SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities and Exchange Act of 1934
----------------------
Maxus Energy Corporation
(Name of Subject Company)
----------------------
YPF Acquisition Corp.
YPF S.A.
(Bidders)
----------------------
Common Stock, Par Value $1.00 Per Share
(Title of Class of Securities)
----------------------
577730 10 4
(CUSIP Number of Class of Securities)
----------------------
Mr. Jose A. Estenssoro
Avenida Roque Saenz Pena 777
1364 Buenos Aires, Argentina
(54)(1) 329-2000
with a copy to:
P. Dexter Peacock, Esq.
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
(713) 220-4200
(Names, Addresses and Telephone Numbers of Persons Authorized
to Receive Notices and Communications on Behalf of Bidders)
----------------------
Calculation of Filing Fee
-------------------------------------------------------------------------
Transaction valuation: $745,237,378*Amount of filing fees: $149,048.00
-------------------------------------------------------------------------
* For purposes of calculating fee only. The amount assumes the
purchase of 135,497,705 Shares (as defined herein) at $5.50
per Share in cash. The amount of the filing fee, calculated
in accordance with Rule 0-11(d) of the Securities Exchange
Act of 1934, as amended, equals 1/50 of one percent of the
aggregate of the cash offered for such number of Shares.
[ ] Check box if any part of the fee is offset by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and
the date of its filing.
Amount Previously Paid: Not applicable Filing Party: Not applicable
Form or Registration No.: Not applicable Date Filed: Not applicable
<PAGE>
CUSIP No. 577730 10 4 14D-1 Page 2 of 9 Pages
- -------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
YPF Acquisition Corp.
- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------
4 SOURCES OF FUNDS
BK; AF
- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
- -------------------------------------------------------------------------
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
- -------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.0%
- -------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
2
<PAGE>
CUSIP No. 577730 10 4 14D-1 Page 3 of 9 Pages
- -------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
YPF S.A.
- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
- -------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------
4 SOURCES OF FUNDS
BK
- -------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ]
- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Republic of Argentina
- -------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,000 Shares
- -------------------------------------------------------------------------
8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN
SHARES [ ]
- -------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
0.0%
- -------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
3
<PAGE>
This Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") relates to the offer by YPF Acquisition Corp.,
a Delaware corporation (the "Purchaser") and a wholly owned
subsidiary of YPF Sociedad Anonima, a sociedad anonima organized
under the laws of the Republic of Argentina ("YPF"), to purchase
all outstanding shares of common stock, par value $1.00 per share
(the "Shares"), of Maxus Energy Corporation (the "Company"), upon
the terms and subject to the conditions set forth in the Offer to
Purchase, dated March 3, 1995 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which together constitute the
"Offer"), which are annexed to and filed with this Statement as
Exhibits (a)(1) and (a)(2), respectively.
Item 1 - Security and Subject Company
(a) The name of the subject company is Maxus Energy
Corporation, a Delaware corporation. The principal executive
offices of the Company are located at 717 North Harwood Street,
Dallas, Texas, 75201.
(b) The class of equity securities to which this
Schedule 14D-1 relates is the common stock, par value $1.00 per
share, of the Company. The information set forth in
"Introduction" of the Offer to Purchase is incorporated herein by
reference.
(c) The information set forth in Section 6 ("Price
Range of Shares; Dividends") of the Offer to Purchase is
incorporated herein by reference.
Item 2 - Identity and Background
(a)-(d) and (g) This Schedule 14D-1 is being filed by
the Purchaser and YPF. The information set forth in
"Introduction," Section 8 ("Certain Information Concerning the
Purchaser and YPF") and in Schedule I ("Directors and Executive
Officers of YPF and the Purchaser") of the Offer to Purchase is
incorporated herein by reference.
(e) and (f) During the last five years, neither the
Purchaser nor YPF or, to the best of their knowledge, any of the
persons listed in Schedule I ("Directors and Executive Officers
of YPF and the Purchaser") to the Offer to Purchase (i) has been
convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) was a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining further violations
of, or prohibiting activities subject to, federal or state
securities laws or finding any violations of such laws.
Item 3 - Past Contacts, Transactions or Negotiations with the
Subject Company
(a)-(b) The information set forth in "Introduction,"
Section 8 ("Certain Information Concerning the Purchaser and
YPF"), Section 10 ("Background of the Offer; Past Contacts,
Transactions or Negotiations with the Company") and Section 11
("Purpose of the Offer; the Merger; Merger Agreement; Plans for
the Company") of the Offer to Purchase is incorporated herein by
reference.
4
<PAGE>
Item 4 - Source and Amount of Funds or Other Consideration
(a)-(b) The information set forth in Section 9
("Source and Amount of Funds") of the Offer to Purchase is
incorporated herein by reference.
(c) Not applicable.
Item 5 - Purpose of the Tender Offer and Plans or Proposals of
the Bidder
(a)-(e) The information set forth in "Introduction,"
Section 6 ("Price Range of Shares; Dividends"), Section 10
("Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company"), Section 11 ("Purpose of the
Offer; the Merger; Merger Agreement; Plans for the Company") and
Section 13 ("Dividends and Distributions") of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 12
("Effect of the Offer on the Market for Shares; Stock Exchange
Listing; Registration Under the Exchange Act") of the Offer to
Purchase is incorporated herein by reference.
Item 6 - Interest in Securities of the Subject Company
(a)-(b) The information set forth in
"Introduction," Section 8 ("Certain Information Concerning the
Purchaser and YPF"), Section 10 ("Background of the Offer; Past
Contacts, Transactions or Negotiations with the Company") and
Section 11 ("Purpose of the Offer; the Merger; Merger Agreement;
Plans for the Company") of the Offer to Purchase is incorporated
herein by reference.
Item 7 - Contracts, Arrangements, Understandings or Relationships
with Respect to the Subject Company's Securities
The information set forth in "Introduction," Section 8
("Certain Information Concerning the Purchaser and YPF"), Section
10 ("Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company") and Section 11 ("Purpose of the
Offer; the Merger; Merger Agreement; Plans for the Company") of
the Offer to Purchase is incorporated herein by reference.
Item 8 - Persons Retained, Employed or to be Compensated
The information set forth in "Introduction" and
Section 16 ("Fees and Expenses") of the Offer to Purchase is
incorporated herein by reference.
Item 9 - Financial Statements of Certain Bidders
The information set forth in Section 8 ("Certain
Information Concerning the Purchaser and YPF") of the Offer to
Purchase is incorporated herein by reference.
The incorporation by reference herein of the above-
referenced financial information does not constitute an admission
that such information is material to a decision by a stockholder
of the Company whether to sell, tender or hold Shares being
sought in the Offer.
5
<PAGE>
Item 10 - Additional Information
(a) The information set forth in "Introduction,"
Section 8 ("Certain Information Concerning the Purchaser and
YPF"), Section 10 ("Background of the Offer; Past Contacts,
Transactions or Negotiations with the Company") and Section 11
("Purpose of the Offer; the Merger; Merger Agreement; Plans for
the Company") of the Offer to Purchase is incorporated herein by
reference.
(b)-(c) The information set forth in Section 11
("Purpose of the Offer; the Merger; Merger Agreement; Plans for
the Company") and Section 15 ("Certain Legal Matters; Required
Regulatory Approvals") of the Offer to Purchase is incorporated
herein by reference.
(d) The information set forth in Section 12 ("Effect
of the Offer on the Market for Shares; Stock Exchange Listing;
Registration Under the Exchange Act") of the Offer to Purchase is
incorporated herein by reference.
(e) The information set forth in Section 15 ("Certain
Legal Matters; Required Regulatory Approvals") of the Offer to
Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to
Purchase and the related Letter of Transmittal, copies of which
are attached hereto as Exhibits (a)(1) and (a)(2), respectively,
is incorporated herein by reference in its entirety.
Item 11 - Material to be Filed as Exhibits
(a)(1) Offer to Purchase, dated March 3, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Salomon Brothers Inc to Brokers,
Dealers, Commercial Banks, Trust Companies
and Other Nominees, dated March 3, 1995.
(a)(5) Letter to Clients for use by Brokers,
Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(6) IRS Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement, dated March 3, 1995.
(b)(1) Commitment Letter.
6
<PAGE>
(c)(1) Agreement of Merger, dated as of February 28,
1995, among YPF S.A., YPF Acquisition Corp.
and Maxus Energy Corporation.
(c)(2) Guaranty Agreement, dated February 28, 1995,
among YPF S.A. and The Prudential Insurance
Company of America.
(c)(3) Letter between Maxus Energy Corporation and
The Prudential Insurance Company, dated
February 28, 1995.
(c)(4) Agreement Regarding Expenses, dated February
28, 1995.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
7
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and
belief, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Dated: March 3, 1995
YPF S.A.
By:
--------------------------
Name:
Title:
YPF Acquisition Corp.
By:
--------------------------
Name:
Title:
8
<PAGE>
EXHIBIT INDEX
Exhibit Exhibit Name
- ------- ------------
(a)(1) Offer to Purchase, dated March 3, 1995.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter from Salomon Brothers Inc to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees,
dated March 3, 1995.
(a)(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(6) IRS Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7) Summary Advertisement, dated March 3, 1995.
(b)(1) Commitment Letter.
(c)(1) Agreement of Merger, dated February 28, 1995 among YPF
S.A., YPF Acquisition Corp. and Maxus Energy
Corporation.
(c)(2) Guaranty Agreement, dated February 28, 1995 among YPF
S.A. and the Prudential Insurance Company of America.
(c)(3) Letter between Maxus Energy Corporation and The
Prudential Insurance Company, dated February 28, 1995.
(c)(4) Agreement Regarding Expenses, dated February 28, 1995.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
9
Exhibit (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MAXUS ENERGY CORPORATION
AT
$5.50 NET PER SHARE
BY
YPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
YPF SOCIEDAD ANONIMA
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME,
ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE A NUMBER OF SHARES THAT
REPRESENTS NOT LESS THAN A MAJORITY OF THE COMPANY'S VOTING SHARES OUTSTANDING
ON A FULLY DILUTED BASIS AND (2) FINANCING HAVING OCCURRED UNDER THE LOAN
AGREEMENT CONTEMPLATED BY THE BANK COMMITMENT LETTER RECEIVED BY YPF. SEE
SECTIONS 1, 14 AND 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (a) complete and sign the enclosed Letter of Transmittal
(or a facsimile copy thereof) in accordance with the instructions in the Letter
of Transmittal and mail or deliver it together with the certificate(s)
representing tendered Shares, and any other required documents, to the
Depositary or tender such Shares pursuant to the procedure for book-entry
transfer set forth in Section 3 or (b) request such stockholder's broker,
dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. A stockholder whose Shares are registered in
the name of a broker, dealer, commercial bank, trust company or other nominee
must contact such broker, dealer, commercial bank, trust company or other
nominee if such stockholder desires to tender such Shares.
Any stockholder who desires to tender such stockholder's Shares and whose
certificates representing such Shares are not immediately available or who
cannot comply with the procedures for book-entry transfer on a timely basis may
tender such Shares by following the procedures for guaranteed delivery set forth
in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Additional copies of this
Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery
and other related materials may be obtained from the Information Agent or from
brokers, dealers, commercial banks and trust companies.
-------------------
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
March 3, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE><CAPTION>
PAGE
----
<C> <S> <C>
Introduction............................................................................ 1
1. Terms of the Offer............................................................ 2
2. Acceptance for Payment and Payment............................................ 3
3. Procedures for Tendering Shares............................................... 4
4. Withdrawal Rights............................................................. 7
5. Certain Tax Consequences...................................................... 7
6. Price Range of Shares; Dividends.............................................. 8
7. Certain Information Concerning the Company.................................... 9
8. Certain Information Concerning the Purchaser and YPF.......................... 12
9. Source and Amount of Funds.................................................... 15
10. Background of the Offer; Past Contacts, Transactions or Negotiations with the
Company....................................................................... 18
11. Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company..... 18
12. Effect of the Offer on the Market for Shares; Stock Exchange Listing;
Registration Under the Exchange Act......................................... 25
13. Dividends and Distributions................................................... 26
14. Conditions to the Offer....................................................... 27
15. Certain Legal Matters; Required Regulatory Approvals.......................... 29
16. Fees and Expenses............................................................. 31
17. Miscellaneous................................................................. 31
Schedule I--Directors and Executive Officers of YPF and the Purchaser................... I-1
</TABLE>
i
<PAGE>
To Holders of Common Stock of
MAXUS ENERGY CORPORATION
INTRODUCTION
YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the
laws of the Republic of Argentina ("YPF"), hereby offers to purchase all
outstanding shares of common stock, par value $1.00 per share (the "Shares"), of
Maxus Energy Corporation, a Delaware corporation (the "Company"), at $5.50 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which together constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage commissions
or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares by the Purchaser pursuant to the Offer. However,
any tendering stockholder or other payee who fails to complete and sign the
Substitute Form W-9 that is included in the Letter of Transmittal may be subject
to a required backup federal income tax withholding of 31% of the gross proceeds
payable to such stockholder or other payee pursuant to the Offer. See Section 3.
The Purchaser will pay all charges and expenses of Salomon Brothers Inc
("Salomon Brothers"), which is acting as Dealer Manager for the Offer (in such
capacity, the "Dealer Manager"), D.F. King & Co., Inc., which is acting as the
Information Agent (the "Information Agent"), and The Chase Manhattan Bank
(National Association), which is acting as the Depositary (the "Depositary"),
incurred in connection with the Offer. See Section 16.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE (AS HEREINAFTER DEFINED) A
NUMBER OF SHARES WHICH REPRESENTS NOT LESS THAN A MAJORITY OF THE COMPANY'S
VOTING SHARES OUTSTANDING ON A FULLY DILUTED BASIS AND (2) FINANCING HAVING
OCCURRED UNDER THE LOAN AGREEMENT CONTEMPLATED BY THE BANK COMMITMENT LETTER
RECEIVED BY YPF. SEE SECTIONS 1, 14 AND 15.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND
RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
THE BOARD OF DIRECTORS OF THE COMPANY HAS RECEIVED THE OPINION OF CS FIRST
BOSTON CORPORATION, THE COMPANY'S FINANCIAL ADVISOR, THAT THE CONSIDERATION TO
BE RECEIVED BY THE HOLDERS OF SHARES OF COMMON STOCK PURSUANT TO THE OFFER AND
THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW.
The Offer is being made pursuant to the Agreement of Merger, dated as of
February 28, 1995 (the "Merger Agreement"), among YPF, the Purchaser and the
Company, pursuant to which, as promptly as practicable following the later of
the Expiration Date and the satisfaction or waiver of certain conditions, the
Purchaser will be merged with and into the Company (the "Merger"), with the
result that all of the outstanding common stock of the Company will be
beneficially owned by YPF. At the effective time of the Merger, each
then-outstanding Share (other than Shares held by YPF, the Purchaser or any of
their subsidiaries, or in the treasury of the Company, all of which will be
cancelled, and Shares held by stockholders who perfect their appraisal rights
under Delaware law) will be converted into the right to receive $5.50 per Share
in cash or any higher price per Share paid pursuant to the Offer. See Section
12.
The Purchaser has been advised by the Company that, to the Company's
knowledge, all of the Company's directors and executive officers currently
intend to tender all Shares owned by them pursuant to the Offer.
<PAGE>
According to the Company, as of February 23, 1995, there were (i)
135,497,705 Shares outstanding, (ii) 8,000,000 warrants outstanding, each
representing the right to purchase from the Company on or prior to October 10,
1997, one Share at a price of $13.00 per Share, (iii) 4,358,658 shares of $4.00
Preferred Stock ("$4.00 Preferred Stock") outstanding, each convertible into
2.29751 Shares (and, together with the Shares, the "Voting Shares"), and (iv)
875,000 shares of $9.75 Cumulative Convertible Preferred Stock ("$9.75 Preferred
Stock") outstanding, each convertible into 9.04 Shares.
The Company's preferred share purchase rights (the "Rights"), issued
pursuant to the Rights Agreement, dated as of September 2, 1988, between the
Company and Ameritrust Company National Association, as Rights Agent (the
"Rights Agreement"), are evidenced by the certificates representing Shares. In
the Merger Agreement, the Company agreed to take the steps necessary to redeem
the Rights so that the Rights issued pursuant to the Rights Agreement will not
become exercisable as a result of the consummation of the transactions
contemplated in the Merger Agreement. The Purchaser announced on March 1, 1995
that the Board of Directors of the Company had taken all necessary action to
redeem the Rights effective as of March 22, 1995, and that holders of record of
Shares on such date will be entitled to receive the redemption price therefor
($0.10 per Right). See Section 1 and Section 7.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH STOCKHOLDERS SHOULD READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the
Offer (including, if the Offer is extended or amended, the terms and conditions
of any extension or amendment), the Purchaser will accept for payment and pay
for all Shares which are validly tendered prior to the Expiration Date and not
withdrawn in accordance with Section 4. The term "Expiration Date" means 12:00
midnight, New York City time, on Thursday, March 30, 1995 unless and until the
Purchaser (subject to the terms of the Merger Agreement) shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall refer to the latest time and date at which the Offer, as
so extended by the Purchaser, shall expire.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE
MINIMUM SHARE CONDITION AND THE FINANCING CONDITION. The "Minimum Share
Condition" is the condition to the Offer that the number of Shares being validly
tendered and not withdrawn prior to the Expiration Date, when added to the
Shares and $4.00 Preferred Stock, beneficially owned by YPF and the Purchaser
represents not less than a majority of the Voting Shares outstanding on a Fully
Diluted Basis. "Fully Diluted Basis" means the number of Voting Shares
outstanding as of the close of business on February 23, 1995, increased by the
number of Voting Shares (i) issued between such date and the Expiration Date,
and (ii) issuable pursuant to the exercise of rights (other than the Rights) to
purchase Voting Shares or upon conversion or exchange of other securities;
reduced, however, by the number (if any) of employee stock options ("Company
Options") and other rights cancelled as described in the Merger Agreement. The
"Financing Condition" is the condition to the Offer that financing shall have
occurred under the loan agreement contemplated by the bank commitment letter
received by YPF. See Section 14 which sets forth the conditions to the Offer. If
any condition to the Purchaser's obligation to purchase Shares under the Offer
is not satisfied prior to the Expiration Date, the Purchaser reserves the right
(but shall not be obligated) to (i) decline to purchase any of the Shares
tendered and terminate the Offer, (ii) waive such unsatisfied condition, subject
to the terms of the Merger Agreement and to compliance with applicable rules and
regulations of the Securities and Exchange Commission (the "Commission"), and
purchase all Shares validly tendered, (iii) extend the Offer and, subject to the
right of stockholders to withdraw Shares as provided in Section 4, retain the
Shares which have been tendered during the period or periods for which the Offer
is extended, or (iv) subject to the terms of the Merger Agreement, amend the
Offer.
The Merger Agreement provides that the Purchaser reserves the right to
increase the price per Share payable in the Offer or to otherwise amend the
Offer; provided, however, that without the consent of the Company, the Purchaser
shall make no amendment that decreases the price per Share payable in
2
<PAGE>
the Offer, reduces the minimum number of Shares to be purchased in the Offer,
imposes additional conditions to the Offer, or makes any other change in the
terms and conditions of the Offer that is materially adverse to the holders of
the Shares. Subject to the foregoing, the Purchaser expressly reserves the
right, at any time or from time to time, subject to the terms of the Merger
Agreement and regardless of whether or not any of the events set forth in
Section 14 shall have occurred or shall have been determined by the Purchaser to
have occurred, (i) to extend the period of time during which the Offer is open
and thereby delay acceptance for payment of, and the payment for, any Shares, by
giving oral or written notice of such extension to the Depositary, and (ii) to
amend the Offer in any respect by giving oral or written notice of such
amendment to the Depositary. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's rights to terminate the Offer
described in Section 14. There can be no assurance, however, that the Purchaser
will exercise its rights to extend the Offer. Any extension, amendment or
termination will be followed as promptly as practicable by public announcement
thereof, the announcement in the case of an extension to be issued no later than
9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the announcement requirements of
Rule 14d-4(c) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Without limiting the obligation of the Purchaser under such
Rule or the manner in which the Purchaser may choose to make any public
announcement, the Purchaser currently intends to make announcements by issuing a
release to the Dow Jones News Service.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering stockholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the
Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in percentage of securities
sought, will depend upon the facts and circumstances, including the relative
materiality of the terms or information. With respect to a change in price or a
change in percentage of securities sought, a minimum period of ten business days
is required to allow for adequate dissemination to stockholders and investor
response. If prior to the Expiration Date, the Purchaser should decide to
increase the price per Share being offered in the Offer, such increase will be
applicable to all stockholders whose Shares are accepted for payment pursuant to
the Offer. As used in this Offer to Purchase, "business day" has the meaning set
forth in Rule 14d-1 under the Exchange Act.
The Company has provided to the Purchaser its list of stockholder and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This Offer to Purchase and the related Letter of Transmittal and
other relevant materials will be mailed to record holders of Shares and
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list or, if applicable, who are listed as participants in a clearing agency's
security position listing, for subsequent transmittal to beneficial owners of
Shares.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of any extension or amendment), the Purchaser will
purchase, by accepting for payment, and will pay for, all Shares validly
3
<PAGE>
tendered prior to the Expiration Date (and not properly withdrawn in accordance
with Section 4) promptly after the Expiration Date. Any determination concerning
the satisfaction of such terms and conditions shall be within the sole
discretion of the Purchaser. See Section 14. The Purchaser expressly reserves
the right to delay acceptance for payment of, or, subject to Rule 14e-1(c) under
the Exchange Act, payment for, Shares in order to comply, in whole or in part,
with any applicable law, including the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act"). See Sections 14 and 15.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates for such
Shares or timely confirmation of book-entry transfer (a "Book-Entry
Confirmation") of such Shares into the Depositary's account at The Depository
Trust Company, the Midwest Securities Trust Company or the Philadelphia
Depository Trust Company (each, a "Book-Entry Transfer Facility") pursuant to
the procedures set forth in Section 3, (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), or an Agent's Message (as
defined below) in connection with a book-entry transfer, and (iii) any other
documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Purchaser may enforce such
agreement against such participant.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment (and thereby purchased) tendered Shares, if, as and when the Purchaser
gives oral or written notice to the Depositary of the Purchaser's acceptance of
such Shares for payment pursuant to the Offer. In all cases, payment for Shares
purchased pursuant to the Offer will be made by deposit of the purchase price
with the Depositary, which will act as agent for tendering stockholders for the
purpose of receiving payment from the Purchaser and transmitting payment to
tendering stockholders. Under no circumstances will interest on the purchase
price of the Shares be paid by the Purchaser.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, or if certificates submitted represent more Shares than are tendered,
certificates for such Shares not purchased or tendered will be returned, without
expense to the tendering stockholder (or, in the case of Shares tendered by
book-entry transfer into the Depositary's account at a Book-Entry Transfer
Facility pursuant to the procedures set forth in Section 3, such Shares will be
credited to an account maintained at such Book-Entry Transfer Facility),
promptly after the expiration, termination or withdrawal of the Offer.
3. PROCEDURES FOR TENDERING SHARES. For Shares to be validly tendered
pursuant to the Offer, a properly completed and duly executed Letter of
Transmittal or facsimile thereof, with any required signature guarantees, or an
Agent's Message in connection with a book-entry delivery of Shares, and any
other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date. In addition, either (i) the certificates for Shares must be
received by the Depositary along with the Letter of Transmittal or Shares must
be tendered pursuant to the procedures for book-entry transfer described below
and a Book-Entry Confirmation must be received by the Depositary, in each case
prior to the Expiration Date, or (ii) the tendering stockholder must comply with
the guaranteed delivery procedures described below.
The Depositary will establish an account with respect to the Shares at each
Book-Entry Transfer Facility for purposes of the Offer within two business days
after the date of this Offer to Purchase. Any financial institution that is a
participant in any of the Book-Entry Transfer Facilities' systems may make
book-entry delivery of Shares by causing a Book-Entry Transfer Facility to
transfer such Shares
4
<PAGE>
into the Depositary's account at a Book-Entry Transfer Facility in accordance
with such Book-Entry Transfer Facility's procedures for transfer. However,
although delivery of Shares may be effected through book-entry transfer at a
Book-Entry Transfer Facility, the Letter of Transmittal or facsimile thereof,
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message in connection with a book-entry transfer, and any other
required documents, must, in any case, be transmitted to and received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date or the tendering stockholder must comply
with the guaranteed delivery procedures described below. DELIVERY OF DOCUMENTS
TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signatures on all Letters of Transmittal must be guaranteed by a member firm
of a registered national securities exchange, a member of the National
Association of Securities Dealers, Inc. ("NASD") or a commercial bank or trust
company having an office or correspondent in the United States (each of the
foregoing being referred to as an "Eligible Institution"), unless the Shares
tendered thereby are tendered (i) by a registered holder of Shares who has not
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on the Letter of Transmittal, or (ii)
for the account of an Eligible Institution. See Instruction 1 of the Letter of
Transmittal. If the certificates are registered in the name of a person other
than the signer of the Letter of Transmittal or if payment is to be made or
certificates for Shares not accepted for payment or not tendered are to be
returned to a person other than the registered holder, then the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered owner or
owners appear on the certificates, with the signatures on the certificates or
stock powers guaranteed as described above. See Instructions 1 and 5 of the
Letter of Transmittal.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL (OR A MANUALLY
SIGNED FACSIMILE THEREOF) AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE
TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN
RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available or time will
not permit all required documents to reach the Depositary on or prior to the
Expiration Date, or the procedure for book-entry transfer cannot be completed on
a timely basis, such Shares may nevertheless be tendered if all the following
conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary as provided below, on or prior to the Expiration
Date as provided below; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a Letter of
Transmittal or facsimile thereof, properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer,
an Agent's Message) and any other documents required by the Letter of
Transmittal are received by the Depositary within five New York Stock
Exchange, Inc. ("NYSE") trading days after the date of execution of such
Notice of Guaranteed Delivery. Stockholders may not extend the foregoing
time period for delivery of Shares to the Depositary by providing a second
Notice of Guaranteed Delivery with respect to such Shares.
5
<PAGE>
The Notice of Guaranteed Delivery may be sent by hand delivery, telegram,
telex, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will in all cases be made only after timely receipt by the
Depositary of certificates for the Shares or a timely Book-Entry Confirmation of
the delivery of such Shares, and a Letter of Transmittal (or manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by the Letter of Transmittal.
Accordingly, payment might not be made to all tendering stockholders at the same
time, and will depend upon when certificates for the Shares or Book-Entry
Confirmations of the delivery of such Shares are received into the Depositary's
account at a Book-Entry Transfer Facility.
UNDER THE BACKUP FEDERAL INCOME TAX LAWS APPLICABLE TO CERTAIN STOCKHOLDERS
(OTHER THAN CERTAIN EXEMPT STOCKHOLDERS, INCLUDING, AMONG OTHERS, ALL
CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS), THE DEPOSITARY MAY BE REQUIRED TO
WITHHOLD 31% OF THE AMOUNT OF ANY PAYMENTS MADE TO SUCH STOCKHOLDERS PURSUANT TO
THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO
PAYMENT OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE OFFER, A
TENDERING STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S
CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT
SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE
FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 9 TO THE LETTER
OF TRANSMITTAL.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tendered Shares pursuant to any of
the procedures described above will be determined in the sole discretion of the
Purchaser, whose determination shall be final and binding. The Purchaser
reserves the absolute right to reject any or all tenders of any Shares
determined by it not to be in proper form if the acceptance for payment of, or
payment for, such Shares may, in the opinion of the Purchaser's counsel, be
unlawful. The Purchaser also reserves the absolute right, in its sole
discretion, subject to the Merger Agreement, to waive any of the conditions of
the Offer or any defect or irregularity in any tender with respect to Shares of
any particular stockholder, whether or not similar defects or irregularities are
waived in the case of other stockholders. The Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
Instructions thereto) will be final and binding. Neither the Purchaser, YPF, the
Company, the Depositary, the Information Agent, the Dealer Manager nor any other
person or entity will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification.
By executing a Letter of Transmittal or by causing the transmission of an
Agent's Message as set forth above, a tendering stockholder irrevocably appoints
designees of the Purchaser as the stockholder's attorneys-in-fact and proxies,
in the manner set forth in the Letter of Transmittal, each with full power of
substitution, to the full extent of the stockholder's rights with respect to the
Shares tendered by the stockholder and accepted for payment by the Purchaser
(and any and all other Shares or other securities issued or issuable in respect
of such Shares on or after the date of the Merger Agreement). All such powers of
attorney and proxies shall be considered to be coupled with an interest in the
tendered Shares. This appointment will be effective when, and only to the extent
that, the Purchaser accepts Shares for payment. Upon acceptance for payment, all
prior powers of attorney and proxies given by the stockholder with respect to
the Shares or other securities will, without further action, be revoked, and no
subsequent powers of attorney proxies may be given nor any subsequent written
consent executed by such stockholder (and, if given or executed, will not be
deemed to be effective) with respect thereto. The designees of the Purchaser
will, with respect to the Shares and other securities, be empowered to exercise
all voting and other rights of such stockholder as they in their sole discretion
may deem proper at any annual, special or adjourned meeting of the Company's
stockholders, by written consent or otherwise. The Purchaser reserves the right
to require that, in order for Shares to
6
<PAGE>
be deemed validly tendered, immediately upon the Purchaser's acceptance for
payment of such Shares, the Purchaser must be able to exercise full voting and
other rights of a record and beneficial holder, including rights in respect of
acting by written consent, with respect to such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment for Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4,
tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered
pursuant to the Offer may be withdrawn at any time prior to the Expiration Date
and, unless theretofore accepted for payment by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after May 2, 1995 (or such later date
as may apply in case the Offer is extended).
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from that of the person who tendered such
Shares. If certificates for Shares have been delivered or otherwise identified
to the Depositary, then, prior to the release of such certificates, the serial
numbers of the particular certificates evidencing the Shares to be withdrawn and
a signed notice of withdrawal with signatures guaranteed by an Eligible
Institution, except in the case of Shares tendered for account of an Eligible
Institution, must also be furnished to the Depositary as described above. If
Shares have been tendered pursuant to the procedures for book-entry transfer as
set forth in Section 3, any notice of withdrawal must also specify the name and
number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares.
ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF
NOTICES OF WITHDRAWAL WILL BE DETERMINED BY THE PURCHASER, IN ITS SOLE
DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NEITHER THE
PURCHASER, YPF, THE COMPANY, THE DEALER MANAGER, THE DEPOSITARY, THE INFORMATION
AGENT NOR ANY OTHER PERSON OR ENTITY WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION
OF ANY DEFECTS OR IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR INCUR ANY
LIABILITY FOR FAILURE TO GIVE ANY NOTIFICATION.
Any Shares properly withdrawn will be deemed to be not validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by following
one of the procedures described in Section 3 at any time prior to the Expiration
Date.
5. CERTAIN TAX CONSEQUENCES. The receipt of cash for Shares pursuant to the
Offer (or the Merger) will be a taxable transaction for federal income tax
purposes and may also be a taxable transaction under applicable state, local or
foreign tax laws. The tax consequences of such receipt pursuant to the Offer (or
the Merger) may vary depending upon, among other things, the particular
circumstances of the stockholder. In general, a stockholder who receives cash
for Shares pursuant to the Offer (or the Merger) will recognize gain or loss for
federal income tax purposes equal to the difference between the amount of cash
received in exchange for the Shares sold and such stockholder's adjusted tax
basis in such Shares. Provided that the Shares constitute capital assets in the
hands of the stockholder, such gain or loss will be capital gain or loss, and
will be long term capital gain or loss if the holder has held the Shares for
more than one year at the time of sale. Gain or loss will be calculated
separately for each block of Shares tendered pursuant to the Offer.
The foregoing discussion may not be applicable to certain types of
stockholders, including stockholders who acquired Shares pursuant to the
exercise of employee stock options or otherwise as compensation, individuals who
are not citizens or residents of the United States, foreign corporations
7
<PAGE>
and entities that are otherwise subject to special tax treatment under the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), such as
insurance companies, tax-exempt entities and regulated investment companies.
The federal income tax discussion set forth above is included for general
information only and is based upon present law. Stockholders are urged to
consult their tax advisors with respect to the specific tax consequences of the
Offer and the Merger to them, including the application and effect of the
alternative minimum tax, and state, local and foreign tax laws.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and principally
traded in the United States on the NYSE and the Pacific Stock Exchange under the
symbol "MXS". The following table sets forth, for the calendar quarters
indicated, the high and low sales price per Share on the NYSE Composite Tape.
The Company did not pay a dividend on the Shares in 1992, 1993 or 1994. All
prices set forth below are as reported in published financial sources:
<TABLE><CAPTION>
HIGH LOW
------------ -----------
1992
<S> <C> <C>
First Quarter............................................... 8 1/4 5 3/4
Second Quarter.............................................. 7 1/4 5 5/8
Third Quarter............................................... 7 3/8 5 1/2
Fourth Quarter.............................................. 7 1/2 6 1/4
1993
First Quarter............................................... 9 3/4 6 1/8
Second Quarter.............................................. 10 3/8 8 3/8
Third Quarter............................................... 9 3/4 7 3/8
Fourth Quarter.............................................. 7 3/8 4 1/2
1994
First Quarter............................................... 5 7/8 4 1/8
Second Quarter.............................................. 5 1/4 4 1/8
Third Quarter............................................... 5 7/8 4 1/2
Fourth Quarter.............................................. 4 3/4 3 1/4
1995
First Quarter (through February 27)......................... 4 1/4 3
</TABLE>
On February 27, 1995, the last full trading day prior to the announcement of
the Merger Agreement, the reported closing sales price per Share on the NYSE
Composite Tape was $3 3/4. On March 2, 1995, the last full trading day prior to
the commencement of the Offer, the reported closing sales price per Share on the
NYSE Composite Tape was $5 7/16. Stockholders are urged to obtain a current
market quotation for the Shares.
8
<PAGE>
7. CERTAIN INFORMATION CONCERNING THE COMPANY.
General. The Company is a Delaware corporation with its principal executive
offices located at 717 North Harwood Street, Dallas, Texas 75201. According to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1993 (the "Company 10-K"), the Company was incorporated to hold the stock of
various corporations, the oldest of which was founded in 1910. The Company,
together with its subsidiaries, is one of the largest independent oil and gas
exploration and production companies in the United States, with ongoing
international activity in Indonesia and a number of other countries, and
domestic activity primarily in the Mid-Continent region of the United States.
Selected Consolidated Financial Data. With the exception of the 1994
year-end results, the following selected consolidated financial data relating to
the Company have been taken or derived from the audited financial statements
contained in the Company 10-K. More comprehensive financial information
(including the notes to the Company's financial statements) is included in such
Company 10-K and other documents filed by the Company with the Commission, and
the financial data set forth below are qualified in their entirety by reference
to such reports and other documents, including the financial statements (and
notes thereto) contained therein. Such reports and other documents may be
examined and copies may be obtained from the offices of the Commission in the
manner set forth below. The 1994 year-end results, which are derived from the
Company's earnings press release dated February 8, 1995, are unaudited.
9
<PAGE>
MAXUS ENERGY CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE><CAPTION>
YEAR ENDED
DECEMBER 31,
-----------------------------------------
1994 1993 1992 1991
----------- ------ ------ ------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues:
Sales and operating revenues.......................... $ 682.1 $786.7 $718.4 $790.8
Settlement of litigation.............................. 0.8 6.8 120.8
Other revenues, net................................... 8.2 13.5 11.9 12.2
----------- ------ ------ ------
691.1 807.0 851.1 803.0
Costs and Expenses:
Operating expenses.................................... 232.7 255.6 232.4 230.1
Gas purchase costs.................................... 116.9 155.6 65.5 44.3
Exploration, including exploratory dry holes.......... 32.6 56.8 64.6 66.5
Depreciation, depletion and amortization.............. 140.2 153.6 174.4 203.6
General and administrative expenses................... 35.4 34.8 34.7 34.1
Taxes other than income taxes......................... 12.9 15.9 15.9 17.1
Interest and debt expenses............................ 96.7 88.4 86.9 88.4
Environmental studies and remediation................. 60.5
Restructuring:
Gain on sale of assets.............................. (201.9)
Restructuring costs................................. 100.9
----------- ------ ------ ------
626.9 760.7 674.4 684.1
----------- ------ ------ ------
Income Before Income Taxes, Extraordinary Item
and Cumulative Effect of Change in Accounting
Principles.............................................. 64.2 46.3 176.7 118.9
Income Taxes............................................ 86.9 84.2 102.5 130.1
----------- ------ ------ ------
Net Income (Loss) Before Extraordinary Item
and Cumulative Effect of Change in Accounting
Principle............................................... (22.7) (37.9) 74.2 (11.2)
Extraordinary item.................................... (7.1)
Cumulative effect of change in accounting
principle........................................... (22.7) (4.4)
----------- ------ ------ ------
Net Income (Loss)....................................... (49.4) 74.2 (11.2)
Dividend requirement on Preferred Stock............... (43.6) (41.7) (41.7) (41.7)
----------- ------ ------ ------
Income (Loss) Applicable to Common Shares............... $ (66.3) $(91.1) $ 32.5 $(52.9)
----------- ------ ------ ------
----------- ------ ------ ------
Income (Loss) Before Extraordinary Item and Cumulative
Effect of Change in Accounting Principle................ $ (.49) $ (.60) $ .27 $ (.52)
Extraordinary item.................................... (.05)
Cumulative effect of change in accounting
principle........................................... (.03)
----------- ------ ------ ------
Net Income (Loss) Per Common Share...................... $ (.49) $ (.68) $ .27 $ (.52)
----------- ------ ------ ------
----------- ------ ------ ------
Average Common Shares Outstanding....................... 134.9 133.9 119.6 100.8
</TABLE>
10
<PAGE>
MAXUS ENERGY CORPORATION
CONSOLIDATED BALANCE SHEET DATA
(IN MILLIONS)
<TABLE><CAPTION>
SEPTEMBER 31, 1994 DECEMBER 31, 1993
------------------ -----------------
<S> <C> <C>
Total current assets..................... $ 448.5 $ 404.7
Total assets............................. 1,703.1 1,987.4
Total current liabilities................ 177.5 263.4
Long-term debt........................... 977.8 1,015.4
Total stockholders' equity............... 119.3 147.9
</TABLE>
The Company is subject to the information and filing requirements of the
Exchange Act and is required to file periodic reports, proxy statements and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning the
Company's directors and officers, their remuneration, options granted to them,
the principal holders of the Company's securities and any material interest of
such persons in transactions with the Company is required to be described in
proxy statements distributed to the Company's stockholders and filed with the
Commission. These reports, proxy statements and other information should be
available for inspection and copying at the Commission's principal office at 450
Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of these materials may also be obtained by mail, upon
payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material should
also be available for inspection at the library of the NYSE, 20 Broad Street,
New York, New York 10005.
Other than as set forth below, the information concerning the Company
contained in this section has been taken from or based upon publicly available
documents on file with the Commission and other publicly available information.
Although neither the Purchaser nor YPF has any knowledge that would indicate
that statements contained herein based upon such documents are untrue, neither
the Purchaser nor YPF takes any responsibility for the accuracy or completeness
of the information contained in such documents or for any failure by the Company
to disclose events that may have occurred and may affect the significance or
accuracy of any such information but which are unknown to either the Purchaser
or YPF.
