SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
-----------------
Maxus Energy Corporation
(Name of Issuer)
-----------------
Common Stock, Par Value $1.00 Per Share
(Title of Class of Securities)
-----------------
577730 10 4
(CUSIP Number)
-----------------
Mr. Jose A. Estenssoro
YPF Sociedad Anonima
Avenida Pte. Roque Saenz Pena 777
1364 Buenos Aires, Argentina
Telephone: (011) (541) 329-2000
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
Copy to:
P. Dexter Peacock, Esq.
Andrews & Kurth L.L.P.
4200 Texas Commerce Tower
Houston, Texas 77002
Telephone: (713) 220-4200
April 5, 1995
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[X].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Exchange Act") or
otherwise subject to the liabilities of that section of the
Exchange Act but shall be subject to all other provisions of the
Exchange Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. 577730 10 4 PAGE 2 OF 20 Pages
1 NAME OF REPORTING PERSON
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 SOURCE OF FUNDS*
BK; AF; SC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
NUMBER OF 119,339,683
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 0
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
119,339,683
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
119,339,683
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES
CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
88.0%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP NO. 577730 10 4 PAGE 3 OF 20 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
YPF Sociedad Anonima
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP *
(a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Argentina
7 SOLE VOTING POWER
NUMBER OF SHARES 119,339,683
BENEFICIALLY
OWNED BY EACH 8 SHARED VOTING POWER
REPORTING PERSON 0
WITH
9 SOLE DISPOSITIVE POWER
119,339,683
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
119,339,683
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN
SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
88.0%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTION BEFORE FILLING OUT!
<PAGE>
Page 4 of 20
Item 1. Security and Issuer
This statement relates to shares of Common Stock, par value
$1.00 per share (the "Shares"), of Maxus Energy Corporation, a
Delaware corporation (the "Company" or "Maxus"). The address of
the Company's principal executive offices is 717 North Harwood
Street, Dallas, Texas 75201.
Item 2. Identity and Background
This statement is filed on behalf of YPF Acquisition Corp.,
a Delaware corporation (the "Purchaser"), and YPF Sociedad
Anonima, a sociedad anonima (stock corporation) organized under
the laws of the Republic of Argentina ("YPF") The Purchaser and
YPF are referred to herein collectively as the "Reporting
Persons". YPF 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.
The Purchaser is a recently organized company that has not
conducted any business except in connection with the transaction
described in Item 3 below.
YPF maintains its principal offices at Avenida Pte. Roque Saenz
Pena 777, 1364 Buenos Aires, Argentina. The Purchaser maintains its
principal executive offices at 600 Madison Avenue, 20th Floor,
New York, New York 10021.
The name, residence or business address, citizenship and
present principal occupation or employment of each of the
directors and executive officers of each of the Reporting Persons
and the name, principal business and address of the organization
in which such occupation or employment is conducted are set forth
in Schedule I attached hereto.
During the five years immediately prior to the date hereof,
none of the Reporting Persons nor, to the best of their
knowledge, any of the persons whose names are set forth in
Schedule I, (i) has been convicted in a criminal proceeding
(excluding traffic violations and similar misdemeanors), or (ii)
has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
On February 28, 1995, Maxus, the Purchaser and YPF entered
into an Agreement of Merger (the "Merger Agreement") pursuant to
which (i) the Purchaser agreed to make a cash tender offer (the
"Offer") for all the issued and outstanding Shares for $5.50 per
Share in cash and (ii) subject to the satisfaction of certain
conditions, including the condition that Shares representing at
least a majority of the Voting Shares (as defined below) of
Maxus, on a fully diluted basis, were validly tendered pursuant
to the Offer, the Purchaser and Maxus agreed that the Purchaser
would be merged with and into Maxus (the "Merger") as soon as
practicable following the satisfaction of such conditions.
YPF, through its subsidiary the Purchaser, submitted the Offer
to shareholders of Maxus on March 3, 1995. The Offer expired at
midnight on March 30, 1995, at which time 119,339,683 Shares
representing 88.0% of the issued and outstanding Shares as of such
date, had been tendered. The Purchaser took delivery of all the
Shares tendered and delivered the purchase price for them on
April 5, 1995.
The total amount of funds required by the Purchaser to
acquire the entire common equity interest in the Company,
including the purchase of Shares pursuant to the Offer and the
payment for Shares converted into the right to receive cash
pursuant to the Merger, and to pay related fees and expenses, is
expected to be approximately $800 million. On April 5, 1995, the
Purchaser entered into a credit agreement (the "Credit
Agreement") with lenders for which The Chase Manhattan Bank
(National Association) ("Chase") acts as agent, pursuant to which
the lenders extended to the Purchaser a $550 million credit
facility (the "Purchaser Facility"). On April 5, 1995, the
Purchaser borrowed $442.2 million under the
<PAGE>
Page 5 of 20
Purchaser Facility and received a capital contribution of
$250 million from YPF. On April 5, 1995, the Purchaser used such
borrowings under the Purchaser Facility and the funds contributed
to it from YPF to purchase 119,339,683 Shares pursuant to the
Offer. Payment for Shares that are converted into the right to
receive cash pursuant to the Merger will be made by the surviving
corporation, Maxus, from additional borrowings by the Purchaser
under the Purchaser Facility and from additional capital
contributions from YPF.
Pursuant to a commitment letter from Chase (the "Commitment
Letter"), Chase has agreed to provide two additional credit
facilities aggregating up to $425 million: (i) a credit facility
of up to $250 million to be extended to Midgard Energy Company
("Midgard"), a wholly owned subsidiary of the Company (the
"Midgard Facility"), and (ii) a credit facility of up to $175
million to be extended to certain other subsidiaries of the
Company as described below (the "Subsidiaries Facility").
Revised term sheets for the Midgard Facility and the Subsidiaries
Facility are annexed as Schedules V and VI, respectively, to the
Credit Agreement for the Purchaser Facility, which is attached
hereto as Exhibit A, and are incorporated herein by reference. 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 two additional 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 and that it proposes to act as the agent for
such lenders in connection with each of the facilities.
The following is a description of the principal terms of the
Purchaser Facility and a description of the proposed terms of the
Midgard Facility and the Subsidiaries Facility.
Purchaser Facility. The Purchaser Facility provides for
loans in an aggregate amount of up to $550 million (collectively,
the "Purchaser Loan") and will mature on the earlier of (i) the
date and time of the filing of a Certificate of Merger with the
Secretary of State of the State of Delaware (the "Effective
Time") and (ii) June 12, 1995 (such earlier date being the
"Purchaser Maturity Date"). The Purchaser borrowed $442.2
million under the Purchaser Facility on April 5, 1995, and may
obtain one additional advance thereunder up to the remaining
$107.8 million of credit available thereunder. At the
Purchaser's option, the interest rate applicable to the Purchaser
Loan is either (i) the one-month London Interbank Offered Rate
plus a margin of 2 1/4% or (ii) the Base Rate (as defined in the
Credit Agreement relating to the Purchaser Facility) plus a
margin of 1 1/4%. The Purchaser Loan is guaranteed by YPF as
described below. In addition, the Purchaser has agreed not to
dispose of any Shares prior to the Merger, except for cash
at fair market value. The lenders' obligation to fund the
remaining amount of credit available under the Purchaser Facility
is subject to certain conditions as described below. It is
anticipated that up to $125 million of the Purchaser Loan, plus
accrued interest on the Purchaser Loan, will be repaid on the
Purchaser Maturity Date from cash held by the Company.
