AGENT. (a) All parties
acknowledge and agree that the Escrow Agent is acting solely and exclusively
as a depository hereunder. The Escrow Agent shall have no liability to any
Person in acting upon on any written notice, request, waiver, consent,
certificate, receipt, authorization, or other paper or document which the
Escrow Agent believes to be genuine and what it purports to be, or refraining
from acting when the Escrow Agent does not believe it to be genuine and what
it purports to be.
(b) The Escrow Agent may confer with legal counsel in the
event of any dispute or question as to the construction of any of the
provisions hereof, or its duties hereunder, and it shall incur no liability
and it shall be fully protected in acting in accordance with the opinions of
such counsel.
(c) In the event of any conflicting or inconsistent claims or
demands being made in connection with the subject matter of this Escrow
Agreement, or in the event that the Escrow Agent is in doubt as to what action
it should take hereunder, the Escrow Agent may, at its option, refuse to
comply with any claims or demands on it, or refuse to take any other action
hereunder so long as such disagreement continues or such doubt exists, and in
any such event, the Escrow Agent shall not be or become liable in any way or
to any person for its failure or refusal to act, and the Escrow Agent shall be
entitled to continue to refrain from acting until the rights of all parties
have been fully and finally adjudicated by the Court. In addition to the
foregoing rights, in the event the Escrow Agent has any doubt as to the course
of action it should
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take under this Escrow Agreement, the Escrow Agent is hereby authorized to
petition the Court for instructions or to interplead the funds or assets so
held into such court. The parties agree to the jurisdiction of the Court over
their persons as well as the Property, waive personal service of process, and
agree that service of process by overnight mail to the address set forth below
in Section 7 corresponding to each party shall constitute adequate service.
The Depositor hereby agrees to indemnify and hold the Escrow Agent harmless
from any liability or losses occasioned thereby and to pay any and all of its
fees, costs, expenses, and counsel fees and expenses incurred in any such
action and agrees that, on such petition or interpleader action, the Escrow
Agent, its servants, agents, employees or officers will be relieved of further
liability.
(d) THE INDEMNIFIED PARTY SHALL NOT BE LIABLE TO ANY PERSON
FOR ANYTHING WHICH IT MAY DO OR REFRAIN FROM DOING IN CONNECTION WITH THIS
ESCROW AGREEMENT, INCLUDING THE INDEMNIFIED PARTY'S OWN NEGLIGENCE, BUT
EXCLUDING THE INDEMNIFIED PARTY'S OWN GROSS NEGLIGENCE OR WILLFUL MALFEASANCE.
THE INDEMNIFIED PARTY'S LIABILITY FOR ANY GROSSLY NEGLIGENT PERFORMANCE OR
NONPERFORMANCE SHALL NOT EXCEED ITS FEES IN CONNECTION WITH THE SERVICES
PROVIDED HEREUNDER. IN NO EVENT SHALL THE INDEMNIFIED PARTY BE LIABLE TO THE
DEPOSITOR OR SVERDLIN OR ANY THIRD PARTY FOR SPECIAL, INDIRECT, OR
CONSEQUENTIAL DAMAGES, OR LOST PROFIT'S OR LOSS OF BUSINESS, ARISING UNDER OR
IN CONNECTION WITH THIS ESCROW AGREEMENT.
(e) THE DEPOSITOR HEREBY AGREES TO PROTECT, DEFEND, INDEMNIFY
AND HOLD HARMLESS THE INDEMNIFIED PARTY AGAINST, ANY AND ALL COSTS, LOSSES,
DAMAGES, LIABILITIES, CLAIMS, EXPENSES (INCLUDING COUNSEL FEES AND EXPENSES)
AND CLAIMS INCURRED BY IT WITHOUT GROSS NEGLIGENCE OR WILLFUL MALFEASANCE ON
THE INDEMNIFIED PARTY'S PART ARISING OUT OF OR IN CONNECTION WITH ITS ENTERING
INTO THIS ESCROW AGREEMENT AND THE CARRYING OUT OF ITS DUTIES HEREUNDER,
INCLUDING THE COSTS AND EXPENSES OF DEFENDING ITSELF AGAINST ANY CLAIM OF
LIABILITY RELATING TO THIS ESCROW AGREEMENT.