YPF and the Company engaged in preliminary discussions concerning a variety
of possible transactions and transaction structures involving a possible
alignment of the businesses of both the Company and YPF. YPF has conducted a
financial due diligence investigation, and the Company and its representatives
discussed with YPF and its representatives certain matters regarding the
business and financial condition of the Company. See "Background of the Offer;
Past Contacts; Transactions or Negotiations with the Company." The Company
provided YPF with projected financial information of the Company for the fiscal
year ending December 31, 1995. None of such projected financial information
provided by the Company to YPF is publicly available. Such information was
prepared for internal purposes. None of this information was prepared for
publication or with a view to complying with the published guidelines of the
Commission regarding projections or with the AICPA Guide for Prospective
Financial Statements, and it is being included in this Offer to Purchase solely
because it was furnished to YPF. The information necessarily reflects numerous
assumptions with respect to the oil and gas exploration and production business,
general business and economic conditions and other matters, many of which are
inherently uncertain or beyond the Company's control, and does not take into
account any change in ownership of the Company or any changes to Company
operations or capital structure which may result therefrom. It is not possible
to predict whether the assumptions made in preparing the projected financial
information will be valid and actual results may prove to be materially higher
or lower than those contained in the projections. The inclusion of this
information should not be
11
<PAGE>
regarded as an indication that YPF, the Purchaser, the Company, the Dealer
Manager or anyone who received this information considered it a reliable
predictor of future events, and this information should not be relied on as
such. Neither YPF, the Purchaser, the Dealer Manager nor the Company assumes any
responsibility for the validity, reasonableness, accuracy or completeness of the
projected financial information, and the Company has made no representation to
YPF or the Purchaser regarding such information.
Set forth below is a summary of selected income statement, cash flow and
balance sheet information which has been provided by the Company to YPF as
described above.
SELECTED PROJECTED INCOME STATEMENT AND CASH FLOW INFORMATION
<TABLE><CAPTION>
FOR THE YEAR ENDING
DECEMBER 31, 1995
(DOLLARS IN
MILLIONS)
-------------------
<S> <C>
Revenues.................................................. $ 694.3
Cash operating and exploration expenses................... 389.4
Depreciation, depletion and amortization.................. 135.6
Interest, administration and other expenses............... 136.8
Income taxes.............................................. 72.2
Net income................................................ (39.7)
Discretionary cash flow (1)............................... 107.6
Expenditures for property, plant and equipment............ 174.0
</TABLE>
SELECTED PROJECTED BALANCE SHEET INFORMATION
<TABLE><CAPTION>
AT
DECEMBER 31, 1995
(DOLLARS IN
MILLIONS)
-------------------
<S> <C>
Current assets............................................ $ 372.7
Total assets.............................................. 1,604.6
Current liabilities....................................... 195.1
Total debt................................................ 969.8
Stockholders' equity...................................... 34.2
</TABLE>
- ------------
(1) Net income adjusted for depreciation, depletion, amortization, deferred
taxes, other non-cash items and exploration expense, less preferred stock
dividends.
8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND YPF. The Purchaser is a
newly incorporated Delaware corporation and a wholly owned subsidiary of YPF
which to date has not conducted any business other than that incident to its
formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer. Accordingly, no meaningful financial information with
respect to the Purchaser is available. The principal executive offices of YPF
and the Purchaser are located at Avenida Pte. Roque Saenz Pena 777, Buenos
Aires, Argentina. YPF, a sociedad anonima organized under the laws of the
Republic of Argentina, and the largest Argentine company, is an integrated oil
and gas company engaged in the exploration, development and production of oil
and natural gas and in the refining, marketing, transportation, and distribution
of oil and a wide range of petroleum products, petroleum derivatives,
petrochemicals and liquid petroleum gas. YPF's shares are listed and traded on
the Buenos Aires Stock Exchange and American Depositary Receipts representing
its American Depositary Shares are traded on the NYSE under the symbol "YPF".
12
<PAGE>
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of YPF and the Purchaser are set forth in Schedule I hereto.
YPF is subject to the informational filing requirements of the Exchange Act
and is required to file reports and other information with the Commission
required by foreign law or otherwise under the Exchange Act relating to its
business, financial condition and other matters. However, YPF is exempt from the
rules under the Exchange Act prescribing the furnishing and content of proxy
statements and its officers, directors and principal stockholders are exempt
from the reporting and the "short-swing" profit recovery provisions contained in
Section 16 of the Exchange Act. Reports and other information may be inspected
and copies may be obtained from the offices of the Commission in the same manner
as set forth with respect to information concerning the Company in Section 7.
The following selected consolidated financial data relating to YPF and its
subsidiaries have been taken or derived from the audited financial statements
contained in YPF's Annual Report on Form 20-F for the year ended December 31,
1993. Such statements were prepared in conformity with generally accepted
accounting principles in Argentina ("Argentine GAAP"). Argentine GAAP differs in
certain significant respects from generally accepted accounting principles in
the United States ("U.S. GAAP"). Pursuant to Argentine GAAP, the consolidated
financial statements and the selected financial data set forth below have been
restated for general price level changes, based on changes in the Argentine
general level whole price index.
Argentine GAAP requires restatement of all financial statements to constant
Argentine pesos ("Pesos") as of the end of each period reported. Accordingly,
all financial accounts of YPF have been restated to constant Argentine pesos as
of December 31, 1993. More comprehensive information concerning YPF is included
in such reports and other documents filed with the Commission and the financial
information that follows is qualified in its entirety by reference to such
reports and other documents and all the financial information and notes
contained therein.
Argentine law currently obliges Banco Central de la Republica Argentina to
sell U.S. dollars ("Dollars") at the rate of one Peso per Dollar . At
February 28, 1995, the exchange rate between Pesos and Dollars was Ps.1.00 to
US$1.00.
13
<PAGE>
YPF AND CONTROLLED COMPANIES
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE><CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1992 1991
----- ----- -----
(IN MILLIONS OF CONSTANT
PESOS,
EXCEPT FOR PER SHARE
AND PER ADS DATA)
<S> <C> <C> <C>
CONSOLIDATED INCOME STATEMENT DATA
AMOUNTS IN ACCORDANCE WITH ARGENTINE GAAP
Net sales.................................................... 3,958 3,867 4,159
Gross profit................................................. 1,237 1,020 816
Administrative expenses...................................... (118) (240) (266)
Selling expenses............................................. (303) (188) (185)
Exploration expenses......................................... (104) (69) (102)
Operating income (loss)...................................... 712 523 263
Other expenses, net.......................................... (115) (45) (161)
Financial income (expense) and holding gains (losses), net... (41) (73) 324
Income from renegotiation of long-term contract.............. 212 -- --
Income before unusual and extraordinary gains (losses)....... 776 409 374
Unusual and extraordinary gains (losses), net................ (43) (153) (121)
Income and assets tax........................................ (28) -- --
Net income (loss)............................................ 706 256 253
Income before unusual and extraordinary items per share and
per ADS (1).................................................... 2.20 1.16 --
Actual and pro forma earnings per share and per ADS (1)...... 2.00 .73 --
Dividends per share and per ADS (1).......................... 68 .68 --
APPROXIMATE AMOUNTS IN ACCORDANCE WITH US GAAP
Operating income (loss)...................................... 592 385 173
Income before extraordinary items............................ 686 277 384
Net income (loss)............................................ 717 169 278
Pro forma income before extraordinary items per share and per
ADS (1)........................................................ 1.94 .78 --
Actual and pro forma earnings per share and per ADS (1)...... 2.03 .48 --
CONSOLIDATED BALANCE SHEET DATA (AT END OF PERIOD)
AMOUNTS IN ACCORDANCE WITH ARGENTINE GAAP
Cash......................................................... 77 75 99
Total assets................................................. 7,353 7,349 8,045
Total debt................................................... 757 795 762
Shareholders' equity......................................... 4,966 4,498 4,481
APPROXIMATE AMOUNTS IN ACCORDANCE WITH US GAAP
Total assets................................................. 7,260 7,245 8,047
Total debt................................................... 1,019 2,662 2,498
Shareholders' equity......................................... 4,611 2,527 2,748
OTHER CONSOLIDATED FINANCIAL DATA
AMOUNTS IN ACCORDANCE WITH ARGENTINE GAAP
Depreciation and amortization................................ 539 628 667
Cash used in fixed asset acquisitions........................ 955 731 800
</TABLE>
- ------------
(1) The pro forma earnings per share and per ADS and dividends per share and per
ADS data are presented assuming that a weighted average of 353,000,000
shares were outstanding during each of the periods for which pro forma
information is presented.
14
<PAGE>
Except as provided in the Merger Agreement, and as otherwise described in
this Offer to Purchase, neither YPF nor the Purchaser, nor to the best knowledge
of YPF and the Purchaser, any of the persons listed on Schedule I hereto, has
any contract, arrangement, understanding, or relationship with any other person
with respect to any securities of the Company, including, but not limited to,
any contract, arrangement, understanding or relationship concerning the transfer
or the voting of any securities of the Company, joint ventures, loan or option
arrangements, puts or calls, guarantees of loans, guarantees against loss of the
giving or withholding of proxies. Except as set forth in this Offer to Purchase,
neither YPF nor the Purchaser, nor, to the best of their knowledge, any of the
persons listed on Schedule I hereto, has had, since January 1, 1991, any
business relationships or transactions with the Company or any of its executive
officers, directors, or affiliates that would require reporting under the rules
of the Commission applicable to this Offer to Purchase. Except as set forth in
this Offer to Purchase, since January 1, 1991, there have been no contacts,
negotiations or transactions between the Purchaser, YPF or any of its
subsidiaries or, to the best knowledge of YPF and the Purchaser, any of the
persons listed on Schedule I hereto, and the Company or its affiliates,
concerning a merger, consolidation or acquisition, tender offer or other
acquisition of securities, election of directors or a sale or other transfer of
a material amount of assets. Except as set forth in this Offer to Purchase, and
except for the ownership by Mr. James Lesch, a director of YPF, of 2,000 Shares,
neither YPF nor the Purchaser, nor, to the best knowledge of YPF or the
Purchaser, any of the persons listed on Schedule I hereto, beneficially owns any
Shares or has effected any transactions in the Shares in the past 60 days.
9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Purchaser to purchase all outstanding Shares and to pay related fees and
expenses is estimated to be approximately $800 million. The funds necessary to
purchase Shares pursuant to the Offer and to pay related fees and expenses will
be furnished to the Purchaser (i) by YPF as a capital contribution and (ii)
through the financings described below.
YPF has received a commitment letter (the "Commitment Letter") from The
Chase Manhattan Bank (National Association) ("Chase") pursuant to which Chase
has agreed to provide four credit facilities aggregating up to $800,000,000: (i)
a $200,000,000 credit facility to be extended to YPF (the "YPF Facility"), (ii)
a credit facility of up to $600,000,000 to be extended to the Purchaser (the
"Purchaser Facility"), (iii) a credit facility of up to $250,000,000 to be
extended to Midgard Energy Company ("Midgard"), a wholly owned subsidiary of the
Company (the "Midgard Facility"), and (iv) a credit facility of up to
$250,000,000 to be extended to certain other subsidiaries of the Company as
described below (the "Subsidiaries Facility"). The proceeds of the YPF Facility
will be used to finance future exports of crude oil from Argentina. The proceeds
of the Purchaser Facility will be used to acquire the Shares. The proceeds of
the Midgard Facility and the Subsidiaries Facility will be used to repay, in
part, the Purchaser Facility. Chase has confirmed that it is willing to provide
the entire amount of these four facilities. Chase also has advised YPF that it
intends to arrange one or more syndicates of commercial banks, financial
institutions and other investors to provide a portion of these facilities
(Chase, together with such other banks, institutions and investors, if any, are
collectively referred to as the "Lenders") and that it proposes to act as the
agent (the "Agent") for the Lenders in connection with each of the facilities.
YPF Facility. The YPF Facility will be made in a single loan (the "YPF
Loan") on or before the funding date of the Purchaser Loan described below and
mature on the earlier of: (a) November 5, 1995 and (b) the date that is seven
months from the date of its funding (such earlier date being the "YPF Maturity
Date"). At YPF's option, the interest rate applicable to the YPF Loan will be
the one, two or three-month London Interbank Offered Rate plus 1%. The YPF Loan
will be repaid in three consecutive monthly installments: the first installment
shall be due two months prior to the YPF Maturity Date and shall be in the
amount of $50,000,000 and the second and third installments shall be due one
month prior to the YPF Maturity Date and at the YPF Maturity Date and shall be
in the amount of $75,000,000 each. It is anticipated that the YPF Loan will be
repaid with funds generated by YPF's business operations, including crude oil
export revenues.
15
<PAGE>
Purchaser Facility. The Purchaser Facility will be made available in not
more than two advances (collectively, the "Purchaser Loan") and mature on the
earlier of: (a) the date that is 90 days after the expiration of the Tender
Offer (the "Tender Offer Closing Date") and (b) July 5, 1995 (such earlier date
being the "Purchaser Maturity Date"). At the Purchaser's option, the interest
rate applicable to the Purchaser Loan will be (a) the one-month London Interbank
Offered Rate plus a margin of (i) 1 3/4% until the date 60 days after the Tender
Offer Closing Date and (ii) 2 1/2% thereafter on that portion of the aggregate
outstanding principal amount of the Purchaser Loan equal to or less than
$500,000,000 and 3 1/2% on the aggregate outstanding principal amount of the
Purchaser Loan in excess of $500,000,000 or (b) Chase's base rate plus a margin
of (i) 3/4% until the date 60 days after the Tender Offer Closing Date and (ii)
1 1/2% thereafter on that portion of the aggregate outstanding principal amount
of the Purchaser Loan that is equal to or less than $500,000,000 and 2 1/2% on
the aggregate outstanding principal amount of the Purchaser Loan in excess of
$500,000,000. The Purchaser Loan will be guaranteed by YPF as described below.
In addition, prior to the Merger, the Purchaser Loan will be secured by a pledge
by the Purchaser of all of the Shares purchased pursuant to the Offer, or if
such pledge is not permissible under the Federal Reserve Board's Margin
Regulations, the Purchaser will agree not to dispose of any such Shares except
for cash at fair market value. The Lenders' obligation to fund the Purchaser
Loan is subject to certain conditions as described below. It is anticipated that
up to $100,000,000 of the Purchaser Loan will be repaid on or before the
Purchaser Maturity Date from cash held by the Company.
Midgard Facility. YPF currently anticipates that on or before the Purchaser
Maturity Date, up to $250,000,000 of the Purchaser Loan will be repaid with
funds provided to the Company by Midgard. Midgard will provide the funds from
the proceeds of a loan of up to $250,000,000 (the "Midgard Loan") to be extended
by the Lenders pursuant to the Midgard Facility. The Midgard Loan will be made
in a single drawing, will mature on the date that is seven years after the date
the initial Purchaser Loan is funded (the "Purchaser Initial Funding Date") and
will be repaid in up to 20 consecutive quarterly installments commencing on the
date (the "Amortization Date") that is two years after the Purchaser Initial
Funding Date. At Midgard's option, the interest rate applicable to the Midgard
Loan will be (a) the one, two or three-month London Interbank Offered Rate plus
a margin of (i) 1 3/8% until the Amortization Date and (ii) 1 7/8% thereafter
until maturity or (b) Chase's base rate plus a margin of (i) 3/8% until the
Amortization Date and (ii) 7/8% thereafter until maturity. The Midgard Loan will
not be secured but will be guaranteed by YPF and the Company. The agreement
evidencing the Midgard Loan (the "Midgard Loan Agreement") will contain, among
other things, a negative pledge on all assets of Midgard. The Lenders'
obligation to fund the Midgard Loan is subject to certain conditions as
described below. It is anticipated that the Midgard Loan will be repaid with
funds generated by Midgard's business operations.
Subsidiaries Facility. YPF currently anticipates that on or before the
Purchaser Maturity Date, up to $250,000,000 of the Purchaser Loan will be repaid
with funds provided to the Company by Natomas Energy Company ("Natomas"), Maxus
Northwest Java, Inc. ("Java") and Maxus Southeast Sumatra, Inc. ("Sumatra")
(collectively, the "Designated Subsidiaries"). The Designated Subsidiaries will
provide these funds from the proceeds of a loan of up to $250,000,000 (the
"Subsidiaries Loan") made to them by the Lenders pursuant to the Subsidiaries
Facility. The Subsidiaries Loan will be made in a single drawing on the
Purchaser Maturity Date, will mature on the date that is six years after the
Purchaser Initial Funding Date and will be repaid in up to 16 consecutive
quarterly installments commencing on the Amortization Date. At the option of the
Designated Subsidiaries, the interest rates applicable to the Subsidiaries Loan
will be (a) the one, two or three-month London Interbank Offered Rate plus a
margin of (i) 1 3/4% until the Amortization Date and (ii) 2 1/4% thereafter
until maturity or (b) Chase's base rate plus a margin of (i) 3/4% until the
Amortization Date and (ii) 1 1/4% thereafter until maturity. The Subsidiaries
Loan will be guaranteed by YPF and the Company and will be secured by certain
intangible assets and rights to payment of Java and Sumatra arising out of their
respective operations in Indonesia. The agreement evidencing the Subsidiaries
Loan (the "Subsidiaries Loan Agreement") will contain a negative pledge on all
of the other assets of the Designated Subsidiaries.
16
<PAGE>
The Lenders' obligation to fund the Subsidiaries Loan is subject to certain
conditions as described below. It is anticipated that the Subsidiaries Loan will
be repaid with funds generated by the Designated Subsidiaries business
operations. Upon further review of the value of the assets of Midgard and the
Designated Subsidiaries, the terms of the Midgard Loan and the Subsidiaries Loan
may be modified to provide for intercompany guarantees or other arrangements
whereby Midgard and the Designated Subsidiaries provide support for each other's
loans.
Conditions to Funding. The obligation of the Lenders to provide the YPF
Facility, the Purchaser Facility, the Midgard Facility and the Subsidiaries
Facility is subject to the fulfillment of certain conditions, including but not
limited to, (a) the absence of any material adverse change in the condition
(financial or otherwise), business operations, assets, nature of assets or
liabilities of (i) YPF and its subsidiaries (taken as a whole), (ii) the Company
and its subsidiaries (taken as a whole) or (iii) Midgard, Natomas, Java, and
Sumatra, (b) the receipt by the Purchaser of at least $200,000,000 from the
issuance of its common stock or a capital contribution from its immediate parent
or both, (c) approval by the Board of Directors of the Company of the Offer and
the Merger and recommendation that its shareholders tender their Shares, (d) the
Lenders' satisfaction that $800,000,000 is sufficient to (and does not exceed
the amount required to) consummate the Merger and to pay all related commissions
and expenses and (e) the Lenders' satisfaction that the Company will have
sufficient cash available to pay the lesser of (i) $100,000,000 or (ii) the
difference between (A) the principal amount of the Purchaser Loan outstanding on
the Purchaser Maturity Date and (B) the lesser of $500,000,000 or such other
amount as is available under the Commitment Letter for the Midgard Loan and the
Subsidiaries Loan as described above.
The obligation of the Lenders to fund the Midgard Loan and the Subsidiaries
Loan will be subject to certain additional conditions, including without
limitation, (a) the effectiveness of the Merger, (b) the absence of any material
adverse change in the condition (financial or otherwise), business, operations,
assets, nature of assets or liabilities of (i) YPF and it subsidiaries (taken as
a whole), (ii) the Company and its subsidiaries (taken as a whole) and (iii)
Midgard, Natomas, Java or Sumatra, (c) the payment in full of the Purchaser Loan
and (d) all indebtedness and other obligations of each of Midgard, Natomas, Java
and Sumatra to the Company and its other subsidiaries shall have been paid in
full or satisfactorily subordinated to the repayment of the Midgard Loan and the
Subsidiaries Loan.
Prepayment. Each of the YPF Loan, the Purchaser Loan, the Midgard Loan and
the Subsidiaries Loan (collectively, the "Loans") may be prepaid in whole or in
part without premium or penalty, except for costs associated with the prepayment
of any portion of a Loan bearing interest at a rate determined by reference to
the London Interbank Offered Rate prior to the end of any applicable interest
period.
YPF Guarantee. YPF will guarantee the repayment of the Purchaser Facility,
the Midgard Facility and the Subsidiaries Facility. The YPF guarantee of the
Purchaser Facility may be secured, prior to the Merger, by a pledge of the
Purchaser's shares, and after the Merger by a pledge of the Company's shares.
The guarantee will also contain certain covenants including a limitation on
YPF's debt level and a required level of tangible net worth.
Certain Fees. YPF has agreed to pay to Chase customary fees in connection
with each of the Facilities.
Covenant Regarding Financing. In the Merger Agreement, YPF and the Purchaser
agreed that they will use their reasonable best efforts to obtain the financing
contemplated by the Commitment Letter.
A copy of the Commitment Letter has been filed with the Commission by the
Purchaser as an exhibit to the Schedule 14D-1 filed by YPF and the Purchaser
with the Commission. The foregoing summary of the financing to be provided
pursuant to the Commitment Letter is qualified in its entirety by reference to
the Commitment Letter.
17
<PAGE>
10. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS
WITH THE COMPANY. In mid-1994, YPF's Board of Directors adopted the goals of
becoming an internationally diversified oil company with significant assets
outside Argentina and obtaining management personnel skilled and experienced in
exploring for and producing oil and gas internationally. YPF sought to identify
a company that would permit it to further this goal. After analyzing several
companies, YPF believed that the Company would potentially present a good fit
with its goals.
In December 1994, Jose Estenssoro, YPF's Chief Executive Officer, met with
Charles Blackburn, Chairman, President and Chief Executive Officer of the
Company. Messrs. Estenssoro and Blackburn had a wide-ranging discussion,
including discussion of a possible substantial equity investment in the Company
by YPF. Thereafter, representatives of YPF conducted due diligence at various
locations of the Company and its subsidiaries and had numerous other contacts
with representatives of the Company to obtain information throughout the period
from mid-December 1994 through the end of February 1995.
In mid-January 1995, YPF determined that it had a serious interest in
exploring a possible transaction with the Company, and retained Salomon Brothers
to advise it in connection with this interest. During the week of January 16,
1995, further due diligence was conducted with the Company in Dallas. Throughout
this period, YPF, with Salomon Brothers' assistance, undertook analyses of
various alternatives and eventually determined that the most advantageous
alternative from the point of view of YPF and its stockholders was an
acquisition of 100% of the Shares. Thereafter, YPF and other interested parties
were advised that the Company wished to receive proposals from all parties
interested in an investment in or purchase of all of the Company, or the
purchase of Midgard, by January 27, 1995 and January 30, 1995, respectively, and
YPF submitted a proposal to acquire all of the Shares for $5 per Share in cash,
subject to arranging satisfactory financing, conducting further due diligence,
the approval of YPF's Board of Directors, the cessation by the Company of its
efforts to sell Midgard and the negotiation, approval and execution of
definitive documents providing for the necessary transactions. On February 15,
1995, Mr. Estenssoro travelled to Dallas to discuss YPF's progress in satisfying
these conditions with Mr. Blackburn, and to advise Mr. Blackburn that YPF was
proceeding towards making a definitive proposal prior to the Company's regularly
scheduled board meeting on February 28, 1995.
On Saturday, February 25, 1995, YPF proposed to acquire all outstanding
Shares pursuant to the Offer and the Merger. During the period proceeding and
immediately following such proposal, representatives of YPF and the Company
engaged in extensive negotiations relating to the terms of the Merger Agreement.
On February 28, 1995, following approval by their respective Boards of
Directors, the Company, YPF and the Purchaser entered into the Merger Agreement.
A summary of the terms of the Merger Agreement is set forth in Section 11. A
copy of the Merger Agreement has been filed as an Exhibit to the Schedule 14D-1
filed by YPF and the Purchaser with the Commission and is available for
inspection and copy at the principal office of the Commission in the manner set
forth in Section 7.
On March 3, 1995, the Purchaser commenced the Offer.
11. PURPOSE OF THE OFFER; THE MERGER; MERGER AGREEMENT; PLANS FOR THE
COMPANY. The purpose of the Offer, the Merger and the Merger Agreement is for
YPF to acquire control of, and the entire common equity interest in, the
Company. The Offer and the Merger Agreement are intended to increase the
likelihood that the Merger will be effected as promptly as practicable.
The Merger Agreement. The following summary of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1, is qualified by reference
to the Merger Agreement.
The Offer. The Merger Agreement provides for the making of the Offer. The
obligation of the Purchaser to accept for payment or pay for Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Share
Condition, the Financing Condition and certain other conditions
18
<PAGE>
that are set forth in Section 14 hereof. The Purchaser has reserved the right to
waive any conditions of the Offer or to modify any of the terms and conditions
of the Offer except that, without the consent of the Company, the Purchaser may
not (i) decrease the price per Share payable in the Offer, (ii) reduce the
minimum number of Shares to be purchased in the Offer, or (iii) impose
additional conditions to the Offer or make any other change in the terms or
conditions of the Offer that is materially adverse to the holders of the Shares.
Recommendation. The Board of Directors of the Company, based in part upon
the opinion of CS First Boston Corporation that the proposed consideration to be
paid in the Offer and the Merger is fair from a financial point of view to the
holders of Shares, determined that the Offer and the Merger are in the best
interests of the Company and its stockholders, approved the Merger Agreement and
the transactions contemplated thereby, and recommended that holders of Shares
accept the Offer and tender their Shares pursuant to the Offer. The Merger
Agreement provides that if the Board of Directors of the Company determines that
it will not recommend acceptance of the Offer and approval of the Merger by the
Company's stockholders (or if such recommendation is withdrawn) based upon the
advice of legal counsel that such action is necessary for the Board of Directors
to comply with its fiduciary duties to stockholders under applicable law, such
non-recommendation or withdrawal of the recommendation shall not constitute a
breach of the Merger Agreement but will entitle the Purchaser to receive a
termination fee. See "Termination."
Board Representation. The Merger Agreement provides that, upon the
Purchaser's acquisition of a majority of the outstanding Voting Shares pursuant
to the Offer, and from time to time thereafter so long as YPF and/or any of its
direct or indirect wholly owned subsidiaries (including the Purchaser) owns a
majority of the outstanding Voting Shares, YPF will be entitled, subject to
compliance with applicable law and the Company's certificate of incorporation,
to designate at its option up to that number of directors, rounded up to the
nearest whole number, of the Company's Board of Directors as will make the
percentage of the Company's directors designated by YPF equal to the percentage
of outstanding Voting Shares held by YPF and any of its direct or indirect
wholly owned subsidiaries (including the Purchaser), including Shares accepted
for payment pursuant to the Offer. The Company has agreed that it will, upon the
request of YPF, promptly increase the size of its Board of Directors and/or use
its reasonable best efforts to secure the resignation of such number of
directors as is necessary to enable YPF's designees to be elected to the
Company's Board of Directors and will use its reasonable best efforts to cause
YPF's designees to be so elected, subject to Section 14(f) of the Exchange Act;
provided, that, prior to the Effective Time (as defined in the Merger Agreement)
of the Merger, the Company will use its reasonable best efforts to assure that
the Company's Board of Directors always has (at its election) at least three
members who were directors of the Company as of the date of the commencement of
the Offer. At such times, the Company will use its reasonable best efforts to
cause persons designated by YPF to constitute the same percentage as such
persons represent on the Company's Board of Directors of (i) each committee of
the Board, (ii) each board of directors or board of management of each
subsidiary of the Company, and (iii) each committee of each such board.
The Merger. The Merger Agreement provides that, unless the Merger Agreement
is terminated or abandoned (see "Termination" below), as soon as practicable
following fulfillment or waiver of the conditions described below under
"Conditions to the Merger," at the Effective Time, the Purchaser will be merged
with and into the Company, whereupon the separate corporate existence of the
Purchaser will cease and the Company will be the surviving corporation in the
Merger. The Merger Agreement further provides that (i) the certificate of
incorporation and the by-laws of the Company as in effect at the Effective Time
shall be the certificate of incorporation and the by-laws of the surviving
corporation, (ii) the directors of the Purchaser immediately prior to the
Effective Time shall be the directors of the surviving corporation, and (iii)
the officers of the Company immediately prior to the Effective Time shall be the
officers of the surviving corporation.
Consideration to be Paid in the Merger. The Merger Agreement provides that
each Share outstanding immediately prior to the Effective Time (other than
Shares held in the treasury of the
19
<PAGE>
Company, Shares owned by YPF, the Purchaser, any other direct or indirect
subsidiary of YPF, and other than Dissenting Shares (as defined below under
"Dissenters' Rights") shall, at the Effective Time, be cancelled and retired and
be converted into a right to receive in cash an amount per Share equal to the
highest price per Share paid by the Purchaser pursuant to the Offer, without
interest, upon the surrender of the certificate formerly representing such Share
and each Share held in the treasury of the Company, and each Share held by YPF,
the Purchaser or any other direct or indirect subsidiary of YPF immediately
prior to the Effective Time shall, at the Effective Time, be cancelled and
retired and no payment will be made with respect thereto. Each share of common
stock of the Purchaser issued and outstanding immediately prior to the Effective
Time will, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and become one share of common stock of the
surviving corporation, and each outstanding share of $4.00 Preferred Stock,
$9.75 Preferred Stock , and $2.50 Cumulative Preferred Stock, par value $1.00
per share ("$2.50 Preferred Stock"), of the Company (collectively, the
"Preferred Stock") will remain outstanding and have the identical powers,
preferences, rights, qualifications, limitations and restrictions as such shares
of Preferred Stock currently have, except as agreed to by the holder of the
$9.75 Preferred Stock See "$9.75 Preferred Stock Arrangements" below.
Company Options and Restricted Shares. The Merger Agreement provides that
the Company will cooperate with YPF and the Purchaser in an effort to obtain the
surrender of all Company Options in respect of Shares in accordance with the
values set forth in Schedule 2.6 of the Merger Agreement. In addition,
immediately prior to the Effective Time, the restrictions on certain restricted
Shares held by certain officers of the Company will lapse without further
action.
Stockholders' Meeting. In the Merger Agreement, the Purchaser agreed to take
all action necessary in accordance with applicable law and its certificate of
incorporation and by-laws to convene a meeting of its stockholders as promptly
as reasonably practicable following the date of the Merger Agreement to consider
and vote upon the adoption of the Merger Agreement, if such shareholder approval
is required by applicable law. At any such meeting, all Shares then owned by
YPF, the Purchaser or any other direct or indirect subsidiary of YPF will be
voted in favor of adoption of the Merger Agreement. Subject to its fiduciary
duties under applicable law, the Board of Directors of the Company will
recommend that the Company's stockholders approve adoption of the Merger
Agreement, if such stockholder approval is required.
Dissenters' Rights. Holders of Shares will not have appraisal rights as a
result of the Offer. If the Merger is consummated, however, persons who hold
Shares at the time would have the right to appraisal of their Shares in
accordance with Section 262 of the Delaware General Corporation Law. Such
appraisal rights, if the statutory procedures are complied with, would result in
a judicial determination of the "fair value" of the Shares owned by such
holders. Any such judicial determination of the fair value of the Shares could
be based upon considerations other than or in addition to the price paid in the
Offer and the Merger and the market value of the Shares, including asset values,
the investment value of the Shares and any other valuation considerations
generally accepted in the investment community. The value so determined for
Shares could be more or less than the value of the consideration per Share to be
paid pursuant to the Offer or the Merger and payment of such consideration would
take place subsequent to payment pursuant to the Offer.
In addition, several recent decisions by the Delaware courts have held that
a controlling stockholder of a corporation involved in a merger has a fiduciary
duty to the other stockholders which requires that the merger be fair to such
other stockholders. In determining whether a merger is fair to minority
stockholders, the Delaware courts have considered, among other things, the type
and amount of consideration to be received by the stockholders and whether there
was fair dealing among the parties. The Delaware Supreme Court indicated in
Weinberger v. UOP, Inc. and Rabkin v. Philip A. Hunt Chemical Corp. that
ordinarily the remedy available to stockholders in a merger that is found not to
be "fair" to minority stockholders is the right to appraisal described above or
a damages remedy based on essentially the same principles.
20
<PAGE>
If the Purchaser purchases Shares pursuant to the Offer, and the Merger or
another merger or other business combination is consummated more than one year
after the completion of the Offer, or if such a merger or other business
combination were to provide for the payment of consideration less than that paid
pursuant to the Offer, compliance by the Purchaser with Rule 13e-3 under the
Exchange Act would be required, unless the Shares were to be deregistered under
the Exchange Act prior to such transaction. See Section 12. Rule 13e-3 would
require, among other things, that certain financial information concerning the
Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders therein be
filed with the Commission and disclosed to minority stockholders prior to
consummation of the transaction.
Representations and Warranties. The Merger Agreement contains
representations and warranties by the Company, relating to, among other things,
(i) the organization of the Company and its subsidiaries and other corporate
matters, (ii) the capital structure of the Company, (iii) the authorization,
execution, delivery and consummation of the transactions contemplated by the
Merger Agreement, (iv) consents and approvals, (v) documents filed by the
Company with the Commission and the accuracy of the information contained
therein, (vi) the absence of certain changes and events, (vii) the accuracy of
the information contained in documents filed with the Commission in connection
with the Offer and the Merger, (viii) litigation, (ix) environmental matters,
(x) tax, insurance and labor matters, and (xi) matters relating to Title IV of
the Employee Retirement Income Security Act of 1974, as amended, and the rules
and regulations promulgated thereunder. In addition, the Merger Agreement
contains representations and warranties by YPF and the Purchaser related to,
among other things, (i) the organization of YPF and the Purchaser and other
corporate matters, (ii) the authorization, execution, delivery and consummation
of the transactions contemplated by the Merger Agreement, (iii) consents and
approvals, (iv) the execution of the Commitment Letter, and (v) YPF's having no
reason to believe that, following the Merger and the financings contemplated by
the Commitment Letter, the Company will not be able to meet its obligations as
they come due.
Redemption of Rights. The Company represented in the Merger Agreement that
it has taken the necessary steps to redeem all of the outstanding Rights issued
pursuant to the Rights Agreement so that the Rights will not become exercisable
as a result of the consummation of the transactions contemplated by the Merger
Agreement.
Agreements with Respect to the Conduct of Business Pending the Merger. The
Merger Agreement provides that except as specifically contemplated by the Merger
Agreement, during the period from the date of the Merger Agreement to the
earlier of the time that the designees of YPF have been elected to, and
constitute a majority of, the Board of Directors of the Company or the Effective
Time, the Company will, and will cause each of its subsidiaries to, conduct
their respective business only in, and not take any action except in, the
ordinary and usual course of business substantially consistent with past
practice, and use reasonable efforts to preserve intact the business
organization of the Company and each of its subsidiaries, to keep available the
services of its and their present officers and key employees and to preserve the
goodwill of those having business relationships with it or its subsidiaries. In
addition, subject to certain exceptions, during such period, the Company will
not, and will not permit any of its subsidiaries to (i) make or propose any
change or amendment to their respective certificates of incorporation or by-laws
(or comparable governing documents), except as may be required by law; (ii)
authorize for issuance, issue, sell or deliver any shares of capital stock or
any other securities of any of them (other than pursuant to the Company Options,
the $4.00 Preferred Stock, the $9.75 Preferred Stock, the Company's 401(k) Plan
or issuance of Shares issued under the terms of the Company's Director Plan in a
manner consistent with any such plan or past practice) or issue any securities
convertible into or exchangeable for, or options, warrants to purchase, scrip,
rights to subscribe for, calls or commitments of any character whatsoever
relating to, or enter into any contract with respect to the issuance of, any
shares of capital stock or any other securities of any of them (other than
pursuant to the Company Options, the $4.00 Preferred Stock, the $9.75 Preferred
Stock, the 401(k) Plan (or in connection with the 401(k) Plan or the Director
Plan, as aforesaid) purchase or otherwise acquire or
21
<PAGE>
enter into any contract with respect to the purchase or voting of shares of
their capital stock, or adjust, split, combine or reclassify any of their
capital stock or other securities or make any other changes in their capital
structures; (iii) declare, set aside, pay or make any dividend or other
distribution or payment (whether in cash, stock or property) with respect to, or
purchase or redeem, any shares of the capital stock of any of them other than
(a) regular quarterly cash dividends on the $4.00 Preferred Stock, the $9.75
Preferred Stock and the $2.50 Preferred Stock, (b) dividends, distributions or
payments paid by its subsidiaries to the Company or its subsidiaries with
respect to their capital stock, (c) the Rights in accordance with the Rights
Agreement and (d) loans and payments from the Company to any of its subsidiaries
or from any of such subsidiaries to the Company or another such subsidiary; (iv)
adopt or amend any bonus, profit sharing, compensation, severance, termination,
stock option, pension, retirement, deferred compensation, welfare benefit plan,
change in control agreement, restricted stock, performance unit, employment or
other employee benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer, employee or former
employee, or (except, other than with respect to certain senior executives of
the Company, for normal increases in the ordinary course of business that are
consistent with past practices and that, in the aggregate, do not result in a
material increase in benefits or compensation expense to the Company or pursuant
to collective bargaining agreements or other contracts presently in effect),
increase in any manner the compensation or fringe benefits of any director or
officer or pay any benefit not required by any existing plan, arrangement or
contract (including without limitation the granting of stock options, stock
appreciation rights, shares of restricted stock or performance units) or take
any action or grant any benefit not expressly required under the terms of any
existing contracts, trusts, plans, funds or other such arrangements or enter
into any contract to do any of the foregoing; or (v) except in the ordinary
course of business, (a) incur or assume any indebtedness, (b) assume, guarantee,
endorse or otherwise become liable (whether directly, contingently or otherwise)
for the obligation of any other person except in the ordinary course of business
and consistent with past practices, or (c) make any loans, advances or capital
contributions to, or investments (other than intercompany accounts and
short-term investments pursuant to customary cash management systems of the
Company in the ordinary course and consistent with past practices) in, any other
person other than such of the foregoing as are made by the Company to or in a
wholly owned subsidiary of the Company. In addition, the Company has agreed to
use its reasonable best efforts to (a) exempt the Company, the Offer and the
Merger from the requirements of any state takeover law, by action of the
Company's Board of Directors or otherwise and (b) assist in any challenge by the
Purchaser to the validity or applicable to the Offer or the Merger of any state
takeover law.
No Solicitation. The Merger Agreement provides that neither the Company nor
any of its subsidiaries may, directly or indirectly, and each will instruct or
otherwise use its reasonable best efforts to cause its affiliates that are
controlled by the Company and the officers, directors, employees, agents or
advisors or other representatives or consultants of the Company not to,
encourage, solicit, initiate, engage or participate in discussions or
negotiations with or provide information to, any Person (as defined in the
Merger Agreement) (other than YPF, the Purchaser or subsidiaries, affiliates or
representatives of any of the foregoing) in connection with any tender offer,
exchange offer, merger, consolidation, business combination, sale of substantial
assets, sale of securities, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries or divisions (including,
without limitation, Midgard Energy Company). Notwithstanding the foregoing, the
Company may do any of the foregoing if outside counsel to the Company advises
the Company's Board of Directors that any action is required for the Company's
directors to satisfy their fiduciary duties to the Company and its
constituencies under applicable law. The Company will (i) promptly notify YPF in
the event of any discussion, negotiation or proposal or offer of the type
referred to in the first sentence of this paragraph or any decision to furnish
information or take any other action referred to in the second sentence of this
paragraph and (ii) promptly furnish YPF copies of all written information
furnished to any corporation, partnership, person or other entity or group
pursuant to the second sentence of this paragraph to the extent not previously
furnished to YPF.
22
<PAGE>
Indemnification of Directors. Pursuant to the Merger Agreement, YPF has
agreed for a period of seven years after the Effective Time, to cause the
surviving corporation to indemnify, defend and hold harmless the present and
former officers, directors, employees and agents of the Company and its
subsidiaries (an "Indemnified Party") against all losses, claims, damages or
liabilities arising out of actions or omissions occurring on, prior to or after
the Effective Time to the full extent provided under Delaware law, the
certificate of incorporation and by-laws of the Company in effect at the date of
the Merger Agreement and under all agreements to which the Company is a party as
of the date of the Merger Agreement, provided that any determination required to
be made with respect to whether an Indemnified Party's conduct complies with the
standards set up under Delaware law, the certificate of incorporation or by-laws
of the Company or under any such agreement will be made by independent counsel
selected by the Indemnified Party and reasonably satisfactory to the surviving
corporation. The surviving corporation will maintain the Company's existing
officers' and directors' liability insurance ("D & O Insurance") in full force
and effect without reduction of coverage for a period of seven years after the
Effective Time, provided, however, that the surviving corporation will not be
required to pay an annual premium therefor in excess of 250% of the last annual
premium paid prior to the date of the Merger Agreement (the "Current Premium"),
and provided, further, that if the existing D&O Insurance expires, is terminated
or cancelled during such seven-year period, the surviving corporation will use
its best efforts to obtain as much D&O Insurance as can be obtained for the
remainder of such period for a premium on an annualized basis not in excess of
250% of the Current Premium.