Midgard Facility. The Reporting Persons currently
anticipate that on the Purchaser Maturity Date, up to $250
million of the Purchaser Loan will be repaid with funds provided
to the Company by Midgard. The Reporting Persons anticipate that
Midgard will provide the funds from the proceeds of a loan of up
to $250 million (the "Midgard Loan") pursuant to the Midgard
Facility. The Midgard Loan will be made in a single drawing,
will mature on December 31, 2003 and will be repaid in up to 28
consecutive quarterly installments commencing on March 31, 1997,
subject to semi-annual borrowing base redeterminations. At
Midgard's option, the interest rate applicable to the Midgard
Loan will be, until March 31, 1997, either (i) the one-, two- or
three-month London Interbank Offered Rate plus a margin of 1 3/4% or
(ii) the Base Rate (to be defined in the credit agreement
relating to the Midgard Facility) plus a margin of 3/4% and,
thereafter, either (iii) the one-, two- or three-month London
Interbank Offered Rate plus a margin of 2 1/4% or (iv) the Base Rate
plus a margin of 1 1/4%. The Midgard Loan will not be secured but
will be guaranteed by YPF and the Company. The agreement
evidencing the Midgard Loan will contain, among other things, a
negative pledge on all assets of Midgard, subject to customary
exceptions. The lenders' obligation to fund the Midgard Loan will
be 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. The Reporting Persons currently
anticipate that on or before the Purchaser Maturity Date, up to
$175 million of the Purchaser Loan will be repaid with funds
provided to the
<PAGE>
Page 6 of 20
Company by Maxus Northwest Java, Inc. ("Java") and Maxus
Southeast Sumatra, Inc. ("Sumatra") (collectively, the
"Designated Subsidiaries"). The Company anticipates that the
Designated Subsidiaries will provide these funds from the
proceeds of a loan of up to $175 million (the "Subsidiaries
Loan") made to them pursuant to the Subsidiaries Facility. The
Subsidiaries Loan will be made in a single drawing on the
Purchaser Maturity Date, will mature on December 31, 2002 and
will be repaid in up to 24 consecutive quarterly installments
commencing on March 31, 1997, subject to semi-annual borrowing
base redeterminations. At the option of the Designated
Subsidiaries, the interest rates applicable to the Subsidiaries
Loan will be, until March 31, 1997, either (i) the one-, two- or
three-month London Interbank Offered Rate plus a margin of 2 1/4% or
(ii) the Base Rate (to be defined in the credit agreement
relating to the Subsidiaries Facility) plus a margin of 1 1/4% and,
thereafter, either (iii) the one-, two- or three-month London
Interbank Offered Rate plus a margin of 2 3/4% or (iv) the Base Rate
plus a margin of 1 3/4%. The Subsidiaries Loan to Java and Sumatra
will be secured by certain of the assets of Java and Sumatra,
will be guaranteed by the Company and a new subsidiary formed to
hold the stock of Java and Sumatra, and the guarantee by that new
holding company will be secured by the stock of Java and Sumatra.
The agreement evidencing the Subsidiaries Loan will contain a
negative pledge on all of the other assets of the Designated
Subsidiaries, subject to customary exceptions.
The lenders' obligation to fund the Subsidiaries Loan will
be 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
advance the remaining amount of credit available under the
Purchaser Facility is subject to the fulfillment of certain
conditions, including but not limited to, (i) the absence of any
material adverse change in the condition (financial or
otherwise), business operations, assets, nature of assets or
liabilities of (a) YPF and its subsidiaries (taken as a whole),
(b) the Purchaser and (c) the Company and its subsidiaries (taken
as a whole) and (ii) the lenders' satisfaction that the Company
will have sufficient cash available to pay the lesser of (a) $125
million or (b) the difference between (1) the principal amount of
the Purchaser Loan outstanding on the Purchaser Maturity Date and
(2) the lesser of $425 million or such other amount as is
available under 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, (i) the effectiveness
of the Merger, (ii) the absence of any material adverse change in
the condition (financial or otherwise), business, operations,
assets, nature of assets or liabilities of (a) YPF and it
subsidiaries (taken as a whole), (b) the Company and its
subsidiaries (taken as a whole) and (c) in the case of the
Midgard Loan, Midgard and its subsidiaries taken as a whole, and
(d) in the case of the Subsidiaries Loan, Java or Sumatra or
their holding company, (iii) the payment in full of the Purchaser
Loan and (iv) all indebtedness and other obligations of each of
Midgard, 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 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 has guaranteed the repayment of the
Purchaser Facility and will guarantee the repayment of the
Midgard Facility and the Subsidiaries Facility. The YPF
guarantee of the Purchaser Facility is secured by a pledge of all
of the shares of capital stock of the Purchaser. The guarantee
also
<PAGE>
Page 7 of 20
contains 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 financings contemplated by the Commitment
Letter.
Item 4. Purpose of Transaction
In mid-1994, YPF's Board of Directors adopted the goals of
becoming an internationally diversified oil and gas company with
significant assets outside Argentina and obtaining management
personnel skilled and experienced in exploring for and producing
oil and gas internationally. YPF believes that Maxus presents a
good fit with its goals. Accordingly, YPF and the Purchaser
entered into the Merger Agreement, and made the Offer pursuant to
the terms of the Merger Agreement, for the purpose of acquiring
all of the outstanding Shares.
(a) Acquisition and disposition of securities of Maxus.
On February 28, 1995, Maxus, the Purchaser and YPF entered
into the Merger Agreement pursuant to which, as described in Item
3 above, the Purchaser made the Offer. The Offer expired on
March 30, 1995, at which time 119,339,683 Shares, representing
88.0% of the issued and outstanding Shares as of such date, had
been tendered. The Purchaser took delivery of all the Shares
tendered and delivered the purchase price for them on April 5,
1995. Pursuant to the Merger Agreement, Maxus, the Purchaser and
YPF agreed to cause the merger of the Purchaser with and into
Maxus as soon as practicable following the purchase of Shares
pursuant to the Offer. Pursuant to the Delaware General
Corporation Law ("DGCL") and the Company's Restated Certificate of
Incorporation (the "Certificate"), the approval and adoption of
the Merger require the affirmative vote of the holders of a
majority of the combined voting power of the outstanding Shares
and $4.00 Cumulative Convertible Preferred Stock (collectively,
the "Voting Shares"), voting together as a single class.
If the Merger is consummated, YPF will become the sole
holder of the Shares (except to the extent that, following the
Effective Time, holders of outstanding options and warrants
exercise such options and warrants for Shares, or holders of
shares of the Company's $4.00 Cumulative Convertible Preferred
Stock (the "$4.00 Preferred Stock") exercise their rights to
convert shares of $4.00 Preferred Stock into Shares), and the
current holders of Shares other than YPF will no longer have an
equity interest in the Company and will not share in its future
earnings or growth, if any. Instead, each such stockholder
(other than those who perfect appraisal rights under Section 262
of the DGCL will have the right to receive $5.50 in cash, without
interest, for each Share held immediately prior to the Merger.
All outstanding shares of the Company's preferred stock will
remain outstanding and have the identical powers, preferences,
rights, qualifications, limitations and restrictions as such
shares of preferred stock currently have (including, in the case
of the $4.00 Preferred Stock, the right to convert into Shares),
except for certain changes to the terms of the $9.75 Cumulative
Convertible Preferred Stock (the "$9.75 Preferred Stock") as
agreed to by the holder of the $9.75 Preferred Stock as described
below in Item 6. Any outstanding option or warrant to acquire
Shares that is not exercised prior to the Effective Time, or
surrendered in the case of employee or director stock options,
will remain outstanding and have the identical terms as such
options and warrants currently have.
(b) Merger of Purchaser and Maxus.
Pursuant to the terms of the Merger Agreement, YPF intends
to seek the Merger of Purchaser and Maxus as soon as possible.
Certain effects of the Merger Agreement and the Merger are
described herein this Item 4. The Merger Agreement is attached
hereto as Exhibit C.
<PAGE>
Page 8 of 20
(c) Sales or transfers of material amounts of assets of
Maxus or its subsidiaries.
While the Reporting Persons reserve the right to take or
recommend such action as they may consider desirable in light of
their ongoing review of the businesses and operations of Maxus
and its subsidiaries, neither of the Reporting Persons has any
present plans or proposals which relate to or would result in the
sale or transfer of a material amount of assets of Maxus or any
of its subsidiaries.