(f) The Escrow Agent may resign for any reason, upon 30 day's
written notice to the Depositor and Sverdlin. Upon expiration of such 30 day
notice period, the Escrow Agent may deliver all cash and other property in its
possession, after the payment of all fees and expenses of the Escrow Agent,
under this Escrow Agreement to any successor escrow agent appointed by
Depositor and approved by order of the Court, or if no successor escrow agent
has been so appointed, to the Court. Upon either such delivery, the Escrow
Agent shall be released from any and all liability under this Escrow
Agreement. A termination under this paragraph shall in no way discharge
clauses (d), (e) and (g) of this Section 6 affecting reimbursement of
expenses, indemnity and fees.
(g) Contemporaneously with the execution of this Escrow
Agreement, the Depositor shall pay to the Escrow Agent an Acceptance Fee of
$500.00 and a base Annual Administration Fee of $2000.00, which fee shall be
deemed fully earned immediately, regardless of the actual length of time
during which this Escrow Agreement is effective. In addition, the Depositor
agrees to pay to the Escrow Agent its customary fees and expenses, including
counsel fees and expenses for the services rendered by it pursuant to the
provisions of this Escrow
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Agreement. The Depositor agrees to reimburse the Escrow Agent for its
expenses, including counsel fees and expenses incurred in connection with the
negotiation of this Escrow Agreement which shall be paid upon execution of
this Escrow Agreement. The Escrow Agent's current fee schedule is attached
hereto as Exhibit B (but such fees may be adjusted from time to time, in which
case the Depositor agrees to pay the adjusted fees).
(h) It is strictly understood that the Escrow Agent has no
duty to disburse any funds to any Person until such funds have been collected
by the Escrow Agent and those funds are available in accordance with normal
banking procedures and/or policy. In the event that any funds, including
collected funds, deposited in the Escrow Account prove uncollectible, the
Depositor and the Escrow Agent shall immediately reimburse the Escrow Agent
upon request for the face amount of such deposit.
(i) No assignment of the interest of the Depositor shall be
binding upon the Escrow Agent unless approved by order of the Court and
written evidence of such assignment in form satisfactory to the Escrow Agent
shall be filed with and accepted by the Escrow Agent.
(j) Any corporation or association into which the Escrow
Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its corporate trust business and assets as a
whole or in part, or any corporation or association resulting from any such
conversion, sale, merger, consolidation or transfer to which it is a party,
shall be and become the successor Escrow Agent hereunder and vested with all
of the title to the whole property or trust estate and all the trust, powers,
immunities, privileges, protections and all other matters as was its
predecessor, without the execution or filing of any instrument or any further
act, deed or conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
Section 7. MISCELLANEOUS.
(a) All notices and other communications or deliveries
hereunder shall, as applicable, be in writing, and shall be deemed to be duly
given if delivered in person or sent by overnight mail to the respective
address of the Person entitled to receive such notice or delivery, as set
forth below. All parties may, from time to time, change their respective
address for notices by giving written notice of such change to the other
parties hereto. The Escrow Agent shall not be charged with knowledge of any
fact, including, but not limited to, performance or nonperformance of any
Condition, unless 'it has actually received written notice thereof from the
Depositor or its authorized representative clearly referring to this Escrow
Agreement.
To the Depositor:
Williams & Connolly
725 Twelfth Street, N.W.
Washington, D.C. 20005
Attn: John J. Buckley, Jr., Esq.
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with a copy to:
Louis Dreyfus Natural Gas Holdings Corp.
3411 Silverside Road
Suite 210E Baynard Bldg.
Wilmington, DE 19810-4808
Attn: Connie S. Linhart
To the Escrow Agent:
Bank One, Texas, N.A.
Corporate Trust Department
500 Throckmorton St., Suite 801
Fort Worth, TX 76102
To Sverdlin:
Cunningham & Associates, P.C.
12 Greenway Plaza, Suite 1350
Houston, TX 77046-1201
Attn: Lloyd R. Cunningham, Esq.
with a copy of such communication, excluding any enclosures, to:
Anatoly SverdIin
c/o Cunningham & Associates, P.C.
12 Greenway Plaza, Suite 1350
Houston, TX 77046-1201
Attn: Lloyd R. Cunningham, Esq.
(b) The rights created by this Escrow Agreement shall inure
to the benefit of, and the obligations created hereby shall be binding upon,
the successors and assigns of each of the parties hereto.
(c) This Escrow Agreement shall be construed and enforced
according to the laws of the State of Texas without regard to its principles
of conflicts of law.
(d) This Escrow Agreement shall terminate and the Escrow
Agent shall be discharged of all responsibility hereunder at such time as
Escrow Agent shall have completed its duties hereunder; PROVIDED, HOWEVER, the
Escrow Agent's rights to indemnity and to receive payment of its fees and
expenses shall survive any termination of this Escrow Agreement and any
resignation or removal of the Escrow Agent.