YPF's Undertaking. The Merger Agreement provides that whenever it requires
the Purchaser to take any action, such requirements will be deemed to include an
undertaking on the part of YPF to cause the Purchaser to take such action.
Listing of Preferred Stock. Pursuant to the Merger Agreement, the Company
will, and YPF will cause the surviving corporation to, use their respective
reasonable efforts to continue the listing on the NYSE of the shares of
Preferred Stock which are currently listed on such Exchange or, if such shares
are delisted, to cause such shares of Preferred Stock to be listed on another
national securities exchange within the United States or admitted to trading on
the National Association of Securities Dealers Automated Quotation System and on
other organized securities markets in such foreign jurisdictions in which such
shares are presently traded. Notwithstanding anything in the Merger Agreement to
the contrary, the obligations of the Company and YPF regarding continued listing
of the Preferred Stock will survive the Effective Time with respect to any
series of Preferred Stock until such time as the aggregate market value of all
outstanding shares of such series is less than $2 million or the number of
outstanding shares of such series is less than 100,000.
Certain Obligations of YPF. Pursuant to the Merger Agreement, in the event
that the Company is unable to meet its obligations as they come due, whether at
maturity or otherwise, including solely for the purposes of this clause,
dividend and redemption payments with respect to the Preferred Stock, YPF has
agreed to capitalize the Company in an amount necessary to permit the Company to
meet such obligations, provided that YPF's aggregate obligation will be (a)
limited to the amount of debt service obligations under the Purchaser Facility
of the loan agreement contemplated by the Commitment and, to the extent the
Purchaser Facility is replaced by the Midgard Facility and/or the Subsidiaries
Facility under the Commitment, the amount of debt service obligations under the
Midgard Facility and/or the Subsidiaries Facility and (b) reduced by the amount,
if any, of capital contributions received by the Company after the Effective
Time and the net proceeds of any sale by the Company of common stock or
non-redeemable preferred stock after the Effective Time. The foregoing
obligations of YPF will survive until the ninth anniversary of the Effective
Time.
Termination. The Merger Agreement may be terminated and the Merger
contemplated thereby may be abandoned at any time prior to the Effective Time,
whether before or after approval by the stockholders of the Company: (a) by the
mutual consent of the Boards of Directors of YPF, Purchaser and the Company; (b)
by YPF and the Purchaser, on one hand, or the Company, on the other hand, if the
Offer expires or is terminated or withdrawn in accordance with the terms of the
Merger Agreement
23
<PAGE>
without any Shares being purchased thereunder or the Offer is terminated, or if
the Purchaser has not purchased Shares validly tendered and not withdrawn
pursuant to the Offer in accordance with the terms of the Merger Agreement
within 75 calendar days after commencement of the Offer; provided, however, that
the party seeking to terminate the Merger Agreement is not in material breach of
the Merger Agreement; (c) by the Company if either YPF or the Purchaser
materially breaches, or by YPF and the Purchaser if the Company materially
breaches, any of the representations and warranties or covenants contained in
the Merger Agreement; (d) by either YPF and the Purchaser or the Company, if the
Merger is not consummated prior to June 30, 1995; provided, however, that the
right to terminate the Merger Agreement pursuant to this provision will not be
available to any party whose failure to fulfill any obligation under the Merger
Agreement has been the cause of, or resulted in, the failure of the Effective
Time to occur on or before such date; (e) by either YPF and Purchaser, on the
one hand, or the Company, on the other hand, if either one (or any assignee
permitted under the Merger Agreement) is restrained, enjoined or otherwise
precluded by an order, decree, ruling or injunction (other than an order or
injunction issued on a temporary or preliminary basis) of a court of competent
jurisdiction, governmental authority or other regulatory or administrative
agency or commission, from consummating the Merger or making the acquisition or
holding by YPF or its subsidiaries of the Shares or shares of common stock of
the surviving corporation illegal and all means of appeal and all appeals from
such order decree, ruling, injunction or other action have been finally
exhausted; (f) by the Company if the Board of Directors of the Company
determines that it must recommend the withdrawal of its acceptance of the Offer
and approval of the Merger by the Company's stockholders based upon the advice
of outside counsel that such action is necessary for the Board of Directors to
comply with its fiduciary duties to stockholders under applicable law; or (g) by
YPF and Purchaser, if: (i) the Board of Directors of the Company shall not have
recommended or shall withdraw, modify or change its recommendation relating to
the Merger or the Offer in a manner materially adverse to YPF or shall have
resolved to do any of the foregoing; (ii) the Board of Directors of the Company
shall have recommended to the stockholders of the Company that they accept or
approve, or the Company or any of its subsidiaries shall have agreed to engage
in, a Competing Transaction (as defined below); or (iii) any Person shall have
acquired beneficial ownership or the right to acquire beneficial ownership or
any "group" (as such term is defined under Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder) shall have been formed which
beneficially owns, or has the right to acquire "beneficial ownership" (as
defined in the Rights Agreement) of, more than 20% of the then-outstanding
Shares of the Company.
"Competing Transaction" is defined as any of the following involving the
Company or any of its subsidiaries: (i) any merger, consolidation, share
exchange, business combination or other similar transaction except for such of
the foregoing in which the only parties are the Company or one or more
subsidiaries of the Company; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of the assets of the Company or any of its
subsidiaries constituting 5% or more of the consolidated assets of the Company
or accounting for 5% or more of the consolidated revenues of the Company in a
single transaction or series of related transactions involving any person other
than the Company or one or more subsidiaries of the Company; or (iii) any tender
or exchange offer for 20% or more of the outstanding Voting Shares or the filing
of a registration statement under the Securities Act in connection therewith.
In the event of any termination and abandonment pursuant to the Merger
Agreement, no party to the Merger Agreement (or any of its directors or
officers) will have any liability or further obligation to any other party to
the Merger Agreement, except for certain express obligations under the Merger
Agreement and except that no party will be relieved from liability for any
breach of the Merger Agreement. Any action by the Company to terminate the
Merger Agreement as described herein will require only the approval of a
majority of the directors of the Company then in office who are directors of the
Company on the date hereof, or persons nominated or elected to succeed such
directors by a majority of such directors (the "Continuing Directors").
24
<PAGE>
In the event the Merger Agreement is terminated, (i) YPF and the Purchaser
will not, and will cause their subsidiaries and affiliates controlled by them
not to, acquire or offer to acquire or request permission to acquire or offer to
acquire (either directly or pursuant to a waiver of this or any other covenant
in the Merger Agreement) Shares otherwise than pursuant to the Offer or the
Merger for a period of not less than 24 months after termination of the Merger
Agreement without prior written approval of the Board of Directors of the
Company, and (ii) the provisions of the confidentiality agreement previously
entered into (the "Confidentiality Agreement") between the Company and YPF (or
one of its affiliates) will continue to apply.
Whether or not the Offer or Merger is consummated, all costs and expenses
incurred in connection with the Offer, the Merger Agreement and the transactions
contemplated thereby will be paid by the party incurring such costs and
expenses; provided, however, that (i) in the event of a termination of Merger
Agreement by the Company pursuant to clause (f) above or by YPF and the
Purchaser pursuant to clauses (g)(i) or (ii) above, the Company will be
obligated to promptly pay to the Purchaser $20 million in cash, and (ii) in the
event of a termination of the Merger Agreement by the Company or by YPF if at
the date of such termination any condition to the funding of the loans
contemplated by the Commitment Letter has not been satisfied, provided that at
such time no other condition to YPF's obligation to consummate the Offer or the
Merger, as the case may be, is unsatisfied (other than the failure to meet the
Minimum Share Condition as a result of the failure to obtain such funding), YPF
and the Purchaser, jointly and severally, will be obligated to promptly pay to
the Company $20 million in cash.
Certain Employment Agreements. YPF has asked Mr. Charles L. Blackburn, the
Chairman, President and Chief Executive Officer of the Company to become an
international consultant to YPF and to remain a director of the Company. Among
other things, Mr. Blackburn would be paid an annual salary of $500,000, under a
proposed 2-year contract. He would have offices in Dallas and Buenos Aires, and
be expected to spend 50-75% of his time working for YPF.
In addition, YPF has announced that following the Merger Mr. Peter Gaffney,
a founding partner of Gaffney, Cline and Associates, and a reservoir engineer
who is currently also President of the Society of Petroleum Engineers, will
become the interim Chief Executive Officer of the Company. The terms of Mr.
Gaffney's employment have not yet been agreed.
$9.75 Preferred Stock Arrangements. In accordance with the provisions of the
Company's certificate of incorporation, the holder of the Company's $9.75
Preferred Stock must approve the Merger in order for the Merger to be
consummated. To induce such holder to consent to the Merger and, effective upon
the Effective Time, to (i) waive certain rights, including appraisal rights,
conversion rights, rights under the Rights Plan and the right to increased
dividends under certain circumstances, (ii) waive certain covenants restricting
the Company's ability to take certain actions and (iii) terminate the
registration rights associated with the $9.75 Preferred Stock, YPF has agreed,
effective as of the Effective Time, to guarantee the payment and performance of
each and every obligation of the Company to the registered owners of the
Company's $9.75 Preferred Stock thereunder, including the obligation to pay
quarterly dividend amounts and to redeem shares of the $9.75 Preferred Stock in
certain circumstances. In addition, the Company has agreed, effective upon the
Effective Time, (i) to waive certain rights, including the right to cause the
Company to redeem the $9.75 Preferred Stock at its option and the right of first
offer with respect to the transfer of the shares of $9.75 Preferred Stock, (ii)
to waive certain transfer restrictions with respect to the $9.75 Preferred
Stock, and (iii) to pay to The Prudential Insurance Company of America
("Prudential"), which is the current holder of all of the outstanding shares of
$9.75 Preferred Stock, a restructuring fee of $250,000 upon the Effective Time.
YPF has agreed to reimburse Prudential for all of its reasonable out-of-pocket
expenses arising in connection with these agreements.
12. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; STOCK EXCHANGE LISTING;
REGISTRATION UNDER THE EXCHANGE ACT. The purchase of Shares pursuant to the
Offer will reduce the number of Shares that
25
<PAGE>
might otherwise trade publicly and the number of holders of Shares, which could
adversely affect the liquidity and market value of the remaining shares held by
stockholders other than the Purchaser.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the requirements of the NYSE for continued listing and
may, therefore, be delisted from such exchange. According to the NYSE's
published guidelines, the NYSE would consider delisting the Shares if, among
other things, the number of publicly-held Shares (excluding Shares held by
officers, directors, their immediate families and holders of 10% or more of the
Shares) were less than 600,000, there were fewer than 1,200 holders of at least
100 Shares or the aggregate market value of publicly held Shares were less than
$5 million. According to the Company 10-K, as of January 31, 1994 there were
approximately 35,740 record holders of Shares. If, as a result of the purchase
of Shares pursuant to the Offer, the Shares no longer meet the requirements of
the NYSE for continued listing and the listing of Shares is discontinued, the
market for the Shares could be adversely affected.
If the NYSE were to delist the Shares (which the Purchaser intends to cause
the Company to seek if it acquires control of the Company and the Shares no
longer meet the NYSE listing requirements), it is possible that the Shares would
trade on another securities exchange or in the over-the-counter market and that
price quotations for the Shares would be reported by such exchange or through
the National Association of Securities Dealers Automated Quotation System
("NASDAQ") or other sources. The extent of the public market for the Shares and
availability of such quotations would, however, depend upon such factors as the
number of holders and/or the aggregate market value of the publicly-held Shares
at such time, the interest in maintaining a market in the Shares on the part of
securities firms, the possible termination of registration of the Shares under
the Exchange Act and other factors.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding listing and market quotations, following the Offer it
is possible that the Shares would no longer constitute "margin securities" for
the purposes of the margin regulations of the Federal Reserve Board and
therefore could no longer be used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Registration of
the Shares under the Exchange Act may be terminated upon application by the
Company to the Commission if the Shares are not listed on a national securities
exchange and there are fewer than 300 record holders of the Shares. Termination
of registration of the Shares under the Exchange Act would reduce substantially
the information required to be furnished by the Company to its stockholders and
would make certain provisions of the Exchange Act, such as the short-swing
profit recovery provisions of Section 16(b), the requirement of furnishing a
proxy statement in connection with stockholders' meetings pursuant to Section
14(a) and the requirements of Rule 13e-3 under the Exchange Act with respect to
"going private" transactions no longer applicable to the Company. Furthermore,
if the Purchaser acquires a substantial number of Shares or the registration of
the Shares under the Exchange Act were to be terminated, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 under the Securities
Act may be impaired or eliminated. If registration of the Shares under the
Exchange Act were terminated prior to the consummation of the Merger, the Shares
would no longer be "margin securities" or be eligible for listing or NASDAQ
reporting. It is the present intention of the Purchaser to seek to cause the
Company to make an application for termination of registration of the Shares as
soon as possible following the Offer if the requirements for termination of
registration are met.
13. DIVIDENDS AND DISTRIBUTIONS. If, on or after February 28, 1995 , the
Company should, except as permitted under the Merger Agreement, (i) split or
combine the Shares, or otherwise change the Shares or its capitalization, (ii)
issue or sell any additional securities of the Company (other than Shares issued
or sold upon the exercise (in accordance with the present terms thereof) of
Company Options outstanding on February 28, 1995, or (iii) acquire currently
outstanding Shares or otherwise cause a
26
<PAGE>
reduction in the number of outstanding Shares, then, without prejudice to the
Purchaser's rights under Sections 1 and 14, the Purchaser, in its sole
discretion (subject to the terms of the Merger Agreement), may make such
adjustments as it deems appropriate in the purchase price and other terms of the
Offer and the Merger including, without limitation, the amount and type of
securities offered to be purchased.
If, on or after February 28, 1995 the Company should, except as permitted
under the Merger Agreement, declare or pay any dividend on the Shares or make
any distribution (including, without limitation, the issuance of additional
Shares pursuant to a stock dividend or stock split, the issuance of other
securities or the issuance of rights for the purchase of any securities) with
respect to the Shares that is payable or distributable to stockholders of record
on a date prior to the transfer to the name of the Purchaser or its nominee or
transferee on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to the Purchaser's rights under
Sections 1 and 14, (i) the purchase price per Share payable by the Purchaser
pursuant to the Offer will be reduced by the amount of any such cash dividend or
cash distribution and (ii) any such non-cash dividend, distribution or right to
be received by the tendering stockholders will be received and held by the
tendering stockholders for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer. Pending such remittance and subject to applicable
law, the Purchaser will be entitled to all rights and privileges as owner of any
such non-cash dividend, distribution or right and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by the Purchaser in its sole discretion.
14. CONDITIONS TO THE OFFER. Notwithstanding any other provision of the
Offer, the Purchaser shall not be required to accept for payment, purchase or
pay for any Shares tendered, and may postpone the acceptance for payment, the
purchase of, and/or payment for, Shares, and/or may, subject to the terms of the
Merger Agreement, amend or terminate the Offer if (i) the Minimum Share
Condition has not been satisfied, (ii) the Company shall not have taken the
steps necessary to redeem the Rights , (iii) the applicable waiting period under
the HSR Act shall not have expired or been terminated, (iv) the Financing
Condition shall not have been satisfied or (v) at any time at or before payment
for any Shares tendered pursuant to the Offer (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to the Offer), any of
the following events shall have occurred and be continuing:
(a) there shall be in effect any temporary restraining order,
preliminary or final injunction or other order or decree issued by any
United States federal or state court of competent jurisdiction or United
States federal or state governmental, regulatory or administrative agency or
authority, (1) enjoining, restraining or otherwise prohibiting the Offer,
the Merger or the acquisition by YPF or the Purchaser of Shares; (2)
prohibiting or materially limiting the ownership or operation by YPF or the
Purchaser of all or any substantial portion of the business or material
assets of the Company and its subsidiaries, taken as a whole, or, as a
consequence of the Offer, the Merger or YPF's or the Purchaser's acquisition
of Shares, of YPF or any of its subsidiaries, or compelling YPF or the
Purchaser to dispose of or to hold separate all or any material portion of
the business or material assets of the Company and its subsidiaries, taken
as a whole, or of YPF or any of its subsidiaries, or imposing any material
limitation on the ability of YPF or the Purchaser to conduct such business
or own such assets, (3) imposing material limitations on the ability of YPF
or the Purchaser (or any other affiliate of YPF) to acquire or hold or to
exercise full rights of ownership of the Shares, including without
limitation the right to vote the Shares purchased by them on all matters
properly presented to the stockholders of the Company, or (4) requiring
material divestitures by YPF or the Purchaser or any of their subsidiaries
or affiliates of any Shares, as a consequence of the Offer, Merger or YPF or
the Purchaser's acquisition of Shares; or
(b) there shall be any statute, rule, regulation or order promulgated,
enacted, entered or deemed applicable to the Offer or the Merger, or any
other action shall have been taken, by any government or governmental
authority or agency or any court domestic or foreign, that is
27
<PAGE>
reasonably likely to result in any of the consequences referred to in
clauses (1) through (4) of paragraph (a) above; or
(c) there shall have occurred (1) any general suspension of trading in,
or limitation on prices for, trading in securities on the NYSE or in the
over-the-counter-market, (2) a declaration of a banking moratorium or any
limitation or suspension of payments by United States authorities on the
extension of credit by United States lending institutions, (3) a
commencement of war, armed hostilities or other international or national
calamity directly or indirectly involving the United States, (4) in the case
of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof; or
(d) it shall have been publicly disclosed or the Purchaser shall have
learned that any person shall have entered into a definitive agreement or an
agreement in principle with the Company with respect to a tender offer or
exchange offer for any shares of capital stock of the Company (including
without limitation the Shares or a merger, consolidation or other business
combination or any acquisition or disposition of a material amount of assets
or any comparable event with or involving the Company (other than such of
the foregoing as is permitted by Merger Agreement); or
(e) any of the representations and warranties of the Company in the
Merger Agreement shall not have been, or shall cease to be, true and correct
in all material respects (whether because of circumstances or events
occurring in whole or in part prior to, on or after the date of the Merger
Agreement), or the Company shall have not performed in all material respects
the covenants to be performed by it pursuant to the Merger Agreement; or
(f) the Merger Agreement shall have been terminated by the Company, on
the one hand, or YPF and the Purchaser, on the other hand, in accordance
with its terms or the Purchaser or YPF, on the one hand, and the Company, on
the other hand, shall have reached an agreement providing for the
termination of the Offer; or
(g) the Company's Board of Directors shall have failed to recommend and
approve, or shall no longer recommend and approve, the Offer or the adoption
of the Merger Agreement, or shall materially modify or amend its
recommendation and approval with respect thereto, or shall have resolved to
do any of the foregoing (except that the foregoing shall not apply to a
modification or amendment solely in the reasons for such recommendation and
approval so long as the Board of Directors of the Company continues to
recommend and approve acceptance of the Offer and adoption of the Merger
Agreement by holders of the Company's Voting Shares); or
(h) without limiting the generality or effect of paragraph (e) above,
except as disclosed to YPF pursuant to the Agreement, there shall have been
any material adverse change in the business, financial condition or results
of operations of the Company and its subsidiaries, taken as a whole;
which, in the sole judgment of the Purchaser, in any such case regardless of the
circumstances (including any action or inaction by the Purchaser or any of its
affiliates other than a material breach by the Purchaser or YPF of the
Agreement) giving rise to any such condition, makes it inadvisable to proceed
with the Offer or with such acceptance for payment or purchase of or payment for
any of the Shares.
The foregoing conditions (i) may be asserted by the Purchaser regardless of
the circumstances (including any action or inaction by the Purchaser or any of
its affiliates other than a breach by the Purchaser or YPF of the Merger
Agreement) giving rise to such condition and (ii) other than the Minimum Share
Condition, are for the sole benefit of the Purchaser and its affiliates. The
foregoing conditions, other than the Minimum Share Condition, may be waived by
the Purchaser in whole or in part at any time and from time to time in its sole
discretion. The failure by the Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any other rights and each such
right will be deemed an ongoing right which may be asserted at any time and from
time to time.
28
<PAGE>
15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as set
forth in this Offer to Purchase, based on a review of publicly available filings
by the Company with the Commission and other publicly available information
regarding the Company, neither YPF nor the Purchaser is aware of any licenses or
regulatory permits that appear to be material to the business of the Company and
its subsidiaries, taken as a whole, and that might be adversely affected by the
Purchaser's acquisition of Shares (and the indirect acquisition of the stock of
the Company's subsidiaries) as contemplated herein, or any approvals or other
actions by or with any domestic, foreign or supranational governmental authority
or administrative or regulatory agency that would be required for the
acquisition or ownership of the Shares (or the indirect acquisition of the stock
of the Company's subsidiaries) by the Purchaser pursuant to the Offer as
contemplated herein. Should any such approval or other action be required, it is
presently contemplated that such approval or action would be sought except as
described below under "State Takeover Laws". Should any such approval or other
action be required, there can be no assurance that any such approval or action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Company's or its subsidiaries' businesses,
or that certain parts of the Company's, YPF's, the Purchaser's or any of their
respective subsidiaries' businesses might not have to be disposed of or held
separate or other substantial conditions complied with in order to obtain such
approval or action or in the event that such approvals were not obtained or such
actions were not taken. The Purchaser's obligation to purchase and pay for
Shares is subject to certain conditions, including conditions with respect to
injunctions and governmental actions. See the Introduction and Section 14 for a
description thereof.
State Takeover Laws. A number of states (including Delaware, where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Merger, the
Purchaser believes that such laws conflict with federal law and constitute an
unconstitutional burden on interstate commerce. In 1982, the Supreme Court of
the United States, in Edgar v. Mite Corp., invalidated on constitutional grounds
the Illinois Business Takeover Statute which, as a matter of state securities
law, made takeovers of corporations meeting certain requirements more difficult,
and the reasoning in such decision is likely to apply to certain other state
takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of America,
the Supreme Court of the United States held that the State of Indiana could, as
a matter of corporate law and, in particular, those aspects of corporate law
concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without the prior
approval of the remaining stockholders, provided that such laws were applicable
only under certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex
Corp., a federal district court in Oklahoma ruled that the Oklahoma statutes
were unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district
court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee. This
decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a federal district court in Florida held in Grand
Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated
Transactions Act and Florida Control Share Acquisition Act were unconstitutional
as applied to corporations incorporated outside of Florida.
The Purchaser has not attempted to comply with any state takeover statutes
in connection with the Offer or the Merger. The Purchaser reserves the right to
challenge the validity or applicability of any state law allegedly applicable to
the Offer or the Merger and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that it is asserted that one or more takeover statutes apply to the Offer or the
Merger, and it is not determined by an appropriate court that such statute or
statutes do not apply or are invalid as applied to the Offer or the Merger, as
applicable, the Purchaser may be required to file certain documents with, or
receive
29
<PAGE>
approvals from, the relevant state authorities, and the Purchaser might be
unable to accept for payment or purchase Shares tendered pursuant to the Offer
or be delayed in continuing or consummating the Offer. In such case, the
Purchaser may not be obligated to accept for purchase, or pay for, any Shares
tendered. See Section 14.
Antitrust. The Offer and the Merger are subject to the HSR Act, which
provides that certain acquisition transactions may not be consummated unless
certain information has been furnished to the Antitrust Division of the
Department of Justice (the "Antitrust Division") and the Federal Trade
Commission ("FTC") and certain waiting period requirements have been satisfied.
On March 2, 1995, YPF filed a Notification and Report Form with respect to the
Offer (the "HSR Filing").
Under the provisions of the HSR Act applicable to the Offer, the purchase of
Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by YPF. Accordingly, as such
filing was made on March 3, 1995, the waiting period with respect to the Offer
will expire at 11:59 p.m., New York City time, on March 18, 1995, unless YPF
receives a request for additional information or documentary material, or the
Antitrust Division and the FTC terminate the waiting period prior thereto. If,
within such 15-calendar day waiting period, either the Antitrust Division or the
FTC requests additional information or material from YPF concerning the Offer,
the waiting period will be extended and would expire at 11:59 p.m., New York
City time, on the tenth calendar day after the date of substantial compliance by
YPF with such request. Only one extension of the waiting period pursuant to a
request for additional information is authorized by the HSR Act. Thereafter,
such waiting period may be extended only by court order or with the consent of
YPF. The Purchaser will not accept for payment Shares tendered pursuant to the
Offer unless and until the waiting period requirements imposed by the HSR Act
with respect to the Offer have been satisfied. See Section 14.
If the transaction to which the HSR Filing relates is abandoned prior to the
expiration of the 15-calendar day waiting period or any extension thereof, then
the purchase of Shares may not be consummated until 30 calendar days after
receipt by the Antitrust Division and the FTC of the Notification and Report
Forms of both YPF and the Company unless the 30-day period is earlier terminated
by the Antitrust Division and the FTC. Within such 30-day period, the Antitrust
Division or the FTC may request additional information or documentary materials
from YPF or the Company. The acquisition of Shares pursuant to the Offer to
Purchase may not be consummated until 20 days after such requests are
substantially complied with by both YPF and the Company. Thereafter, the waiting
period may be extended only by court order or with the consent of YPF and the
Company.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of YPF or its subsidiaries.
Private parties and state attorneys general may also bring legal action under
the antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which YPF and the
Company are engaged, YPF and the Purchaser believe that the acquisition of
Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there
can be no assurance that a challenge to the Offer or other acquisition of Shares
by the Purchaser on antitrust grounds will not be made or, if such a challenge
is made, of the result. See Section 14 for certain conditions to the Offer,
including conditions with respect to injunctions and certain governmental
actions.
Certain Litigation. YPF and the Company have obtained copies of nine
complaints filed on March 1, 1995 in the Chancery Court of the State of Delaware
by alleged holders of Shares. In the various complaints, the plaintiffs purport
to sue individually and on behalf of classes comprised of the holders of Shares,
stockholders of the Company or all holders of the Company's securities. The
30
<PAGE>
complaints name as defendants the Company, directors of the Company and certain
officers of the Company, a former director of the Company, and, with respect to
certain of the complaints, YPF, and allege, among other things, that the
defendant directors and officers of the Company breached their fiduciary duties
in approving the Offer and the Merger and that YPF aided and abetted the alleged
breach of duties. The plaintiffs purport to seek orders enjoining the
consummation of the Offer and the Merger (or the recission of those
transactions) or, in the alternative, accountings for any damages to the alleged
classes, together with their attorneys' fees and other relief. YPF intends to
vigorously defend these lawsuits. The absence of an injunction, among other
things, is a condition to Purchaser's obligation to purchase Shares tendered
pursuant to the Offer. See Section 11.
16. FEES AND EXPENSES. Salomon Brothers is acting as Dealer Manager in
connection with the Offer. In addition, Salomon Brothers has provided certain
financial advisory services to YPF in connection with the proposed acquisition
of the Company. As compensation for such services, YPF has to date paid Salomon
Brothers a fee of $250,000, which fee was payable upon execution of the
engagement letter with Salomon Brothers, and $750,000 which fee was payable upon
execution of the Merger Agreement. YPF has also agreed to pay Salomon Brothers a
fee of 0.5% of the aggregate consideration involved in the acquisition of the
Company (less the $1,000,000 previously paid) contingent upon the consummation
of such acquisition. YPF has also agreed to retain Salomon Brothers as lead
underwriter or placement agent in connection with the possible issuance of debt
or equity securities to refinance such acquisition, for which it would receive
customary underwriting or placements fees or discounts. In addition, YPF has
agreed to reimburse Salomon Brothers for its reasonable out-of-pocket expenses,
including reasonable fees and disbursements of its counsel, incurred in
connection with the Offer and the Proposed Merger or otherwise arising out of
Salomon Brothers' engagement and to indemnify Salomon Brothers (and certain
affiliated persons) against certain liabilities and expenses, including certain
liabilities under the federal securities laws. Salomon Brothers may from time to
time in the future render various investment banking services to YPF and its
affiliates, for which it is expected it would be paid customary fees.
D.F. King & Co., Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee stockholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services in
addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith. The Purchaser has agreed to indemnify the
Information Agent against certain liabilities and expenses in connection with
the Offer, including certain liabilities under the federal securities laws.
In addition, Chase has been retained as the Depositary. The Purchaser will
pay the Depositary reasonable and customary compensation for its services in
connection with the Offer, will reimburse the Depositary for its reasonable
out-of-pocket expenses in connection therewith and will indemnify the Depositary
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
Except as set forth above, neither YPF nor the Purchaser will pay any fees
or commissions to any broker, dealer or other person for soliciting tenders of
Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by YPF or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
17. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which
the making of the Offer is not in compliance with applicable law. If the
Purchaser becomes aware of any jurisdiction in which the making of the Offer
would not be in compliance with applicable law, the Purchaser will make a good
faith effort to comply with any such law. If, after such good faith effort, the
Purchaser cannot comply with any such law, the Offer will not be made to (nor
will tenders be accepted from or on behalf
31
<PAGE>
of) the holders of Shares residing in such jurisdiction. In those jurisdictions
whose securities or blue sky laws require the Offer to be made by a licensed
broker or dealer, the Offer is being made on behalf of the Purchaser by one or
more registered brokers or dealers which are licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of the Purchaser or YPF not contained in this Offer to
Purchase or in the Letter of Transmittal and, if given or made, such information
or representation must not be relied upon as having been authorized.
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to
Rule 14d-3 under the Exchange Act, furnishing certain additional information
with respect to the Offer, and may file amendments thereto. The Schedule 14D-1
and any amendments thereto, including exhibits, may be inspected and copies may
be obtained at the same places and in the same manner as set forth in Section 7
(except that they will not be available at the regional offices of the
Commission).
YPF ACQUISITION CORP.
32
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF
THE PURCHASER
AND YPF
1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table
sets forth the name, current business address and present principal occupation
or employment and material occupations, positions, offices or employments for
the past five years of each director and executive officer of YPF. Unless
otherwise indicated, the current business address of each person is c/o
YPF-Directorio, Avenida Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina
and each occupation set forth opposite an individual's name refers to employment
with the Purchaser. Each such person is a citizen of the Republic of Argentina,
unless otherwise indicated.
DIRECTORS AND EXECUTIVE OFFICERS
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
AND CURRENT BUSINESS ADDRESS; MATERIAL
POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ----------------------------- ------------------------------------------------------------
<S> <C>
Jose A. Estenssoro Director, President (see Directors and Executive Officers of
YPF below)
Cedric Bridger Vice President (See Directors and Executive Officers of YPF
below)
Carlos Olivieri Vice President (See Directors and Executive Officers of YPF
below)
Darial R. Sneed Vice President and Secretary. Since 1993, Ms. Sneed has
served as Vice President and Manager, Investor Relations
for YPF-- U.S.A., Inc. From 1990 to 1993, she served as
Associate Director, Investor Relations for BP America Inc.
Her business address is YPF-U.S.A., Inc., 660 Madison
Avenue, 20th floor, New York, New York 10021. Ms. Sneed is
a citizen of the United States of America.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF YPF. The following table sets forth
the name, business address and present principal occupation or employment, and
material occupations, positions, offices or employments for the past five years
of each director and executive officer of YPF. Unless otherwise indicated, the
current business address of each such person is c/o YPF--Directorio, Avenida
Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina, and each occupation set
forth opposite an individual's name refers to employment with YPF. Each such
person is a citizen of the Republic of Argentina, unless otherwise indicated.
I-1
<PAGE>
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
AND CURRENT BUSINESS ADDRESS; MATERIAL
POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ----------------------------- ------------------------------------------------------------
<S> <C>
Jose A. Estenssoro Director since 1991, President since 1990. He has been
associated with YPF since 1990, when he was appointed
Trustee by the Argentine Government. From 1987 through
1989, he was President of Compania Sol Petroleo S.A. and
previously, from 1962 to 1987, he occupied various
executive positions with Hughes Tool Company, where he was
named President in 1987.
Nells Leon Director since 1991, Executive Vice President since 1990. He
was Vice President of Operations of Sol Petroleo S.A. from
1987 to 1990.
Mario L. Pineiro Director since 1992. He retired in 1992 as CEO of Alejandro
Llauro e Hijos S.A., where he served for many years. Mr.
Pineiro is also a director of Transportadora de Gas del
Sur S.A.
Miguel Madanes Director since 1993. Presently involved in the cable
television industry in Argentina and Brazil. Previously a
Director of YPF from 1991 to 1992. He served as the CEO of
Fate S.A. from 1971 until 1991.
Bayless A. Manning Director since 1993. Director of IBJ Schroder Bank & Trust
Company. Currently serves as a consultant. Partner of
Paul, Weiss, Rifkind, Wharton & Garrison from 1977 until
1990. Mr. Manning is a citizen of the United States of
America.
Carlos de la Vega Director since 1993. Presently Director of Institutional
Relations and Human Resources of CIBA-Geigy Argentina.
President of the Argentine Chamber of Commerce from 1988
to 1993. He was also President of the Ibero-American
Association of Chambers of Commerce from 1990 to 1992.
James R. Lesch Director since 1993. Currently retired. Chief Executive
Officer (1979-1986) and Chairman of the Board (1981-1986)
of the Hughes Tool Company. He also served as
Commissioner, State of Texas Department Commerce
(1988-1992) and previously as Director of the American
Petroleum Institute. Mr. Lesch is a citizen of the United
States of America.
Ernst Schneider Director since 1993. Chairman of the Board of Leu Holding
and Bank Leu Ltd. and a member of the Board of Directors
of CS Holding Ltd. since 1993. Previously, he served as
Vice Chairman and member of the Board of Credit Suisse.
Mr. Schneider is a dual citizen of Switzerland and the
United States of America.
Hector A. Domeniconi Director since 1993. Presently, Managing Director of DEXCOR,
a consulting firm in Argentina. Held several positions in
the Ministry of Economy of Argentina from 1990 through
1992.
Luis A. Prol Director since 1993. President of YPF Gas S.A. Held several
positions in both Argentine Federal and Provincial
governments, serving as Minister of the Treasury and
Finance of the Province of Formosa from 1987 to 1989 and
as Secretary of Hydrocarbons and Mining of the Ministry of
Economy from 1991 to 1992.
</TABLE>
I-2
<PAGE>
<TABLE><CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
AND CURRENT BUSINESS ADDRESS; MATERIAL
POSITIONS HELD DURING THE PAST FIVE
NAME YEARS AND BUSINESS ADDRESSES THEREOF
- ----------------------------- ------------------------------------------------------------
<S> <C>
Angel Cirasino Director since 1993. Assistant Secretary for Petrochemistry
and Mining of the Ministry of Economy of the Province of
Mendoza since 1991. He was Managing Partner of Motomar
Cuyo Marketing S.R.L. from 1989 to 1991.
Rodolfo Alejandro Diaz Director since 1994. Mr. Diaz is a lawyer and has private
practices in Buenos Aires and Mendoza. He was Secretary of
Labor from 1989 until 1991 and Labor Minister from 1991
until 1992.
Eduardo Petazze Vice President, Refining and Marketing and Head of
Restructuring Project since 1993. Previously, he served as
Vice President of Exploration and Production from 1992 to
1993 and Head of the Restructuring Project since 1991.
Joined YPF in 1983.
Marcelo Guiscardo Vice President, Exploration and Production since 1993.
Previously, he was associated with Exxon Corporation from
1979 to 1993.
Cedric Bridger Vice President, Finance and Corporate Development since
1992. Before joining YPF, he was Marketing Manager for CVB
Industrias Mecanicas in Brazil. Previously, he was
associated with Hughes Tool Company from 1964 to 1989.
Carlos A. Olivieri Vice President and General Controller since 1993. He was
Controller and Director of Aerolineas Argentinas S.A. from
1991 to 1992, a Director of the Central Bank of Argentina
in 1991 and an accountant with Arthur Andersen & Co. from
1974 to 1986.
Raul H. Oreste Vice President, Human Resources since 1990. He was
previously associated with YPF from 1943 to 1963 and from
1965 to 1977. From 1978 to 1990, Mr. Oreste was associated
with Compania Naviera Perez Companc.
Juan A. Rodriguez Vice President of Engineering and Technology since 1992. He
joined YPF in 1990. From 1968 to 1990, he was associated
with Hughes Tool Company of Argentina.
Juan J. Garacija Vice President, Purchasing, Contracts and Environmental
Protection since 1992. Consultant from 1989 to 1990, when
he joined YPF. He has previously served YPF in various
capacities from 1941 to 1976 and from 1982 to 1988.
Norberto Noblia Vice President, Legal Affairs since 1989. Previously, he was
associated with the Sindicatura General de Empresas
Publicas from 1975 to 1986.
Martin Paez-Allende Vice President for Institutional Affairs since September
1994. From 1991 to 1994, he practiced law. Until 1991 he
served as Vice President and member of the Board of Shell
C.A.P.S.A. (Argentina).
</TABLE>
I-3
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at its address set forth below:
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
<TABLE><CAPTION>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
Box 3032 c/o Chase Securities Processing Corp. (9:00a.m.-5:00p.m.
4 Chase MetroTech Center Ft. Lee Executive Park New York City Time)
Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B
Ft. Lee, NJ 07024 Nassau and Liberty Streets
New York, NY 10081
By Facsimile Transmission: (201) 592-1674
Confirm by Telephone: (201) 592-4672
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, this Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
<TABLE>
<S> <C>
UNITED STATES EUROPE
77 Water Street Royex House, Aldermanbury Square
New York, New York 10005 London, England EC2V 7HR
(212) 269-5550 (Collect) (44) 71 600 5005 (Collect)
(800) 488-8035 (Toll Free)
</TABLE>
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-6731
(call collect)
Exhibit (a)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES
OF
COMMON STOCK
OF
MAXUS ENERGY CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 3, 1995
BY
YPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
YPF SOCIEDAD ANONIMA
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS
EXTENDED
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
<TABLE><CAPTION>
By Mail: By Overnight Delivery: By Hand:
<S> <C> <C>
Box 3032 c/o Chase Securities Processing Corp. (9:00a.m.-5:00p.m.
4 Chase MetroTech Center Ft. Lee Executive Park New York City Time)
Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B
Ft. Lee, NJ 07024 Nassau and Liberty Streets
New York, NY 10081
<CAPTION>
By Facsimile Transmission: (201) 592-1674
Confirm by Telephone: (201) 592-4672
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders if
certificates for Shares (as defined in the Offer to Purchase, dated March 3,
1995 (the "Offer to Purchase")) are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of
shares are made by book-entry transfer to an account maintained by The Chase
Manhattan Bank (National Association) (the "Depositary") at The Depository Trust
Company ("DTC"), Midwest Securities Trust Company ("MSTC") or Philadelphia
Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and
collectively referred to as the "Book-Entry Transfer Facilities"), pursuant to
the procedures set forth in Section 3 of the Offer to Purchase. Stockholders who
tender Shares by book-entry transfer are referred to herein as "Book-Entry
Stockholders".