(d) Change in the present Board of Directors and management
of Maxus.
The Merger Agreement provides, among other things, 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) own a
majority of the outstanding Voting Shares, YPF is entitled,
subject to compliance with applicable law and the Certificate, 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
(the "Board") 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
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 Board 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; except that, prior to the Effective Time,
the Company will use its reasonable best efforts to assure that
the Board always has (at its election) at least three members who
were directors of the Company as of February 28, 1995. At such
times, the Company will use its reasonable best efforts, subject
to any limitations imposed by applicable law or rules of the New
York Stock Exchange (the "NYSE"), to cause persons designated by
YPF to constitute the same percentage as such persons represent
on the Board 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 Purchaser's ownership of 85.3% of the outstanding Voting
Shares entitles it to be represented on the Board pursuant to the
above-described provision, and the Purchaser has designated five
persons, Messrs. Jose A. Estenssoro, Cedric Bridger, Peter
Gaffney, James R. Lesch and P. Dexter Peacock (collectively, the
"Designees") to serve on the Board. YPF and the Purchaser expect
that all of the directors of the Company, except Messrs. Charles
L. Blackburn, George L. Jackson and R.A. Walker, will submit
their resignations from the Board on or about April 22, 1995
(the "Election Date") and that, effective upon such resignations,
the remaining directors on the Board will elect the
Designees to the Board to fill the vacancies created thereby. As
a result of the foregoing, YPF and the Purchaser expect that the
Board will consist of the five Designees, and Messrs. Blackburn,
Jackson and Walker, with five vacancies.
Certain additional information relating to the election of
the Designees is contained in the information statement filed
by the Company pursuant to Rule 14f-1 under the Exchange Act (the
"14f-1 Information Statement") with the Securities and Exchange
Commission (the "Commission") and mailed on or about April 11,
1995 to Stockholders of record as of April 4, 1995.
Cedric Bridger presently is the sole director of the
Purchaser. It is currently contemplated that prior to the
Effective Time, each of the Designees and Messrs. Blackburn,
Jackson and Walker will be elected to the Board of Directors of
the Purchaser. Pursuant to the Merger Agreement, at the
Effective Time, the directors of Purchaser immediately prior to
the Effective Time will be the directors of the Company and the
officers of the Company immediately prior to the Effective Time
will be the officers of the Company, in each case until their
successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance
with the Company's Certificate, By-Laws and the DGCL.
On April 7, 1995, all of the Company's executive officers gave
notice of their intent to resign under circumstances in which they
had the right to receive severance payments thereunder. In order
to facilitate the transition following such event, the Company and
its eight executive officers agreed that the executive officers would
continue to work for the Company in their present positions at their
current level of compensation until June 30, 1995 or otherwise
mutually agreed. The Company also agreed to pay the executive
officers such severance payments no later than April 15, 1995. The
Reporting Persons have not yet made any decisions as to executive
officers of the Company following the effectiveness of such
resignations.
It is expected that Mr. Charles L. Blackburn will resign as
Chairman, President and Chief Executive Officer of the Company on the
<PAGE>
Page 9 of 20
Election Date. YPF has asked Mr. Blackburn to become an international
consultant to YPF and to remain a director of the Company. Under the
proposed two-year arrangement, Mr. Blackburn would be
available to render consulting services for a minimum of 60 days
per year and would be paid a retainer of $180,000 per year. Mr.
Blackburn would also be paid $3,000 per day for each day in
excess of 60 days per year in which he renders consulting
services for YPF. He would also be provided offices in Dallas
and Buenos Aires.
Mr. Peter Gaffney, a Designee, is expected to be named the
interim Chief Executive Officer of the Company on the Election
Date. Mr. Gaffney is to receive $50,000 per month and will be
eligible to participate in the Company's benefit plans for executive
officers. This six-month arrangement between Mr. Gaffney and YPF
is to be effective as of April 1,1995, is renewable upon mutual
agreement and provides that, with respect to the period before Mr.
Gaffney is named interim Chief Executive Officer, Mr. Gaffney will
serve as an advisor to YPF with respect to the Company.
(e) Material changes in present capitalization and dividend
policy of Maxus.
The Reporting Persons and the Company plan to engage in a
material change in the present capitalization of the Company
through the assumption of the debt described in Item 3 above. In
addition, 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 undertaking, 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, however, that YPF's aggregate
obligation will be (i) limited to the amount of debt service
obligations under the Purchaser Facility, and to the extent the
Purchaser Facility is replaced by the Midgard Facility and/or the
Subsidiaries Facility, the amount of debt service obligations
under the Midgard Facility and/or the Subsidiaries Facility and
(ii) 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. On March 7, 1995, YPF also announced that its
board of directors authorized YPF to guarantee the Company's
outstanding long-term debt as of the Effective Time. The long-term
debt to be covered by the YPF guarantee is the Company's outstanding
11 1/4%, 11 1/2% and 8 1/2% Sinking Fund Debentures, its outstanding
9 7/8%, 9 1/2% and 9 3/8% Notes, and its outstanding medium-term
notes.
Neither of the Reporting Persons has any present plans or
proposals which relate to or would result in a material change in
the dividend policy of the Company.
(f) Other material changes in the Company's business or
corporate structure.
The Company's business will continue to be conducted in
its current corporate form. Various corporate overhead and
administrative functions may be consolidated with those of YPF.
While the Reporting Persons reserve the right to take or
recommend such action as they may consider desirable in light of
their ongoing review of the business and operations of Maxus and
its subsidiaries, neither of the Reporting Persons has any
present plans or proposals which relate to other material changes
in the Company's business or corporate structure, including the
sale of Maxus' material assets, entry into joint ventures, or the
expansion or contraction of operations in various geographic
areas.
(g) Changes in the Company's charter, by-laws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person.
While the Reporting Persons reserve the right to take
or recommend such actions as they may consider desirable in light
of their ongoing review of the businesses and operations of Maxus
and its subsidiaries, neither of the Reporting Persons has any
present plans or proposals which relate to changes in the
Company's Certificate, By-Laws or instruments corresponding thereto
which may impede the acquisition of control of the Company by any
person or other actions which may impede the acquisition of control
of the Company by any person.
<PAGE>
Page 10 of 20
(h) and (i) Delisting of securities of the Company;
Termination of registration pursuant to Section 12(g)(4) of the
Act.
Following completion of the Merger, it is expected that the
Shares will be delisted from the NYSE, the Pacific Stock Exchange
and any other securities exchanges on which the Shares are
listed. 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. However,
termination of registration of the Shares under the Exchange Act
will not affect the registration of the $4.00 Preferred Stock and
the $2.50 Preferred Stock under the Exchange Act, the holders of
which will continue to be entitled to information required to be
furnished to them thereunder. Termination of registration of the
Shares would reduce substantially the information required to be
furnished by the Company to holders of Shares and would make
certain provisions of the Exchange Act, including the requirement
of furnishing a proxy statement or information 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 Shares. Furthermore, if 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 of 1933, as amended (the
"Securities Act"), may be impaired or eliminated. If
registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or
be eligible for listing or National Association of Securities
Dealers Automated Quotation ("NASDAQ") reporting. YPF may seek
or cause the Company to make an application for termination of
registration of the Shares as soon as possible following the
Merger.