(e) This Escrow Agreement may be executed in several
counterparts, which taken together shall constitute a single document.
(f) This Escrow Agreement constitutes the entire
understanding and agreement of the parties hereto with respect to the
transactions described herein and supersedes all prior agreements or
understandings, written or oral, between the parties with respect thereto.
There are no implied duties under this Escrow Agreement. The Escrow Agent's
only duty is to
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act in accordance with this Escrow Agreement. The Escrow Agent is not a party
to any other agreement and the Escrow Agent shall not be subject to any other
agreement even though reference thereto may be made herein.
(g) If any provision of this Escrow Agreement is declared by
the Court to be invalid, void or unenforceable, the remaining provisions shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way.
(h) No amendment, modification or waiver of any provision of
this Escrow Agreement nor consent to any departure by any Person from the
provisions hereof shall be effective in any event unless the same shall be in
writing and signed by each of Depositor and Escrow Agent and approved by order
of the Court, and then any such waiver or consent shall be effective only in
the specific instance and purpose for which given.
(i) Pursuant to the regulations of the Office of the
Comptroller of the Currency [12 C.F.R 12.5(a)], the Depositor has the right to
receive, at no additional cost and within five Business Days of the
transaction, a written notification disclosing certain information, if
applicable, relating to securities purchase and sale transactions in the
Escrow Account. The Escrow Agent has the option of furnishing to the
Depositor either (1) a copy of the broker-dealer confirmation relating to the
transaction or (2) a written notification disclosing: the Escrow Agent's name,
the account name, the Escrow Agent's capacity in the transaction, the date of
execution (and, upon the Depositor's written request, the time of execution)
of the transaction, the identity, price and number of shares involved, the
remuneration to the broker-dealer and his identity, the total remuneration to
be received by the Escrow Agent, and, if no broker-dealer was involved, the
identity of the person from whom the security was purchased or to whom it was
sold.
In lieu of the foregoing time and form of notification, the
Depositor agrees that the Escrow Agent's periodic statements, transmitted
pursuant to the terms of this Escrow Agreement, will suffice.
(j) The Depositor warrants to the Escrow Agent that there are
no federal, state or local tax liabilities or filing requirements whatsoever
concerning the Escrow Agent's actions contemplated hereunder and warrant and
represent to the Escrow Agent that the Escrow Agent has no duty to withhold or
file any report or any tax liability under any federal or state income tax,
local or state property tax, local or state sales or use taxes, or any other
tax by any taxing authority. The Depositor agrees to indemnify the Escrow
Agent fully from any tax liability, penalties or interest incurred by the
Escrow Agent arising hereunder and agrees to pay in full any such tax
liability together with penalty and interest, if any, that is ultimately
assessed against the Escrow Agent for any reason as a result of its action
hereunder (except for the Escrow Agent's individual income tax liability).
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IN WITNESS WHEREOF, the Depositor and the Escrow Agent have
executed this Escrow Agreement effective as of the day and year first above
written.
LOUIS DREYFUS NATURAL GAS HOLDINGS
CORP.
"Depositor"
By:
----------------------------------
Title: President & Treasurer
Tax Identification Number: 06-1319711
BANK ONE, TEXAS, N.A.
"Escrow Agent"
By:
--------------------------------
Title:
-----------------------------
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EXHIBIT A
The Escrow Agent shall hold the Property and deliver the
Property either to the Depositor or to Sverdlin upon receipt of an older of
the 295th District Court, Harris County, Texas in the action entitled ANATOLY
SVERDLIN V. AUTOMATED MARINE PROPULSION SYSTEMS, INC. AND L.D.E. ASSOCIATES,
LLC., ET AL. (Cause No. 97-0210) authorizing or directing the Escrow Agent to
deliver the Property to the Depositor or to Sverdlin, as the case may be.
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EXHIBIT B
Escrow Fee Schedule
RE: Louis Dreyfus Natural Gas Holdings Corp. - Escrow Agreement
Acceptance Fee.....................................................$500
Annual Administration Fee..........................................$2,000
Out-of-pocket Expenses:
A charge of 4% of the total fees will be added to cover ordinary business
expenses for postage, checks, stationery, printing, messenger deliveries,
and telephone. Expenses for extraordinary services, such as, but not
limited to, travel, legal securities delivery, and legal notice
publication will be billed additionally.