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available, or who cannot deliver their Share
Certificates and all other required documents to the Depositary on or prior to
the Expiration Date, must tender their Shares according to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase. See
instruction 2.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
/ / CHECK HERE IF TENDERED COMMON SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering
Institution:______________________________________________________________
Check Box of Book-Entry Transfer Facility:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Account No. _____________________ Transaction Code No. _________________
/ / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered
Holder(s):___________________________________________________________
Window Ticket Number (if
any):________________________________________________________________
Date of Execution of Notice of Guaranteed
Delivery:____________________________________________________________
Name of Institution which Guaranteed
Delivery:____________________________________________________________
<TABLE><CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE(S) TENDERED
APPEAR(S) ON SHARE CERTIFICATES) (ATTACH ADDITIONAL LIST, IF NECESSARY)
<S> <C> <C> <C>
TOTAL NUMBER
OF SHARES
SHARE REPRESENTED NUMBER OF
CERTIFICATE BY SHARE SHARES
NUMBER(S) CERTIFICATE(S)* TENDERED**
Total Shares
</TABLE>
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, it will be assumed that all Shares
represented by certificates delivered to the Depositary are being
tendered. See Instruction 4.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to YPF Acquisition Corp. (the "Purchaser"), a
Delaware corporation and a wholly owned subsidiary of YPF Sociedad Anonima
("YPF"), an Argentine corporation, the described shares of Common Stock, par
value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware
corporation (the "Company"), at a price of $5.50 per Share, net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which together with the Offer to Purchase constitute the "Offer"). The
undersigned understands that the Purchaser reserves the right to transfer or
assign, in whole or from time to time in part, to YPF or one or more of YPF's
subsidiaries or affiliates, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), the undersigned hereby
sells, assigns, and transfers to, or upon the order of, the Purchaser all right,
title and interest in and to all of the Shares that are being tendered hereby
and any and all dividends on the Shares or any distribution (including, without
limitation, the issuance of additional Shares pursuant to a stock dividend or
stock split, the issuance of other securities or the issuance of rights for the
purchase of any securities) with respect to the Shares that is declared or paid
by the Company on or after March 3, 1995 and is payable or distributable to
stockholders of record on a date prior to the transfer into the name of the
Purchaser or its nominees or transferees on the Company's stock transfer records
of the Shares purchased pursuant to the Offer (a "Distribution"), and
constitutes and irrevocably appoints the Depositary the true and lawful agent,
attorney-in-fact and proxy of the undersigned to the full extent of the
undersigned's rights with respect to such Shares (and any Distributions) with
full power of substitution (such power of attorney and proxy being deemed to be
an irrevocable power coupled with an interest), to (i) deliver Share
Certificates (and any Distributions) or transfer ownership of such Shares on the
account books maintained by the Book-Entry Transfer Facilities, together in
either such case with all accompanying evidences of transfer and authenticity,
to or upon the order of the Purchaser upon receipt by the Depositary, as the
undersigned's agent, of the purchase price, (ii) present Shares (and any
Distributions) for transfer on the books of the Company and (iii) receive all
benefits and otherwise exercise all rights of beneficial ownership of Shares
(and any Distributions), all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Jose A. Estenssoro, Cedric
Bridger and Darial R. Sneed, and each of them individually, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote in such manner as each such attorney and proxy or his
substitute shall, in his sole discretion, deem proper, and otherwise act
(including pursuant to written consent) with respect to all of the Shares
tendered hereby which have been accepted for payment by the Purchaser prior to
the time of such vote or action (and any Distributions) which the undersigned is
entitled to vote at any meeting of stockholders (whether annual or special and
whether or not an adjourned or postponed meeting) of the Company, or by consent
in lieu of such meeting, or otherwise. This power of attorney and proxy is
coupled with an interest in the tendered Shares and is irrevocable and is
granted in consideration of, and is effective upon, the acceptance for payment
of such Shares by the Purchaser in accordance with the terms of the Offer. Such
acceptance for payment shall revoke, without further action, any other power of
attorney or proxy granted by the undersigned at any time with respect to the
Shares (and any Distributions) and no subsequent powers of attorney or proxies
will be given (and if given will be deemed not to be effective) with respect
thereto by the undersigned. The undersigned understands that the Purchaser
reserves the right to require that, in order for Shares to be deemed validly
tendered, immediately upon the Purchaser's acceptance for payment of such
Shares, the Purchaser or its designees is able to exercise full voting rights
with respect to such Shares and other securities, including voting at any
meeting of stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any Distributions) and that, when the same are accepted for payment
by the Purchaser, the Purchaser will acquire good, marketable and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver all additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby (and
any Distributions). In addition, the undersigned shall promptly remit and
transfer to the Depositary for the account of the Purchaser any and all other
Distributions in respect of the Shares tendered hereby, accompanied by
appropriate documentation of transfer and, pending such remittance or
appropriate assurance thereof, the Purchaser shall be entitled to all rights and
privileges as owner of any such Distributions, and may withhold the entire
purchase price or deduct from the purchase price of Shares tendered hereby the
amount or value thereof, as determined by the Purchaser in its sole discretion.
<PAGE>
All authority herein conferred or herein agreed to be conferred shall not be
affected by, and shall survive, the death or incapacity of the undersigned and
any obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, legal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
Certificates not tendered or accepted for payment in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and/or return any
Share Certificates not tendered or accepted for payment (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature. In the event that either or both the "Special Delivery
Instructions" and the "Special Payment Instructions" are completed, please issue
the check for the purchase price and/or return any Share Certificates not
tendered or accepted for payment in the name(s) of, and deliver said check
and/or return Share Certificates to, the person or persons so indicated. The
undersigned recognizes that the Purchaser has no obligation pursuant to the
"Special Payment Instructions" to transfer any Shares from the name of the
registered holder thereof if the Purchaser does not accept for payment any of
such Shares.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased and/or
the check for the purchase price of Shares purchased are to be issued in the
name of someone other than the undersigned, or if Shares tendered by book-entry
transfer which are not purchased are returned by credit to an account
maintained at a Book-Entry Transfer Facility other than that designated on the
front cover.
Issue check and/or certificates to:
Name:____________________________________________
(PLEASE PRINT)
Address:_________________________________________
_________________________________________________
_________________________________________________
(INCLUDE ZIP CODE)
_________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
(SEE SUBSTITUTE FORM W-9 BELOW)
/ / Credit unpurchased Shares tendered by book-entry transfer to the Book-Entry
Transfer Account set forth below:
/ / DTC / / MSTC / / PDTC
___________________________________________
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if Share Certificates not tendered or not purchased and/or
the check for the purchase price of Shares purchased are to be sent to someone
other than the undersigned, or to the undersigned at an address other than that
shown on the front cover.
Mail check and/or certificates to:
Name:___________________________________________
(PLEASE PRINT)
Address:________________________________________
________________________________________________
________________________________________________
(INCLUDE ZIP CODE)
________________________________________________
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.)
<PAGE>
SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) SIGN
HERE
X____________________________________________________________________ <--
X____________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Dated: ______________________________________________________________
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on the
Share Certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the necessary information.
See Instruction 5.)
Name(s): ____________________________________________________________
_____________________________________________________________________
(PLEASE PRINT)
Capacity (Full Title): ______________________________________________
Address: ____________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: _____________________________________
Tax Identification or Social Security No.: __________________________
(SEE SUBSTITUTE FORM W-9 BELOW)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _______________________________________________
Name: _______________________________________________________________
Name of Firm: _______________________________________________________
Address: ____________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ___________________________________
Dated: ______________________________________________________________
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (a) if this Letter of Transmittal is signed by the
registered holder of the Shares tendered herewith, unless such holder has
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" or (b) if such Shares are tendered for
the account of a bank or trust company in the United States or by a firm that is
a member of the National Association of Securities Dealers, Inc. or of a
registered national securities exchange (an "Eligible Institution"). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used if Share Certificates are to be forwarded herewith or,
unless an Agent's Message is utilized, if tenders are to be made pursuant to the
procedures for tender by book-entry transfer set forth in Section 3 of the Offer
to Purchase. Share Certificates, or timely confirmation (a "Book-Entry
Confirmation") of a book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility, as well as this Letter of Transmittal
(or a facsimile hereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry transfer, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth herein prior to the Expiration Date and, if
later, stockholders who cannot deliver their Share Certificates and all other
required documents to the Depositary prior to the Expiration Date or who cannot
complete the procedures for delivery by book-entry transfer on a timely basis
must tender their Shares by properly completing and duly executing a Notice of
Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender
must be made by or through an Eligible Institution; (b) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form made
available by the Purchaser, must be received by the Depositary on or prior to
the Expiration Date; and (c) the Share Certificates (or a Book-Entry
Confirmation) representing all tendered Shares, in proper form for transfer
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile hereof), with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within five New
York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of
such Notice of Guaranteed Delivery as provided in Section 3 of the Offer to
Purchase. If Share Certificates are forwarded separately to the Depositary, a
properly completed and duly executed Letter of Transmittal (or facsimile hereof)
must accompany each such delivery.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING
STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY
THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. All
tendering stockholders, by execution of this Letter of Transmittal or facsimile
hereof, waive any right to receive any notice of the acceptance of their Shares
for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares and any other required information should be listed on a separate
schedule attached hereto and separately signed on each page thereof in the same
manner as this Letter of Transmittal is signed.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any certificate submitted
are to be tendered, fill in the number of Shares which are to be tendered in the
box entitled "Number of Shares Tendered." In such case, new certificate(s) for
the remainder of the Shares that were evidenced by your old certificate(s) will
be sent to you, unless otherwise provided in the appropriate box marked "Special
Payment Instructions" and/or "Special Delivery Instructions" on this Letter of
Transmittal, as soon as practicable after the Expiration Date. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificate(s) without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
<PAGE>
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares listed and transmitted hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or purchased are to be issued in the name
of, a person other than the registered holder(s). Signatures on such Share
Certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares listed, the Share Certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered holder(s) appear(s) on the
certificates. Signatures on such Share Certificates or stock powers must be
guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or purchased are to be registered in the
name of, any person other than the registered holder, or if tendered Share
Certificates are registered in the name of any person other than the person(s)
signing this Letter of Transmittal, the amount of any stock transfer taxes
(whether imposed on the registered holder or such person) payable on account of
the transfer to such person will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes or exemption therefrom is
submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES LISTED IN THIS
LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of and/or certificates for unpurchased Shares are to be returned to a
person other than the signer of this Letter of Transmittal or if a check is to
be sent and/or such Share Certificates are to be returned to someone other than
the signer of this Letter of Transmittal or to an address other than that shown
on the front cover hereof, the appropriate boxes on this Letter of Transmittal
should be completed. Stockholders tendering Shares by book-entry transfer may
request that Shares not purchased be credited to such account maintained at such
Book-Entry Transfer Facility as such stockholder may designate hereon. If no
such instructions are given, such Shares not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated above. See
Instruction 1.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance may be directed to the Information Agent at its address or telephone
number set forth below. Requests for additional copies of the Offer to Purchase
and this Letter of Transmittal may be directed to the Information Agent or to
brokers, dealers, commercial banks or trust companies.
9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income
tax law, a stockholder whose tendered Shares are accepted for payment is
required to provide the Depositary with such stockholder's correct taxpayer
identification number ("TIN") on Substitute Form W-9 below. If the Depositary is
not provided with the correct TIN, the Internal Revenue Service may subject the
stockholder or other payee to a $50 penalty. In addition, payments that are made
to such stockholder or other payee with respect to Shares purchased pursuant to
the Offer may be subject to 31% backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the stockholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the stockholder or other payee. Backup withholding is
not an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The stockholder is required to give the Depositary the TIN (e.g. social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the Shares. If the Shares are in more than one name or are not in
the name of the
<PAGE>
actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has (have) been lost, destroyed or stolen, the stockholder
should promptly notify the Transfer Agent for the Company, Society National
Bank. The stockholder will then be instructed as to the steps that must be taken
in order to replace the certificate(s). This Letter of Transmittal and related
documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON
OR PRIOR TO THE EXPIRATION DATE.
<PAGE>
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE><CAPTION>
PAYER'S NAME: CHASE MANHATTAN BANK, N.A.
<S> <C>
PART 1--PLEASE PROVIDE
YOUR TIN IN THE BOX AT RIGHT AND -------------------------
SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
or
FORM W-9 -------------------------
Department of the Treasury Employer Identification Number
Internal Revenue Service
PART 2--Certification--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me) and
(2) I am not subject to backup withholding because:
(a) I am exempt from backup withholding, or (b) I
have not been notified by the Internal Revenue
PAYER'S REQUEST FOR Service (the "IRS") that I am subject
TAXPAYER IDENTIFICATION to backup withholding as a result of a failure to
NUMBER ("TIN") report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to
backup withholding.
Certification Instructions--You must cross out
item (2) above if you have been notified by the
IRS that you are currently subject to backup
withholding because of under-reporting interest
or dividends on your tax return. However, if
after being notified by the IRS that you were
subject to backup withholding, you received
another notification from the IRS that you are no
longer subject to backup withholding, do not
cross out such Item (2).
PART 3--
Signature________________________________________
Awaiting TIN / /
Date
___________________________________________, 1995
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office, or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a Taxpayer Identification Number by the
time of payment, 31% of all reportable payments made to me will be withheld,
but that such amounts will be refunded to me if I then provide a Taxpayer
Identification Number within sixty (60) days.
Signature Date , 1995
----------------------- ________________
<PAGE>
Facsimile copies of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates for Shares
and any other required documents should be sent or delivered by each stockholder
of the company or his broker, dealer, commercial bank, trust company or other
nominee to the Depositary at its address set forth below:
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
<TABLE><CAPTION>
By Mail: By Overnight Delivery: By Hand:
<S> <C> <C>
Box 3032 c/o Chase Securities Processing Corp. (9:00a.m.-5:00p.m.
4 Chase MetroTech Center Ft. Lee Executive Park New York City Time)
Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B
Ft. Lee, NJ 07024 Nassau and Liberty Streets
New York, NY 10081
By Facsimile Transmission: (201) 592-1674
Confirm by Telephone: (201) 592-4672
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
listed below. Additional copies of the Offer to Purchase, this Letter of
Transmittal and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
<TABLE>
<S> <C>
UNITED STATES EUROPE
77 Water Street Royex House, Aldermanbury Square
New York, New York 10005 London, England EC2V 7HR
(212) 269-5550 (Collect) (44) 71 600 5005 (Collect)
(800) 488-8035 (Toll Free)
</TABLE>
The Dealer Manager for the Offer is:
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
(212) 783-6731
(call collect)
Exhibit (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
MAXUS ENERGY CORPORATION
This Notice of Guaranteed Delivery or one substantially equivalent hereto
must be used to accept the Offer (as defined below) if certificates representing
shares of common stock, par value $1.00 per share (the "Shares"), of Maxus
Energy Corporation, a Delaware corporation (the "Company") are not immediately
available or time will not permit all required documents to reach The Chase
Manhattan Bank (National Association) (the "Depositary") on or prior to the
Expiration Date (as defined in the Offer to Purchase), or the procedures for
delivery by book-entry transfer cannot be completed on a timely basis. This
Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile
transmission or mail to the Depositary. See Section 3 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
The Chase Manhattan Bank
(National Association)
(201) 592-4672
<TABLE>
<CAPTION>
By Mail: By Overnight Delivery: By Hand:
<S> <C> <C>
Box 3032 c/o Chase Securities Processing Corp. (9:00 a.m.-5:00 p.m.
4 Chase MetroTech Center Ft. Lee Executive Park New York City Time)
Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B
Ft. Lee, NJ 07024 Nassau and Liberty Streets
New York, NY 10081
By Facsimile Transmission: (201) 592-1674
Confirm by Telephone: (201) 592-4672
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO
A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to YPF Acquisition Corp., a Delaware
corporation (the "Purchaser"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which together constitute the
"Offer"), receipt of each of which is hereby acknowledged, the number of Shares
indicated below pursuant to the guaranteed delivery procedures set forth in
Section 3 of the Offer to Purchase.
Number of Shares: ________________ Shares
Name(s) of Record
Holder(s): _____________
Certificate No(s). (if available):
________________________________
________________________________
Address(es):____________________
________________________________
________________________________
If Share(s) will be tendered by book-entry
transfer, check one box.
________________________________
Area Code and Telephone
Number(s): ______
/ / The Depository Trust Company
________________________________
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
Signature(s): __________________
________________________________
________________________________
THE GUARANTEE BELOW MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm that is a bank, broker, dealer, credit union,
savings association or other entity which is a member in good standing of
the Securities Transfer Agents Medallion Program, hereby (1) represents that
the tender of Shares effected hereby complies with Rule 14e-4 under the
Securities Exchange Act of 1934, as amended, and (2) guarantees to deliver
to the Depositary, at one of its addresses set forth above, the certificates
representing all tendered Shares, in proper form for transfer, or a
Book-Entry Confirmation (as defined in the Offer to Purchase), together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or, in the case of
book-entry transfer of Shares, an Agent's Message (as defined in the Offer
to Purchase), and any other documents required by the Letter of Transmittal
within five New York Stock Exchange, Inc. ("NYSE") trading days after the
date of execution of this Notice of Guaranteed Delivery.
<TABLE>
<S> <C>
Name of Firm (Authorized Signature)
Address Title
Name:
(Please type or print)
Area Code and Telephone Number Date:
</TABLE>
NOTE: DO NOT SEND SHARE CERTIFICATES FOR SHARES WITH THIS NOTICE OF
GUARANTEED DELIVERY. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
Exhibit (a)(4)
SALOMON BROTHERS INC
------------------------
Seven World Trade Center
SALOMON BROTHERS INC
------------------------
New York, New York 10048
(212) 783-6731
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MAXUS ENERGY CORPORATION
AT
$5.50 NET PER SHARE
BY
YPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
YPF SOCIEDAD ANONIMA
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED
March 3, 1995
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by YPF Acquisition Corp., a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad
anonima organized under the laws of the Republic of Argentina ("YPF"), to act as
financial advisor and Dealer Manager in connection with the Purchaser's offer to
purchase all outstanding shares of common stock, par value $1.00 per share (the
"Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company"),
at a purchase price of $5.50 per Share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and in the
related Letter of Transmittal (which together constitute "Offer") enclosed
herewith.
Holders of Shares whose certificates for such Shares (the "Share
Certificates") are not immediately available or who cannot complete the
procedures for book-entry transfer on a timely basis, must tender their Shares
according to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
The Offer is conditioned upon, among other things, (a) Shares representing
not less than a majority of the Company's Voting Shares (as defined in the Offer
to Purchase) on a Fully Diluted Basis (as defined in the Offer to Purchase)
being validly tendered and not withdrawn prior to the expiration of the Offer
(the "Minimum Share Condition"), (b) the Company redeeming the Rights (as
defined in the Offer to Purchase) so that the Rights issued pursuant to the
Rights Agreement (as defined in the Offer to Purchase) will not become
exercisable, (c) the expiration or termination of the applicable waiting period
under the HSR Act (as defined in the Offer to Purchase), and (d) financing
occurring under the
<PAGE>
Loan Agreement contemplated by the commitment letter, dated February 24, 1995,
addressed to YPF and the Purchaser from The Chase Manhattan Bank (National
Association). The Offer is also subject to other terms and conditions contained
in the Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the
Offer to Purchase.
Enclosed herewith for your information and forwarding to your clients are
copies of the following documents:
1. The Offer to Purchase, dated March 3, 1995.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. The Notice of Guaranteed Delivery for Shares to be used to accept the
Offer if certificates for Shares are not immediately available or if such
certificates and all other required documents cannot be delivered to The
Chase Manhattan Bank (National Association) (the "Depositary") by the
Expiration Date or if the procedure for book-entry transfer cannot be
completed by the Expiration Date.
4. A letter to stockholders of the Company from Charles L. Blackburn,
Chairman, President and Chief Executive Officer of the Company, together
with the Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company.
5. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995,
UNLESS THE OFFER IS EXTENDED.
In order to accept the Offer, a duly executed and properly completed Letter
of Transmittal and any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry delivery of
Shares, and any other required documents should be sent to the Depositary and
Share Certificates representing the tendered Shares should be delivered to the
Depositary or such Shares should be tendered by book-entry transfer into the
Depositary's account maintained at one of the Book Entry Transfer Facilities (as
described in the Offer to Purchase), all in accordance with the instructions set
forth in the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents on or prior to the
Expiration Date or to comply with the book-entry transfer procedures on a timely
basis, a tender of Shares may be effected by following the guaranteed delivery
procedures specified in Section 3 of the Offer to Purchase.
The Purchaser will not pay any commission or fees to any broker, dealer or
other person (other than the Dealer Manager and the Information Agent, as
described in the Offer to Purchase) for soliciting tenders of Shares pursuant to
the Offer. The Purchaser will, however, upon request, reimburse you for
customary clerical and mailing expenses incurred by you in forwarding any of the
enclosed
2
<PAGE>
materials to your clients. The Purchaser will pay or cause to be paid any stock
transfer taxes payable on the transfers of Shares to it, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the Dealer Manager or the Information Agent, at their respective addresses and
telephone numbers set forth on the back cover of the Offer to Purchase. Requests
for additional copies of the enclosed materials may be directed to the
Information Agent.
Very truly yours,
SALOMON BROTHERS INC
Dealer Manager
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE DEALER MANAGER, THE COMPANY,
THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
Exhibit (a)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
MAXUS ENERGY CORPORATION
AT
$5.50 NET PER SHARE
BY
YPF ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY
OF
YPF SOCIEDAD ANONIMA
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED
To our Clients:
Enclosed for your consideration are the Offer to Purchase, dated March 3,
1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by YPF Acquisition Corp.,
a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF
Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of
Argentina ("YPF"), to purchase all outstanding shares of common stock, par value
$1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware
corporation (the "Company") at a purchase price of $5.50 per Share, net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal enclosed herewith. Holders of Shares whose certificates for such
Shares (the "Share Certificates") are not immediately available or who cannot
deliver all required documents to the Depositary on or prior to the Expiration
Date, or who cannot complete the procedures for book-entry transfer on a timely
basis, must tender their Shares according to the guaranteed delivery procedures
set forth in Section 3 of the Offer to Purchase.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all Shares held by us for your account pursuant to
the terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $5.50 per Share, net to you in cash without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all Shares.
3. The Offer is conditioned upon, among other things, (a) Shares
representing not less than a majority of the Company's Voting Shares (as
defined in the Offer to Purchase) on a Fully Diluted Basis (as defined in
the Offer to Purchase) being validly tendered and not withdrawn prior to the
expiration of the Offer (the "Minimum Share Condition"), (b) the Company
redeeming the Rights (as defined in the Offer to Purchase) so that the
Rights issued pursuant to the Rights Agreement (as defined in the Offer to
Purchase) will not become exercisable, (c) the expiration or termination of
the applicable waiting period under the HSR Act (as defined in
<PAGE>
the Offer to Purchase), and (d) financing occurring under the Loan Agreement
contemplated by the commitment letter, dated February 24, 1995, addressed to
YPF and the Purchaser from The Chase Manhattan Bank (National Association).
The Offer is also subject to other terms and conditions contained in the
Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the
Offer to Purchase.
4. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes on the purchase of Shares by the
Purchaser pursuant to the Offer.
5. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, March 30, 1995, unless the Offer is extended.
6. Payment for Shares purchased pursuant to the Offer will in all cases
be made only after timely receipt by The Chase Manhattan Bank (National
Association) (the "Depositary") of (a) Share Certificates for such Shares or
timely confirmation of the book-entry transfer of such Shares into the
account maintained by the Depositary at The Depository Trust Company,
Midwest Securities Trust Company or Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities"), pursuant to the
procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or an Agent's Message (as
defined in the Offer to Purchase), in connection with a book-entry transfer,
and (c) any other documents required by the Letter of Transmittal.
Accordingly, payment may not be made to all tendering stockholders at the
same time depending upon when Share Certificates or confirmations of
book-entry transfer of such Shares into the Depositary's account at a
Book-Entry Transfer Facility are actually received by the Depositary.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form set forth below. If you authorize the tender of your
Shares, all such Shares will be tendered unless otherwise specified below. An
envelope to return your instructions to us is enclosed. Your instructions should
be forwarded to us in ample time to permit us to submit a tender on your behalf
prior to the expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares residing in any jurisdiction in which the making of
the Offer or the acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction. However, the Purchaser
may, in its discretion, take such action as it may deem necessary to make the
Offer in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by Salomon Brothers Inc, the Dealer Manager for the
Offer, or one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL SHARES OF COMMON STOCK
OF
MAXUS ENERGY CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer") in connection with
the offer by YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and
a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized
under the laws of the Republic of Argentina, to purchase all outstanding shares
of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy
Corporation, a Delaware corporation (the "Company") at a purchase price of $5.50
per Share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares), which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer.
Number of Shares to Be Tendered:
_________________________ Shares
SIGN HERE
Signature(s): __________________________________________________________________
Print
Name(s): _______________________________________________________________________
Print
Address(es): ___________________________________________________________________
Area Code and Telephone
Number(s): ____________________________________________________
Taxpayer Identification or Social Security
Number(s): ______________________________________
Exhibit (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINATION THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separate by two hyphens: i.e.
000-00-0000. Employer identification numbers have digits separated by only one
hyphen: i.e. 00-0000000. The table below will help determine the number to give
the payer.
- -----------------------------------------------------
GIVE THE
SOCIAL SECURITY
NUMBER OF--
FOR THIS TYPE OF ACCOUNT:
- -----------------------------------------------------
1. An individual's The individual
account
2. Two or more The actual owner of
individuals (joint the account or, if
account) combined funds, any
one of the
individuals(1)
3. Husband and wife The actual owner of
(joint account) the account or, if
joint funds, either
person(1)
4. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent person(3)
committee for a
designated ward,
minor, or incompetent
person
7. A. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
B. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
State law
- -----------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
NUMBER OF--
FOR THIS TYPE OF ACCOUNT:
- -----------------------------------------------------
8. Sole proprietorship The owner(4)
account
9. A valid trust, Legal entity (Do not
estate, or pension furnish the
trust identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization account
12. Partnership account The partnership
held in the name of
the business
13. Association, club, or The organization
other tax exempt
organization
14. A broker or The broker or
registered nominee nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
- -----------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service (the "IRS") and
apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
. An international organization or any agency or instru mentality thereof.
. A registered dealer in securities or commodities reg istered in the U.S. or a
possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under sec tion 584(a).
. An exempt charitable remainder trust, or a non- exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification num ber to the payer.
. Payments of tax-exempt interest (including exempt- interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresi dent aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Beginning January 1, 1984, payers
must generally withhold 20% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to a
payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of any
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--
Falsifying certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
Exhibit (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated
March 3, 1995, and the related Letter of Transmittal, and is being made to all
holders of Shares. The Purchaser is not aware of any state where the making of
the Offer is prohibited by administrative or judicial action pursuant to any
valid state statute. If the Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, the Purchaser will make a good faith effort to comply with any such
state statute or seek to have such statute declared inapplicable to the Offer.
If, after such good faith effort, the Purchaser cannot comply with any such
state statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) holders of Shares in such state. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
the Purchaser by one or more registered brokers or dealers licensed under the
law of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Maxus Energy Corporation
at
$5.50 Net Per Share
by
YPF Acquisition Corp.
a wholly owned subsidiary
of
YPF Sociedad Anonima
YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the
laws of the Republic of Argentina ("YPF"), is offering to purchase all
outstanding shares of Common Stock, par value $1.00 per share (the "Shares"), of
Maxus Energy Corporation, a Delaware corporation (the "Company"), at $5.50 per
Share, net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Offer to Purchase, dated March 3,
1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which
together constitute the "Offer"). Following the Offer, the Purchaser intends to
effect the Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MARCH 30, 1995 UNLESS EXTENDED.
The Offer is conditioned upon, among other things, there being validly tendered
and not withdrawn by the Expiration Date (as defined below) a number of Shares
which represents not less than a majority of the Company's Voting Shares
outstanding on a fully diluted basis. "Voting Shares" is defined to mean the
Shares and the Company's $4.00 Cumulative Convertible Preferred Stock, par
value $1.00 per Share (the "$4.00 Preferred Stock"). The Offer is also subject
to certain other conditions contained in the Offer to Purchase, including that
funding shall have occurred under a Loan Agreement contemplated by the bank
commitment letter received by YPF and the Purchaser.
The purpose of the Offer and the Merger is to enable YPF to acquire control of,
and the entire common equity interest in, the Company. The Offer is being made
pursuant to an Agreement of Merger, dated as of February 28, 1995 (the "Merger
Agreement"), among YPF, the Purchaser and the Company. The Merger Agreement
provides, among other things, for the commencement of the Offer by the Purchaser
and further provides that, subject to the satisfaction or waiver of certain
conditions, the Purchaser will be merged with and into the Company (the
"Merger"), with the Company surviving the Merger. Pursuant to the Merger, each
then-outstanding Share not owned by YPF, the Purchaser or any other direct or
indirect subsidiary of YPF (other than Shares held in the treasury of the
Company and Shares held by holders who perfect their appraisal rights as
described in the Offer to Purchase) will be converted into a right to receive in
cash an amount per Share equal to the highest price per Share paid pursuant to
the Offer, without interest thereon, upon surrender of the certificate formerly
representing such Share. Pursuant to the Merger, each share of $4.00 Preferred
Stock, $9.75 Cumulative Convertible Preferred Stock, and $2.50 Cumulative
Preferred Stock will remain outstanding, and have the identical powers,
preferences, rights, qualifications, limitations and restrictions as such shares
of Preferred Stock presently have, except, in the case of the $9.75 Preferred
Stock, as described in the Offer to Purchase.
The Board of Directors of the Company has determined that the Offer and the
Merger are in the best interests of the Company and its stockholders and
recommends that holders of shares accept the Offer and tender their Shares
pursuant to the Offer. For purposes of the Offer, the Purchaser will be deemed
to have accepted for payment, and thereby purchased, Shares validly tendered, if
and when the Purchaser gives oral or written notice to The Chase Manhattan Bank
(National Association), as the Depositary, of the Purchaser's acceptance of such
Shares for payment pursuant to the Offer. In all cases, upon the terms and
subject to the conditions of the Offer, payment for Shares purchased pursuant to
the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering stockholders for the purpose
of receiving payment from the Purchaser and transmitting payment to validly
tendering stockholders. Under no circumstances will interest on the purchase
price for Shares be paid by the Purchaser. In all cases, payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates representing Shares (the "Share Certificates")
(or a timely Book-Entry confirmation), pursuant to the procedures set forth in
Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees or an Agent's Message (as defined in the Offer to Purchase)
in connection with a book-entry transfer, and (iii) any other documents required
by the Letter of Transmittal. Upon the terms and subject to the conditions of
the Offer, all Shares validly tendered will be accepted for purchase on the
Expiration Date.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Thursday, March 30, 1995, unless and until the Purchaser (subject to the terms
of the Merger Agreement) shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall refer to the
latest time and date at which the Offer, as so extended by the Purchaser, will
expire. The Purchaser expressly reserves the right, at any time or from time to
time, subject to the terms of the Merger Agreement, to extend the period of time
during which the Offer is open and thereby delay acceptance for payment of, and
the payment for, any Shares, by giving oral or written notice of such extension
to the Depositary and by making a public announcement thereof by no later than
9:00 a.m. New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the announcement requirements of
Rule 14d-4(c) under the Securities Exchange Act of 1934, as amended. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares. Without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser currently
intends to make such announcement by issuing a press release to the Dow Jones
News Service.
Except as otherwise provided below, tenders of Shares made pursuant to the Offer
are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any
time prior to the Expiration Date and, unless theretofore accepted for payment
by the Purchaser, may also be withdrawn at any time after May 1, 1995. For a
withdrawal to be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of the Offer to Purchase. Any such notice
<PAGE>
of withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of shares to be withdrawn, and the name of the registered
holder, if different from that of the person who tendered such Shares. If
certificates for the Shares have been delivered or otherwise identified to the
Depositary, then (except in the case of Shares tendered for the account of an
Eligible Institution, as defined under "Procedures for Tendering Shares" in the
Offer to Purchase) prior to the release of such certificates, the tendering
stockholder must also submit the serial numbers shown on the particular
certificates evidencing the Shares to be withdrawn, and the signature on the
notice of withdrawal must be guaranteed by an Eligible Institution. If Shares
have been tendered pursuant to the procedure for book-entry transfer set forth
under "Procedures for Tendering Shares" in the Offer to Purchase, the notice of
withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares. All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination shall be final and binding. None of the
Purchaser, YPF, the Company, the Dealer Manager (as set forth below), the
Depositary, the Information Agent (as set forth below) or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failing to give such
notification. Any Shares properly withdrawn will be deemed not validly tendered
for purposes of the Offer. However, withdrawn Shares may be tendered again by
following any of the procedures described under "Procedures for Tendering
Shares" in the Offer to Purchase.
The Company has provided the Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to holders
of Shares. The Offer to Purchase, the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the Company's
stockholder list or, if applicable, who are listed as participants in a clearing
agency's security position listing, for subsequent transmittal to beneficial
owners of Shares by the Purchaser. The information required to be disclosed by
Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain important
information which should be read carefully before any decision is made with
respect to the Offer.
Requests for copies of the Offer to Purchase, the Letter of Transmittal and
other tender offer documents may be directed to the Information Agent, and
copies will be furnished promptly at the Purchaser's expense. Questions or
requests for assistance may be directed to the Information Agent or the Dealer
Manager. Except as set forth under "Fees and Expenses" in the Offer to Purchase,
the Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Dealer Manger, the Depositary and the Information
Agent) in connection with the solicitation of tenders of Shares pursuant to the
Offer.
The Information Agent for the Offer is:
D. F. King & Co., Inc.
United States
77 Water Street
New York, New York 10005
(212) 269-5550 (Collect)
(800) 488-8035 (Toll Free)
Europe
Royex House, Aldermanbury Square
London, England EC2V 7HR
(44) 71 600 5005 (Collect)
The Dealer Manager for the Offer is:
Salomon Brothers Inc
Seven World Trade Center
New York, NY 10048
Call (212) 783-6731 (collect)
March 3, 1995
Exhibit (b)(1)
February 24, 1995
YPF Sociedad Anonima
Avenida Pte R. Saenz Pena 777
1364 Buenos Aires, Argentina
Ladies and Gentlemen:
You ("Sponsor") have advised The Chase Manhattan Bank
-------
(National Association) ("Chase" and, together with its
-----
affiliates, the "Chase Entities") that you propose to acquire the
--------------
company which we have code-named Cowboy (the "Target") in a
------
transaction pursuant to which a newly-formed indirect subsidiary
of Sponsor (the "Company") will make a cash tender offer (the
-------
"Tender Offer") for all of the issued and outstanding shares of
------------
common stock of Target (the "Target Shares"). All of the capital
-------------
stock of the Company will be owned by a newly-formed corporation
("Holdings") and all of the capital stock of Holdings will be
--------
owned by Sponsor.
We understand that the Tender Offer is to be
conditioned upon, among other things, there being validly
tendered prior to the expiration of the Tender Offer, and not
withdrawn, Target Shares representing not less than 50.1% (on a
fully diluted basis) of the outstanding Target Shares and the
Target's outstanding $4.00 Cumulative Convertible Preferred
shares (the "Voting Preferred Shares"), but in an amount not less
-----------------------
than the number of Target Shares and Voting Preferred Shares
required to permit the Merger referred to below to occur
promptly.
<PAGE>
- 2 -
As promptly as practicable following the purchase of
Target Shares pursuant to the Tender Offer (the "Tender Offer
------------
Closing"), the Company will merge (the "Merger" and, together
------- ------
with the Tender Offer, the "Acquisition") with and into Target
-----------
pursuant to an agreement of merger (the "Merger Agreement") to be
----------------
entered into by Target, the Company and Sponsor prior to the
commencement of the Tender Offer. By virtue of the Merger, the
holders of Target Shares (other than the Company and the
stockholders of Target who perfect their appraisal rights under
Delaware law) will be entitled to receive cash in an amount equal
to the price paid for each Target Share pursuant to the Tender
Offer.
Sponsor has requested that senior financing aggregating
up to U.S. $800,000,000 (the "Senior Facilities") be made
-----------------
available to Sponsor, the Company and the other entities
specified in the Term Sheets referred to below to provide
financing for (i) the actual purchase price of the Target Shares,
(ii) fees, commissions and expenses incurred and paid by Sponsor
or the Company in connection with the Acquisition in an aggregate
amount not in excess of U.S. $35,000,000 and (iii) poison pill
and golden parachute payments payable by Target in connection
with the Acquisition and paid by Sponsor or the Company. Sponsor
agrees that total funds of up to U.S. $800,000,000 are required
to consummate the Acquisition and related transactions and that
no external debt financing will be required for such purposes
other than the Senior Facilities.
Chase is pleased to offer to commit to provide the full
amount of the Senior Facilities, all on the terms conditions set
forth herein, in the Term Sheets attached hereto as Exhibit A and
Exhibit B (collectively, the "Term Sheets") and in the letter of
-----------
even date herewith addressed by Chase to Sponsor providing, among
other things, for certain fees relating to the Senior Facilities
(the "Fee Letter"). Subject to terms and conditions set forth
----------
herein and in the Fee Letter, U.S. $200,000,000 will be made
available to Sponsor pursuant to the terms and conditions set
forth in Exhibit B and up to U.S. $600,000,000 will be made
available to the Company, Target and the borrowing subsidiaries
of Target pursuant to the terms and conditions set forth in
<PAGE>
- 3 -
Exhibit A. Chase reserves the right to syndicate directly or
through one or more of Chase Securities, Inc., Chase Investment
Bank, Ltd. and Chase Manhattan Asia Limited (collectively with
Chase, the "Chase Participants")), all or a portion of the Senior
------------------
Facilities on the same terms and conditions as are set forth
herein and in the Term Sheets (other than with respect to rights
and obligations which relate only to Chase) to a group of banks
and/or other financial institutions acceptable to Chase
(including Chase, the "Lenders") and the Sponsor. Chase shall be
-------
relieved of its obligation to provide the Senior Facilities to
the extent that at any time Sponsor accepts the written offers of
Lenders other than Chase to provide a portion of the Senior
Facilities (such acceptance not to be unreasonably withheld or
delayed). Chase agrees that at all times subsequent to the
initial extension of credit under the Senior Facilities and prior
to the date which is three days following the consummation of the
Merger, Chase and its affiliates will hold an aggregate of not
less than 20% of the aggregate principal amount of the Senior
Facilities.
Chase has submitted this letter after reviewing certain
historical financial statements relating to Sponsor and its
subsidiaries and Target and its subsidiaries and certain other
information provided to Chase by Sponsor. Chase may terminate
its obligations under the preceding paragraph to provide the
Senior Facilities if (the conditions set forth in clauses (i)
through (xi) below, collectively the "Conditions"): (i) the
----------
terms of the proposed Tender Offer or Merger are changed in any
respect determined by Chase to be material; (ii) (a) any
information with respect to Midgard Energy Company, Natomas
Energy Company, Maxus Northwest Java, Inc. or Maxus Southeast
Sumatra Inc., or the ability of such subsidiaries to engage in
the transactions contemplated by Tranche 2 or Tranche 3 (as
defined in the Term Sheets) submitted to Chase in writing proves
to have been inaccurate, incomplete or misleading in any respect
determined by Chase to be material with respect to each of such
subsidiaries taken as a whole or (b) any other information, taken
as a whole, submitted to Chase in writing proves to have been
inaccurate, incomplete or misleading in any respect determined by
Chase to be material, in each case, other than any such
<PAGE>
- 4 -
information which, at the time of delivery, Sponsor indicates in
writing is inaccurate; (iii) any change occurs after September
30, 1994, or any additional information is disclosed to or
discovered by Chase or its counsel, which Chase deems materially
adverse, in respect of the condition (financial or otherwise),
business, operations, assets, nature of assets or liabilities of
any of (a) Sponsor and its subsidiaries (taken as a whole) (which
shall include, without limitation, the investment ratings of any
of the Sponsor's securities being downgraded or being put on
"credit watch" or "credit review" with negative implications by
any nationally recognized statistical rating organization), (b)
Target and its subsidiaries (taken as a whole) or (c) the
intended Target borrowing subsidiaries or any of their respective
subsidiaries (which shall include, without limitation, the
investment ratings of the government of Indonesia being
downgraded or being put in "credit watch " or "credit review"
with negative implications by a nationally recognized statistical
rating organization at any time after the consummation of the
Merger); (iv) any of the fees payable to Chase pursuant to the
Fee Letter are not paid when due; (v) any condition to Chase's
obligations set forth herein or in the Term Sheets cannot be
satisfied; (vi) (a) to the extent the Merger Agreement and Tender
Offer are not executed in the forms of "the Andrews & Kurth Mark-
Up 1/27/94" furnished to Chase, unless Chase has approved the
changes from such draft or (b) the executed Merger Agreement or
Tender Offer (or other key acquisition documents) are modified
subsequent to the "the Andrews & Kurth Mark-Up 1/27/94" furnished
to Chase or waived in any respect determined by Chase to be
material, unless approved by Chase; (vii) the Tender Offer
conditions have not been satisfied in any respect determined by
Chase to be material without modification or waiver, unless
approved by Chase; (viii) Chase determines that any litigation or
other proceedings seeking to enjoin or in any way modify or
affect the Tender Offer or the Merger has a material adverse
effect on the Merger, the Tender Offer, the Company, the Target
or any of their respective subsidiaries or any of the Senior
Facilities; or (ix) any of Sponsor's or Target's existing debt,
preferred stock documents or other written contractual
arrangements prohibit the Acquisition or the borrowings or
security interests under any of the Senior Facilities or
<PAGE>
- 5 -
otherwise adversely affect the consummation of the transactions
contemplated hereby, unless the provisions of such documents or
arrangements which prohibit the consummation of such transactions
have been waived or modified to the satisfaction of Chase
(Sponsor has represented to Chase that no such prohibitions exist
with respect to Sponsor or any of its subsidiaries). In
addition, Chase's obligations under this letter are subject to
the negotiation, execution and delivery of mutually satisfactory
financing and security documentation reflecting, without
limitation, the provisions of the Term Sheets.