In addition to the Shares, the Company's $4.00 Preferred
Stock, the $2.50 Preferred Stock and the 8 1/2% Sinking Fund
Debentures Due April 1, 2008 (the "8 1/2% Debentures") are
registered under the Exchange Act and listed on the NYSE. If
registration of the Shares under the Exchange Act were
terminated, and registration under the Exchange Act of the $4.00
Preferred Stock, the $2.50 Preferred Stock, the 8 1/2% Debentures or
other securities of the Company continued, the Exchange Act
requirement that the Company file periodic reports would remain
applicable. YPF and the Company have agreed to use their
respective reasonable efforts to continue the listing on the NYSE
of the series of Preferred Stock which are currently listed on
such Exchange, or, if any such series is delisted, to cause such
series of the Preferred Stock to be listed on another national
securities exchange within the United States or admitted to
trading on the NASDAQ 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. The NYSE
has informed the Company that the $4.00 Preferred Stock will be
delisted from the NYSE when the Shares are delisted (which is
expected to occur promptly after the Effective Time). On April
7, 1995, the Company received notice for the National Association
of Securities Dealers that the $4.00 Preferred Stock had been
accepted for trading on the NASDAQ. The Reporting Persons expect
the $4.00 Preferred Stock will being trading on the NASDAQ
promptly following the Effective Time.
The Exchange Act provides that registration of the $4.00
Preferred Stock, the $2.50 Preferred Stock or the 8 1/2% Debentures
may be terminated upon application by the Company to the
Commission if such class of securities is not listed on a
national securities exchange and there are fewer than 300 record
holders of such class of securities. Termination of registration
of any such class of securities would reduce substantially the
information required to be furnished by the Company to holders of
such class of securities. Termination of registration of the
$4.00 Preferred Stock or the $2.50 Preferred Stock would make
certain provisions of the Exchange Act, including the requirement
of furnishing a proxy statement or information statement pursuant
to Section 14(a) in connection with stockholders' meetings and
the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to
such class of securities. Furthermore, if the registration of
any such class of securities under the Exchange Act
<PAGE>
Page 11 of 20
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
any such class of securities under the Exchange Act were to be
terminated, such class of securities would no longer be "margin
securities" or be eligible for listing on NASDAQ reporting.
Item 5. Interest in Securities of the Issuer
(a) and (b) The Purchaser has sole voting and dispositive
power over 119,339,683 Shares, which represents approximately
88.0% of the outstanding Shares and 85.3% of the outstanding
Voting Shares. YPF, by virtue of its ownership of all of the
capital stock of the Purchaser, is a beneficial owner of all of
the Shares owned by the Purchaser. If the Merger is consummated,
YPF will own 100% of the then-outstanding Shares.
(c) In connection with the Offer, Mr. James R. Lesch, a director
of YPF tendered 2,000 Shares. Except as disclosed in this Schedule
13D, no Reporting Person has effected any other transactions in
Shares in the 60 day period ended as of the date hereof.
(d) No other person is known to have the right to receive
or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the Shares reported in this Item 5.
(e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
(a) The Merger Agreement.
The Merger Agreement provides for, and YPF has designated,
various persons to the Board of Maxus as described in Item 4(d)
above. Additional material terms of the Merger Agreement
include:
(i) 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, if permissible, 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 existence of the
Purchaser will cease and the Company will be the surviving
corporation in the Merger (as such, the "Surviving
Corporation"). The Merger Agreement further provides that
the Certificate and the By-Laws of the Company as in effect
at the Effective Time will be the certificate and the by-
laws of the Surviving Corporation.
(ii) 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 Company, Shares owned by YPF,
the Purchaser, and any other direct or indirect subsidiary
of YPF, and other than Shares held by Stockholders who
perfect their appraisal rights under Section 262 of the
DGCL) will, at the Effective Time, be cancelled and retired
and be converted into a right to receive $5.50 per Share in
cash, without interest, upon the surrender of the Stock
Certificates formerly representing such Shares, 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
will, 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 preferred stock of the Company will remain
outstanding and have the identical powers, preferences,
rights, qualifications, limitations and restrictions as such
shares of preferred stock currently have, except for such
changes thereto as agreed to by the holder of the $9.75
Preferred Stock as described in "$9.75 Preferred Stock
<PAGE>
Page 12 of 20
Arrangements" below. The number of shares of outstanding
common stock of the Purchaser immediately prior to the
Effective Time will be equal to the number of outstanding
shares of common stock of the Company at such time.
(iii) 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 Options, in exchange for the payments set
forth in Schedule 2.6 of the Merger Agreement. In addition,
immediately prior to the Effective Time, the restrictions on
certain restricted Shares, including Shares held by certain
executive officers of the Company, will lapse without
further action.
(iv) Representations and Warranties. The Merger
Agreement contains representations and warranties by the
Company, relating to, among other things, (a) the
organization of the Company and its subsidiaries and other
corporate matters, (b) the capital structure of the Company,
(c) the authorization, execution, delivery and consummation
of the transactions contemplated by the Merger Agreement,
(d) consents and approvals, (e) documents filed by the
Company with the Commission and the accuracy of the
information contained therein, (f) the absence of certain
changes and events, (g) the accuracy of the information
contained in documents filed with the Commission in
connection with the Offer and the Merger, (h) litigation,
(i) compliance with laws and certain environmental matters,
(j) tax, insurance and labor matters, and (k) 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, (a) the
organization of YPF and the Purchaser and other corporate
matters, (b) the authorization, execution, delivery and
consummation of the transactions contemplated by the Merger
Agreement, (c) consents and approvals, and (d) YPF's having
no reason to believe that, following the Merger, the
borrowings under the Purchaser Facility and the other
financings contemplated by the Commitment Letter, the
Company will not be able to meet its obligations as they
come due including, solely for purposes of this
representation and warranty, preferred stock dividends and
redemption requirements.
(v) Redemption of Rights. Pursuant to the Merger
Agreement, effective as of March 22, 1995, the Company
redeemed all of the outstanding rights (the "Rights") issued
pursuant to the Rights Agreement dated September 2, 1988
between the Company and Society National Bank, as rights
agent, so that the Rights did not become exercisable as a
result of the Offer.
(vi) Indemnification of Directors. Pursuant to the
Merger Agreement, for a period of seven years following the
Effective Time, YPF has agreed 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 as described herein.
(vii) 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.
(viii) Listing of Preferred Stock. Pursuant to the
Merger Agreement, the Company will, and YPF will cause the
Surviving Corporation to, subject to certain limitations,
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 as more fully
described elsewhere herein, and if any such series is
delisted, to cause such series of the Preferred Stock to be
listed on another national securities exchange within the
United States or admitted to trading on the NASDAQ 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 such shares of preferred stock will
survive the Effective Time with respect to any such series
of preferred stock until such time as the aggregate
<PAGE>
Page 13 of 20
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. The NYSE has informed the
Company that the $4.00 Preferred Stock will be delisted from
the NYSE when the Shares are delisted (which is expected to
occur promptly after the Effective Time). See also
Item 4(h) and (i) above.
(ix) 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
undertaking, 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, however, that YPF's aggregate
obligation will be (a) limited to the amount of debt service
obligations under the Purchaser Facility, and to the extent
the Purchaser Facility is replaced by the Midgard Facility
and/or the Subsidiaries Facility, 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. In addition, on March 7, 1995, YPF announced that its
board of directors authorized YPF to guarantee the Company's
outstanding long-term debt as of the Effective Time. The
long-term debt to be covered by the YPF guarantee is the
Company's outstanding 11 1/4%, 11 1/2% and 8 1/2% Sinking Fund
Debentures, its outstanding 9 7/8%, 9 1/2% and 9 3/8% Notes, and
its outstanding medium-term notes. See also "Item 3 -- YPF
Guarantee" above.
Termination. The Merger Agreement provides that it 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:
(i) by the mutual consent of the boards of directors of YPF,
the Purchaser and the Company; (ii) 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; (iii) 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; (iv) by either YPF and the
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; (v) by the Company if the Board
determines that it will not recommend the 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
to comply with its fiduciary duties to stockholders under
applicable law; or (vi) by YPF and the Purchaser, if:
(a) the Board shall not have recommended or shall withdraw,
modify or change its recommendation relating to the Merger
in a manner materially adverse to YPF or shall have resolved
to do any of the foregoing; (b) the Board 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). "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
<PAGE>
Page 14 of 20
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 were directors of the Company on the date of the Merger
Agreement, or persons nominated or elected to succeed such
directors by a majority of such directors.