Extraordinary Time Charges: .......................................$200 per
hour (see
below)
Additional Terms and Conditions:
Acceptance of the appointment is subject to document provisions being
satisfactory to the bank.
After initial review and comment on the escrow document, any additional
review, comment and negotiation on material changes to the document will
be billed as Extraordinary Time Charges.
The fees quoted in this letter apply to services ordinarily rendered is
the administration of an Agency Account. They are subject to reasonable
adjustment based on final review of documents. Fees can also be adjusted
when the Agent is called upon to undertake unusual duties or
responsibilities, or as changes in law, procedures, or the cost of doing
business demand. Services in addition to and not contemplated in the
agreement, including, but not limited to, document amendments and
revisions, nonstandard cash and/or investment transactions, calculations,
notices, reports, and default administration will be billed as
Extraordinary Time Charges.
Unless otherwise indicated, the above fees provide for the establishment
of one account. Additional sub-accounts governed by the same escrow
agreement may be established at as additional charge of $250 per account.
The Acceptance Fee and the first year Annual Administration Fee are
payable upon execution of the escrow documents. In the event the escrow
is not funded, the Acceptance Fee and all related expenses will not be
refunded. Annual Administration fees cover a full year in advance, or
any part thereof, and thus are not pro-rated in the year of termination.
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Upon a client's direction, cash balances will be invested in any one of
the following:
Cash balances may be invested on a daily basis in a time deposit
account with a BANK ONE affiliate bank in which event Bank One
will waive its cash management fee.
Cash balances may be invested in The One Group-Registered
Trademark- Money Market Funds in which event Bank One will charge
a 50 basis point .005 cash management fee. The One Group will pay
Banc One Investment Advisors Corporation, an affiliate of BANK
ONE, as investment advisory fee as described in the prospectuses.
Cash balances may be invested in an alternative short-term
investment fund in which event Bank One will charge a 50 basis
point .005 cash management fee. However, no credit will be given
against annual fees as previously described with respect to Bank
One deposit accounts or The One Group Investments.
In determining the general schedule of fees, Bank One takes into
consideration the various incidental benefits accruing to it from the
operation of the accounts. Collected funds must be on deposit prior to
disbursement of payments. In addition, Bank One has the use of funds
deposited to pay checks that have not yet been presented for payment. No
interest shall be paid to the client on these funds, it being understood
that the float on these funds is considered is the calculation of our
fees.
Should you elect to appoint Bank One as your Escrow Agent, we request that you
sign and return the enclosed copy of this attachment acknowledging your
agreement to these fees, terms, and conditions.
ACKNOWLEDGMENT AND ACCEPTANCE
The undersigned agrees to the above quoted fees, terms, and conditions.
By:
---------------------------------------------------------
Date:
-------------------------------------------------------
The One Group is a family of registered, open-ended mutual fund portfolios.
Banc One Investment Advisors Corporation, an indirect subsidiary of BANK ONE
CORPORATION, serves a investment advisor to The One Group for which it
receives advisory fees. Shares of The One Group are not endorsed or
guaranteed by and do not constitute obligations of BANK ONE CORPORATION or its
affiliates. INVESTMENTS IN THE ONE GROUP FUNDS INVOLVE INVESTMENT RISK
INCLUDING POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE ONE GROUP ARE NOT INSURED
OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR BY ANY OTHER
GOVERNMENTAL AGENCY OR GOVERNMENT SPONSORED AGENCY OF THE FEDERAL GOVERNMENT
OR ANY STATE.
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EXHIBIT C
(a) 5,500,000 shares of the common stock of Louis Dreyfus
Natural Gas Corp., an Oklahoma corporation, represented by 11 certificates of
500,000 shares each, bearing the following numbers: C-017275, C-017276,
C-017267, C-017287, C-017289, C-017290, C-017291, C-017293, C-017294, C-017295
and C-017300 and by the corresponding Stock Powers, which shall be delivered
to the Escrow Agent on or before September 10, 1999;
(b) 5,500,000 shares of the common stock of Louis Dreyfus
Natural Gas Corp., an Oklahoma corporation, represented by 11 certificates of
500,000 shares each, bearing the following numbers: C-017270, C-017277,
C-017278, C-017279, C-017280, C-017281, C-017282, C-017283, C-017284, C-017285
and C-017286 and by the corresponding Stock Powers, some or all of which may
be delivered to the Escrow Agent from time to time in the future;
(c) a copy of the Assignment, dated as of September 8, 1999,
by Louis Dreyfus Natural Gas Holdings Corp. to Anatoly Sverdlin, individually
and derivatively on behalf of Automated Marine Propulsion Systems, Inc. and
consented to by Louis Dreyfus Natural Gas Corp.;
(d) a copy of the Assignment Of Equity Interest In Shares,
dated as of September 8, 1999, by Louis Dreyfus Natural Gas Holdings Corp. to
Anatoly Sverdlin, individually and derivatively on behalf of Automated Marine
Propulsion Systems, Inc.; and
(e) amounts which may be delivered to the Escrow Agent from
time to time in the future on account of certain Louis Dreyfus Natural Gas
Corp. common stock dividends received by Louis Dreyfus Natural Gas Holdings
Corp. and forwarded to the Escrow Agent.