Sponsor hereby indemnifies and holds harmless each of
the Chase Participants and the other Lenders and each director,
officer, employee and affiliate thereof (each, an "indemnified
-----------
person") from and against any and all losses, claims, damages,
------
liabilities (or actions or other proceedings commenced or
threatened in respect thereof) and reasonable expenses that arise
out of, result from or in any way relate to this letter, the Term
Sheet or the Fee Letter, the use or intended use of the Senior
Facilities, or in connection with the Acquisition or the other
transactions contemplated hereby or the provision or syndication
of the Senior Facilities, and Sponsor hereby agrees to reimburse
each indemnified person, upon its demand, for any reasonable
legal or other expenses incurred in connection with
investigating, defending or participating in any such loss,
claim, damage, liability or action or other proceeding (whether
or not such indemnified person is a party to any action or
proceeding out of which any such expenses arise), other than any
of the foregoing claimed by any indemnified person to the extent
finally determined by a court of competent jurisdiction to be
incurred directly and primarily by reason of the gross negligence
or willful misconduct of such indemnified person; provided,
--------
however, Sponsor shall not be required to pay for more than one
-------
counsel for all indemnified parties in any single jurisdiction
unless such indemnified parties have conflicting interests.
Neither any Chase Participant nor any other Lender shall be
responsible or liable to the Sponsor, the Company, Holdings or
any other person or entity for any consequential damages that may
be alleged as a result of this letter or any other transaction
referred to herein. In addition, Sponsor hereby agrees to
<PAGE>
- 6 -
reimburse Chase from time to time upon Chase's demand for Chase's
reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable legal fees and expenses, appraisal fees
and printing, reproduction, document delivery, communication,
publicity and travel costs) incurred in connection with this
letter and the other transactions contemplated hereby (including,
without limitation, the syndication of the Senior Facilities and
the preparation, review, negotiation, execution and delivery of
this letter, the Term Sheet, the Fee Letter, the definitive
financing agreements and the other documents relating to the
Senior Facilities and/or the Acquisition) in accordance with a
budget (as to legal expenses) and guidelines to be agreed upon by
Sponsor and Chase. Sponsor's obligations under this paragraph
shall survive any termination of the obligations of Chase under
this letter and shall be effective regardless of whether the
definitive financing agreements are executed. The foregoing
provisions of this paragraph shall be in addition to any rights
that any of the Chase Entities or any other indemnified person
may have at common law or otherwise.
This letter is delivered to Sponsor upon the condition
that, prior to its acceptance of this offer, neither the
existence of this letter, the Term Sheets or the Fee Letter nor
any of their contents shall be disclosed by it without the prior
written consent of Chase except (a) as may be compelled to be
disclosed in a judicial or administrative proceeding or as
otherwise required by law, (b) in connection with any enforcement
by Sponsor of its rights under this letter agreement, (c) on a
confidential and "need to know" basis, to its directors,
officers, employees, advisors and agents or (d) on a confidential
and "need to know" basis, to the Target, its directors, officers,
employees, advisors and agents. If Sponsor makes or permits any
such disclosure in violation of this paragraph, Sponsor shall be
deemed to have accepted and agreed to this letter and the Term
Sheets and be obligated to Chase as provided herein and therein.
Sponsor further agrees that after it has accepted this offer it
will not disclose the Term Sheets, or any documents referred to
in the Term Sheets or its contents except as permitted under
clause (a), (b), (c) or (d) of the first sentence of this
paragraph.
<PAGE>
- 7 -
In accordance with market practice, an information
package containing relevant information relating to the Senior
Facilities, Sponsor and Target and their respective subsidiaries,
the Acquisition and the other transactions and entities referred
to herein and in the Term Sheets will be provided, on a
confidential basis, by Sponsor to potential lenders and
participants. Chase will be pleased to assist Sponsor in the
preparation of this package. Sponsor and the Company will
cooperate with Chase in effecting the syndication of the Senior
Facilities (including participation by officers requested by
Chase (which may include the Chief Executive Officer and the
Chief Financial Officer of the Sponsor) in "roadshows" or other
meetings with potential lenders and participants).
Sponsor acknowledges that the Chase Entities may be
providing debt financing, equity capital or other services
(including financial advisory services) to other persons or
entities in respect of which Sponsor or its affiliates may have
conflicting interests. None of the Chase Entities will use
confidential information obtained from Sponsor or its affiliates
by virtue of the transactions contemplated by this letter or
their other relationships with Sponsor and its affiliates in
connection with the performance by any such Chase Entity of
services for other companies, and nor will any Chase Entity
furnish any such information to any person or entity other than a
Chase Participant; provided that nothing herein shall limit the
--------
disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to counsel
for any of the Lenders or Chase, (iii) to bank examiners,
auditors or accountants, (iv) in connection with any litigation
to which any one or more of the Lenders or Chase is a party, or
(vi) to any Lender (or prospective Lender) so long as such
assignee or participant (or prospective assignee or participant)
first executes and delivers to Chase a confidentiality agreement
containing the provisions set forth in this sentence. Sponsor
also acknowledges that none of the Chase Entities have any
obligation to use in connection with the transactions
contemplated by this letter, or to furnish to Sponsor or any of
its affiliates, confidential information obtained from any such
person or entity.
<PAGE>
- 8 -
Sponsor agrees that, after it has accepted this offer
and so long as this commitment is in effect, it will not accept
or solicit any offer or commitment from, or execute any agreement
with, any other potential source of the financing for the
Acquisition (other than the Senior Facilities), without Chase's
prior written consent (which consent shall not be unreasonably
withheld). In addition, from the date of the delivery of this
letter until the earliest of (i) August 5, 1995, (ii) the
completion of the general syndication of the Senior Facilities
and (iii) such date as Chase shall inform Sponsor that it will
not provide any of the Senior Facilities, Sponsor agrees that it
will not accept or solicit and will not permit any of its
subsidiaries or affiliates over which it exercises control to
accept or solicit any financing for Sponsor or any of its
subsidiaries or affiliates other than (a) usual and customary
bilateral lines of credit and pre-export financing incurred in
the ordinary course of business and (b) secured export notes
(SEN's) in an aggregate amount not to exceed U.S. $500,000,000 so
long as in the case of the SEN's, Sponsor agrees to consult and
work with Chase to coordinate such offering so that it will not
interfere with the syndication of the Senior Facilities.
Chase shall have the right to review and approve all
public announcements and filings made by Sponsor or its
affiliates relating to the Acquisition or the other transactions
contemplated hereby that refer to the Senior Facilities or to
Chase or the other Lenders before they are made (such approval
not to be unreasonably withheld).
Chase's offer set forth in this letter will terminate
at 5:00 p.m. (New York City time) on February 28, 1995 unless
Sponsor accepts this letter and the Fee Letter at or prior to
that time by (a) signing and returning to Chase counterparts of
this letter and the Fee Letter and (b) paying to Chase the fee
required by the Fee Letter to be paid on such acceptance.
Chase's commitment under this letter, if accepted by Sponsor,
will in any event terminate at 5:00 p.m. (New York City time) on
April 5, 1995 if the initial extension of credit under the Senior
Facilities shall not have occurred prior to such time.
<PAGE>
- 9 -
Sponsor consents to the non-exclusive jurisdiction of
any court of the State of New York or any United States federal
court sitting in the Borough of Manhattan, New York City, New
York, United States, and any appellate court from any thereof,
and waives any immunity from the jurisdiction of such courts over
any suit, action or proceeding that may be brought in connection
with this letter agreement, the Term Sheets and the transactions
contemplated hereby and thereby. Sponsor irrevocably waives, to
the fullest extent permitted by law, any objection to any suit,
action or proceeding that may be brought in connection with this
letter agreement, the Term Sheets, the Fee Letter and the
transactions contemplated hereby and thereby in such courts
whether on grounds of venue, residence or domicile or on the
ground that any such suit, action or proceeding has been brought
in an inconvenient forum. Sponsor agrees that final judgment in
any such suit, action or proceeding brought in such court shall
be conclusive and binding upon Sponsor and may be enforced in any
court to the jurisdiction of which Sponsor is subject by a suit
upon such judgment. Notwithstanding the foregoing, any suit,
action or proceeding brought in connection with this letter
agreement, the Term Sheets, the Fee Letter or the transactions
contemplated hereby or thereby, may be instituted in any
competent court in Argentina.
If for the purpose of obtaining judgment in any court
it is necessary to convert a sum due hereunder to Chase, any
Lender or any indemnified person in U.S. Dollars into another
currency the rate of exchange used shall be that at which in
accordance with normal banking procedures such party could
purchase U.S. Dollars with such other currency in New York City
on the business day in New York next preceding the day on which
final judgment is rendered. The obligation of Sponsor in respect
of any sum payable hereunder by it to Chase, any Lender or any
indemnified person shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than U.S. Dollars, be
-----------------
discharged only to the extent that on the business day in New
York next following receipt by such payee of any sum adjudged to
be so due in the Judgment Currency such payee may in accordance
with normal banking procedures purchase and transfer to New York
U.S. Dollars with the Judgment Currency; if the amount of U.S.
<PAGE>
- 10 -
Dollars which could have been so purchased and transferred is
less than the sum originally due to Chase, any Lender or any
indemnified person, as the case may be, in U.S. Dollars, Sponsor
agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such payee against the deficiency.
To the extent that Sponsor has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal
process, Sponsor hereby waives such immunity and agrees not to
assert, by way of motion, as a defense or otherwise, in any suit,
action or proceeding the defense of sovereign immunity or any
claim that it is not personally subject to the jurisdiction of
the above-named courts by reason of sovereign immunity or
otherwise, or that it is immune from any legal process (whether
through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with
respect to itself or its property or from attachment either prior
to judgment or in aid of execution by reason of sovereign
immunity.
This letter and the Fee Letter may be executed in any
number of counterparts, each of which shall be an original and
all of which, when taken together, shall constitute one
agreement, and this letter, the Term Sheet may not be assigned by
Sponsor without the prior written consent of Chase and may not be
amended or any provision hereof or thereof waived or modified
except by an instrument in writing signed by Chase and Sponsor.
No person or entity (including, without limitation, Target and
its affiliates) other than the parties hereto shall have any
rights under or be entitled to rely upon this letter. This
letter, the Fee Letter and the Term Sheets shall be governed by
and construed in accordance with the law of the State of New
York.
<PAGE>
- 11 -
We look forward to working with Sponsor to complete
this transaction.
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By____________________________
Title:
ACCEPTED AND AGREED:
YPF SOCIEDAD ANONIMA
By____________________________
Title:
Date:_________________________
Exhibit (c)(1)
=================================================================
AGREEMENT OF MERGER
Among
YPF Sociedad Anonima
YPF Acquisition Corp.
and
Maxus Energy Corporation
February 28, 1995
=================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
(Not a part of the Agreement)
Page
----
I. THE TENDER OFFER . . . . . . . . . . . . . . . . . . 1
1.1. The Offer . . . . . . . . . . . . . . . . . . 1
1.2. Company Action . . . . . . . . . . . . . . . . 4
1.3. Stockholder Lists . . . . . . . . . . . . . . 6
1.4. Board of Directors of the Company . . . . . . 6
II. THE MERGER . . . . . . . . . . . . . . . . . . . . . 8
2.1.1. Merger . . . . . . . . . . . . . . . . 8
2.1.2. Effective Time . . . . . . . . . . . . 8
2.1.3. Effect of Merger . . . . . . . . . . . 9
2.1.4. Conversion of Shares of Common Stock . 9
2.2. Stockholders' Meeting of the Company . . . . . 11
2.3. Consummation of the Merger . . . . . . . . . . 11
2.4. Payment for Shares of Common Stock . . . . . . 12
2.5. Closing of the Company's Transfer Books . . . 14
2.6. The Company Stock Options and Related Matters 14
III. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
15
3.1. Corporate Organization . . . . . . . . . . . . 15
3.2. Authority . . . . . . . . . . . . . . . . . . 15
3.3. Offer Documents . . . . . . . . . . . . . . . 16
3.4. Proxy Statement . . . . . . . . . . . . . . . 17
3.5. Fees . . . . . . . . . . . . . . . . . . . . . 17
3.6. Consents and Approvals; No Violation . . . . . 17
3.7. Financing . . . . . . . . . . . . . . . . . . 19
3.8. Operations of the Company Following the Merger 19
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . 20
4.1. Corporate Organization . . . . . . . . . . . . 20
4.2. Capitalization . . . . . . . . . . . . . . . . 21
4.3. Authority . . . . . . . . . . . . . . . . . . 22
4.4. Consents and Approvals; No Violation . . . . . 23
4.5. Commission Filings . . . . . . . . . . . . . . 24
4.6. Absence of Certain Changes . . . . . . . . . . 25
4.7. Litigation . . . . . . . . . . . . . . . . . . 26
4.8. Compliance with Applicable Laws . . . . . . . 27
4.9. Fees . . . . . . . . . . . . . . . . . . . . . 28
4.10. Offer Documents . . . . . . . . . . . . . . . 28
4.11. Schedule 14D-9 . . . . . . . . . . . . . . . . 28
4.12. Proxy Statement . . . . . . . . . . . . . . . 29
4.13. Rights . . . . . . . . . . . . . . . . . . . . 29
4.14. Certain Actions. . . . . . . . . . . . . . . . 30
4.15. Subsidiaries . . . . . . . . . . . . . . . . . 30
4.16. No Default . . . . . . . . . . . . . . . . . . 32
(i)
<PAGE>
Page
----
4.17. Taxes . . . . . . . . . . . . . . . . . . . . 32
4.18. Insurance . . . . . . . . . . . . . . . . . . 35
4.19. Benefit Plans . . . . . . . . . . . . . . . . 36
4.20. Labor Matters . . . . . . . . . . . . . . . . 38
4.21. Certain Environmental Matters . . . . . . . . 40
V. COVENANTS . . . . . . . . . . . . . . . . . . . . . 40
5.1. Acquisition Proposals . . . . . . . . . . . . 40
5.2. Interim Operations . . . . . . . . . . . . . . 41
5.2.1. Conduct of Business . . . . . . . . . 41
5.2.2. Certificate and By-Laws . . . . . . . 42
5.2.3. Capital Stock . . . . . . . . . . . . 42
5.2.4. Dividends . . . . . . . . . . . . . . 43
5.2.5. Debt . . . . . . . . . . . . . . . . . 43
5.3. Employee Plans, Compensation, Etc. . . . . . . 44
5.4. Access and Information . . . . . . . . . . . . 46
5.5. Certain Filings, Consents and Arrangements . . 48
5.6. State Takeover Statutes . . . . . . . . . . . 48
5.7. Proxy Statement . . . . . . . . . . . . . . . 48
5.8. Indemnification and Insurance . . . . . . . . 49
5.9. Additional Agreements . . . . . . . . . . . . 50
5.10. Compliance with Antitrust Laws . . . . . . . . 52
5.11. Publicity . . . . . . . . . . . . . . . . . . 52
5.12. Notice of Actions and Proceedings . . . . . . 53
5.13. Notification of Certain Other Matters . . . . 53
5.14. Listing of Preferred Stock . . . . . . . . . . 54
5.15. Certain Obligations of Parent . . . . . . . . 54
VI. CONDITIONS . . . . . . . . . . . . . . . . . . . . . 55
6.1. Conditions . . . . . . . . . . . . . . . . . . 55
6.1.1. Stockholder Approval . . . . . . . . . 55
6.1.2. Purchase of Shares of Voting Stock . . 55
6.1.3. Injunctions; Illegality . . . . . . . 55
6.1.4. HSR Act . . . . . . . . . . . . . . . 56
6.2. Parent Obligations. . . . . . . . . . . . . . 56
VII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 57
7.1. Termination . . . . . . . . . . . . . . . . . 57
7.2. Non-Survival of Representations, Warranties
and Agreements . . . . . . . . . . . . . . . . 60
7.3. Waiver and Amendment . . . . . . . . . . . . . 60
7.4. Entire Agreement . . . . . . . . . . . . . . . 61
7.5. Applicable Law . . . . . . . . . . . . . . . . 61
7.6. Interpretation . . . . . . . . . . . . . . . . 61
7.7. Notices . . . . . . . . . . . . . . . . . . . 61
7.8. Counterparts . . . . . . . . . . . . . . . . . 63
7.9. Parties in Interest; Assignment . . . . . . . 63
7.10. Expenses; Termination Fee . . . . . . . . . . 64
7.11. Obligation of Parent . . . . . . . . . . . . . 64
7.12. Enforcement of the Agreement . . . . . . . . . 64
(ii)
<PAGE>
Page
----
7.13. Severability . . . . . . . . . . . . . . . . . 65
7.14. Consent to Jurisdiction and Service of Process 65
(iii)
<PAGE>
TABLE OF DEFINED TERMS
----------------------
(Not a part of the Agreement)
Term Section
---- -------
Agreement . . . . . . . . . . . . . . . . . . . . . . . Preamble
Balance Sheet . . . . . . . . . . . . . . . . . . . . . . 4.19(b)
Benefits Agreements . . . . . . . . . . . . . . . . . . . 5.3(c)
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 4.19
Certificate of Merger . . . . . . . . . . . . . . . . . . . 2.1.2
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Closing . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
Code . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17(a)
Commission . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Commitment . . . . . . . . . . . . . . . . . . . . . . . . . 3.7
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Company . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Competing Transaction . . . . . . . . . . . . . . . . . . . 7.1
Confidentiality Agreement . . . . . . . . . . . . . . . . . . 1.1
Constituent Corporations . . . . . . . . . . . . . . . . . 2.1.2
Continuing Directors . . . . . . . . . . . . . . . . . . . . 7.1
Controlled Group . . . . . . . . . . . . . . . . . . . . 4.19(e)
CSFB . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Current Premium . . . . . . . . . . . . . . . . . . . . . . . 5.8
D&O Insurance . . . . . . . . . . . . . . . . . . . . . . . . 5.8
DGCL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2
Director Plan . . . . . . . . . . . . . . . . . . . . . . . . 4.2
Domestic Taxes . . . . . . . . . . . . . . . . . . . . . 4.17(a)
Effective Time . . . . . . . . . . . . . . . . . . . . . . 2.1.2
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19(a)
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . 1.1
$4.00 Preferred Stock . . . . . . . . . . . . . . . . . . . . 1.1
401(k) Plan . . . . . . . . . . . . . . . . . . . . . . . . . 4.2
Fully Diluted . . . . . . . . . . . . . . . . . . . . . . . . 1.1
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5
Governmental Entity . . . . . . . . . . . . . . . . . . . . . 3.6
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6
Indemnified Party . . . . . . . . . . . . . . . . . . . . . . 5.8
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1.1
Merger Price . . . . . . . . . . . . . . . . . . . . . . . 2.1.4
Minimum Share Condition . . . . . . . . . . . . . . . . . . . 1.1
$9.75 Preferred Stock . . . . . . . . . . . . . . . . . . . 2.1.4
Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Offer Documents . . . . . . . . . . . . . . . . . . . . . . . 3.3
Option Plans . . . . . . . . . . . . . . . . . . . . . . . . 2.6
Options . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.6
Options and Converts . . . . . . . . . . . . . . . . . . . . 1.1
Parent . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . 2.4
PBGC . . . . . . . . . . . . . . . . . . . . . . . . . . 4.19(e)
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . 2.1.4
Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . 3.4
Purchaser . . . . . . . . . . . . . . . . . . . . . . . Preamble
(iv)
<PAGE>
Term Section
---- -------
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1
Rights Agreement . . . . . . . . . . . . . . . . . . . . . . 1.1
Schedule 14D-1 . . . . . . . . . . . . . . . . . . . . . . . 3.3
Schedule 14D-9 . . . . . . . . . . . . . . . . . . . . . . . 1.2
Securities Act . . . . . . . . . . . . . . . . . . . . . . . 4.5
SEC Documents . . . . . . . . . . . . . . . . . . . . . . . . 4.5
Senior Executives . . . . . . . . . . . . . . . . . . . . . . 4.6
Significant Subsidiary . . . . . . . . . . . . . . . . . . 4.16
Stock Certificate . . . . . . . . . . . . . . . . . . . . . . 2.4
Stock Plans . . . . . . . . . . . . . . . . . . . . . . . 5.3(b)
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 7.6
Surviving Corporation . . . . . . . . . . . . . . . . . . . 2.1.3
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.17(b)
Tax Affiliates . . . . . . . . . . . . . . . . . . . . . 4.17(a)
Tax Return . . . . . . . . . . . . . . . . . . . . . . . 4.17(b)
Transmittal Letter . . . . . . . . . . . . . . . . . . . . . 2.4
$2.50 Preferred Stock . . . . . . . . . . . . . . . . . . . 2.1.4
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . 1.1
(v)
<PAGE>
AGREEMENT OF MERGER
-------------------
AGREEMENT OF MERGER, dated as of February 28, 1995 (the
"Agreement"), among YPF Sociedad Anonima, a sociedad anonima
organized under the laws of the Republic of Argentina ("Parent"),
YPF Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and Maxus Energy Corporation,
a Delaware corporation (the "Company").
Parent, Purchaser and the Company hereby agree as follows:
I. THE TENDER OFFER
----------------
1.1. The Offer. Provided that this Agreement has not been
---------
terminated in accordance with Section 7.1 hereof and none of the
events set forth in Exhibit A hereto has occurred or exists,
Purchaser will, and Parent will cause Purchaser to, commence
(within the meaning of Rule 14d-2(a) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) as promptly as
practicable after the date hereof, but in any event not later
than March 7, 1995, a tender offer for all outstanding shares of
Common Stock, par value $1.00 per share ("Common Stock"), of the
Company at a price of $5.50 per share, net to the seller in cash.
(Such tender offer, as it may be amended from time to time
pursuant to this Agreement, is referred to herein as the
"Offer.") The Offer will be subject only to the conditions set
forth in Exhibit A, including without limitation the conditions
that (a) the Board of Directors of the Company, within the time
provided in the Rights Agreement, dated as of September 8, 1988,
between the Company and AmeriTrust Company National Association
<PAGE>
as rights agent (the "Rights Agreement") shall have taken the
steps necessary to redeem the preferred stock purchase rights
(the "Rights") issued pursuant to the Rights Agreement so that
the Rights issued pursuant to the Rights Agreement will not
become exercisable as a result of the consummation of the
transactions contemplated in this Agreement (such action, the
"Redemption") and (b) the number of shares of Common Stock being
validly tendered and not withdrawn prior to the expiration date
provided in the Offer which, when added to the shares of Common
Stock and $4.00 Cumulative Convertible Preferred Stock, par value
$1.00 per share, of the Company ("$4.00 Preferred Stock" and,
together with the Common Stock, "Voting Stock") beneficially
owned by Parent and Purchaser, represent not less than a majority
of the shares of Voting Stock outstanding on a Fully Diluted (as
hereinafter defined) basis (the "Minimum Share Condition"). For
purposes of this Agreement, "Fully Diluted" means the number of
shares of Voting Stock outstanding as of the close of business on
February 23, 1995, increased by the number of shares of Voting
Stock (i) issued between such date and the expiration date of the
Offer and (ii) issuable pursuant to the exercise of rights (other
than the Rights) to purchase Voting Stock or upon conversion or
exchange of other securities, including without limitation the
rights and securities listed on Schedule 1.1 (collectively, the
"Options and Converts"), reduced, however, by the number of
employee stock options and other rights to be cancelled as
contemplated by Section 2.6. Any such condition other than the
Minimum Share Condition may be waived by Purchaser in its sole
2
<PAGE>
discretion. Purchaser may, at any time, transfer or assign to
one or more corporations directly or indirectly wholly owned by
Parent the right to purchase all or any portion of the shares of
Common Stock tendered pursuant to the Offer, but any such
transfer or assignment will not relieve Purchaser of its
obligations under the Offer or prejudice the rights of tendering
stockholders to receive payment for shares of Common Stock
validly tendered and accepted for payment. Purchaser will accept
for payment all shares of Common Stock validly tendered pursuant
to the Offer and not withdrawn as soon as legally permissible,
and pay for all such shares of Common Stock as promptly as
practicable thereafter, in each case upon the terms and subject
to the conditions of the Offer. Purchaser reserves the right to
increase the price per share of Common Stock payable in the Offer
or otherwise to amend the Offer; provided, however, that no such
amendment may be made that decreases the price per share of
Common Stock payable pursuant to the Offer, reduces the minimum
number of shares of Common Stock to be purchased in the Offer,
imposes additional conditions to the Offer or makes any other
change in the terms and conditions of the Offer that is
materially adverse to the holders of shares of Common Stock. If
the Agreement is terminated pursuant to Section 7.1 hereof,
(A) Parent and Purchaser will not, and will cause their
subsidiaries and affiliates controlled by them not to, acquire or
offer to acquire or request permission to acquire or offer to
acquire (either directly or pursuant to a waiver of this or any
other covenant) shares of Voting Stock otherwise than pursuant to
3
<PAGE>
the Offer or the Merger (as defined in Section 2.1.1 hereof) for
a period of not less than 24 months after termination of this
Agreement without the prior written approval of the Board of
Directors of the Company and (B) the provisions of the
confidentiality agreement previously entered into (the
"Confidentiality Agreement") between the Company and Parent (or
one of its affiliates) will continue to apply.
1.2. Company Action. The Company consents to the Offer.
--------------
As soon as practicable on the date of commencement of the Offer,
the Company will file with the Securities and Exchange Commission
(the "Commission") and mail to the holders of shares of Common
Stock a Solicitation/Recommendation Statement on Schedule 14D-9
pursuant to the Exchange Act (the "Schedule 14D-9"). The
Schedule 14D-9 will set forth, and the Company hereby represents,
that the Board of Directors of the Company has at a meeting duly
called and held and at which a quorum was present and acting
throughout, by the requisite vote of all directors present,
(a) determined, based in part on the advice of CS First Boston
Corporation ("CSFB") described in the sixth sentence of this
Section 1.2, the Company's financial advisor in connection with
the Offer and the Merger, that the Offer and the Merger are in
the best interests of the Company and its stockholders,
(b) approved the Offer, this Agreement and the Merger, and
determined that such approval satisfies the requirements of
Section 203(a)(1) of the General Corporation Law of the State of
Delaware (the "DGCL") and, as a result, renders inapplicable to
the Offer, the Merger and this Agreement the other provisions of
4
<PAGE>
Section 203(a) of the DGCL, (c) subject to the fiduciary duties
of the Board of Directors, recommended acceptance of the Offer
and adoption of this Agreement by the holders of shares of Common
Stock, (d) taken all such action as may be required by law and
the Rights Agreement to redeem the Rights, and (e) taken all such
action as may be required by law and the Company's Restated
Certificate of Incorporation (the "Certificate") so that Sections
1 and 2 of Article Ninth of the Certificate are not applicable to
the transactions contemplated in this Agreement and, as a result,
the requirements of Sections 1 and 2 of Article Ninth of the
Certificate will not apply to the Offer, the Merger and the
transactions with Parent and Purchaser contemplated in this
Agreement. The Company will provide Purchaser's counsel a
reasonable opportunity to review and comment on the Schedule
14D-9 prior to its being filed with the Commission. The Company
will provide Purchaser's counsel a copy of any written comments
or a summary of telephonic notification of any verbal comments
the Company or its counsel may receive from the Commission or its
Staff with respect to the Schedule 14D-9 promptly after receipt
of such comments and provide Purchaser's counsel with a copy of
any written responses and a summary of any such verbal responses.
The Company further represents and warrants that CSFB has advised
the Board of Directors of the Company that, in the opinion of
CSFB as of the date hereof, the consideration to be received by
the existing holders of shares of Common Stock pursuant to the
Offer and the Merger is fair to such stockholders from a
financial point of view. The Company will, and the Board of
5
<PAGE>
Directors of the Company has resolved to, take all actions
reasonably requested by Purchaser necessary to exempt the Offer
and the Merger from the provisions of any applicable takeover,
business combination or control share acquisition law or
regulation adopted by any State of the United States of America.
1.3. Stockholder Lists. The Company will promptly furnish
-----------------
Purchaser a list of the holders of Common Stock and mailing
labels containing the names and addresses of all record holders
relating to Common Stock and lists of securities positions of
shares of Common Stock held in stock depositories, each as of a
recent date, and will promptly furnish Purchaser with such
additional information, including updated lists of stockholders
of the Company, mailing labels and lists of securities positions,
and such other assistance as Purchaser or its agents may
reasonably request in connection with the Offer. Subject to the
requirements of law, and except for such steps as are necessary
to disseminate the Offer Documents (as defined in Section 3.3
hereof), Parent and Purchaser will hold in confidence the
information contained in any of such labels and lists and the
additional information referred to in the preceding sentence,
will use such information only in connection with the Offer and,
if this Agreement is terminated, will upon request deliver to the
Company all such written information and any copies or extracts
therefrom in its possession or under its control.
1.4. Board of Directors of the Company. Upon Purchaser's
---------------------------------
acquisition of a majority of the outstanding shares of Voting
Stock pursuant to the Offer, and from time to time thereafter so
6
<PAGE>
long as Parent and/or any of its direct or indirect wholly owned
subsidiaries (including Purchaser) owns a majority of the
outstanding shares of Voting Stock, Parent will be entitled,
subject to compliance with applicable law, the Certificate and
the provisions of the next sentence, to designate at its option
up to that number of directors, rounded up to the nearest whole
number, of the Company's Board of Directors as will make the
percentage of the Company's directors designated by Parent equal
to the percentage of outstanding shares of Voting Stock held by
Parent and any of its direct or indirect wholly owned
subsidiaries (including Purchaser), including shares of Common
Stock accepted for payment pursuant to the Offer. The Company
will, upon the request of Parent, promptly increase the size of
its Board of Directors and/or use its reasonable best efforts to
secure the resignation of such number of directors as is
necessary to enable Parent's designees to be elected to the
Company's Board of Directors and will use its reasonable best
efforts to cause Parent's designees to be so elected, subject in
all cases to Section 14(f) of the Exchange Act, it being
understood that the Company will have no obligation to comply
with Section 14(f) of the Exchange Act until after the Offer is
completed in accordance with the terms hereof and that the
Company agrees to comply with such Section of the Exchange Act as
promptly as practicable thereafter, provided that, prior to the
Effective Time (as defined in Section 2.1.2 hereof), the Company
will use its reasonable best efforts to assure that the Company's
Board of Directors always has (at its election) at least three
7
<PAGE>
members who are directors of the Company as of the date hereof.
At such times, the Company will use its reasonable best efforts,
subject to any limitations imposed by applicable laws or rules of
the New York Stock Exchange, to cause persons designated by
Parent to constitute the same percentage as such persons
represent on the Company's Board of Directors of (a) each
committee of the Board of Directors of the Company, (b) each
board of directors or board of management of each subsidiary of
the Company, and (c) each committee of each such board.
II. THE MERGER
----------
2.1.1. Merger. Subject to the terms and conditions
------
hereof, (a) Purchaser will be merged with and into the Company
and the separate corporate existence of Purchaser will thereupon
cease (the "Merger") in accordance with the applicable provisions
of the DGCL and (b) each of the Company and Parent will use its
reasonable best efforts to cause the Merger to be consummated as
soon as practicable following the expiration of the Offer.
2.1.2. Effective Time. As soon as practicable
--------------
following fulfillment or waiver of the conditions specified in
Article VI hereof, and provided that this Agreement has not been
terminated or abandoned pursuant to Section 7.1 hereof, the
Company and Purchaser (the "Constituent Corporations") will cause
a Certificate of Merger (the "Certificate of Merger") to be filed
with the Secretary of State of the State of Delaware as provided
in Section 251 of the DGCL. The Merger will become effective on
the date on which the Certificate of Merger has been filed with
8
<PAGE>
the Secretary of State of the State of Delaware (the "Effective
Time").
2.1.3. Effect of Merger. The Company will be the
----------------
surviving corporation in the Merger (sometimes hereinafter
referred to as the "Surviving Corporation") and will continue to
be governed by the laws of the State of Delaware, and the
separate corporate existence of the Company and all of its
rights, privileges, powers and franchises of a public as well as
of a private nature, and being subject to all of the
restrictions, disabilities and duties as a corporation organized
under the DGCL, will continue unaffected by the Merger. The
Merger will have the effects specified in the DGCL. The
Certificate and the By-Laws of the Company in effect at the
Effective Time will be the Certificate of Incorporation and
By-Laws of the Surviving Corporation until duly amended in
accordance with their terms and the DGCL. The directors of
Purchaser immediately prior to the Effective Time will be the
directors of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time will be the
officers of the Surviving Corporation, from and after the
Effective Time, until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation
or removal in accordance with the terms of Surviving
Corporation's Certificate of Incorporation and By-Laws and the
DGCL.
2.1.4. Conversion of Shares of Common Stock. At the
------------------------------------
Effective Time, (a) each then-outstanding share of Common Stock
9
<PAGE>
not owned by Parent, Purchaser or any other direct or indirect
subsidiary of Parent (other than those shares of Common Stock
held in the treasury of the Company and shares of Common Stock
held by stockholders who perfect their appraisal rights under the
DGCL) will be cancelled and retired and be converted into a right
to receive in cash an amount per share of Common Stock equal to
the highest price per share paid for a share of such stock by
Purchaser pursuant to the Offer (the "Merger Price"), without
interest thereon, (b) each then-outstanding share of Common Stock
owned by Parent, Purchaser or any other direct or indirect
subsidiary of Parent will be cancelled and retired, and no
payment will be made with respect thereto, (c) each share of
Common Stock issued and held in the Company's treasury will be
cancelled and retired, and no payment will be made with respect
thereto, (d) each outstanding share of common stock of Purchaser
will, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and become one share of
common stock of the Surviving Corporation, and (e) each
outstanding share of $4.00 Preferred Stock, $9.75 Cumulative
Convertible Preferred Stock, par value $1.00 per share ("$9.75
Preferred Stock"), and $2.50 Cumulative Preferred Stock, par
value $1.00 per share ("$2.50 Preferred Stock"), of the Company
(collectively, the "Preferred Stock") will remain outstanding and
have, as to the Surviving Corporation, the identical powers,
preferences, rights, qualifications, limitations and restrictions
as such shares of Preferred Stock presently have, except as
agreed to by the holder of $9.75 Preferred Stock.
10
<PAGE>
2.2. Stockholders' Meeting of the Company. The Company
------------------------------------
will take all action necessary in accordance with applicable law
and the Certificate and its By-Laws to convene a meeting of its
stockholders as promptly as reasonably practicable following the
date hereof to consider and vote upon the adoption of this
Agreement, if such stockholder approval is required by applicable
law; provided, however, that nothing herein will affect the right
of Purchaser to take action by written consent in lieu of a
meeting or otherwise to the extent permitted by applicable law.
At any such meeting, all shares of Voting Stock then owned by
Parent, Purchaser or any other direct or indirect subsidiary of
Parent will be voted in favor of adoption of this Agreement.
Subject to its fiduciary duties under applicable law, the Board
of Directors of the Company will recommend that the Company's
stockholders approve adoption of this Agreement if such
stockholder approval is required.
2.3. Consummation of the Merger. The closing of the Merger
--------------------------
(the "Closing") will take place (a) at the principal executive
offices of the Company as promptly as practicable after the later
of (i) the business day of (and immediately following) the
receipt of approval of adoption of this Agreement by the
Company's stockholders if such approval is required, or as soon
as practicable after completion of the Offer if such approval by
stockholders is not required, and (ii) the day on which the last
of the conditions set forth in Article VI hereof is satisfied or
duly waived or (b) at such other time and place and on such other
date as Purchaser and the Company may agree.
11
<PAGE>
2.4. Payment for Shares of Common Stock. Purchaser will
----------------------------------
authorize the depositary for the Offer (or one or more commercial
banks organized under the laws of the United States or any state
thereof with capital, surplus and undivided profits of at least
$100,000,000) to act as Paying Agent hereunder with respect to
the Merger (the "Paying Agent"). Each holder (other than Parent,
Purchaser or any subsidiary of Parent) of a certificate or
certificates which prior to the Effective Time represented shares
of Common Stock will be entitled to receive, upon surrender to
the Paying Agent of such certificate or certificates for
cancellation and subject to any required withholding of taxes,
the aggregate amount of cash into which the shares of Common
Stock previously represented by such certificate or certificates
shall have been converted in the Merger. On or before the
Effective Time, Purchaser will make available to the Paying Agent
sufficient funds to make all payments pursuant to the preceding
sentence. Pending payment of such funds to the holders of shares
of Common Stock, such funds shall be held and invested by the
Paying Agent as Parent directs. Any net profit resulting from,
or interest or income produced by, such investments will be
payable to the Surviving Corporation or Parent, as Parent
directs. Parent will promptly replace any monies lost through
any investment made pursuant to this Section 2.4. Until
surrendered to the Paying Agent, each certificate which
immediately prior to the Effective Time represented outstanding
shares of Common Stock (other than shares of Common Stock owned
by Parent, Purchaser or any other direct or indirect subsidiary
12
<PAGE>
of Parent and shares of Common Stock held by stockholders who
perfect their appraisal rights under the DGCL) (a "Stock
Certificate") will be deemed for all corporate purposes to
evidence only the right to receive upon such surrender the
aggregate amount of cash into which the shares of Common Stock
represented thereby will have been converted, subject to any
required withholding of taxes. No interest will be paid on the
cash payable upon the surrender of the Stock Certificate or Stock
Certificates. Any cash delivered or made available to the Paying
Agent pursuant to this Section 2.4 and not exchanged for Stock
Certificates within three months after the Effective Time will be
returned by the Paying Agent to the Surviving Corporation which
thereafter will act as Paying Agent, subject to the rights of
holders of unsurrendered Stock Certificates under this Article
II, and any former stockholders of the Company who have not
theretofore complied with the instructions for exchanging their
Stock Certificates will thereafter look only to the Surviving
Corporation for payment of their claim for the consideration set
forth in Section 2.1, without any interest thereon, but will have
no greater rights against the Surviving Corporation (or either
Constituent Corporation) than may be accorded to general
creditors thereof under applicable law. Notwithstanding the
foregoing, neither the Paying Agent nor any party hereto will be
liable to a holder of shares of Common Stock for any cash or
interest thereon delivered to a public official pursuant to
applicable abandoned property laws. Promptly after the Effective
Time, the Paying Agent will mail to each record holder of Stock
13
<PAGE>
Certificates a form of letter of transmittal (the "Transmittal
Letter") and instructions for use thereof in surrendering such
Stock Certificates which will specify that delivery will be
effected and risk of loss and title to the Stock Certificates
will pass to the Paying Agent only upon proper delivery of the
Stock Certificates to the Paying Agent in accordance with the
terms of delivery specified in the Transmittal Letter and
instructions for use thereof in surrendering such Stock
Certificates and receiving the applicable Merger Price for each
share of Common Stock previously represented by such Stock
Certificates. From and after the Effective Time, holders of
Stock Certificates immediately prior to the Merger will have no
right to vote or to receive any dividends or other distributions
with respect to any shares of Common Stock which were theretofore
represented by such Stock Certificates, other than any dividends
or other distributions payable to holders of record as of a date
prior to the Effective Time, and will have no other rights other
than as provided herein or by law.