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) any
additional Voting Shares otherwise than pursuant to the
Merger for a period of not less than 24 months after
termination of the Merger Agreement without prior written
approval of the Board, and (ii) the provisions of the
confidentiality agreement previously entered into between
the Company and YPF (or one of its affiliates) will continue
to apply.
Whether or not the 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
the Merger Agreement by (a) the Company if the Board
determines that it will not recommend the 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
to comply with its fiduciary duties to stockholders under
applicable law and (b) YPF and the Purchaser if (1) the
Board shall withdraw, modify or change its recommendation
relating to the Merger in a manner materially adverse to YPF
or shall have resolved to do any of the foregoing or (2) the
Board 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, 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 remaining available credit
under the Purchaser Facility or the other 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 Merger, 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.
(b) $9.75 Preferred Stock Arrangements.
In accordance with the provisions of the Certificate, the
holder of the $9.75 Preferred Stock was required to approve the
Merger Agreement 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
Agreement 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, 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, to
(i) waive certain rights, including the right to redeem the $9.75
Preferred Stock at its option and the right of first offer with
<PAGE>
Page 15 of 20
respect to the transfer of the shares of $9.75 Preferred Stock,
(ii) waive certain transfer restrictions with respect to the
$9.75 Preferred Stock, and (iii) pay to The Prudential Insurance
Company of America ("Prudential"), which is the current holder of
all of the outstanding shares of the $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. See
"Item 7--Exhibit D and Exhibit E," which constitute the
arrangement with the holder of the Company's $9.75 Preferred
Stock.
(c) YPF Guarantee of Purchaser Obligations.
YPF has guaranteed the obligations of the Purchaser under
the Purchaser Facility, and in connection therewith YPF pledged
all of the capital stock of the Purchaser to the lenders
providing the Purchaser Facility. In the event of a foreclosure
on such capital stock, the lender would be the beneficial owner
of the Shares owned by the Purchaser or YPF, as the case may be.
See "Item 3 -- YPF Guarantee" above.
(d) Other Contracts and Arrangements.
Except as described above, none of the Reporting Persons has
any other contract, arrangement, understanding or relationship
(whether or not legally enforceable) with any other person with
respect to any securities of the Company, including but not
limited to transfer or voting of any of the securities, finder's
fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
Item 7. Material to be Filed As Exhibits
Exhibit A Credit Agreement, dated April 5, 1995, among the
lenders specified therein for which The Chase
Manhattan Bank (National Association) acts as
agent, YPF Acquisition Corp. and YPF Sociedad
Anonima.
Exhibit B Commitment Letter, dated February 24, 1995,
between The Chase Manhattan Bank (National
Association) and YPF Sociedad Anonima.
Exhibit C Agreement of Merger, dated February 28, 1995,
among Maxus Energy Corporation, YPF Sociedad
Anonima and YPF Acquisition Corp.
Exhibit D Guarantee Agreement, dated February 28, 1995,
between YPF Sociedad Anonima and The Prudential
Insurance Company of America.
Exhibit E Letter Agreement between Maxus Energy Corporation
and The Prudential Insurance Company of America,
dated February 28, 1995.
<PAGE>
Page 16 of 20
SIGNATURE
After reasonable inquiry and to the best of our knowledge
and belief, each of the undersigned certifies that the
information set forth in this statement is true, complete and
correct.
Dated: April 11, 1995
YPF SOCIEDAD ANONIMA
By: /s/ Jose A. Estenssoro
---------------------------
Jose A. Estenssoro
President
YPF ACQUISITION CORP.
By: /s/ Jose A. Estenssoro
---------------------------
Jose A. Estenssoro
President
<PAGE>
Page 17 of 20
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
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.
Present Principal Occupation Or Employment and
Current Business Address; Material Positions Held
Name During The Past Five Years and Business Addresses Thereof
---- ---------------------------------------------------------
Jose A. Estenssoro President (see Directors and Executive Officers of
YPF below).
Cedric Bridger Director since April 4, 1995, Vice President, Assistant
Secretary and Treasurer (See Directors and Executive
Officers of YPF below).
Carlos Olivieri Vice President and Assistant Secretary (See Directors and
Executive Officers of YPF below).
Darial R. Sneed Vice President. 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.
Norberto Noblia Secretary (See Directors and Executive Officers of YPF
below).
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.
Present Principal Occupation Or Employment and
Current Business Address; Material Positions Held
Name During The Past Five Years and Business Addresses Thereof
---- ---------------------------------------------------------
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.
<PAGE>
Page 18 of 20
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. Mr. Lesch is currently retired.
He was Chief Executive Officer (1979-1986) and Chairman
of the Board (1981-1986) of the Hughes Tool Company and
he also served as Commissioner, State of Texas
Department Commerce (1988-1992). He previously served
as Director of the American Petroleum Institute. Mr.
Lesch is a citizen of the United States of America.
His business address is P. O. Box 4442, Houston,
Texas 77210.
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.
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.
<PAGE>
Page 19 of 20
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 from 1989. 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).
<PAGE>
Page 20 of 20
Exhibit Index
Exhibit Sequential Page Number
------- ----------------------
Exhibit A Credit Agreement, dated April 5, 1995,
among the lenders specified therein for
which The Chase Manhattan Bank (National
Association) acts as agent, YPF
Acquisition Corp. and YPF Sociedad
Anonima.
Exhibit B Commitment Letter, dated February 24,
1995, between The Chase Manhattan Bank
(National Association) and YPF Sociedad
Anonima.
Exhibit C Agreement of Merger, dated February 28,
1995, among Maxus Energy Corporation,
YPF Sociedad Anonima and YPF Acquisition
Corp.
Exhibit D Guarantee Agreement, dated February 28,
1995, between YPF Sociedad Anonima and
The Prudential Insurance Company of
America.
Exhibit E Letter Agreement between Maxus Energy
Corporation and The Prudential Insurance
Company of America, dated February 28,
1995.
Exhibit A
CONFORMED COPY
File No. 33307
____________________________
YPF ACQUISITION CORP.
(To Be Merged With and Into
MAXUS ENERGY CORPORATION)
and
YPF SOCIEDAD ANONIMA,
as Guarantor
_____________________________
CREDIT AGREEMENT
Dated as of April 5, 1995
______________________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
BII\32161_1 04/07/95 10:16am
<PAGE>
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to
which it is attached but is inserted for convenience of reference
only.