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ASSIGNMENT
Assignment (this "Assignment") by Louis Dreyfus Natural Gas
Holdings Corp. ("Pledgor") to Anatoly Sverdlin, individually and derivatively
on behalf of Automated Marine Propulsion Systems, Inc. (collectively, the
"Secured Party").
WHEREAS, pursuant to a Registration Rights Agreement dated as of
November 9, 1993 by and between Louis Dreyfus Natural Gas Corp. ("Issuer") and
Pledgor the ("Rights Agreement"), Pledgor possesses certain rights to cause
shares issued by Issuer that have not been registered under the Securities Act
of 1933 ( the "Unregistered Shares") to be registered under certain
circumstances.
WHEREAS, by amendments to the Rights Agreement dated December
27, 1995 and May 1, 1998, respectively (the "Amendments"), Pledgor granted to
Societe Generale, as agent for certain banks to which certain of the
Unregistered Shares had been pledged (the "Pledge"), and to L.D. Fashions
Holdings Corp. ("Fashions"), to which certain of the Unregistered Shares had
been sold, rights to register the Unregistered Shares that were pledged under
the Pledge and the Unregistered Shares that were transferred to Fashions, in
each case that are senior in right to register to the rights retained by
Pledgor (the "Retained Rights").
WHEREAS, by a Grant of Security Interests dated the date of this
Assignment (the "Grant"), Pledgor has granted to the Secured Party a security
interest in the Unregistered Shares held by Pledgor, subject to the rights
granted under the Pledge, and agreed to assign to the Secured Parry the
Retained Rights.
WHEREAS, this Assignment is entered into to effect Pledgor's
agreement to assign the Retained Rights to the Secured Party.
NOW, THEREFORE, Pledgor hereby makes this Assignment to the
Secured Party on the following terms and conditions:
1. Pledgor assigns to the Secured Party all of Pledgor's
right and title to and interest in the Retained Rights as part of the
Collateral (as that term is defined in the Grant) under the terms set forth in
the Grant in accordance with the terms of this Assignment.
2. As provided in the Grant, this Assignment will be
delivered to and held by the Escrow Agent (as that term is defined in the
Grant) and will become effective only if and when this Assignment is delivered
by the Escrow Agent to the Secured Party as provided under the Escrow
Agreement (as that term is defined in the Grant); and upon that delivery to
the Secured Party, the Secured Party may exercise all of the Retained Rights
as fully as if it were named as a party to the Rights Agreement and Pledgor
will take such actions (including, but not limited to, executing and
delivering such further instruments, documents and agreements) as may be
necessary or desirable to evidence the assignment by Pledgor referred to above
and to enable the Secured Party to exercise the Retained Rights.
3. If this Assignment is delivered to the Secured Party by
the Escrow Agent pursuant to Section 2, and as a condition to its exercise of
the Retained Rights, the Secured Parry will perform all of the obligations
that Pledgor has under the Retained Rights.
4. This Assignment may not be assigned by the Secured Party.
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5. THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. PLEDGOR SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURT, THAT IS, THE 295TH JUDICIAL DISTRICT
COURT SITUATED IN HARRIS COUNTY, TEXAS. ALL DISPUTES AND CONTROVERSIES
RELATING TO THIS ASSIGNMENT OR TO ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
ASSIGNMENT SHALL BE DETERMINED BY THE COURT.
Signed by Pledgor as of September 8, 1999.
LOUIS DREYFUS NATURAL GAS HOLDINGS CORP.
By:
-----------------------------
Name: Connie S. Linhart
Title: President & Treasurer
The undersigned hereby consents to the assignment set forth above:
LOUIS DREYFUS NATURAL GAS CORP.
BY
--------------------------
Its:
Date: September __, 1999
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