2.5. Closing of the Company's Transfer Books. At the
---------------------------------------
Effective Time, the stock transfer books of the Company will be
closed with respect to Common Stock and no transfer of shares of
Common Stock will thereafter be made. If, after the Effective
Time, Stock Certificates are presented to the Surviving
Corporation, they will be cancelled, retired and exchanged for
cash as provided in Section 2.4 hereof.
2.6. The Company Stock Options and Related Matters. The
---------------------------------------------
Company will cooperate with Parent and Purchaser in an effort to
14
<PAGE>
obtain the surrender of all options to purchase shares of Common
Stock and other rights (collectively, "Options") granted pursuant
to the 1992 Director Stock Option Plan, the 1992 Long-Term
Incentive Plan, the 1986 Long-Term Incentive Plan, the 1980
Long-Term Incentive Plan or any other plans in effect as of the
date hereof (collectively, the "Option Plans") in accordance with
the provisions of Schedule 2.6. Effective immediately prior to
the Effective Time, the restrictions on all shares of restricted
Common Stock identified in Schedule 2.6 will lapse without
further action.
III. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
------------------------------------------------------
Parent and Purchaser hereby jointly and severally represent
and warrant to the Company that:
3.1. Corporate Organization. Each of Parent and Purchaser
----------------------
is a corporation duly organized, validly existing and in good
standing under the laws of its state or other jurisdiction of
incorporation and has all requisite corporate power and authority
to own, lease and operate its properties and assets and to carry
on its business as it is now being conducted, except where the
failure to have such power or authority would not individually or
in the aggregate have a material adverse effect on the financial
condition, properties, business or results of operations of
Parent and Purchaser, taken as a whole. Parent beneficially owns
all of the outstanding capital stock of Purchaser.
3.2. Authority. Each of Parent and Purchaser has the
---------
requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated
15
<PAGE>
hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been
duly approved by the respective Boards of Directors of Parent and
Purchaser and by Parent as the sole stockholder of Purchaser, and
no other corporate proceedings on the part of Parent or Purchaser
are necessary to consummate the transactions so contemplated.
This Agreement has been duly executed and delivered by each of
Parent and Purchaser and constitutes a valid and binding
obligation of each of Parent and Purchaser, enforceable against
Parent and Purchaser in accordance with its terms.
3.3. Offer Documents. The documents (the "Offer
---------------
Documents") pursuant to which the Offer will be made, including
the Schedule 14D-1 filed by Purchaser pursuant to the Exchange
Act (the "Schedule 14D-1"), will comply as to form in all
material respects with the provisions of the Exchange Act and the
rules and regulations thereunder. The information contained in
the Offer Documents (other than information supplied in writing
by the Company expressly for inclusion in the Offer Documents)
will not, at the respective times the Schedule 14D-1 or any
amendments or supplements thereto are filed with the Commission,
contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
Purchaser will promptly correct any statements in the Schedule
14D-1 and the Offer Documents that have become false or
misleading and take all steps necessary to cause such Schedule
16
<PAGE>
14D-1 as so corrected to be filed with the Commission and such
Offer Documents as so corrected to be disseminated to holders of
shares of Common Stock, in each case as and to the extent
required by applicable law.
3.4. Proxy Statement. None of the information to be
---------------
supplied by Parent or Purchaser in writing expressly for
inclusion in a proxy or information statement of the Company
required to be mailed to the Company's stockholders in connection
with the adoption of this Agreement (the "Proxy Statement"), or
in any amendments or supplements thereto will, at the time of (a)
the first mailing thereof and (b) the meeting, if any, of
stockholders to be held in connection with the adoption of this
Agreement, contain any untrue statement of a material fact or
omit to state any 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.
3.5. Fees. In no event, including without limitation
----
termination of this Agreement and abandonment of the Merger
pursuant to Section 7.1 hereof, will the Company or any of its
subsidiaries, prior to the Merger, be obligated to pay any fee or
commission to any financial advisor, broker, finder or
intermediary in connection with the transactions contemplated
hereby pursuant to or as a consequence of any agreement or
commitment of Parent, Purchaser or any of their respective
affiliates.
3.6. Consents and Approvals; No Violation. Except as set
------------------------------------
forth in Schedule 3.6, neither the execution and delivery of this
17
<PAGE>
Agreement by Parent and Purchaser nor the consummation by Parent
and Purchaser of the transactions contemplated hereby will (a)
conflict with or result in any breach of any provision of their
respective certificates of incorporation or by-laws (or
comparable governing instruments), (b) violate, conflict with,
constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or
result in the creation of any lien or other encumbrance upon any
of the properties or assets of Parent or any of its subsidiaries
under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease
agreement or other instrument or obligation to which Parent or
any such subsidiary is a party or to which they or any of their
respective properties or assets are subject, except for such
violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens or other encumbrances, which,
individually or in the aggregate, will not have a material
adverse effect on the business, financial condition or results of
operations of Parent and its subsidiaries, taken as a whole, or
(c) require any consent, approval, authorization or permit of or
from, or filing with or notification to, any court, governmental
authority or other regulatory or administrative agency or
commission, domestic or foreign ("Governmental Entity"), except
(i) pursuant to the Exchange Act, (ii) filing certificates of
merger pursuant to the DGCL and the laws of any other state,
(iii) filings required under the securities or blue sky laws of
18
<PAGE>
the various states, (iv) filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(v) consents, approvals, authorizations, permits, filings or
notifications under laws and regulations of various foreign
jurisdictions, other than Argentina and its provinces, or
(vi) consents, approvals, authorizations, permits, filings or
notifications which if not obtained or made will not,
individually or in the aggregate, have a material adverse effect
on the business, financial condition or results of operations of
Parent and its subsidiaries, taken as a whole.
3.7. Financing. Prior to the execution of this Agreement
---------
by the parties hereto, Parent executed a commitment letter with
Chase Manhattan Bank, N.A. (the "Commitment"), a copy of which
has been previously furnished to the Company, providing for up to
$800 million of acquisition financing. As of the date hereof,
the executive officers of Parent have no reason to believe that
any condition to the financing contemplated by the Commitment
will not be satisfied in accordance with the terms of the
Commitment. Parent and Purchaser hereby covenant that they will
use their respective reasonable best efforts to obtain the
financing contemplated by the Commitment.
3.8. Operations of the Company Following the Merger. Based
----------------------------------------------
upon, among other things, Parent's review of the Company's
financial condition and operations, the Company's business plan
and the representations made by the Company in this Agreement,
the financial condition of Parent and its subsidiaries and
Parent's and Purchaser's present plans with respect to the
19
<PAGE>
Company and its subsidiaries following the Merger, Parent has no
reason to believe that, following the consummation of the Merger
and the completion of the financings contemplated by the
Commitment, the Company will not be able to meet its obligations
as they come due, including solely for purposes of this
representation preferred stock dividend and mandatory redemption
payments.
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to each of Parent
and Purchaser that:
4.1. Corporate Organization. The Company is a corporation
----------------------
duly organized, validly existing and in good standing under the
laws of its state of incorporation and is in good standing as a
foreign corporation in each jurisdiction where failure to so
qualify or be in good standing is reasonably likely to have a
material adverse effect on the financial condition, properties,
business or results of operation of the Company and its
subsidiaries, taken as a whole. The Company has the requisite
corporate power to own, lease and operate its properties and
assets and to carry on its businesses as they are now being
conducted. The Company has furnished Parent true and correct
copies of the certificate of incorporation and by-laws (or other
governing instruments), as amended to the date hereof, of the
Company and each of its subsidiaries (except the inactive
subsidiaries identified as such on Schedule 4.1). The Company's
and each subsidiary's certificate of incorporation and by-laws
20
<PAGE>
(or other governing instruments) as so delivered are in full
force and effect.
4.2. Capitalization. As of the date hereof, the authorized
--------------
capital stock of the Company consists of (i) 300,000,000 shares
of Common Stock and (ii) 100,000,000 shares of Preferred Stock.
As of the close of business on February 23, 1995, (a) 135,497,705
shares of Common Stock were validly issued and outstanding, fully
paid and nonassessable and not subject to preemptive rights,
(b) 4,358,658 shares of $4.00 Preferred Stock were validly issued
and outstanding, fully paid and nonassessable, (c) 1,250,000
shares of $9.75 Preferred Stock were validly issued and
outstanding, fully paid and nonassessable, and (d) 3,500,000
shares of $2.50 Preferred Stock were validly issued and
outstanding, fully paid and nonassessable. Since such date, the
Company has not issued any additional shares of capital stock
other than pursuant to (i) the exercise or conversion of Options
and Converts, (ii) the Company's Employee Shareholding and
Investment Plan (the "401(k) Plan"), or (iii) the Company's
Director Stock Compensation Plan (the "Director Plan"). Except
for the Options and Converts, the Rights, shares issued pursuant
to the Director Plan and as otherwise set forth in this
Section 4.2, there are not now, and at the Effective Time there
will not be, any shares of capital stock of the Company
authorized, issued or outstanding and there are not now, and at
the Effective Time there will not be, any outstanding
subscriptions, options, warrants, rights, convertible securities
or any other agreements or commitments of any character relating
21
<PAGE>
to the issued or unissued capital stock or other securities of
the Company obligating the Company to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of
capital stock of the Company or obligating the Company to grant,
extend or enter into any subscription, option, warrant, right,
convertible security or other similar agreement or commitment.
Except as set forth in this Section 4.2, on Schedule 4.2 or
otherwise in this Agreement, and except for provisions in
employee plans relating to the pass-through of voting rights,
there are not now, and at the Effective Time there will not be,
any voting trusts or other agreements or understandings to which
the Company or any subsidiary of the Company is a party or is
bound with respect to the voting of the capital stock of the
Company.
4.3. Authority. The Company has the requisite corporate
---------
power and authority to enter into this Agreement and, except for
any required adoption of this Agreement by the holders of the
Voting Stock, to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby have been duly and
validly approved by the Board of Directors of the Company and no
other corporate proceedings on the part of the Company are
necessary to enter into this Agreement or to consummate the
transactions so contemplated, subject only, to the extent
required with respect to the consummation of the Merger, to
adoption of this Agreement, if necessary, by the holders of
Voting Stock. This Agreement has been duly executed and
22
<PAGE>
delivered by, and constitutes a valid and binding obligation of,
the Company, enforceable against the Company in accordance with
its terms.
4.4. Consents and Approvals; No Violation. Neither the
------------------------------------
execution and delivery of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated
hereby will (a) conflict with or result in any breach or
violation of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation
of any lien or other encumbrance upon any of the properties or
assets of the Company or any of its subsidiaries under, any of
the terms, conditions or provisions of (i) their respective
certificates of incorporation or by-laws or (ii) any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which the Company or any such
subsidiary is a party or to which they or any of their respective
properties or assets are subject, except for such violations,
conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances which are set forth on
Schedule 4.4 or which, individually or in the aggregate, will not
have a material adverse effect on the business, financial
condition or results of operations of the Company and its
subsidiaries, taken as a whole, or (b) require any consent,
approval, authorization or permit of, or filing with or
notification to, any Governmental Entity, except (i) pursuant to
23
<PAGE>
the Exchange Act, (ii) filing certificates of merger pursuant to
the DGCL and the laws of any other state, (iii) filings required
under the securities or blue sky laws of the various states, (iv)
filings under the HSR Act, (v) consents, approvals,
authorizations, permits, filings or notifications under laws and
regulations of various foreign jurisdictions listed or described
on Schedule 4.4, and (vi) consents, approvals, authorizations,
permits, filings or notifications which if not obtained or made
will not, individually or in the aggregate, have a material
adverse effect on the business, financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
4.5. Commission Filings. The Company has heretofore filed
------------------
all statements, forms, reports and other documents with the
Commission required to be filed pursuant to the Securities Act of
1933, as amended (the "Securities Act"), and the Exchange Act
since January 1, 1993, and has made available to Parent copies of
all such statements, forms, reports and other documents,
including without limitation each registration statement, Current
Report on Form 8-K, proxy or information statement, Annual Report
on Form 10-K and Quarterly Report on Form 10-Q filed during such
period (in the case of each such report, including all exhibits
thereto) (the "SEC Documents"). The SEC Documents, as of their
respective filing dates, complied as to form in all material
respects with all applicable requirements of the Securities Act
and the Exchange Act and did not (as of their respective filing
dates) contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary
24
<PAGE>
in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The
audited and unaudited consolidated financial statements, together
with the notes thereto, of the Company included (or incorporated
by reference) in the SEC Documents present fairly, in all
material respects, the financial position of the Company and its
consolidated subsidiaries as of the dates thereof and the results
of their operations and changes in financial position for the
periods then ended in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis
(except as stated in such financial statements), subject, in the
case of the unaudited financial statements, to normal year-end
audit adjustments.
4.6. Absence of Certain Changes. Except as disclosed in
--------------------------
the SEC Documents, as disclosed to Parent by the Company in a
writing which makes express reference to this Section 4.6 or as
set forth on Schedule 4.6, since December 31, 1994, the Company
and its subsidiaries have conducted their respective businesses
only in the ordinary course, and there has not been (a) any event
or change having or that is reasonably expected to have a
material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries, taken
as a whole, (b) in the case of the Company, any declaration,
setting aside or payment of any dividend or other distribution
with respect to its capital stock, other than the regular cash
dividends on shares of $4.00 Preferred Stock, $9.75 Preferred
Stock and $2.50 Preferred Stock, or relating to the redemption of
25
<PAGE>
the Rights as herein contemplated, (c) in the case of the
Company, any change by the Company in accounting principles used
for purposes of financial reporting, (d) any entry into any
agreement or understanding, whether written or (if enforceable)
oral, between the Company or any of its subsidiaries on the one
hand, and any of their respective employees at Pay Grade 12 or
above ("Senior Executives"), on the other hand, providing for the
employment of any such Senior Executive or any severance or
termination benefits payable or to become payable by the Company
or any subsidiary to any Senior Executive, or (e) except as
permitted by this Agreement, any increase (including any increase
effective in the future) in (i) the compensation, severance or
termination benefits payable or to become payable by the Company
or any subsidiary to any Senior Executive (or any increase in
benefits under any change in control severance arrangement
applicable to employees of the Company and its subsidiaries,
generally) or (ii) any bonus, insurance, pension or other
employee benefits (including without limitation the granting of
stock options, stock appreciation rights or restricted stock
awards) made to, for or with any Senior Executive, except for
normal increases associated with regular annual performance
evaluations in the ordinary course of business or normal accruals
of benefits under the terms of any such plan or arrangement.
4.7. Litigation. Except as disclosed in SEC Documents
----------
filed prior to the date of this Agreement or on Schedule 4.7,
there is no suit, action, investigation or proceeding pending,
or, to the knowledge of the executive officers of the Company,
26
<PAGE>
threatened against or affecting the Company or any subsidiary of
the Company which is reasonably expected to have a material
adverse effect on the Company and its subsidiaries taken as a
whole, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator outstanding
against the Company having, or which, insofar as reasonably can
be foreseen, in the future would have, any such effect.
4.8. Compliance with Applicable Laws. The Company and each
-------------------------------
of its subsidiaries hold, and at all relevant times have held,
all material licenses, franchises, permits and authorizations
necessary for the lawful conduct of its business substantially as
it is currently conducted. Except as required to be disclosed in
the SEC Documents filed prior to the date of this Agreement or as
to matters for which reserves have been established and which
reserves have been disclosed to Purchaser, to the knowledge of
the executive officers of the Company, the businesses of the
Company and its subsidiaries are not presently being conducted,
and to the knowledge of the executive officers of the Company,
have not previously been conducted, in violation of any law,
ordinance or regulation of any Governmental Entity, except for
possible violations which individually or in the aggregate do
not, and, insofar as reasonably can be foreseen, in the future
will not, have a material adverse effect on the Company and its
subsidiaries taken as a whole. Except as described in SEC
Documents filed prior to the date of this Agreement, no
investigation or review by any Governmental Entity concerning any
such possible violations by the Company or any of its
27
<PAGE>
subsidiaries is pending or, to the knowledge of the executive
officers of the Company, threatened, nor has any Governmental
Entity indicated an intention to conduct the same in each case
other than those the outcome of which will not have a material
adverse effect on the Company and its subsidiaries taken as a
whole.
4.9. Fees. Except as will be set forth in the Schedule
----
14D-9, neither the Company nor any of its subsidiaries has paid
or become obligated to pay any fee or commission to any financial
advisor, broker, finder or intermediary in connection with the
transactions contemplated hereby. The Company has previously
furnished Parent a copy of its engagement letter with CSFB.
4.10. Offer Documents. None of the information supplied by
---------------
the Company or its subsidiaries in writing expressly for
inclusion in the Offer Documents or in any amendments thereto or
supplements thereto will, at the time supplied or upon the
expiration of the Offer, contain any untrue statement of a
material fact or omit to state any 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.
4.11. Schedule 14D-9. The Schedule 14D-9 will comply as to
--------------
form in all material respects with the applicable requirements of
the Exchange Act and the rules and regulations thereunder and
will not, at the respective times the Schedule 14D-9 or any
amendments thereto or supplements thereto are filed with the
Commission, contain any untrue statement of a material fact or
28
<PAGE>
omit to state any 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.
The Company will promptly correct any statements in the Schedule
14D-9 that have become materially false or misleading and take
all steps necessary to cause such Schedule 14D-9 as so corrected
to be filed with the Commission and to be disseminated to holders
of shares of Voting Stock, in each case as and to the extent
required by applicable law.
4.12. Proxy Statement. The Proxy Statement and all
---------------
amendments and supplements thereto will comply as to form in all
material respects with the applicable requirements of the
Exchange Act and the rules and regulations thereunder and will
not, at the time of (a) the first mailing thereof and (b) the
meeting, if any, of stockholders to be held in connection with
the Merger, together with any amendments and supplements thereto,
contain any untrue statement of a material fact or omit to state
any 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, except
that no representation is made by the Company with respect to
information supplied in writing by Parent or any affiliate of
Parent expressly for inclusion in the Proxy Statement.
4.13. Rights. The Company has, or prior to the
------
commencement of the Offer shall have, taken the necessary steps
to redeem prior to the close of business on the 20th calendar day
after commencement of the Offer all of the outstanding Rights
29
<PAGE>
issued pursuant to the Rights Agreement in accordance with the
terms of the Rights Agreement and applicable law.
4.14. Certain Actions. The actions referred to in Section
---------------
1.2 have been duly taken by the Board of Directors of the Company
prior to the date hereof.
4.15. Subsidiaries. (a) Each subsidiary of the Company is
------------
a corporation or other legal entity duly incorporated or
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization, has all
requisite corporate or similar power and authority to own its
properties and assets and to carry on its business as now
conducted except where the failure to have such power and
authority would not have a material adverse effect on the
financial condition, properties, business or results of
operations of the Company and its subsidiaries taken as a whole.
Each subsidiary of the Company is duly qualified to do business
as a foreign corporation or other legal entity and is in good
standing in each jurisdiction where the character of the property
owned or leased by it or the nature of its activities make such
qualification necessary, except for those jurisdictions where
failure to be so qualified or in good standing would not,
individually or in the aggregate, have a material adverse effect
on the financial condition, properties, business or results of
operations of the Company and its subsidiaries taken as a whole.
Schedule 4.15(a) sets forth the name, jurisdiction of
incorporation or organization, capitalization and equity holders
of each subsidiary of the Company. Except as disclosed in
30
<PAGE>
Schedule 4.15(a) and except for insignificant equity or other
interests received in the ordinary course of business of the
Company, the Company does not own, directly or indirectly, or
have voting rights with respect to, any capital stock or other
equity securities of any corporation or have any direct or
indirect equity or ownership interest in any business.
(b) Except as disclosed on Schedule 4.15(a) or
4.15(b), or as may be disclosed on the certificates representing
the capital stock of the subsidiaries of the Company or provided
pursuant to the terms of partnership agreements, joint venture
agreements or other constituent documentation, copies of which
have been provided or made available to representatives of
Parent, and except as may be required under the securities laws
of any jurisdiction, (i) all of the outstanding capital stock of,
or other ownership interests in, each subsidiary of the Company,
has been validly issued, is (in the case of capital stock) fully
paid and nonassessable and (in the case of partnership interests)
not subject to current or future capital calls, and is owned by
the Company, directly or indirectly, free and clear of any lien
and free of any other charge, claim, encumbrance, limitation or
restriction (including any restriction on the right to vote, sell
or otherwise dispose of such capital stock or other ownership
interests) and (ii) there are not now, and at the Effective Time
there will not be, any outstanding subscriptions, options,
warrants, calls, rights, convertible securities or other
agreements or commitments of any character relating to the issued
or unissued capital stock or other securities of any of the
31
<PAGE>
Company's subsidiaries, or otherwise obligating the Company or
any such subsidiary to issue, transfer or sell any such
securities or to make any payments in respect of any of its
securities or its equity.
4.16. No Default. Neither the Company nor any of its
----------
subsidiaries which would be a "significant subsidiary" within the
meaning of Regulation S-X (a "Significant Subsidiary") is in
default or violation (and no event has occurred which with notice
or the lapse of time or both would constitute a default or
violation) of any term, condition or provision of (a) the
Certificate or the By-Laws of the Company, (b) the organizational
documentation of any Significant Subsidiary, or (c) except as set
forth in Schedule 4.16, any note, bond, mortgage, indenture,
license, contract, franchise, permit, lease, agreement or other
instrument or obligation to which the Company or any of its
Significant Subsidiaries is a party or by which they or any of
their properties or assets may be bound, except for defaults or
violations which, in the case of clauses (b) or (c) of this
sentence, will not, individually or in the aggregate, have a
material adverse effect on the financial condition, properties,
business or results of operations of the Company and its
Significant Subsidiaries taken as a whole.
4.17. Taxes. (a) Except as set forth in Schedule 4.17, the
-----
Company has filed all federal, state, local and foreign tax
returns required to be filed by itself and by each of its and any
member of its consolidated, combined or similar group (each such
member a "Tax Affiliate") and by any of the Company's
32
<PAGE>
subsidiaries and has paid or caused to be paid, or has made
adequate provision or set up adequate accruals or reserves which,
in the aggregate, are adequate under GAAP in respect of,
liabilities for taxes required to be paid in respect of the
periods for which returns are due, and has established (or will
establish at least quarterly) similar accruals or reserves for
the payment of all taxes payable in respect of periods subsequent
to the last of such periods required to be so accrued or
reserved, as the case may be. Except as set forth in Schedule
4.17, neither the Company nor any of its Tax Affiliates or
subsidiaries has entered into any written agreement or other
document waiving or extending the time to assess any taxes due to
any United States jurisdiction ("Domestic Taxes") nor, to the
knowledge of the executive officers of the Company, has any such
entity entered into any such agreement or other document in
respect of any tax due to any jurisdiction outside the United
States. Except as set forth in Schedule 4.17, the tax returns of
the Company, its Tax Affiliates and subsidiaries of the Company
relating to Domestic Taxes are not under active audit by the
Internal Revenue Service or any comparable state or local agency.
The open taxable years of the Company, its Tax Affiliates and its
subsidiaries relating to United States federal income taxes are
set forth in Schedule 4.17. At no time within the last five
years, and to the knowledge of the executive officers of the
Company, (i) at no time in the preceding eight years, have the
Company, any of its Tax Affiliates or any of its subsidiaries
ever filed a consent under Section 341(f) of the Internal Revenue
33
<PAGE>
Code of 1986, as amended (the "Code"), concerning collapsible
corporations, (ii) except as set forth on Schedule 4.17, none of
the Company, any of its Tax Affiliates or any of its subsidiaries
has made any payments, is obligated to make any payments, or is a
party to any agreement that under certain circumstances obligates
it to make any payments that will not be deductible under
Sections 280G or 162(m) of the Code; provided, however, that the
foregoing representation will not apply to any payments made as a
result of this Agreement or the transactions contemplated hereby,
(iii) the Company is not currently a United States real property
holding corporation within the meaning of Section 897(c)(2) of
the Code, (iv) each of the Company, each of its Tax Affiliates
and each of its subsidiaries has disclosed on its federal income
Tax Returns all positions taken therein that could give rise to a
material understatement of federal income tax within the meaning
of Section 6662 of the Code, (v) none of the Company, any of its
Tax Affiliates or any of its subsidiaries is a party to any tax
allocation or sharing agreement other than as set forth in
Schedule 4.17, and (vi) none of the Company, any of its Tax
Affiliates or any of its subsidiaries (A) has been a member of an
affiliated group filing a consolidated federal income tax return
(other than a group the common parent of which was the Company)
for any open taxable year or (B) has any liability for the taxes
of any person or entity (other than any of the Company and any of
its Affiliates and any of its subsidiaries) under Treas. Reg.
Sec. 1.1502-6 (or any similar provision of state, local or foreign
law), as a transferee or successor, by contract, or otherwise
34
<PAGE>
except as set forth in Schedule 4.17 or as otherwise disclosed to
Purchaser.
(b) For the purposes of this Section, (i) the term
"tax" means income, gross receipts, payroll, employment, excise,
severance, stamp, windfall profits, environmental (including
taxes under Section 59A of the Code), customs duties, capital
stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added,
alternative or add-on minimum, estimated or other tax of any
kind, levies, penalties, or interest imposed by any United States
federal, state, local and foreign or other taxing authority on
the Company or any of its Tax Affiliates, and (ii) the term "tax
return" includes any return, declaration, claim for refund or
information return relating to taxes, including without
limitation any schedule or attachment thereto and including any
amendment thereof.
4.18. Insurance. Schedule 4.18 lists all insurance
---------
policies carried by the Company or any of its subsidiaries
insuring occurrences or claims on or made on the date hereof.
There is no default by the Company or any subsidiary with respect
to any provision contained in any such insurance policy which
would permit the denial of coverage or cancellation of coverage
thereunder, except for defaults or failures which, individually
or in the aggregate, would not have a material adverse effect on
the Company and its subsidiaries taken as a whole.
35
<PAGE>
4.19. Benefit Plans. (a) Schedule 4.19(a) lists (i) the
-------------
material "employee benefit plans" (within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), which the Company or any of its
subsidiaries maintains or sponsors or with respect to which the
Company or any of its subsidiaries has any material liability
(actual or contingent, primary or secondary), and (ii) all other
(A) employee benefit plans, programs or arrangements, (B) stock
purchase, stock option, severance, bonus, incentive and deferred
compensation plans, (C) written employment contracts, and (D)
change-in-control agreements which the Company or any of its
subsidiaries maintains, sponsors or is a party to or with respect
to which the Company or any of its subsidiaries has any material
liability. (The plans, programs, arrangements, contracts and
agreements referred to in the preceding sentence are collectively
referred to herein as the "Benefit Plans.")
(b) Except as set forth on Schedule 4.19(b), (i) the
reserves reflected in the balance sheet contained in the audited
financial statements for the period ending December 31, 1994
(together with all footnotes attached thereto, the "Balance
Sheet") relating to any unfunded benefits under the Benefit Plans
were adequate in the aggregate under GAAP as of December 31, 1994
and (ii) neither the Company nor any of its subsidiaries has
incurred any material unfunded liability in respect of any such
plans since that date.
(c) There are no suits or claims pending or, to the
knowledge of the Company's executive officers, threatened
36
<PAGE>
relating to or for benefits under the Benefit Plans, except for
those suits or claims set forth on Schedule 4.19(c) or which,
individually or in the aggregate, will not have a material
adverse effect on the business, financial condition or results of
operation of the Company or its subsidiaries, taken as a whole.
(d) (i) Each Benefit Plan has been established and
administered in all material respects in accordance with its
terms, and in all material respects in compliance with the
applicable provisions of ERISA, the Code and other applicable
laws, rules and regulations and (ii) each Benefit Plan which is
intended to be qualified within the meaning of Code Section
401(a) is so qualified and nothing has occurred, to the knowledge
of the executive officers of the Company, whether by action or
failure to act, which is reasonably expected to cause the loss of
such qualification except where such loss of qualification would
not have a material adverse effect on the business, financial
condition or results of operation of the Company or its
subsidiaries, taken as a whole.
(e) Except as set forth on Schedule 4.19(e), (i) no
Benefit Plan currently has any "accumulated funding deficiency"
as such term is defined in ERISA Section 302 and Code Section 412
(whether or not waived); (ii) to the knowledge of the executive
officers of the Company, no event or condition exists which is a
reportable event within the meaning of ERISA Section 4043 with
respect to any Benefit Plan that is subject to Title IV of ERISA;
(iii) each member of the Company's Controlled Group (as defined
below) has made all required premium payments when due to the
37
<PAGE>
Pension Benefit Guaranty Corporation ("PBGC"); (iv) neither the
Company nor any member of its Controlled Group is subject to any
liability to the PBGC for any plan termination; (v) no amendment
has occurred which requires the Company or any member of its
Controlled Group to provide security pursuant to Code Section
401(a)(29); and (vi) neither the Company nor any member of its
Controlled Group has engaged in a transaction which is reasonably
likely to subject it to liability under ERISA Section 4069,
except, in each case, where any such circumstance will not have a
material adverse effect on the business, financial condition or
results of operations of the Company and its subsidiaries, taken
as a whole. For the purposes of this Section 4.19, the term
"Controlled Group" means all corporations, trades or businesses
which, together with the Company, are treated as a single
employer under Section 414 of the Code.
(f) No Benefit Plan is a multiemployer plan (within
the meaning of Section 3(37) of ERISA) and neither the Company
nor any member of its Controlled Group is reasonably likely to
incur any liability to any multiemployer plan nor is engaged in a
transaction which is reasonably expected to subject the Company
to any material liability under ERISA Section 4212(c).
4.20. Labor Matters. Except as set forth in Schedule 4.20,
-------------
(a) neither the Company nor any of its subsidiaries is party to
an unexpired collective bargaining agreement or other unexpired
material contract or agreement with any labor organization or
other representative of employees nor is any such contract being
negotiated; (b) there is no material unfair labor practices
38
<PAGE>
charge or complaint pending nor, to the knowledge of the
executive officers of the Company, threatened, with regard to
employees of the Company or any of its subsidiaries; (c) there is
no labor strike, material organized slowdown, material organized
work stoppage or other material organized labor controversy in
effect or, to the knowledge of the executive officers of the
Company, threatened against the Company or any of its
subsidiaries; (d) as of the date hereof, to the knowledge of the
executive officers of the Company, no representation question
exists and no campaigns are being conducted to solicit cards from
the employees of the Company or any subsidiary of the Company to
authorize representation by any labor organization; (e) neither
the Company nor any subsidiary of the Company is party to, or is
otherwise bound by, any consent decree with any governmental
authority relating to employees or employment practices of the
Company or any subsidiary of the Company which is material to the
Company or its subsidiaries taken as a whole; and (f) the Company
and each subsidiary of the Company is in compliance with all
applicable agreements, contracts and policies relating to
employment, employment practices, wages, hours and terms and
conditions of employment of the employees except where failure to
be in compliance with each such agreement, contract and policy is
not, individually or in the aggregate, reasonably likely to have
a material adverse effect on the financial condition, properties,
business or results of operations of the Company and its
subsidiaries taken as a whole.
39
<PAGE>
4.21. Certain Environmental Matters. To the knowledge of
-----------------------------
the executive officers of the Company, (a) the reserves reflected
in the Balance Sheet relating to environmental matters were
adequate under GAAP as of December 31, 1994, and neither the
Company nor any of its subsidiaries has incurred any material
liability in respect of any environmental matter since that date,
and (b) the SEC Documents include all information relating to
environmental matters required to be included therein under the
rules and regulations of the Commission applicable thereto.
V. COVENANTS
---------
5.1. Acquisition Proposals. Neither the Company nor any of
---------------------
its subsidiaries may, directly or indirectly, and each will
instruct and otherwise use its reasonable best efforts to cause
its affiliates that are controlled by the Company, and the
officers, directors, employees, agents or advisors or other
representatives or consultants of the Company not to, encourage,
solicit, initiate, engage or participate in discussions or
negotiations with, or provide information to, any Person (as
hereafter defined) (other than Parent, Purchaser or subsidiaries,
affiliates or representatives of any of the foregoing) in
connection with any tender offer, exchange offer, merger,
consolidation, business combination, sale of substantial assets,
sale of securities, liquidation, dissolution or similar
transaction involving the Company or any of its subsidiaries or
divisions, including, without limitation, Midgard Energy Company.
Notwithstanding the foregoing, the Company may do any of the
foregoing if outside counsel to the Company advises the Company's
40
<PAGE>
Board of Directors that any such action is required for the
Company's directors to satisfy their fiduciary duties to the
Company and its constituencies under applicable law. The Company
will (a) promptly notify Parent in the event of any discussion,
negotiation, proposal or offer of the type referred to in the
first sentence of this Section 5.1 or any decision to furnish
information or take any other action referred to in the second
sentence of this Section 5.1 and (b) promptly furnish Parent
copies of all written information furnished to any Person
pursuant to the second sentence of this Section 5.1 to the extent
not previously furnished to Parent.
5.2. Interim Operations. During the period from the date
------------------
of this Agreement to the earlier of the time that the designees
of Parent have been elected to, and constitute a majority of, the
Board of Directors of the Company pursuant to Section 1.4 hereof
or the Effective Time, except as specifically contemplated by
this Agreement, as set forth in Schedule 5.2 or as otherwise
approved by Parent in a writing which makes express reference to
this Section 5.2:
5.2.1. Conduct of Business. The Company will, and
-------------------
will cause each of its subsidiaries to, conduct their
respective businesses only in, and not take any action
except in, the ordinary and usual course of business
substantially consistent with past practice. The Company
will use reasonable efforts to preserve intact the business
organization of the Company and each of its subsidiaries, to
keep available the services of its and their present
41
<PAGE>
officers and key employees and to preserve the goodwill of
those having business relationships with it or its
subsidiaries.
5.2.2. Certificate and By-Laws. The Company will not
-----------------------
and will not permit any of its subsidiaries to make or
propose any change or amendment to their respective
certificates of incorporation or by-laws (or comparable
governing instruments), except as may be required by law.
5.2.3. Capital Stock. The Company will not and will
-------------
not permit any of its subsidiaries to authorize for
issuance, issue, sell or deliver any shares of capital stock
or any other securities of any of them (other than pursuant
to the Options, Options and Converts, the $4.00 Preferred
Stock, the $9.75 Preferred Stock or the 401(k) Plan or the
issuance of shares issued under the terms of the Director
Plan in a manner consistent with any such plan or past
practice) or issue any securities convertible into or
exchangeable for, or options, warrants to purchase, scrip,
rights to subscribe for, calls or commitments of any
character whatsoever relating to, or enter into any contract
with respect to the issuance of, any shares of capital stock
or any other securities of any of them (other than pursuant
to the Options, Options and Converts, the $4.00 Preferred
Stock, the $9.75 Preferred Stock, the 401(k) Plan (or in
connection with the 401(k) Plan or the Director Plan as
aforesaid), purchase or otherwise acquire or enter into any
contract with respect to the purchase or voting of shares of
42
<PAGE>
their capital stock, or adjust, split, combine or reclassify
any of their capital stock or other securities, or make any
other changes in their capital structures.
5.2.4. Dividends. The Company will not and will not
---------
permit any of its subsidiaries to declare, set aside, pay or
make any dividend or other distribution or payment (whether
in cash, stock or property) with respect to, or purchase or
redeem, any shares of the capital stock of any of them other
than (a) regular quarterly cash dividends on the $4.00
Preferred Stock, the $9.75 Preferred Stock and the $2.50
Preferred Stock, (b) dividends, distributions or payments
paid by its subsidiaries to the Company or its subsidiaries
with respect to their capital stock, (c) the Rights in
accordance with the Rights Agreement, and (d) loans and
payments from the Company to any of its subsidiaries or from
any of such subsidiaries to the Company or another such
subsidiary.
5.2.5. Debt. Except as set forth in Schedule 5.2.5,
----
the Company and its subsidiaries will not, except in the
ordinary course of business, (a) incur or assume any
indebtedness, (b) assume, guarantee, endorse or otherwise
become liable (whether directly, contingently or otherwise)
for the obligation of any other Person except in the
ordinary course of business and consistent with past
practice, or (c) make any loans, advances or capital
contributions to, or investments (other than intercompany
accounts and short-term investments pursuant to customary
43
<PAGE>
cash management systems of the Company in the ordinary
course and consistent with past practices) in, any other
Person other than such of the foregoing as are made by the
Company to or in a wholly owned subsidiary of the Company.
5.3. Employee Plans, Compensation, Etc. (a) Except as
----------------------------------
provided in Section 2.6 hereof, this Section 5.3 or as set forth
in Schedule 5.3 or required by applicable law, prior to the
Effective Time the Company will not and will not permit any of
its subsidiaries to adopt or amend any bonus, profit sharing,
compensation, severance, termination, stock option, pension,
retirement, deferred compensation, welfare benefit plan, change-
in-control agreement, restricted stock, performance unit,
employment or other employee benefit agreements, trusts, plans,
funds or other arrangements for the benefit or welfare of any
director, officer or employee, or (except, other than with
respect to the Senior Executives, for normal increases in the
ordinary course of business that are consistent with past
practices and that, in the aggregate, do not result in a material
increase in benefits or compensation expense to the Company or
pursuant to collective bargaining agreements or other contracts
presently in effect) increase in any manner the compensation or
fringe benefits of any director or officer or pay any benefit not
required by any existing plan, arrangement or contract (including
without limitation the granting of stock options, stock
appreciation rights, shares of restricted stock or performance
units) or take any action or grant any benefit not expressly
required under the terms of any existing contracts, trusts,
44
<PAGE>
plans, funds or other such arrangements or enter into any
contract to do any of the foregoing.
(b) Subject to Purchaser's purchase of Common Stock
pursuant to the Offer and for a period of 12 months following the
Effective Time, the Company or Surviving Corporation, as the case
may be, will continue without amendment or change, except changes
which increase compensation or benefits paid or payable
thereunder or as may be required by law, the Benefit Plans and
other sponsored, maintained or offered compensation and benefit
policies, practices, programs and arrangements which provide
compensation or benefits to employees of the Company or its
subsidiaries. Anything in the preceding sentence to the contrary
notwithstanding, (i) to the extent any Benefit Plan, or such
other compensation or benefit policy, practice, program or
arrangement other than any stock option, restricted stock or
other stock-based award plan or program ("Stock Plans") so
allows, the Surviving Corporation may replace any of such
individual plans, policies, practices, programs or arrangements
with another plan, policy, practice, program or arrangement
providing, in the aggregate, not less than a substantially
equivalent level of compensation or benefits, as the case may be,
and (ii) the Company or the Surviving Corporation, as the case
may be, may amend or replace any Stock Plan of the Company with
another plan, policy, practice, program or arrangement that the
Board of Directors of the Company or the Surviving Corporation,
as the case may be, determines in good faith provides comparable
incentive compensation opportunities.
45
<PAGE>
(c) Except as may be expressly provided in a valid
written waiver voluntarily signed by an affected employee, the
Company will honor and, on and after the Effective Time, Parent
will cause the Surviving Corporation to honor in accordance with
the terms thereof, without offset, deduction, counterclaim,
interruption or deferment (other than withholdings under
applicable law), all employment, change-in-control, severance,
termination, consulting and unfunded retirement or benefit
agreements to which the Company or any of its subsidiaries is
presently a party ("Benefits Agreements"). All of the Benefits
Agreements which require the Company to make payments in excess
of $250,000 from and after the Effective Date are set forth in
Schedule 5.3.
(d) Without limiting the obligations of Parent,
Purchaser, the Company or the Surviving Corporation contained
herein, the parties will take the actions, if any, with respect
to employment, severance and other benefits as set forth in
Schedule 5.3.
(e) Parent will consult with the human resources
department of the Company regarding the appropriate treatment of
the insurance, compensation and other benefit plans of the
Company after the Merger.