Page
----
Section 1. Definitions and Accounting Matters . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . 18
1.03 Types of Loans . . . . . . . . . . . . . . . . . 18
1.04 Copies of Documents . . . . . . . . . . . . . . . 18
Section 2. Commitments, Loans, Notes and Prepayments . . . . 18
2.01 Loans . . . . . . . . . . . . . . . . . . . . . . 18
2.02 Borrowings . . . . . . . . . . . . . . . . . . . 19
2.03 Changes of Commitments . . . . . . . . . . . . . 19
2.04 Lending Offices . . . . . . . . . . . . . . . . . 20
2.05 Several Obligations; Remedies Independent . . . . 20
2.06 Notes . . . . . . . . . . . . . . . . . . . . . . 20
2.07 Prepayments and Conversions or Continuations of
Loans . . . . . . . . . . . . . . . . . . . . . 21
Section 3. Payments of Principal and Interest . . . . . . . 21
3.01 Repayment of Loans . . . . . . . . . . . . . . . 21
3.02 Interest . . . . . . . . . . . . . . . . . . . . 21
Section 4. Payments; Pro Rata Treatment; Computations;
Etc. . . . . . . . . . . . . . . . . . . . . . . 22
4.01 Payments . . . . . . . . . . . . . . . . . . . . 22
4.02 Pro Rata Treatment . . . . . . . . . . . . . . . 23
4.03 Computations . . . . . . . . . . . . . . . . . . 24
4.04 Minimum Amounts . . . . . . . . . . . . . . . . . 24
4.05 Certain Notices . . . . . . . . . . . . . . . . . 24
4.06 Non-Receipt of Funds by the Agent . . . . . . . . 25
4.07 Sharing of Payments, Etc. . . . . . . . . . . . . 26
Section 5. Yield Protection, Etc. . . . . . . . . . . . . . 27
5.01 Additional Costs . . . . . . . . . . . . . . . . 27
5.02 Limitation on Types of Loans . . . . . . . . . . 29
5.03 Illegality . . . . . . . . . . . . . . . . . . . 30
5.04 Treatment of Affected Loans . . . . . . . . . . . 30
5.05 Broken Funding . . . . . . . . . . . . . . . . . 31
5.06 U.S. Taxes . . . . . . . . . . . . . . . . . . . 32
5.07 Replacement of Certain Lenders . . . . . . . . . 33
Section 6. Guarantee . . . . . . . . . . . . . . . . . . . . 34
6.01 The Guarantee . . . . . . . . . . . . . . . . . . 34
6.02 Obligations Unconditional . . . . . . . . . . . . 34
BII\32161_1 04/07/95 10:16am (i)
<PAGE>
Page
----
6.03 Reinstatement . . . . . . . . . . . . . . . . . . 35
6.04 Subrogation . . . . . . . . . . . . . . . . . . . 36
6.05 Remedies . . . . . . . . . . . . . . . . . . . . 36
6.06 Instrument for the Payment of Money . . . . . . . 36
6.07 Continuing Guarantee . . . . . . . . . . . . . . 36
6.08 Taxes . . . . . . . . . . . . . . . . . . . . . . 37
Section 7. Conditions Precedent . . . . . . . . . . . . . . 38
7.01 Initial Loans . . . . . . . . . . . . . . . . . . 38
7.02 Second Loans . . . . . . . . . . . . . . . . . . 43
7.03 Initial and Second Loans . . . . . . . . . . . . 45
Section 8. Representations and Warranties . . . . . . . . . 48
8.01 Corporate Existence . . . . . . . . . . . . . . . 48
8.02 Litigation . . . . . . . . . . . . . . . . . . . 48
8.03 No Breach . . . . . . . . . . . . . . . . . . . . 48
8.04 Action . . . . . . . . . . . . . . . . . . . . . 50
8.05 Approvals . . . . . . . . . . . . . . . . . . . . 50
8.06 Use of Credit . . . . . . . . . . . . . . . . . . 51
8.07 Investment Company Act . . . . . . . . . . . . . 51
8.08 Public Utility Holding Company Act . . . . . . . 51
8.09 Certain Documents . . . . . . . . . . . . . . . . 51
8.10 Capitalization of Company . . . . . . . . . . . . 51
8.11 True and Complete Disclosure . . . . . . . . . . 51
8.12 Pledge Agreement . . . . . . . . . . . . . . . . 52
8.13 Special Purpose Corporation . . . . . . . . . . . 52
8.14 Transaction Costs . . . . . . . . . . . . . . . . 52
8.15 YPF Representations . . . . . . . . . . . . . . . 52
Section 9. Covenants of Obligors . . . . . . . . . . . . . . 53
9.01 Financial Statements, Etc. . . . . . . . . . . . 53
9.02 Litigation; Etc. . . . . . . . . . . . . . . . . 56
9.03 Existence, Etc. . . . . . . . . . . . . . . . . . 57
9.04 Insurance . . . . . . . . . . . . . . . . . . . . 58
9.05 Prohibition of Fundamental Changes . . . . . . . 58
9.06 Limitation on Liens . . . . . . . . . . . . . . . 59
9.07 Indebtedness . . . . . . . . . . . . . . . . . . 61
9.08 Investments . . . . . . . . . . . . . . . . . . . 61
9.09 Dividend Payments . . . . . . . . . . . . . . . . 62
9.10 Maxus Cash . . . . . . . . . . . . . . . . . . . 62
9.11 Ownership of Refinancing Subsidiaries . . . . . . 62
9.12 Special Covenants relating to YPF Acquisition
Prior to Merger . . . . . . . . . . . . . . . . 63
9.13 Special Covenants relating to Midgard Group and
the Maxus Indonesia Group and their
Subsidiaries . . . . . . . . . . . . . . . . . . 63
9.14 Payments of Maxus Indebtedness . . . . . . . . . 64
9.15 Lines of Business . . . . . . . . . . . . . . . . 65
9.16 Transactions with YPF Affiliates . . . . . . . . 65
9.17 Use of Proceeds . . . . . . . . . . . . . . . . . 65
9.18 Modifications of Certain Documents . . . . . . . 65
BII\32161_1 04/07/95 10:16am (ii)
<PAGE>
Page
----
9.19 Consummation of the Merger . . . . . . . . . . . 66
9.20 Ownership of YPF Acquisition and Maxus . . . . . 66
9.21 Other Covenants of YPF . . . . . . . . . . . . . 66
Section 10. Events of Default . . . . . . . . . . . . . . . . 66
Section 11. The Agent . . . . . . . . . . . . . . . . . . . . 69
11.01 Appointment, Powers and Immunities . . . . . . . 69
11.02 Reliance by Agent . . . . . . . . . . . . . . . . 70
11.03 Defaults . . . . . . . . . . . . . . . . . . . . 71
11.04 Rights as a Lender . . . . . . . . . . . . . . . 71
11.05 Indemnification . . . . . . . . . . . . . . . . . 71
11.06 Non-Reliance on Agent and Other Lenders . . . . . 72
11.07 Failure to Act . . . . . . . . . . . . . . . . . 72
11.08 Resignation or Removal of Agent . . . . . . . . . 73
11.09 Consents under Other Basic Documents . . . . . . 73
Section 12. Miscellaneous . . . . . . . . . . . . . . . . . . 73
12.01 Waiver . . . . . . . . . . . . . . . . . . . . . 73
12.02 Notices . . . . . . . . . . . . . . . . . . . . . 74
12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . 74
12.04 Amendments, Etc. . . . . . . . . . . . . . . . . 75
12.05 Successors and Assigns . . . . . . . . . . . . . 76
12.06 Assignments and Participations . . . . . . . . . 76
12.07 Survival . . . . . . . . . . . . . . . . . . . . 78
12.08 Captions . . . . . . . . . . . . . . . . . . . . 78
12.09 Counterparts . . . . . . . . . . . . . . . . . . 78
12.10 Jurisdiction, Venue, Immunity and Service of
Process . . . . . . . . . . . . . . . . . . . . 79
12.11 Governing Law . . . . . . . . . . . . . . . . . . 80
12.12 Waiver of Jury Trial . . . . . . . . . . . . . . 80
12.13 Special Waiver . . . . . . . . . . . . . . . . . 80
12.14 Judgment Currency . . . . . . . . . . . . . . . . 80
12.15 Use of English Language . . . . . . . . . . . . . 82
12.16 Treatment of Certain Information;
Confidentiality . . . . . . . . . . . . . . . . . 83
BII\32161_1 04/07/95 10:16am(iii)
<PAGE>
SCHEDULE I - Representations and Warranties of YPF
SCHEDULE II - Covenants of YPF
SCHEDULE III - Events of Default relating to YPF
SCHEDULE IV - Litigation
SCHEDULE V - Term Sheet - Midgard Facility
SCHEDULE VI - Term Sheet - Java/Sumatra Facility
SCHEDULE VII - Legal Requirements
SCHEDULE VIII - Permitted Transactions
EXHIBIT A - Form of Note
EXHIBIT B - Form of Pledge Agreement
EXHIBIT C - Form of Assumption Agreement
EXHIBIT D-1 - Form of Opinion of Special New York Counsel
to the Obligors, to be delivered on the
Initial Borrowing Date
EXHIBIT D-2 - Form of Opinion of Special Argentine Counsel
to the Obligors, to be delivered on the
Initial Borrowing Date
EXHIBIT D-3 - Form of Opinion of Special Counsel to
the Obligors, to be delivered on the
Second Borrowing Date
EXHIBIT D-4 - Form of Opinion of Special New York Counsel
to Maxus, to be delivered on the Second
Borrowing Date
EXHIBIT D-5 - Form of Opinion of General Counsel of Maxus,
to be delivered on the Second Borrowing
Date
EXHIBIT E-1 - Form of Opinion of Special New York Counsel
to Chase, to be delivered on the Initial
Borrowing Date
EXHIBIT E-2 - Form of Opinion of Special Argentine Counsel
to Chase, to be delivered on the Initial
Borrowing Date
EXHIBIT E-3 - Form of Opinion of Special New York Counsel
to Chase, to be delivered on the Second
Borrowing Date
EXHIBIT F - Form of Confidentiality Agreement
EXHIBIT G - Form of Notice of Assignment
EXHIBIT H - Form of Process Agent Acceptance
BII\32161_1 04/07/95 10:16am (iv)
<PAGE>
CREDIT AGREEMENT dated as of April 5, 1995, between:
YPF ACQUISITION CORP., a corporation duly organized and validly
existing under the laws of the State of Delaware ("YPF
---
Acquisition"); YPF SOCIEDAD ANONIMA, an Argentine sociedad
-----------
anonima duly organized and validly existing under the laws of the
Republic of Argentina ("YPF"); each of the lenders that is a
---
signatory hereto identified under the caption "LENDERS" on the
signature pages hereto or that, pursuant to Section 12.06(b)
hereof, shall become a "Lender" hereunder (individually, a
"Lender" and, collectively, the "Lenders"); and THE CHASE
------ -------
MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking
association, as agent for the Lenders (in such capacity, together
with its successors in such capacity, the "Agent").
-----
Each of YPF and YPF Acquisition has requested that the
Lenders make loans to the Company (as defined in Section 1.01
hereof) in an aggregate principal amount not exceeding
$550,000,000 and the Lenders are prepared to make such loans upon
the terms and conditions hereof. Accordingly, the parties hereto
agree as follows:
Section 1. Definitions and Accounting Matters.
----------------------------------
1.01 Certain Defined Terms. As used herein, the
---------------------
following terms shall have the following meanings (all terms
defined in this Section 1.01 or in other provisions of this
Agreement in the singular to have the same meanings when used in
the plural and vice versa):
---- -----
"Acquisition" shall mean (a) the purchase by YPF
-----------
Acquisition of Maxus Shares (at a price equal to $5.50 per share)
for cash pursuant to the Tender Offer Documents and (b) the
Merger.
"Acquisition Documents" shall mean the Tender Offer
---------------------
Documents, the Merger Agreement, the certificate of merger with
respect to the Merger, all Proxy Materials and any other document
sent by YPF, YPF Acquisition or Maxus to the stockholders of
Maxus or filed by YPF, YPF Acquisition or Maxus with the
Commission in connection with the Acquisition.
"Acquisition Financing Transactions" shall mean (a) the
----------------------------------
loans and other extensions of credit made or contemplated to be
made under this Agreement, the YPF Credit Agreement and each of
the Refinancing Facilities, (b) the guarantees of any of such
loans and other extensions of credit provided for by or
contemplated in connection with this Agreement and each of the
Refinancing Facilities and (c) any Liens provided for by or
contemplated in connection with this Agreement and each of the
Refinancing Facilities to secure any of such loans and other
extensions of credit or guarantees.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 2 -
"Affiliate" shall mean, with respect to any Person, any
---------
other Person that directly or indirectly controls, or is under
common control with, or is controlled by, such Person. As used
in this definition, "control" (including, with its correlative
-------
meanings, "controlled by" and "under common control with") shall
------------- -------------------------
mean possession, directly or indirectly, of power to direct or
cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership
interests, by contract or otherwise), provided that, in any
--------
event, any Person that owns directly or indirectly securities
having 5% or more of the voting power for the election of
directors or other governing body of a corporation or 5% or more
of the partnership or other ownership interests of any other
Person (other than as a limited partner of such other Person or
as an owner of an undivided fractional interest in hydrocarbon
reserves or production with respect to which such Person is not
the operator) will be deemed to control such corporation or other
Person. Notwithstanding the foregoing, no individual shall be an
Affiliate of any Person solely by reason of his or her being a
director, officer or employee of such Person.
"Applicable Lending Office" shall mean, for each Lender
-------------------------
and for each Type of Loan, the "Lending Office" of such Lender
(or of an affiliate of such Lender) designated for such Type of
Loan on the signature pages hereof or such other office of such
Lender (or of an affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Company as the
office by which its Loans of such Type are to be made and
maintained.
"Applicable Margin" shall mean, with respect to Base
-----------------
Rate Loans, 1-1/4% per annum and with respect to Eurodollar
Loans, 2-1/4% per annum.
"Argentina" shall mean the Republic of Argentina.
---------
"Argentine Taxes" shall have the meaning assigned to
---------------
such term in Section 6.08 hereof.
"Assumption Agreement" shall mean an Assumption
--------------------
Agreement, substantially in the form of Exhibit C hereto, dated
as of the Second Borrowing Date and executed and delivered by
Maxus, pursuant to which Maxus shall (among other things)
expressly assume all of the obligations of YPF Acquisition under
this Agreement and the other Basic Documents.
"Bankruptcy Code" shall mean the U.S. Federal
---------------
Bankruptcy Code of 1978, as amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum
---------
equal to the higher of (a) the Federal Funds Rate for such day
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 3 -
plus 1/2 of 1% and (b) the Prime Rate for such day. Each change
in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect at the
time of such change in the Base Rate.
"Base Rate Loans" shall mean Loans that bear interest
---------------
at rates based upon the Base Rate.
"Basic Documents" shall mean, collectively, this
---------------
Agreement, the Notes, the Pledge Agreement and the Assumption
Agreement.
"Business Day" shall mean any day (a) on which
------------
commercial banks are not authorized or required to close in New
York City and (b) if such day relates to a borrowing of, a
payment or prepayment of principal of or interest on, a
Conversion of or into, or an Interest Period for, a Eurodollar
Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period,
that is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Lease Obligations" shall mean, for any Person,
-------------------------
all obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be
classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Chase" shall mean The Chase Manhattan Bank (National
-----
Association).
"Code" shall mean the U.S. Internal Revenue Code of
----
1986, as amended from time to time.
"Commission" shall mean the Securities and Exchange
----------
Commission, or any regulatory body that succeeds to the functions
thereof.
"Commitment" shall mean, as to each Lender, the
----------
obligation of such Lender to make Loans pursuant to Section 2.01
hereof in an aggregate principal amount at any one time
outstanding up to but not exceeding (a) in the case of a Lender
that is a party to this Agreement as of the date hereof, the
amount set opposite such Lender's name on the signature pages
hereof under the caption "Commitment" or (b) in the case of any
other Lender, the aggregate amount of the Commitments of such
Lender acquired by it pursuant to Section 12.06(b) hereof (in
each case, as the same may be reduced at any time or from time to
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 4 -
time pursuant to Section 2.03 hereof or increased or reduced from
time to time pursuant to said Section 12.06(b)). The original
aggregate principal amount of the Commitments is $550,000,000.
"Commitment Termination Date" shall mean June 12, 1995.
---------------------------
"Commodity Hedging Agreement" shall mean, for any
---------------------------
Person, an agreement or arrangement between such Person and one
or more financial institutions or other entities providing for
the transfer or mitigation of risks of fluctuations in the prices
of hydrocarbons, either generally or under specific
circumstances.
"Company" shall mean (a) at all times up to the time
-------
the Merger is consummated, YPF Acquisition and (b) at all times
thereafter, Maxus (as successor by merger to YPF Acquisition).