5.4. Access and Information. The Company will (and will
----------------------
cause each of its subsidiaries to) afford to Parent and its
representatives (including without limitation directors, officers
and employees of Parent and its affiliates, and counsel,
accountants and other professionals retained by Parent) such
46
<PAGE>
access, during normal business hours throughout the period prior
to the Effective Time, to the Company's books, records (including
without limitation tax returns and work papers of the Company's
independent auditors), properties, personnel and to such other
information as Parent reasonably requests and will permit Parent
to make such inspections as Parent may reasonably request and
will cause the officers of the Company and those of its
subsidiaries to furnish Parent with such financial and operating
data and other information with respect to the business,
properties and personnel of the Company and its subsidiaries as
Parent may from time to time reasonably request, provided,
however, that no investigation pursuant to this Section 5.4 will
affect or be deemed to modify any of the representations or
warranties made by the Company in this Agreement. Subject to the
requirements of law, Parent will hold in confidence, and will
instruct and use its reasonable best efforts to cause its
representatives to keep confidential, all such non-public
information it may acquire in its investigation pursuant to this
Section 5.4, and if this Agreement is terminated, Parent will,
and will instruct and use its reasonable best efforts to cause
its representatives to, destroy or deliver to the Company all
documents, work papers and other material (including copies)
obtained by Parent or such representatives pursuant to this
Section 5.4 and such of the foregoing as has been furnished by
the Company to Parent or Purchaser prior to the date hereof,
whether so obtained or furnished before or after the execution
hereof. Nothing in this Section 5.4 will require the Company to
47
<PAGE>
afford Parent or its representatives access to any information,
documents or materials which are privileged or which are
confidential and as to which such disclosure would cause the loss
of privilege or breach the terms of a confidentiality agreement.
5.5. Certain Filings, Consents and Arrangements. Parent,
------------------------------------------
Purchaser and the Company will (a) promptly make their respective
filings, and will thereafter use their best efforts promptly to
make any required submissions under the HSR Act with respect to
the Offer, the Merger and the other transactions contemplated by
this Agreement and (b) cooperate with one another (i) in promptly
determining whether any filings are required to be made or
consents, approvals, permits or authorizations are required to be
obtained under any other federal, state or foreign law or
regulation and (ii) in promptly making any such filings,
furnishing information required in connection therewith and
seeking timely to obtain any such consents, approvals, permits or
authorizations.
5.6. State Takeover Statutes. The Company will use its
-----------------------
reasonable best efforts to (a) exempt the Company, the Offer and
the Merger from the requirements of any state takeover law by
action of the Company's Board of Directors or otherwise and (b)
assist in any challenge by Purchaser to the validity or
applicability to the Offer or the Merger of any state takeover
law.
5.7. Proxy Statement. As soon as reasonably practicable
---------------
after the date hereof, the Company will, if required by
applicable law in order to consummate the Merger, prepare the
48
<PAGE>
Proxy Statement, file it with the Commission and mail it to all
holders of shares of Voting Stock. Parent, Purchaser and the
Company will cooperate with each other in the preparation of the
Proxy Statement; without limiting the generality of the
foregoing, Parent and Purchaser will furnish to the Company the
information relating to Parent and Purchaser required by the
Exchange Act to be set forth in the Proxy Statement. The
Company, acting through its Board of Directors, subject to the
fiduciary duties of the Company's Board of Directors as advised
by counsel, will include in the Proxy Statement the
recommendation of its Board of Directors that stockholders of the
Company vote in favor of the adoption of this Agreement and use
its reasonable best efforts to secure such adoption.
5.8. Indemnification and Insurance. For seven years after
-----------------------------
the Effective Time, Parent will cause the Surviving Corporation
to indemnify, defend and hold harmless the present and former
officers, directors, employees and agents of the Company and its
subsidiaries (an "Indemnified Party") against all losses, claims,
damages or liabilities arising out of actions or omissions
occurring on, prior to or after the Effective Time (whether or
not based in whole or in part on the sole or concurrent
negligence of the Indemnified Party or on the theory of strict
products liability) to the full extent provided under Delaware
law, the Certificate and By-Laws of the Company in effect at the
date hereof and under all agreements to which the Company is a
party as of the date hereof, including without limitation
provisions relating to advances of expenses incurred in the
49
<PAGE>
defense of any action or suit (including without limitation
attorneys' fees of counsel selected by the Indemnified Party),
provided that any determination required to be made with respect
to whether an Indemnified Party's conduct complies with the
standards set forth under Delaware law, the Certificate or
By-Laws of the Company or under any such contract will be made by
independent counsel selected by the Indemnified Party and
reasonably satisfactory to the Surviving Corporation. Nothing in
this Agreement shall diminish or impair the rights of any
Indemnified Party under the Certificate or By-Laws of the Company
or any agreement to which the Company is a party at the date
hereof. The Surviving Corporation will maintain the Company's
existing officers' and directors' liability insurance ("D&O
Insurance") in full force and effect without reduction of
coverage for a period of seven years after the Effective Time,
provided, however, that the Surviving Corporation will not be
required to pay an annual premium therefor in excess of 250% of
the last annual premium paid prior to the date hereof (the
"Current Premium"), and, provided, further, however, that if the
existing D&O Insurance expires, is terminated or cancelled during
such seven-year period, the Surviving Corporation will use its
best efforts to obtain as much D&O Insurance as can be obtained
for the remainder of such period for a premium on an annualized
basis not in excess of 250% of the Current Premium.
5.9. Additional Agreements. Subject to the terms and
---------------------
conditions herein provided, each of the parties will use its
reasonable best efforts to take promptly, or cause to be taken
50
<PAGE>
promptly, all actions and to do promptly, or cause to be done
promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including using
its reasonable best efforts to obtain all necessary actions or
non-actions, extensions, waivers, consents and approvals from all
applicable Governmental Entities, effecting all necessary
registrations and filings (including without limitation filings
under the HSR Act) and obtaining any required contractual
consents, subject, however, to any required vote of the
stockholders of the Company. If, at any time after the Effective
Time, the Surviving Corporation considers or is advised that any
deeds, bills of sale, assignments, assurances or any other
actions or things are necessary or desirable to vest, perfect or
confirm of record or otherwise in the Surviving Corporation its
right, title or interest in, to or under any of the rights,
properties or assets of either of the Constituent Corporations
acquired or to be acquired by the Surviving Corporation as a
result of, or in connection with the Merger or otherwise to carry
out the purposes of this Agreement, the officers and directors of
the Surviving Corporation will be authorized to execute and
deliver, in the name and on behalf of each of the Constituent
Corporations or otherwise, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on
behalf of each of the Constituent Corporations or otherwise, all
such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest
51
<PAGE>
in, to and under such rights, properties or assets in the
Surviving Corporation or otherwise to carry out the purposes of
this Agreement.
5.10. Compliance with Antitrust Laws. Each of Parent and
------------------------------
the Company will use its reasonable best efforts to resolve such
objections, if any, which may be asserted with respect to the
Offer or the Merger under the antitrust laws. In the event a
suit is instituted challenging the Offer or the Merger as
violative of the antitrust laws, each of Parent and the Company
will use its best efforts to resist or resolve such suit. Parent
and the Company will use their reasonable best efforts to take
such action as may be required (a) by the Antitrust Division of
the Department of Justice or the Federal Trade Commission in
order to resolve such objections as either of them may have to
the Offer or the Merger under the antitrust laws or (b) by any
federal or state court of the United States, in any suit brought
by a private party or Governmental Entity challenging the Offer
or the Merger as violative of the antitrust laws, in order to
avoid the entry of, or to effect the dissolution of, any
injunction, temporary restraining order or other order which has
the effect of preventing the consummation of the Offer or the
Merger.
5.11. Publicity. The initial press release announcing this
---------
Agreement will be a joint press release and thereafter the
Company and Parent will consult with each other in issuing any
press releases or otherwise making public statements with respect
to the transactions contemplated hereby and in making any filings
52
<PAGE>
with any Governmental Entity or with any national securities
exchange with respect thereto, and will not issue any such press
release or make any such public statement prior to such
consultation except as may be required by law or by obligation
pursuant to any listing agreement with any national securities
exchange or the National Association of Securities Dealers or any
rules or regulations of a foreign securities exchange upon which
the securities are traded.
5.12. Notice of Actions and Proceedings. The Company will
---------------------------------
promptly notify Parent of any actions, suits, claims,
investigations or proceedings commenced or, to the knowledge of
the executive officers of the Company, threatened in writing
against, relating to or involving or otherwise affecting the
Company or any of its subsidiaries which, if pending on the date
hereof, would have been required to have been disclosed in
writing pursuant to any Schedule required hereby or which relates
to the consummation of the Offer or the Merger.
5.13. Notification of Certain Other Matters. The Company
-------------------------------------
will promptly notify Parent of:
(a) any written notice or other written communication
from any third party alleging that the consent of such third
party is or may be required in connection with the transactions
contemplated by this Agreement;
(b) any written notice or other written communication
from any Governmental Entity in connection with the transactions
contemplated hereby; and
53
<PAGE>
(c) any fact, development or occurrence that
constitutes a material adverse effect on the business, financial
condition or results of operations of the Company and its
subsidiaries taken as a whole or is reasonably expected to result
in such an effect.
5.14. Listing of Preferred Stock. The Company will, and
--------------------------
Parent will cause the Surviving Corporation to, use their
respective reasonable efforts to continue the listing on the
New York Stock Exchange of the shares of Preferred Stock which
are currently listed on such Exchange or, if such shares are
delisted, to cause such shares of Preferred Stock to be listed on
another national securities exchange within the United States or
admitted to trading on the National Association of Securities
Dealers Automated Quotation System and on other organized
securities markets in such foreign jurisdictions in which such
shares are presently traded. Notwithstanding anything in this
Agreement to the contrary, the obligations of the Company and
Parent under this Section 5.14 will survive the Effective Time
with respect to any series of Preferred Stock until such time as
the aggregate market value of all outstanding shares of such
series is less than $2 million or the number of outstanding
shares of such series is less than 100,000.
5.15. Certain Obligations of Parent. In the event that the
-----------------------------
Company is unable to meet its obligations as they come due,
whether at maturity or otherwise, including solely for the
purposes of this Section 5.15 dividend and redemption payments
with respect to the Preferred Stock, Parent will capitalize the
54
<PAGE>
Company in an amount necessary to permit the Company to meet such
obligations, provided that Parent's aggregate obligation under
this Section 5.15 shall be (a) limited to the amount of debt
service obligations under "Tranche 1" of the loan agreement
contemplated by the Commitment and, to the extent "Tranche 1" is
replaced by "Tranche 2 and/or Tranche 3" under the Commitment,
the amount of debt service obligations under such "Tranche 2
and/or Tranche 3," and (b) reduced by the amount, if any, of
capital contributions received by the Company after the Effective
Time and the net proceeds of any sale by the Company of common
stock or non-redeemable preferred stock after the Effective Time.
Notwithstanding anything in this Agreement to the contrary, the
obligations of Parent under this Section 5.15 will survive until
the ninth anniversary of the Effective Time.
VI. CONDITIONS
----------
6.1. Conditions. The obligations of Parent, Purchaser and
----------
the Company to consummate the Merger are subject to the
satisfaction, at or before the Effective Time, of each of the
following conditions, as applicable thereto:
6.1.1. Stockholder Approval. The holders of the
--------------------
Voting Stock shall have duly adopted this Agreement.
6.1.2. Purchase of Shares of Voting Stock. Purchaser
----------------------------------
shall have accepted for payment shares of Common Stock
pursuant to the Offer.
6.1.3. Injunctions; Illegality. The consummation of
-----------------------
the Merger shall not be precluded or materially restricted
by any order, injunction, decree or ruling of a court of
55
<PAGE>
competent jurisdiction or Governmental Entity (each party
agreeing to use its reasonable best efforts to rectify any
such occurrence), and there shall not have been any action
taken or any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any
Governmental Entity which prevents or materially restricts
the consummation of the Merger or that would make the
acquisition or holding by Parent or its subsidiaries of the
shares of Common Stock or shares of common stock of the
Surviving Corporation illegal.
6.1.4. HSR Act. Any applicable waiting period under
-------
the HSR Act shall have expired or been terminated.
6.2. Parent Obligations. The obligations of Parent and
------------------
Purchaser to consummate the Merger are subject to the
satisfaction at or prior to the Effective Time of the additional
conditions that (a) the Company in all material respects shall
have satisfied and complied with each of the covenants of the
Company contained herein, (b) the representations and warranties
of the Company contained in this Agreement shall be true and
correct in all material respects as of the date of this Agreement
and as of the Closing Date (except for representations and
warranties made as of a specified date, which shall be true and
correct in all material respects as of such specified date) and
(c) Purchaser and Parent shall have the right to draw down funds
under the loan agreement contemplated by the Commitment.
56
<PAGE>
VII. MISCELLANEOUS
-------------
7.1. Termination. This Agreement may be terminated and the
-----------
Merger contemplated hereby may be abandoned (a) by the mutual
consent of the Boards of Directors of Parent, Purchaser and the
Company; (b) by Parent and Purchaser, on the one hand, or the
Company, on the other hand, if the Offer expires or is terminated
or withdrawn in accordance with the terms hereof without any
shares of Common Stock being purchased thereunder or the Offer is
terminated, or has not been commenced in accordance with the
terms hereof by the close of business on March 7, 1995, or if
Purchaser has not purchased shares of Common Stock validly
tendered and not withdrawn pursuant to the Offer in accordance
with the terms hereof within 75 calendar days after commencement
of the Offer; provided, however, that the party seeking to
terminate this Agreement pursuant to this Section 7.1(b) is not
in material breach of this Agreement; (c) by the Company, if
Parent or Purchaser materially breaches any of the
representations and warranties or covenants contained in this
Agreement, or by Parent and Purchaser if the Company materially
breaches any of the representations and warranties or covenants
contained in this Agreement; (d) by either Parent and Purchaser
or the Company, if the Merger is not consummated prior to
June 30, 1995; provided, however, that the right to terminate
this Agreement under this Section 7.1(d) will not be available to
any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of
the Effective Time to occur on or before such date; (e) by either
57
<PAGE>
Parent and Purchaser, on the one hand, or the Company, on the
other hand, if either one (or any permitted assignee hereunder)
is restrained, enjoined or otherwise precluded by an order,
decree, ruling or injunction (other than an order or injunction
issued on a temporary or preliminary basis) of a court, domestic
or foreign, of competent jurisdiction or other Governmental
Entity from consummating the Merger or making the acquisition or
holding by Parent or its subsidiaries of the shares of Common
Stock or shares of common stock of the Surviving Corporation
illegal and all means of appeal and all appeals from such order
decree, ruling, injunction or other action have been finally
exhausted; (f) by the Company if the Board of Directors of the
Company determines that it will not recommend acceptance of the
Offer and approval of the Merger by the Company's stockholders
(or if such recommendation is withdrawn) based upon the advice of
outside counsel that such action is necessary for the Board of
Directors to comply with its fiduciary duties to stockholders
under applicable law; and (g) by Parent and Purchaser, if (i) the
Board of Directors of the Company shall not have recommended or
shall withdraw, modify or change its recommendation relating to
the Merger or the Offer in a manner materially adverse to Parent
or shall have resolved to do any of the foregoing; (ii) the Board
of Directors of the Company shall have recommended to the
stockholders of the Company that they accept or approve, or the
Company or any of its subsidiaries shall have agreed to engage
in, a Competing Transaction; or (iii) any Person shall have
acquired beneficial ownership or the right to acquire beneficial
58
<PAGE>
ownership or any "group" (as such term is defined under Section
13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) shall have been formed which beneficially
owns, or has the right to acquire "beneficial ownership" (as
defined in the Rights Agreement) of, more than 20% of the then-
outstanding shares of Common Stock of the Company. For the
purposes of this Agreement, "Competing Transaction" means any of
the following involving the Company or any of its subsidiaries:
(i) any merger, consolidation, share exchange, business
combination or other similar transaction except for such of the
foregoing as to which the only parties are the Company or one or
more subsidiaries of the Company; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of the assets of
the Company or any of its subsidiaries constituting 5% or more of
the consolidated assets of the Company or accounting for 5% or
more of the consolidated revenues of the Company in a single
transaction or series of related transactions involving any
Person other than the Company or one or more subsidiaries of the
Company; or (iii) any tender or exchange offer for 20% or more of
the outstanding shares of Voting Stock or the filing of a
registration statement under the Securities Act in connection
therewith. In the event of any termination and abandonment
pursuant to this Section 7.1, no party hereto (or any of its
directors or officers) will have any liability or further
obligation to any other party to this Agreement, except for
obligations under the last sentences of Sections 1.1 and 1.3, the
second sentence of Section 5.4 and all of Section 7.10 hereof and
59
<PAGE>
except that nothing herein will relieve any party from liability
for any breach of this Agreement. Any action by the Company to
terminate this Agreement pursuant to this Section 7.1 will
require only the approval of a majority of the directors of the
Company then in office who are directors of the Company on the
date hereof, or persons nominated or elected to succeed such
directors by a majority of such directors (the "Continuing
Directors").
7.2. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations and warranties or agreements in
----------
this Agreement will terminate at the Effective Time or the
earlier termination of this Agreement pursuant to Section 7.1, as
the case may be, provided, however, that if the Merger is
consummated, Sections 2.6, 5.3, 5.8, 5.9, 5.14 and 5.15 hereof
will survive the Effective Time to the extent contemplated by
such Sections, and provided further, however, that the last
sentences of Sections 1.1 and 1.3, the second sentence of
Section 5.4 and all of Section 7.10 hereof will in all events
survive any termination of this Agreement.
7.3. Waiver and Amendment. Subject to applicable
--------------------
provisions of the DGCL, any provision of this Agreement may be
waived at any time by the party which is, or whose stockholders
are, entitled to the benefits thereof, and this Agreement may be
amended or supplemented at any time, provided that no amendment
will be made after any stockholder approval of the adoption of
the Merger Agreement which reduces the Merger Price without
further approval of the holders of the Voting Stock, provided
60
<PAGE>
further that any action by the Company to waive or amend any
provision of this Agreement will require the approval of a
majority of the Continuing Directors. No such waiver, amendment
or supplement will be effective unless in a writing which makes
express reference to this Section 7.3 and is signed by the party
or parties sought to be bound thereby.
7.4. Entire Agreement. This Agreement contains the entire
----------------
agreement among Parent, Purchaser and the Company with respect to
the Offer, the Merger and the other transactions contemplated
hereby and thereby, and supersedes all prior agreements among the
parties with respect to such matters other than, prior to the
Effective Time, the Confidentiality Agreement.
7.5. Applicable Law. This Agreement will be governed by
--------------
and construed in accordance with the laws of the State of
Delaware, without giving effect in the principles of conflict of
laws of that State.
7.6. Interpretation. For purposes of this Agreement, a
--------------
"subsidiary" of a corporation means any corporation or other
legal entity (including without limitation partnerships or
limited liability companies) more than 50% of the outstanding
voting securities or similar rights of which are directly or
indirectly owned by such other corporation and "Person" means an
individual or legal entity. The descriptive headings contained
herein are for convenience and reference only and will not affect
in any way the meaning or interpretation of this Agreement.
7.7. Notices. All notices and other communications
-------
hereunder will be in writing and will be given by delivery (and
61
<PAGE>
will be deemed to have been duly given upon receipt) in person,
by cable, facsimile transmission, telegram, telex or other
standard form of telecommunications, or by registered or
certified mail, postage prepaid, return receipt requested,
addressed as follows:
If to the Company to:
Maxus Energy Corporation
717 North Harwood Street
Dallas, Texas 75201
Attention: General Counsel
Telephone: 214/953-2000
Telecopy: 214/979-1986
With a copy to:
Jones, Day, Reavis & Pogue
599 Lexington Avenue, 22nd Floor
New York, New York 10022
Attention: Robert A. Profusek, Esq.
Telephone: 212/326-3800
Telecopy: 212/755-7306
If to Parent or Purchaser to:
YPF Sociedad Anonima
Avenida Pte. Roque Saenz Pena 777
Buenos Aires 1364, Argentina
Attention: President
Telephone: 011-541-329-5705
Telecopy: 011-541-329-5704
With a copy to:
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Attention: P. Dexter Peacock, Esq.
Telephone: 713/220-4354
Telecopy: 713/220-3690
or to such other address as any party may have furnished to the
other parties in writing in accordance herewith.
62
<PAGE>
7.8. Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which will be deemed to be an
original but all of which together will constitute but one
agreement.
7.9. Parties in Interest; Assignment. Except for
-------------------------------
Sections 2.6 and 5.3 hereof (which are intended to be for the
benefit of directors and Senior Executives to the extent
contemplated thereby and their beneficiaries, and may be enforced
by such persons) and Section 5.8 hereof (which is intended to be
for the benefit of directors, officers, agents and employees to
the extent contemplated thereby and their beneficiaries, and may
be enforced by such persons), this Agreement is not intended to
nor will it confer upon any other person (other than the parties
hereto) any rights or remedies. Except as otherwise expressly
provided herein, this Agreement is binding upon and is solely for
the benefit of the parties hereto and their respective
successors, legal representatives and assigns. Purchaser will
have the right (a) to assign to Parent or any direct or indirect
wholly owned subsidiary of Parent any and all rights and
obligations of Purchaser under this Agreement, including without
limitation the right to substitute in its place Parent or such a
subsidiary as one of the constituent corporations in the Merger
(such subsidiary assuming all of the obligations of Purchaser in
connection with the Merger), provided that any such assignment
will not relieve Parent or Purchaser from any of its obligations
hereunder, and (b) to transfer to Parent or to any direct or
indirect wholly owned subsidiary of Parent the right to purchase
63
<PAGE>
shares of Common Stock tendered pursuant to the Offer, provided
that any such transfer will not relieve Purchaser from any of its
obligations hereunder.
7.10. Expenses; Termination Fee. Whether or not the Offer
-------------------------
or Merger is consummated, all costs and expenses incurred in
connection with the Offer, this Agreement and the transactions
contemplated hereby will be paid by the party incurring such
costs and expenses, provided, however, that (a) in the event of a
termination of this Agreement by the Company pursuant to
Section 7.1(f) or by Parent and Purchaser pursuant to
Section 7.1(g)(i) or (ii) hereof, the Company will be obligated
to promptly pay to Purchaser $20 million in cash, and (b) in the
event of a termination of this Agreement by the Company or by
Parent if at the date of such termination any condition to the
funding of the loans contemplated by the Commitment has not been
satisfied, provided that at such time no other condition to
Parent's obligation to consummate the Offer or the Merger, as the
case may be, is unsatisfied (other than the failure to meet the
Minimum Share Condition as a result of the failure to obtain such
funding), Parent and Purchaser, jointly and severally, will be
obligated to promptly pay to the Company $20 million in cash.
7.11. Obligation of Parent. Whenever this Agreement
--------------------
requires Purchaser to take any action, such requirement will be
deemed to include an undertaking on the part of Parent to cause
Purchaser to take such action.
7.12. Enforcement of the Agreement. The parties hereto
----------------------------
agree that irreparable damage would occur in the event that any
64
<PAGE>
of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties hereto will be entitled
to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any State of the
United States having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity,
including without limitation under Section 7.10 hereof.
7.13. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by
any rule of law or public policy, all other terms and provisions
of this Agreement will nevertheless remain in full force and
effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner
adverse to any party hereto. Upon any such determination that
any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto will negotiate in good faith
to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the
end that the transactions contemplated by this Agreement are
consummated to the extent possible.
7.14. Consent to Jurisdiction and Service of Process.
----------------------------------------------
(a) Parent consents to the non-exclusive jurisdiction of any
court of the State of New York or any United States federal court
sitting in the Borough of Manhattan, New York City, New York,
United States, and any appellate court from any thereof, and
65
<PAGE>
waives any immunity from the jurisdiction of such courts over any
suit, action or proceeding that may be brought in connection with
this Agreement. Parent irrevocably waives, to the fullest extent
permitted by law, any objection to any suit, action or proceeding
that may be brought in connection with this Agreement in such
courts whether on the grounds of venue, residence or domicile or
on the ground that any such suit, action or proceeding has been
brought in an inconvenient forum. Parent agrees that final
judgment in any such suit, action or proceeding brought in such
court shall be conclusive and binding upon Parent and may be
enforced in any court to the jurisdiction of which Parent is
subject by suit upon such judgment; provided that service of
process is effected upon Parent in the manner provided in this
Agreement. Notwithstanding the foregoing, any suit, action or
proceeding brought in connection with this Agreement may be
instituted in any competent court in Argentina.
(b) Parent agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in
connection with this Agreement against Parent in any court
sitting in the Borough of Manhattan, New York City, New York,
United States may be made upon CT Corporation System at
1633 Broadway, New York, New York 10019, whom Parent irrevocably
appoints as its authorized agent for service of process. Parent
represents and warrants that CT Corporation System has agreed to
act as Parent's agent for service of process. Parent agrees that
such appointment shall be irrevocable so long as this Agreement
shall remain in effect or until the irrevocable appointment by
66
<PAGE>
Parent of a successor in The City of New York as its authorized
agent for such purpose and the acceptance of such appointment by
such successor. Parent further agrees to take any and all
action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment
in full force and effect as aforesaid. If CT Corporation System
shall cease to be Parent's agent for service of process, Parent
shall appoint without delay another such agent and provide prompt
written notice to the Company, to the extent known to it, of such
appointment. With respect to any such action in any court of the
State of New York or any United States federal court in the
Borough of Manhattan, New York City, service of process upon CT
Corporation System, as the authorized agent of Parent for service
of process, and written notice of such service to Parent, shall
be deemed, in every respect, effective service of process upon
Parent.
(c) Nothing in this Section 7.14 shall affect the
right of any party to serve legal process in any other manner
permitted by law or affect the right of any party to bring any
action or proceeding against any other party or its property in
the courts of other jurisdictions.
67
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement.
ATTEST: YPF SOCIEDAD ANONIMA
By By
--------------------------- ---------------------------
YPF ACQUISITION CORP.
By By
--------------------------- ---------------------------
MAXUS ENERGY CORPORATION
By By
--------------------------- ---------------------------
68
<PAGE>
Exhibit A
---------
CONDITIONS TO THE OFFER
-----------------------
Notwithstanding any other provision of the Offer,
Purchaser shall not be required to accept for payment, purchase
or pay for any shares of Common Stock tendered pursuant to the
Offer (the "Shares"), and may postpone the acceptance for
payment, the purchase of, and/or payment for Shares, and/or may,
subject to the terms of the Agreement, amend or terminate the
Offer if (i) the Minimum Share Condition has not been satisfied,
(ii) the Company shall not have taken the steps necessary to
redeem the Rights, (iii) the applicable waiting period under the
HSR Act shall not have expired or been terminated, (iv) the
closing of the loans in connection with the Offer shall not have
occurred under the Loan Agreement contemplated by the commitment
letter, dated February 24, 1995, addressed to Parent from The
Chase Manhattan Bank (National Association), a copy of which has
heretofore been delivered to the Company, or (v) at any time at
or before payment for any Shares (whether or not any Shares have
theretofore been accepted for payment or paid for pursuant to the
Offer), any of the following events shall have occurred and be
continuing:
(a) there shall be in effect any temporary
restraining order, preliminary or final injunction or
other order or decree issued by any United States
federal or state court of competent jurisdiction or
<PAGE>
United States federal or state governmental, regulatory
or administrative agency or authority, (1) enjoining,
restraining or otherwise prohibiting the Offer, the
Merger or the acquisition by Parent or Purchaser of
shares of Common Stock; (2) prohibiting or materially
limiting the ownership or operation by Parent or
Purchaser of all or any substantial portion of the
business or material assets of the Company and its
subsidiaries, taken as a whole, or, as a consequence of
the Offer, Merger or Parent or Purchaser's acquisition
of shares of Common Stock, of Parent or any of its
subsidiaries, or compelling Parent or Purchaser to
dispose of or to hold separate all or any material
portion of the business or material assets of the
Company and its subsidiaries, taken as a whole, or of
Parent or any of its subsidiaries, or imposing any
material limitation on the ability of Parent or
Purchaser to conduct such business or own such assets,
(3) imposing material limitations on the ability of
Parent or Purchaser (or any other affiliate of Parent)
to acquire or hold or to exercise full rights of
ownership of the shares of Common Stock, including
without limitation the right to vote the shares of
Common Stock purchased by them on all matters properly
presented to the stockholders of the Company, or
(4) requiring material divestitures by Parent or
Purchaser or any of their subsidiaries or affiliates of
-2-
<PAGE>
any Shares, as a consequence of the Offer, Merger or
Parent or Purchaser's acquisition of shares of Common
Stock; or
(b) there shall be any statute, rule, regulation
or order promulgated, enacted, entered or deemed
applicable to the Offer or the Merger, or any other
action shall have been taken, by any Governmental
Entity that is reasonably likely to result in any of
the consequences referred to in clauses (1) through (4)
of paragraph (a) above; or
(c) there shall have occurred (1) any general
suspension of trading in, or limitation on prices for,
trading in securities on the New York Stock Exchange or
in the over-the-counter-market, (2) a declaration of a
banking moratorium or any limitation or suspension of
payments by United States authorities on the extension
of credit by United States lending institutions, (3) a
commencement of war, armed hostilities or other
international or national calamity directly or
indirectly involving the United States, or (4) in the
case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration
or worsening thereof; or
(d) it shall have been publicly disclosed or
Purchaser shall have learned that any Person shall have
entered into a definitive agreement or an agreement in
principle with the Company with respect to a tender
-3-
<PAGE>
offer or exchange offer for any shares of capital stock
of the Company (including without limitation the shares
of Common Stock) or a merger, consolidation or other
business combination or any acquisition or disposition
of a material amount of assets or any comparable event
with or involving the Company (other than such of the
foregoing as is permitted by the Agreement); or
(e) any of the representations and warranties of
the Company in the Agreement shall not have been, or
shall cease to be, true and correct in all material
respects (whether because of circumstances or events
occurring in whole or in part prior to, on or after the
date of the Agreement), or the Company shall have not
performed in all material respects the covenants to be
performed by it pursuant to the Agreement; or
(f) the Agreement shall have been terminated by
the Company, on the one hand, or Parent and Purchaser,
on the other hand, in accordance with its terms or
Purchaser or Parent, on the one hand, and the Company,
on the other hand, shall have reached an agreement
providing for the termination of the Offer; or
(g) the Company's Board of Directors shall have
failed to recommend and approve, or shall no longer
recommend and approve, the Offer or the adoption of the
Merger Agreement, or shall materially modify or amend
its recommendation and approval with respect thereto,
or shall have resolved to do any of the foregoing
-4-
<PAGE>
(except that the foregoing shall not apply to a
modification or amendment solely in the reasons for
such recommendation and approval so long as the Board
of Directors of the Company continues to recommend and
approve acceptance of the Offer and adoption of the
Merger Agreement by holders of Voting Stock); or
(h) without limiting the generality or effect of
Paragraph (e) of this Section, except as disclosed to
Parent pursuant to the Agreement, there shall have been
any material adverse change in the business, financial
condition or results of operations of the Company and
its subsidiaries, taken as a whole;
which, in the sole judgment of Purchaser, in any such case
regardless of the circumstances (including any action or inaction
by Purchaser or any of its affiliates other than a material
breach by Purchaser or Parent of the Agreement) giving rise to
any such condition, makes it inadvisable to proceed with the
Offer or with such acceptance for payment or purchase of or
payment for any of the Shares.
The foregoing conditions (i) may be asserted by
Purchaser regardless of the circumstances (including any action
or inaction by Purchaser or any of its affiliates other than a
breach by Purchaser or Parent of the Agreement) giving rise to
such condition and (ii) other than the Minimum Share Condition,
are for the sole benefit of Purchaser and its affiliates. The
foregoing conditions, other than the Minimum Share Condition, may
be waived by Purchaser in whole or in part at any time and from
-5-
<PAGE>
time to time in its sole discretion. The failure by Purchaser at
any time to exercise any of the foregoing rights will not be
deemed a waiver of any other rights and each such right will be
deemed an ongoing right which may be asserted at any time and
from time to time.
-6-
<PAGE>
I. THE TENDER OFFER . . . . . . . . . . . . . . . . . . . . 1
----------------
1.1. The Offer . . . . . . . . . . . . . . . . . . 1
---------
1.2. Company Action . . . . . . . . . . . . . . . 4
--------------
1.3. Stockholder Lists . . . . . . . . . . . . . . 6
-----------------
1.4. Board of Directors of the Company . . . . . . 6
---------------------------------
II. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . 8
----------
2.1.1. Merger . . . . . . . . . . . . . 8
------
2.1.2. Effective Time . . . . . . . . . 8
--------------
2.1.3. Effect of Merger . . . . . . . . 9
----------------
2.1.4. Conversion of Shares of Common
------------------------------
Stock . . . . . . . . . . . . . . . . . . . . 9
-----
2.2. Stockholders' Meeting of the Company . . . . 11
------------------------------------
2.3. Consummation of the Merger . . . . . . . . . 11
--------------------------
2.4. Payment for Shares of Common Stock . . . . . 12
----------------------------------
2.5. Closing of the Company's Transfer Books . . . 14
---------------------------------------
2.6. The Company Stock Options and Related
-------------------------------------
Matters . . . . . . . . . . . . . . . . . . . . . . 14
-------
III. REPRESENTATIONS AND WARRANTIES OF PARENT AND
--------------------------------------------
PURCHASER . . . . . . . . . . . . . . . . . . . . . . . 15
---------
3.1. Corporate Organization . . . . . . . . . . . 15
----------------------
3.2. Authority . . . . . . . . . . . . . . . . . . 15
---------
3.3. Offer Documents . . . . . . . . . . . . . . . 16
---------------
3.4. Proxy Statement . . . . . . . . . . . . . . . 17
---------------
3.5. Fees . . . . . . . . . . . . . . . . . . . . 17
----
-7-
<PAGE>
3.6. Consents and Approvals; No Violation . . . . 17
------------------------------------
3.7. Financing . . . . . . . . . . . . . . . . . . 19
---------
3.8. Operations of the Company Following the
---------------------------------------
Merger . . . . . . . . . . . . . . . . . . . . . . 19
------
IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . 20
---------------------------------------------
4.1. Corporate Organization . . . . . . . . . . . 20
----------------------
4.2. Capitalization . . . . . . . . . . . . . . . 21
--------------
4.3. Authority . . . . . . . . . . . . . . . . . . 22
---------
4.4. Consents and Approvals; No Violation . . . . 23
------------------------------------
4.5. Commission Filings . . . . . . . . . . . . . 24
------------------
4.6. Absence of Certain Changes . . . . . . . . . 25
--------------------------
4.7. Litigation . . . . . . . . . . . . . . . . . 26
----------
4.8. Compliance with Applicable Laws . . . . . . . 27
-------------------------------
4.9. Fees . . . . . . . . . . . . . . . . . . . . 28
----
4.10. Offer Documents . . . . . . . . . . . . . . 28
---------------
4.11. Schedule 14D-9 . . . . . . . . . . . . . . . 28
--------------
4.12. Proxy Statement . . . . . . . . . . . . . . 29
---------------
4.13. Rights . . . . . . . . . . . . . . . . . . . 29
------
4.14. Certain Actions. . . . . . . . . . . . . . . 30
---------------
4.15. Subsidiaries . . . . . . . . . . . . . . . . 30
------------
4.16. No Default . . . . . . . . . . . . . . . . . 32
----------
4.17. Taxes . . . . . . . . . . . . . . . . . . . 32
-----
4.18. Insurance . . . . . . . . . . . . . . . . . 35
---------
4.19. Benefit Plans . . . . . . . . . . . . . . . 36
-------------
4.20. Labor Matters . . . . . . . . . . . . . . . 38
-------------
4.21. Certain Environmental Matters . . . . . . . 40
-----------------------------
-8-
<PAGE>
V. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 40
---------
5.1. Acquisition Proposals . . . . . . . . . . . . 40
---------------------
5.2. Interim Operations . . . . . . . . . . . . . 41
------------------
5.2.1. Conduct of Business . . . . . . . 41
-------------------
5.2.2. Certificate and By-Laws . . . . . 42
-----------------------
5.2.3. Capital Stock . . . . . . . . . . 42
-------------
5.2.4. Dividends . . . . . . . . . . . . 43
---------
5.2.5. Debt . . . . . . . . . . . . . . 43
----
5.3. Employee Plans, Compensation, Etc. . . . . . 44
----------------------------------
5.4. Access and Information . . . . . . . . . . . 46
----------------------
5.5. Certain Filings, Consents and Arrangements . 48
------------------------------------------
5.6. State Takeover Statutes . . . . . . . . . . . 48
-----------------------
5.7. Proxy Statement . . . . . . . . . . . . . . . 48
---------------
5.8. Indemnification and Insurance . . . . . . . . 49
-----------------------------
5.9. Additional Agreements . . . . . . . . . . . . 50
---------------------
5.10. Compliance with Antitrust Laws . . . . . . . 52
------------------------------
5.11. Publicity . . . . . . . . . . . . . . . . . 52
---------
5.12. Notice of Actions and Proceedings . . . . . 53
---------------------------------
5.13. Notification of Certain Other Matters . . . 53
-------------------------------------
5.14. Listing of Preferred Stock . . . . . . . . . 54
--------------------------
5.15. Certain Obligations of Parent . . . . . . . 54
-----------------------------
VI. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . 55
----------
6.1. Conditions . . . . . . . . . . . . . . . . . 55
----------
6.1.1. Stockholder Approval . . . . . . 55
--------------------
6.1.2. Purchase of Shares of Voting
----------------------------
Stock . . . . . . . . . . . . . . . . . . . . 55
-----
-9-
<PAGE>
6.1.3. Injunctions; Illegality . . . . . 55
-----------------------
6.1.4. HSR Act . . . . . . . . . . . . . 56
-------
6.2. Parent Obligations. . . . . . . . . . . . . . 56
------------------
VII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 57
-------------
7.1. Termination . . . . . . . . . . . . . . . . . 57
-----------
7.2. Non-Survival of Representations, Warranties
-------------------------------------------
and Agreements . . . . . . . . . . . . . . . . . . 60
--------------
7.3. Waiver and Amendment . . . . . . . . . . . . 60
--------------------
7.4. Entire Agreement . . . . . . . . . . . . . . 61
----------------
7.5. Applicable Law . . . . . . . . . . . . . . . 61
--------------
7.6. Interpretation . . . . . . . . . . . . . . . 61
--------------
7.7. Notices . . . . . . . . . . . . . . . . . . . 61
-------
7.8. Counterparts . . . . . . . . . . . . . . . . 63
------------
7.9. Parties in Interest; Assignment . . . . . . . 63
-------------------------------
7.10. Expenses; Termination Fee . . . . . . . . . 64
-------------------------
7.11. Obligation of Parent . . . . . . . . . . . . 64
--------------------
7.12. Enforcement of the Agreement . . . . . . . . 64
----------------------------
7.13. Severability . . . . . . . . . . . . . . . . 65
------------
7.14. Consent to Jurisdiction and Service of Process . 65
----------------------------------------------
-10-
Exhibit (c)(2)
GUARANTEE AGREEMENT
THIS GUARANTEE AGREEMENT, dated February 28, 1995, of
YPF Sociedad Anonima, a corporation (sociedad anonima) organized
and existing under the laws of the Republic of Argentina, with
principal executive offices located at Avenida Pte. R. Saenz Pena
777, 1364 Buenos Aires, Argentina (hereinafter called the
"Guarantor"), in favor of The Prudential Insurance Company of
America (hereinafter called "Prudential") and Prudential's
successors and assigns who are the registered owners of shares of
$9.75 Cumulative Convertible Preferred Stock (hereinafter called
the "Shares") of Maxus Energy Corporation, a corporation
organized and existing under the laws of the State of Delaware
(hereinafter called the "Company") acquired in compliance with
Section 3 of the 1995 Agreement hereinafter referred to
(Prudential and all such successors and assigns being hereinafter
sometimes collectively called the "Obligees").
RECITALS
On February 1, 1987 Prudential and the Company entered
into a Preferred Stock Purchase Agreement, dated February 1, 1987
(hereinafter called the "Original Stock Purchase Agreement")
providing for the issuance to Prudential of 3,000,000 of the
Shares. The Original Stock Purchase Agreement was subsequently
amended by agreements between the Company and Prudential dated
February 8, 1987 (hereinafter called the "First Amendment"), and
April 12, 1990 (hereinafter called the "Existing Second Stock
Purchase Agreement"), and pursuant to the Existing Second Stock
Purchase Agreement (a) the Company reacquired from Prudential
500,000 of the Shares, and (b) Prudential executed and delivered
a Waiver of Certain Equity Offering Rights dated as of April 12,
1990 and a Waiver of Certain Rights Relating to $9.75 Preferred
Stock dated June 5, 1990 (hereinafter collectively called the
"Waivers"). Prudential is currently the registered owner of all
the outstanding Shares.
In contemplation of certain Transactions (as said term
is defined in the 1995 Agreement hereinafter referred to),
including a cash tender offer by a wholly-owned subsidiary of the
Guarantor for shares of Common Stock of the Company (the "Tender
Offer") as a result of which the Company would become a
subsidiary of the Guarantor, the Company and Prudential are
entering into an agreement (the "1995 Agreement"), making
provision, among other things, with respect to (a) certain
consents and waivers by Prudential in connection with the
Transactions, (b) certain further amendments of the Original
Stock Purchase Agreement, as previously amended, (c) certain
amendments of the Existing Second Stock Purchase Agreement, (d)
consent to certain amendments of, or, at the request of the
Company, waivers with respect to, the Certificate of Designations
relating to the Shares, and (e) the termination of the
Registration Rights Agreement referred to in the Original Stock
Purchase Agreement. The Original Stock Purchase Agreement, as
amended as aforesaid (including by the 1995 Agreement), and as
the same may be further amended in accordance with the provisions
thereof and be in effect from time to time is hereinafter called
the "Stock
<PAGE>
Purchase Agreement"; the Existing Second Stock Purchase
Agreement, as amended by the 1995 Agreement, and as the same may
be further amended in accordance with the provisions thereof and
be in effect from time to time is hereinafter called the "Second
Stock Purchase Agreement"); and the Certificate of Designations
with respect to the Shares, as certain provisions thereof have
heretofore been waived and as amended as contemplated by the 1995
Agreement, and as the same may be further amended in accordance
with the terms thereof and be in effect from time to time, is
hereinafter called the "Certificate of Designations").
The 1995 Agreement provides that it is a condition to
the effectiveness of the consent and waivers of Prudential with
respect to the Transactions, and of the amendments of the
Original Stock Purchase Agreement and the Existing Stock Purchase
Agreement, and of the consent of Prudential to the amendments of,
or, at the request of the Company, waivers with respect to, the
Certificate of Designations, and of the termination of the
Registration Rights Agreement, therein provided for, that the
Guarantor execute and deliver to Prudential a guarantee agreement
substantially in the form hereof, and the Guarantor is willing to
give its guarantee of the Obligations (as hereinbelow defined) on
the terms and conditions hereinbelow set forth.
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
For and in consideration of the execution and delivery
by Prudential of the 1995 Agreement, and the taking by Prudential
of the actions specified therein to be taken by it, the Guarantor
does hereby covenant and agree, for the benefit of Prudential and
each of the other Obligees from time to time, as follows:
1. Guarantee. The Guarantor unconditionally and
---------
irrevocably guarantees to each Obligee the due and punctual
payment and performance of each and every obligation of the
Company to such Obligee (hereinafter collectively called the
"Obligations") under (a) the Stock Purchase Agreement, (b) the
Second Stock Purchase Agreement, and (c) the Certificate of
Designations (the instruments referred to in the foregoing
clauses (a), (b) and (c) being sometimes hereinafter called the
"Guaranteed Instruments"), in each case (as to monetary
Obligations) when and as the same shall become due and payable
(without regard, in the case of dividend and redemption payments
on the Shares, to whether the Company shall have funds legally
available therefor, the Board of Directors of the Company shall
have taken any action with respect thereto, or the Company shall
otherwise be under any legal disability in respect of making such
payments), or (as to non-monetary Obligations) when performance
thereof shall be due, in accordance with the terms of the Stock
Purchase Agreement, the Second Stock Purchase Agreement or the
Certificate of Designations, as the case may be. In the case of
the failure of the Company punctually to make any such payment or
to render any such performance, the Guarantor hereby
unconditionally agrees to cause any such payment to be made or
performance to be rendered, as the case may be, punctually when
and as the same shall become due, all as if such payment or
performance were made or rendered by the Company.
2. Certain Waivers; Unconditionality. The Guarantor
---------------------------------
waives (to the extent permitted by applicable law) notice of
acceptance of the guaranties set forth herein, of any
2
<PAGE>
action taken or omitted in reliance hereon or of any default in
the payment or in the performance of any Obligations guaranteed
hereby.
The Guarantor hereby agrees that its obligations under
this Agreement (in respect of monetary Obligations) constitute a
present and continuing guarantee of payment and not of
collectibility, and that its obligations hereunder with respect
to payment and performance of the Obligations shall be absolute
and unconditional, and to the extent permitted by applicable law,
shall not be subject to any counterclaim, setoff, deduction or
defense based upon any claim the Guarantor may have against the
Company, any Obligee or any other person, and shall remain in
full force and effect without regard to, and shall not be
released, discharged or in any way affected or impaired by any
thing, event, happening, matter, circumstance or condition
whatsoever (whether or not the Guarantor shall have any knowledge
or notice thereof or consent thereto), including, without
limitation: (a) any amendment or modification of or supplement to
any provision of this Agreement or any of the Guaranteed
Instruments, or any assignment or transfer thereof or of any
Shares to another Obligee, including, without limitation, any
renewal or extension of the terms of payment of any monetary
Obligation or the granting of time in respect of any payment
thereof, or any furnishing or acceptance of security or any
release of any security so furnished or accepted for any such
Obligation; (b) any waiver, consent, extension, granting of time,
forbearance, indulgence or other action or inaction under or in
respect of this Agreement or any of the Guaranteed Instruments,
or any exercise or nonexercise of any right, remedy or power in
respect hereof or thereof; (c) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition,
liquidation or similar proceedings with respect to the Company,
or any other person, or the properties or creditors of any of
them; (d) any invalidity or any unenforceability of, or any
misrepresentation, irregularity or other defect in, this
Agreement or any of the Guaranteed Instruments or any other
agreement; (e) any transfer of any assets to or from the Company,
including, without limitation, any transfer or purported transfer
to the Company from any person, any invalidity, illegality of, or
inability to enforce, any such transfer or purported transfer,
any consolidation or merger of the Company with or into any other
corporation or entity, or any change whatsoever in the objects,
capital structure, constitution or business of the Company; (f)
any failure on the part of the Company or any other person to
perform or comply with any term of any of the Guaranteed
Instruments, this Agreement or any other agreement; (g) any suit
or other action brought by any stockholders or creditors of, or
by, the Guarantor or the Company or any other person for any
reason whatsoever, including, without limitation, any suit or
action in any way attacking or involving any issue, manner or
thing in respect of this Agreement, any of the Guaranteed
Instruments or any other agreement; (h) any lack or limitation of
status or of power, incapacity or disability of the Guarantor,
the Company or of any director or agent of either of them; (i)
there not being funds legally available to the Company on any
Quarterly Dividend Payment Date (as defined in the Certificate of
Designations) for the payment on such date of a dividend on the
Shares, or on any February 1 for the making on such date of any
redemption payment in respect of the Shares as required by
Section 5(b) of the Certificate of Designations; (j) the Board of
Directors of the Company not having taken any action with respect
thereto; or (k) any other thing, event, happening, matter,
circumstance or condition whatsoever, not in any way limited to
the foregoing.
3. Subrogation; Limitations Thereon. The Guarantor
--------------------------------
hereby agrees that if it shall make any payment or render any
performance in respect of any Obligation, it shall,
3
<PAGE>
to the extent permitted by applicable law, be subrogated to the
rights of the Obligee to which such payment was made or
performance rendered; provided, however, that such rights of
-------- -------
subrogation and all indebtedness and claims arising therefrom
shall be, and the Guarantor agrees that it is, and shall at all
times be, in all respects subordinate and junior to the prior
payment in full, in cash, of all monetary Obligations which shall
have become due in respect of which payment was not made and the
prior performance in full of all non-monetary Obligations which
shall have become due in respect of which performance not
rendered. The Guarantor agrees that the foregoing right of
subrogation shall not be effective until, and that it shall not
be entitled to receive any payment, under any condition, in
respect of any such subrogated claim unless and until, all
Obligations the payment or performance of which shall have become
due shall have been paid in full in cash or funds for their
payment shall have been duly and sufficiently provided, or such
performance shall have been duly and fully rendered, as the case
may be.
4. Further Waivers; Reinstatement; Expenses. The
----------------------------------------
Guarantor waives any right it may have to require any Obligee to
proceed against the Company or against any other party prior to
making any claim under this Agreement. The Guarantor agrees that
its guaranties herein contained shall be automatically reinstated
if and to the extent that for any reason any payment by or on
behalf of the Company or the Guarantor is rescinded or must be
otherwise restored by any Obligee, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.
Without limiting the generality of the foregoing, if
the Obligees are prevented by applicable law from exercising
remedies otherwise available to them in respect of any Guaranteed
Instrument, to the fullest extent permitted by applicable law the
Obligees shall be entitled to receive hereunder from the
Guarantor, upon demand therefor, the payment or performance which
would have otherwise been due had such remedies been exercised.
The Guarantor shall pay each Obligee such further
amounts as shall be sufficient to cover the reasonable costs and
expenses of collecting any sums due under this Agreement or any
of the Guaranteed Instruments, or of otherwise enforcing the
same, including, in any case, reasonable compensation to its
attorneys for all services rendered in that connection.
5. Representations and Warranties. The Guarantor
------------------------------
represents and warrants that (a) it is a sociedad anonima
(corporation) duly existing and incorporated in the City of
Buenos Aires, Argentina, with a term of duration expiring on June
15, 2093, and registered with the Public Registry of Commerce on
June 15, 1993 under number 5109, Book 13, Volume A of Local By-
Laws; (b) it has all requisite corporate power to execute,
deliver and perform its obligations under this Agreement and,
when executed and delivered, this Agreement will constitute its
valid and binding obligation under the laws of Argentina, to the
extent applicable hereto, enforceable in accordance with its
terms , except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other similar laws affecting the
rights of creditors generally; and (c) such execution, delivery
and performance do not require any consent or approval of any
governmental authority of or in Argentina, except such as has
been obtained and is valid and sufficient for its purpose, and do
not constitute a breach or violation of, or a default under, any
provision of (i) its organic documents, (ii) any law, rule,
regulation or decree, or any order, writ or judgment, of any
4
<PAGE>
court or governmental authority of or in Argentina binding upon
it, or to which it is subject, or (iii) any agreement, or other
instrument to which it is a party, or to which it or its
properties are subject.
6. Consent to Jurisdiction and Service of Process.
----------------------------------------------
(a) The Guarantor consents to the non-exclusive jurisdiction of
any court of the State of New York or any United States federal
court sitting in the Borough of Manhattan, New York City, New
York, United States, and any appellate court from any thereof,
and waives any immunity from the jurisdiction of such courts over
any suit, action or proceeding that may be brought in connection
with this Agreement. The Guarantor irrevocably waives, to the
fullest extent permitted by law, any objection to any suit,
action, or proceeding that may be brought in connection with this
Agreement in such courts whether on the grounds of venue,
residence or domicile or on the ground that any such suit, action
or proceeding has been brought in an inconvenient forum. The
Guarantor agrees that final judgment in any such suit, action or
proceeding brought in such court shall be conclusive and binding
upon the Guarantor and may be enforced in any court to the
jurisdiction of which the Guarantor is subject by suit upon such
judgment; provided that service of process is effected upon the
--------
Guarantor in the manner provided in this Agreement.
Notwithstanding the foregoing, any suit, action or proceeding
brought in connection with this Agreement may be instituted in
any competent court in Argentina.
(b) The Guarantor agrees that service of all
writs, process and summonses in any suit, action or proceeding
brought in connection with this Agreement against the Guarantor
in any court sitting in the Borough of Manhattan, New York City
may be made upon CT Corporation System at 1633 Broadway, New
York, New York 10019, whom the Guarantor irrevocably appoints as
its authorized agent for service of process. The Guarantor
represents and warrants that CT Corporation System has agreed to
act as the Guarantor's agent for service of process. The
Guarantor agrees that such appointment shall be irrevocable so
long as this Agreement shall remain in effect or until the
irrevocable appointment by the Guarantor of a successor in The
City of New York as its authorized agent for such purpose and the
acceptance of such appointment by such successor. The Guarantor
further agrees to take any and all action, including the filing
of any and all documents and instruments, that may be necessary
to continue such appointment in full force and effect as
aforesaid. If CT Corporation System shall cease to be the
Guarantor's agent for service of process, the Guarantor shall
appoint without delay another such agent and provide prompt
written notice to the Obligees, to the extent known to it, of
such appointment. With respect to any such action in any court
of the State of New York or any United States federal court in
the Borough of Manhattan, New York City, service of process upon
CT Corporation System, as the authorized agent of the Guarantor
for service of process, and written notice of such service to the
Guarantor, shall be deemed, in every respect, effective service
of process upon the Guarantor.
(c) Nothing in this paragraph 6 shall affect the
right of any party to serve legal process in any other manner
permitted by law or affect the right of any party to bring any
action or proceeding against any other party or its property in
the courts of other jurisdictions.
5
<PAGE>
7. Payments of Additional Amounts. All payments in
------------------------------
respect of this Agreement, including, without limitation,
payments of dividend amounts and redemption amounts, shall be
made by the Guarantor without withholding or deduction for or on
account of any present or future taxes, duties, levies, or other
governmental charges of whatever nature in effect on the date of
this Agreement or imposed or established in the future by or on
behalf of Argentina or any authority in Argentina. In the event
any such taxes or liabilities are so imposed or established, the
Guarantor shall pay such additional amounts as may be necessary
in order that the net amounts receivable by the Obligees after
any withholding or deduction in respect of such tax or liability
shall equal the amounts that would have been receivable in
respect of this Agreement in the absence of such withholding or
deduction; except that no such additional amounts will be payable
with respect to any withholding or deduction on any security to,
or to a third party on behalf of, an Obligee for or on account of
any such taxes or liabilities that have been imposed by reason of
the Obligee being a resident of Argentina or having some
connection with Argentina other than the mere holding of the
Shares or the receipt of dividend payments in respect thereof.
Furthermore, no additional amounts shall be paid with respect to
any payment under this Agreement to an Obligee that is a
fiduciary or partnership or other than the sole beneficial owner
of such payment to the extent that a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or
beneficial owner would not have been entitled to receive the
additional amounts had such beneficiary, settlor, member or
beneficial owner been the Obligee.
8. Governing Law. This Agreement is being delivered
-------------
and is intended to be performed in the State of New York, and
shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of such
State.
9. Effectiveness. This Agreement shall take effect
-------------
upon (and concurrently with) the merger into the Company of the
wholly-owned subsidiary of the Guarantor which shall have
acquired shares of the Common Stock of the Company in the Tender
Offer.
10. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties contained herein or made in
writing by the Guarantor or Prudential in connection herewith
shall survive the execution and delivery of this Agreement and
any disposition of the Shares.
11. Successors and Assigns. All covenants and
----------------------
agreements in this Agreement contained shall bind and inure to
the benefit of (a) the Guarantor and its successors and assigns
and (b) the Obligees. This Agreement shall not be assignable, in
whole or in part by any Obligee, except to another Obligee,
without the prior written consent of the Guarantor.
12. Notices. All communications provided for
-------
hereunder shall be sent by first class mail and (a) if to
Prudential, addressed to it in care of Prudential Capital Group,
1201 Elm Street, Suite 4900, Dallas, Texas 75270, Attention:
Managing Director, or to such other address as it may have
designated to the Guarantor and the Company in writing, (b) if to
any other Obligee, addressed to such Obligee at the address of
such Obligee in the stock record books of the Company, (c) if to
the Guarantor, at its address set forth in the prefatory
paragraph of this Agreement, Attention: President, or to such
other address as it shall have designated to the Obligees in
writing, and (d) if to the Company, addressed to it at: 717 North
Harwood Street, Dallas, Texas 75201, Attention: Secretary, or to
such other address or
6
<PAGE>
addresses as the Company may have designated in writing to you
and each other holder of any of the Shares at the time
outstanding.
13. Descriptive Headings. The descriptive headings of
--------------------
the several paragraphs of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
14. Acknowledgment; Counterparts. By its execution of
----------------------------
the acknowledgment set forth at the foot hereof Prudential
acknowledges the execution and delivery to it of this Agreement
as provided in the 1995 Agreement, and confirms the effectiveness
of all consents and waivers contained in such agreement
effectiveness of which is conditioned upon such execution and
delivery. This Agreement and the acknowledgment hereof may be
executed in two or more counterparts, each of which shall be
deemed an original, and it shall not be necessary in making proof
of this Agreement to produce or account for more than one such
counterpart.
IN WITNESS WHEREOF, the Guarantor has caused this
Agreement to be executed by its officer thereunto duly
authorized, all as of the day and year first above written.
YPF SOCIEDAD ANONIMA
By:
--------------------------
Name:
Title:
Execution and delivery hereof
by the Guarantor acknowledged,
and effectiveness of certain provisions
of the 1995 Agreement confirmed,
as set forth in Section 14 above,
as of the day and year first above written:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By
------------------------
Name:
Title:
7
Exhibit (c)(3)
MAXUS ENERGY CORPORATION
717 North Harwood Street
Dallas, Texas 75201
February 28, 1995
The Prudential Insurance Company
of America
Three Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Gentlemen:
On February 1, 1987, the undersigned, MAXUS ENERGY
CORPORATION (the "Company"), a Delaware corporation, and you
entered into a Preferred Stock Purchase Agreement, dated February
1, 1987 (the "Original Stock Purchase Agreement"), providing for
the issuance to you of 3,000,000 shares of $9.75 Cumulative
Convertible Preferred Stock of the Company (the "Shares"). The
Original Stock Purchase Agreement was subsequently amended by
agreements between the undersigned and you dated February 8, 1987
(the "First Amendment"), and April 12, 1990 (the "Second Stock
Purchase Agreement"), and pursuant to the Second Stock Purchase
Agreement (a) the Company reacquired from you 500,000 of the
Shares, and (b) you executed and delivered a Waiver of Certain
Equity Offering Rights dated as of April 12, 1990 and a Waiver of
Certain Rights Relating to $9.75 Preferred Stock dated June 5,
1990 (collectively the "Waivers"), relating to certain provisions
of the Certificate of Designations, the Registration Rights
Agreement and the Company's Preferred Stock Purchase Rights Plan.
The Original Stock Purchase Agreement, as amended as aforesaid,
is herein called the "Stock Purchase Agreement," and except as
otherwise expressly provided herein, all capitalized terms used
herein and defined in the Stock Purchase Agreement or the Second
Stock Purchase Agreement, as the case may be, are used herein as
so defined.
The undersigned has advised you that it contemplates
entering into the Transactions, including a cash tender offer by
a wholly-owned subsidiary of Gaucho for shares of the Common
Stock of the Company (the "Tender Offer"), as a result of which
the Company would become a subsidiary of Gaucho, and in
connection therewith has obtained the agreement of Gaucho,
effective upon the merger into the Company of such wholly-owned
subsidiary of Gaucho, to guarantee the Company's obligations
under the Certificate of Designations, the Stock Purchase
Agreement and the Second Stock Purchase Agreement (each as
heretofore and hereby amended or to be amended or certain
provisions thereof heretofore and hereby waived or to be waived,
as the case may be), such guarantee to be substantially in the
form annexed hereto as Exhibit A (the "Gaucho Guarantee"). In
consideration of the execution and delivery to you of the Gaucho
Guarantee, you have agreed to consent to the Transactions and
waive all provisions of applicable agreements and other
instruments necessary in connection therewith, effective upon the
execution and delivery of
<PAGE>
this Agreement and the execution and delivery to you of the
Gaucho Guarantee, and to further amendments of or, with respect
to the Certificate of Designations, amendments or permanent
waivers of (and, in anticipation of the effectiveness of such
amendments and/or permanent waivers, temporary waivers of certain
provisions of) the Stock Purchase Agreement, the Second Stock
Purchase Agreement and the Certificate of Designations, a waiver
of certain rights under the Company's Preferred Stock Purchase
Rights Plan, and termination of the Registration Rights
Agreement, such amendments and/or permanent waivers and
termination to become effective upon the merger into the Company
of the wholly-owned subsidiary of Gaucho, and such temporary
waivers to become effective immediately, all as more fully
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and
of the mutual covenants and agreements herein contained, the
Company and you agree as follows:
1. Consent to Transactions. Notwithstanding any
-----------------------
provisions of the Certificate of Designations, the Stock Purchase
Agreement, the Second Stock Purchase Agreement, the Registration
Rights Agreement, or of any other agreement or instrument which
would prohibit, restrict, impose conditions upon, or otherwise
adversely affect, the Company's consummation of all or any
portion of the Transactions, or pursuant to which you do or may
have the right to consent to or impose conditions upon the
Company's consummation of all or any portion of the Transactions,
you do hereby unconditionally and irrevocably waive your rights
under any such provisions (including, without limitation, Section
3(b) of the Certificate of Designations) and any appraisal rights
in connection with the Transactions, and grant your unqualified,
unconditional and irrevocable consent to the Company's
consummation of the Transactions, such waiver and consent to
become and be effective upon execution and delivery of this
Agreement and the execution and delivery to you of the Gaucho
Guarantee.
2. Amendments, etc.
---------------
2A. Amendments of Stock Purchase Agreement. You and
--------------------------------------
the Company agree that, effective upon the effectiveness of the
Gaucho Guarantee, the Stock Purchase Agreement shall be amended
to delete therefrom paragraphs 5F, 5H, 7A, 7B, 7C and 7D thereof.
2B. Amendments of Second Stock Purchase Agreement.
---------------------------------------------
You and the Company agree that, effective upon the effectiveness
of the Gaucho Guarantee, the Second Stock Purchase Agreement
shall be amended
(a) to delete therefrom paragraphs 5A, 5B, 5C(b),
5D(a) and 5D(b) thereof; and
(b) to delete therefrom paragraphs 7A, 7B and 7C
thereof.
2C. Amendment or Waiver of Certificate of
-------------------------------------
Designations; Certain Waivers. Without limitation of paragraph
-----------------------------
1, Prudential and the Company hereby agree effective upon the
effectiveness of the Gaucho Guarantee, to the amendment of the
Certificate of Designations with respect to all outstanding
Shares to delete therefrom Section 2(b), Section
2
<PAGE>
3(b), Section 5(a) , Section 5(c), Section 8 and Section 9
thereof, and all defined terms, if any, used only in one or more
of such deleted Sections, and to effect any other modifications
thereof (including but not limited to deletion of cross-
references to deleted provisions) necessary or appropriate to
give effect to the aforementioned amendments. Alternatively, in
lieu of such amendments, if the Company shall so request, you and
the Company shall execute and deliver unconditional, irrevocable
and permanent waivers (i) in the case of such waivers to be
executed and delivered by you, of any and all rights of the
holders of Shares under Section 2(b), Section 3(b), Section 8 and
Section 9 of the Certificate of Designations, (ii) in the case of
such waivers to be executed and delivered by the Company, of any
and all rights of the Company under Section 5(a) and Section 5(c)
of the Certificate of Designations, and (iii) in the case of such
waivers to be executed and delivered by you and the Company, of
any other provisions of the Certificate of Designations necessary
to give effect to the intent of the foregoing waivers, all such
waivers specified in clauses (i), (ii) and (iii) of this sentence
to be effective upon the effectiveness of the Gaucho Guarantee.
In furtherance thereof, effective upon the execution and delivery
hereof and execution and delivery to you of the Gaucho Guarantee,
you agree that until such amendment of, or permanent waivers with
respect to, the Certificate of Designations shall become
effective (but subject to the following proviso) you will take no
action to exercise, and do hereby unconditionally and irrevocably
waive, any right to receive increased dividends pursuant to said
Section 2(b), or to convert any Shares into Common Stock of the
Company pursuant to said Section 8; and (subject to the following
proviso) without limitation as to time you unconditionally and
irrevocably waive any rights attributable to the Convertible
Shares you would otherwise have with respect to Rights granted
under the Company's Preferred Stock Purchase Rights Plan,
including the right to receive any redemption payment with
respect thereto (you having previously and effectively waived
such rights with respect to the Conversion Waiver Shares under
date of June 5, 1990); provided, however, that the waivers in
this sentence shall become null and void and of no force or
effect, ab initio and as if the same had never been granted, if
the Transactions shall not have been consummated and said
amendment of, or waivers with respect to, the Certificate of
Designations shall not have become effective, on or before June
30, 1995.
2D. Termination of Registration Rights Agreement. You
--------------------------------------------
and the Company agree that, effective upon the effectiveness of
the Gaucho Guarantee, the Registration Rights Agreement shall be
terminated and be of no further force or effect, and agree that,
effective upon the execution and delivery hereof and until such
termination shall become effective (but subject to the following
proviso), you will take no action to exercise, and do hereby
unconditionally and irrevocably waive, any right to obtain
registration of any Registrable Securities (as defined in the
Registration Rights Agreement) pursuant thereto; provided,
however, that the waiver in this paragraph 2D shall become null
and void and of no force or effect, ab initio and as if the same
had never been granted, if the Transactions shall not have been
consummated and such termination shall not have become effective,
on or before June 30, 1995.
3. Representations and Agreements of the Holder. You
--------------------------------------------
represent and warrant that this Agreement has been duly
authorized, executed and delivered by you, the performance hereof
is within your corporate powers and this Agreement constitutes
your valid and binding obligation, enforceable in accordance with
its terms.
3
<PAGE>
You hereby agree that if you shall sell, transfer or
otherwise dispose of any Shares, any transferee, as a condition
of the transfer shall, by written agreement satisfactory to the
Company and its counsel delivered to the Company at least five
business days prior to the proposed effective date of such
transfer, expressly assume all of your obligations, waivers,
duties and covenants under the Stock Purchase Agreement, the
Second Stock Purchase Agreement and this Agreement (as each may
have been amended or modified, or any provisions thereof waived,
and shall at such time be in effect), including without
limitation your obligations under this paragraph 3, as to the
Shares to be so transferred.
Concurrently with the execution and delivery hereof,
the certificates currently evidencing the Conversion Waiver
Shares and the Convertible Shares are being surrendered against
delivery to you of one or more certificates evidencing a like
aggregate number of Shares which shall not contain the legends
provided for in paragraph 7A of the Second Stock Purchase
Agreement but which, in addition to any other legend placed upon
such certificate(s), shall bear a legend to the following effect:
"The securities represented by this certificate are
subject to certain provisions of an agreement, dated
April 12, 1990, and the provisions of an agreement,
dated February 28, 1995, each between the Corporation
and The Prudential Insurance Company of America, the
terms of which require the holder hereof to execute
certain unconditional and irrevocable waivers of
certain rights of the holder, including without
limitation the right to convert these securities into
Common Stock of the Corporation, to receive increased
dividends in certain circumstances and to vote in
respect of certain matters, and, under certain
circumstances, to consent to amendments of, or, at the
request of the Company, waivers with respect to, the
Certificate of Designations and amendments of certain
agreements to which the Corporation is a party. Copies
of such agreements are on file at the principal
executive offices of the Corporation."
If the Gaucho Guarantee, and the amendments and waivers of
various instruments provided in paragraphs 2A, 2B and 2C hereof,
shall not have become effective, on or before June 30, 1995, on
the next succeeding business day the Company shall deliver to
you, against delivery to it of the certificates evidencing the
Shares issued as provided hereinabove in this paragraph 3,
replacement certificates for a like aggregate number of Shares
bearing the legends required by the Second Stock Purchase
Agreement (disregarding the amendments thereof provided in said
paragraph 2B hereof). You represent and warrant that you are as
of the date hereof the sole record and beneficial owner of
1,250,000 Shares (of which 375,000 Shares are Conversion Waiver
Shares and 875,000 Shares are Convertible Shares).
4. Effect of Amendments. If any provision of the
--------------------
Waivers shall be inconsistent with any provision hereof, or of
the Stock Purchase Agreement or the Second Stock Purchase
Agreement as amended hereby, the provisions of this Agreement, or
the Stock Purchase Agreement or the Second Stock Purchase
Agreement (as so amended), as the case may be, shall govern. As
amended hereby, the Stock Purchase Agreement and the Second Stock
Purchase Agreement, and (subject to the preceding sentence) the
Waivers, shall be and remain in full force and effect.
4
<PAGE>
5. Definitions. In addition to the definitions
-----------
contained and referred to in the preamble of this Agreement, for
the purpose of this Agreement the following terms shall have the
meanings specified with respect thereto below:
"Gaucho" shall mean YPF Sociedad Anonima, a corporation
------
(sociedad anonima) organized and existing under the
laws of the Republic of Argentina.
"Transactions" shall mean and include a tender offer
------------
for the Company's Common Stock as a result of which, if
successful, the Company will become a subsidiary of
Gaucho, the subsequent merger of Gaucho's wholly-owned
subsidiary that is the holder of a majority of the
outstanding shares of common stock of the Company into
the Company, and the incurrence of not in excess of
$600,000,000 aggregate principal amount of indebtedness
by the Company and/or its subsidiaries, a portion of
which may be secured by liens upon the Common Stock of
the Company acquired in such tender offer and/or upon
assets of the Company's and/or its subsidiaries, and
certain related transactions (including the repayment
and making of loans and advances, and/or payment of
dividends) among the Company and its subsidiaries.
6. Miscellaneous.
-------------
6A. Restructuring Fee. The Company agrees to pay you
-----------------
a restructuring fee of $250,000 upon the effectiveness of the
Gaucho Guarantee. The obligation of the Company under this
paragraph 6A shall survive the transfer or redemption of any
Shares.
6B. Consent to Amendments. This Agreement may be
---------------------
amended with the consent of the Company and the Company may take
any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have
obtained the written consent to such amendment, action or
omission to act of the holder or holders of not less than 66-2/3%
of the Shares at the time outstanding and each holder of the
Shares at the time or thereafter outstanding shall be bound by
any consent authorized by this paragraph 6B. The Company shall
promptly send copies of any amendment, consent or waiver (and any
request for any such amendment, consent or waiver) relating to
this Agreement to you and each other Institutional Holder then
holding any of the Shares and, to the extent practicable, shall
consult with you and each other Institutional Holder then holding
any of the Shares in connection with each such amendment, consent
and waiver. No course of dealing between the Company and the
holder of any Shares nor any delay in exercising any rights
hereunder shall operate as a waiver of any rights of any holder
of such Shares.
6C. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties contained herein or made in
writing by the Company or you in connection herewith shall
survive the execution and delivery of this Agreement and any
disposition of the Shares.
6D. Successors and Assigns. All covenants and
----------------------
agreements in this Agreement contained by or on behalf of either
of the parties hereto shall bind and inure to the benefit of the
Company and its successors and assigns and you and your
successors and assigns to the
5
<PAGE>
extent they are the registered owners of Shares acquired in
compliance with Section 3 of this Agreement.
6E. Notices. All communications provided for
-------
hereunder shall be sent by first class mail and (a) if to you,
addressed to you at the address set forth by you for such
communications on Schedule I hereto, or to such other address as
you may have designated to the Company in writing, (b) if to any
other holder of Shares, addressed to such holder at the address
of such holder in the stock record books of the Company, and (c)
if to the Company, addressed to it at: 717 North Harwood Street,
Dallas, Texas 75201, Attention: Secretary, or to such other
---------
address or addresses as the Company may have designated in
writing to you and each other holder of any of the Shares at the
time outstanding.
6F. Descriptive Headings. The descriptive headings of
--------------------
the several paragraphs of this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
6G. Governing Law. This Agreement is being delivered
-------------
and is intended to be performed in the State of Delaware, and
shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of such
state.
6H. Counterparts. This Agreement may be executed in
------------
two or more counterparts, each of which shall be deemed an
original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such
counterpart.
If you are in agreement with the foregoing, please sign
the form of acceptance on the enclosed counterpart of this letter
and return the same to the undersigned, whereupon this letter
shall become a binding agreement between you and the undersigned.
Very truly yours,
MAXUS ENERGY CORPORATION
By:
---------------------------
Title:
The foregoing Agreement is
hereby accepted as of the date
first above written:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
6
<PAGE>
By:
------------------------
Name:
Title:
7
Exhibit (c)(4)
AGREEMENT REGARDING EXPENSES
THIS AGREEMENT, dated February 28, 1995, of YPF
Sociedad Anonima, a corporation (sociedad anonima) organized and
existing under the laws of the Republic of Argentina, with
principal executive offices located at Avenida Pte. R. Saenz Pena
777, 1364 Buenos Aires, Argentina (hereinafter called "YPF"), in
favor of The Prudential Insurance Company of America (hereinafter
called "Prudential") and Prudential's successors and assigns who
are the registered owners of shares of $9.75 Cumulative
Convertible Preferred Stock (hereinafter called the "Shares") of
Maxus Energy Corporation, a corporation organized and existing
under the laws of the State of Delaware (hereinafter called the
"Company") acquired in compliance with Section 3 of the 1995
Agreement hereinafter referred to (Prudential and all such
successors and assigns being hereinafter sometimes collectively
called the "Obligees").
In contemplation of certain Transactions (as said term
is defined in the 1995 Agreement hereinafter referred to),
including a cash tender offer by a wholly-owned subsidiary of YPF
for shares of Common Stock of the Company as a result of which
the Company would become a subsidiary of YPF, the Company and
Prudential are entering into an agreement of even date herewith
(the "1995 Agreement," all capitalized terms used herein without
definition being used herein as the same are defined in the 1995
Agreement). In connection therewith Prudential has requested,
among other things, that YPF make provision with respect to
certain expenses of Prudential, and YPF is willing to do so, all
on the terms and conditions hereinafter set forth.
NOW, THEREFORE, this Agreement
W I T N E S S E T H:
For and in consideration of the execution and delivery
by Prudential of the 1995 Agreement, and the taking by Prudential
of the actions specified therein to be taken by it, YPF does
hereby covenant and agree, for the benefit of Prudential and each
of the other Obligees from time to time, as follows:
1. Expenses. YPF agrees, whether or not the
---------
Transactions contemplated by the 1995 Agreement shall be
consummated, to pay, and save the Obligees harmless against
liability for the payment of, all reasonable out-of-pocket
expenses arising in connection with the 1995 Agreement, and the
Transactions contemplated thereby, including without limitation,
all such expenses incurred with respect to the enforcement of any
provision of any agreement or instrument, any amendments or
waivers (whether or not the same become effective) under or in
respect of any such agreement or instrument, and all reasonable
expenses incurred in connection with the preparation of such
agreements and instruments which may be payable in respect of the
execution and delivery of such agreements or instruments, and the
reasonable fees and expenses of special counsel and all local
counsel retained in connection with such agreements and
instruments, and the Transactions contemplated by the 1995
Agreement, including the enforcement of any provision thereof,
and any such amendments or waivers, including without limitation
costs and expenses incurred in any bankruptcy case. The
obligations of YPF under this paragraph 1 shall survive the
transfer or redemption of any Shares.
<PAGE>
2. Consent to Jurisdiction and Service of Process.
----------------------------------------------
(a) YPF consents to the non-exclusive jurisdiction of any court
of the State of New York or any United States federal court
sitting in the Borough of Manhattan, New York City, New York,
United States, and any appellate court from any thereof, and
waives any immunity from the jurisdiction of such courts over any
suit, action or proceeding that may be brought in connection with
this Agreement. YPF irrevocably waives, to the fullest extent
permitted by law, any objection to any suit, action, or
proceeding that may be brought in connection with this Agreement
in such courts whether on the grounds of venue, residence or
domicile or on the ground that any such suit, action or
proceeding has been brought in an inconvenient forum. YPF agrees
that final judgment in any such suit, action or proceeding
brought in such court shall be conclusive and binding upon YPF
and may be enforced in any court to the jurisdiction of which YPF
is subject by suit upon such judgment; provided that service of
--------
process is effected upon YPF in the manner provided in this
Agreement. Notwithstanding the foregoing, any suit, action or
proceeding brought in connection with this Agreement may be
instituted in any competent court in Argentina.
(b) YPF agrees that service of all writs, process
and summonses in any suit, action or proceeding brought in
connection with this Agreement against YPF in any court sitting
in the Borough of Manhattan, New York City may be made upon CT
Corporation System at 1633 Broadway, New York, New York 10019,
whom YPF irrevocably appoints as its authorized agent for service
of process. YPF represents and warrants that CT Corporation
System has agreed to act as YPF's agent for service of process.
YPF agrees that such appointment shall be irrevocable so long as
this Agreement shall remain in effect or until the irrevocable
appointment by YPF of a successor in The City of New York as its
authorized agent for such purpose and the acceptance of such
appointment by such successor. YPF further agrees to take any
and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment
in full force and effect as aforesaid. If CT Corporation System
shall cease to be YPF's agent for service of process, YPF shall
appoint without delay another such agent and provide prompt
written notice to the Obligees, to the extent known to it, of
such appointment. With respect to any such action in any court
of the State of New York or any United States federal court in
the Borough of Manhattan, New York City, service of process upon
CT Corporation System, as the authorized agent of YPF for service
of process, and written notice of such service to YPF, shall be
deemed, in every respect, effective service of process upon YPF.
(c) Nothing in this paragraph 2 shall affect the
right of any party to serve legal process in any other manner
permitted by law or affect the right of any party to bring any
action or proceeding against any other party or its property in
the courts of other jurisdictions.
3. Payments of Additional Amounts. All payments in
------------------------------
respect of this Agreement shall be made by YPF without
withholding or deduction for or on account of any present or
future taxes, duties, levies, or other governmental charges of
whatever nature in effect on the date of this Agreement or
imposed or established in the future by or on behalf of Argentina
or any authority in Argentina. In the event any such taxes or
liabilities are so imposed or established, YPF shall pay such
additional amounts as may be necessary in order that the net
amounts receivable by the Obligees after any withholding or
deduction in respect
2
<PAGE>
of such tax or liability shall equal the amounts that would have
been receivable in respect of this Agreement in the absence of
such withholding or deduction; except that no such additional
amounts will be payable with respect to any withholding or
deduction on any security to, or to a third party on behalf of,
an Obligee for or on account of any such taxes or liabilities
that have been imposed by reason of the Obligee being a resident
of Argentina or having some connection with Argentina other than
the mere holding of the Shares or the receipt of payments
hereunder. Furthermore, no additional amounts shall be paid with
respect to any payment under this Agreement to an Obligee that is
a fiduciary or partnership or other than the sole beneficial
owner of such payment to the extent that a beneficiary or settlor
with respect to such fiduciary or a member of such partnership or
beneficial owner would not have been entitled to receive the
additional amounts had such beneficiary, settlor, member or
beneficial owner been the Obligee.
4. Governing Law. This Agreement is being delivered
-------------
and is intended to be performed in the State of New York, and
shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of such
State.
5. Effectiveness. This Agreement shall take effect
-------------
upon (and concurrently with) the execution and delivery by the
Company and Prudential of the 1995 Agreement.
6. Successors and Assigns. All covenants and
----------------------
agreements in this Agreement contained shall bind and inure to
the benefit of (a) YPF and its successors and assigns and (b) the
Obligees. This Agreement shall not be assignable, in whole or in
part by any Obligee, except to another Obligee, without the prior
written consent of YPF.
7. Notices. All communications provided for
-------
hereunder shall be sent by first class mail and (a) if to
Prudential, addressed to it in care of Prudential Capital Group,
1201 Elm Street, Suite 4900, Dallas, Texas 75270, Attention:
Managing Director, or to such other address as it may have
designated to YPF in writing, (b) if to any other Obligee,
addressed to such Obligee at the address of such Obligee in the
stock record books of the Company, and (c) if to YPF, at its
address set forth in the prefatory paragraph of this Agreement,
Attention: President, or to such other address as it shall have
designated to the Obligees in writing.
IN WITNESS WHEREOF, YPF has caused this Agreement to be
executed by its officer thereunto duly authorized, all as of the
day and year first above written.
YPF SOCIEDAD ANONIMA
By:
--------------------------
Name:
Title:
3