"Continue", "Continuation" and "Continued" shall refer
-------- ------------ ---------
to the continuation pursuant to Section 2.07 hereof of a
Eurodollar Loan from one Interest Period to the next Interest
Period.
"Control Transfer Date" shall mean the earlier to occur
---------------------
of (a) the date that the designees of YPF have been elected to,
and constitute a majority of, the Board of Directors of Maxus
pursuant to Section 1.4 of the Merger Agreement and (b) the
Merger Closing Date.
"Convert", "Conversion" and "Converted" shall refer to
------- ---------- ---------
a conversion pursuant to Section 2.07 hereof of one Type of Loans
into another Type of Loans, which may be accompanied by the
transfer by a Lender (at its sole discretion) of a Loan from one
Applicable Lending Office to another.
"Default" shall mean an Event of Default or an event
-------
that with notice or lapse of time or both would become an Event
of Default.
"Dividend Payment" shall mean, with respect to any
----------------
Person, dividends (in cash, Property or obligations) on, or other
payments or distributions on account of, or the setting apart of
money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any shares of any
class of stock of such Person or of any warrants, options or
other rights to acquire the same (or to make any payments to any
other Person, such as "phantom stock" payments, where the amount
thereof is calculated with reference to the fair market or equity
value of such Person or any of its Subsidiaries), but excluding
dividends payable solely in shares of common stock of such
Person.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 5 -
"Dollars" and "$" shall mean lawful money of the United
------- -
States of America.
"Equity Rights" shall mean, with respect to any Person,
-------------
any subscriptions, options, warrants, commitments, preemptive
rights or agreements of any kind (including, without limitation,
any stockholders' or voting trust agreements) for the issuance,
sale, registration or voting of, or securities convertible into
or exchangeable for, any additional shares of capital stock of
any class, or partnership or other ownership interests of any
type in, such Person.
"ERISA" shall mean the Employee Retirement Income
-----
Security Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade
---------------
or business that is a member of any group of organizations
(i) described in Section 414(b) or (c) of the Code of which the
Company is a member and (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and
Section 412(c)(11) of the Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which the Company is a
member.
"Eurodollar Base Rate" shall mean, with respect to any
--------------------
Eurodollar Loan for any Interest Period therefor, the arithmetic
mean (rounded upwards, if necessary, to the nearest 1/16 of 1%),
as determined by the Agent, of the rates per annum quoted by the
respective Reference Lenders at approximately 11:00 a.m. London
time (or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period for
the offering by the respective Reference Lenders to leading banks
in the London interbank market of Dollar deposits having a term
comparable to such Interest Period and in an amount comparable to
the principal amount of the Eurodollar Loan to be made by the
respective Reference Lenders for such Interest Period. If any
Reference Lender is not participating in any Eurodollar Loans
during any Interest Period therefor, the Eurodollar Base Rate for
such Loans for such Interest Period shall be determined by
reference to the amount of such Loans that such Reference Lender
would have made or had outstanding had it been participating in
such Loan during such Interest Period.
"Eurodollar Loans" shall mean Loans that bear interest
----------------
at rates based on rates referred to in the definition of
"Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan
---------------
for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 6 -
the Agent to be equal to the Eurodollar Base Rate for such Loan
for such Interest Period divided by 1 minus the Reserve
Requirement (if any) for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to
----------------
such term in Section 10 hereof.
"Exchange Act" shall mean the Securities and Exchange
------------
Act of 1934, as amended from time to time and the rules and
regulations promulgated by the Commission thereunder.
"Federal Funds Rate" shall mean, for any day, the rate
------------------
per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for
--------
which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not
so published for any Business Day, the Federal Funds Rate for
such Business Day shall be the average rate charged to Chase on
such Business Day on such transactions as determined by the
Agent.
"GAAP" shall mean generally accepted accounting
----
principles as in effect from time to time as set forth in the
opinions, statements and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants, the Financial Accounting Standards Board and such
other Persons who shall be approved by a significant segment of
the accounting profession and concurred in by the independent
certified public accountants certifying any audited financial
statements delivered hereunder.
"Guarantee" shall mean a guarantee, an endorsement, a
---------
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other
distributions upon the stock or equity interests of any Person,
or an agreement to purchase, sell or lease (as lessee or lessor)
Property, products, materials, supplies or services primarily for
the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss,
and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other
similar instrument for the benefit of another Person, but
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 7 -
excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used
--------- ----------
as a verb shall have a correlative meaning.
"Guaranteed Obligations" shall have the meaning
----------------------
assigned to such term in Section 6.01 hereof.
"Indebtedness" shall mean, for any Person (without
------------
duplication): (a) obligations created, issued or incurred by
such Person for borrowed money (whether by loan, the issuance and
sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person);
(b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade
accounts payable (other than for borrowed money) arising, and
accrued expenses incurred, in the ordinary course of business;
(c) Indebtedness of others secured by a Lien on the Property of
such Person, whether or not the respective indebtedness so
secured has been assumed by such Person; (d) obligations of such
Person in respect of letters of credit or similar instruments
issued or accepted by banks and other financial institutions for
account of such Person; (e) Capital Lease Obligations of such
Person; (f) the unearned balance of any advance payment received
by such Person under any contract to be performed in excess of
$5,000,000 in the aggregate; and (g) Indebtedness of others
Guaranteed by such Person.
"Independent Petroleum Engineer" shall mean any firm of
------------------------------
independent petroleum engineers selected by the Company and
satisfactory to the Majority Lenders.
"Information Statement" shall mean the Information
---------------------
Statement, if required, to be filed by Maxus with the Commission
with respect to the Acquisition pursuant to Rule 14c-2 of the
Exchange Act, together with all exhibits and schedules thereto.
"Initial Borrowing Date" shall mean the date on which
----------------------
the Initial Loans are or shall have been made.
"Initial Loans" shall mean the Loans made upon the
-------------
satisfaction or waiver of the conditions precedent set forth in
Section 7.01 and 7.03 hereof.
"Interest Payment Date" shall mean the date three
---------------------
months after the Initial Borrowing Date or, if such date is not a
Business Day, the immediately preceding Business Day.
"Interest Period" shall mean, with respect to any
---------------
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or Converted from a Base Rate Loan or the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 8 -
last day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first calendar
month thereafter, as the Company may select as provided in
Section 4.05 hereof, except that each Interest Period that
commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) no Interest Period may end
after June 12, 1995; (ii) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on
the next succeeding Business Day (or, if such next succeeding
Business Day falls in the next succeeding calendar month, on the
next preceding Business Day); (iii) no Interest Period shall have
a duration of less than one month (notwithstanding clause (i)
above) and, if the Interest Period for any Eurodollar Loan would
otherwise be a shorter period, such Loan shall not be available
as a Eurodollar Loan hereunder for such period.
"Interest Rate Protection Agreement" shall mean, for
----------------------------------
any Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and one or more financial
institutions providing for the transfer or mitigation of interest
risks, either generally or under specific contingencies.
"Investment" shall mean, for any Person: (a) the
----------
acquisition (whether for cash, Property, services or securities
or otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities of
any other Person or any agreement to make any such acquisition
(including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by
the Person entering into such sale); (b) the making of any
deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another
Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person), but excluding
any such advance, loan or extension of credit having a term not
exceeding 90 days arising in connection with the sale of
inventory or supplies or the providing of oil and gas operating,
producing or marketing services by such Person in the ordinary
course of business; and (c) the entering into of any Guarantee
of, or other contingent obligation with respect to, Indebtedness
or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such
other Person (other than Guarantees included in the definition of
Indebtedness in this Section 1.01).
"Legal Requirements" shall have the meaning assigned to
------------------
such term in Section 8.03(b) hereof.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 9 -
"Lien" shall mean, with respect to any Property, any
----
assignment in trust, mortgage, lien, pledge, charge, fiduciary or
security assignment, security interest or encumbrance of any kind
in respect of such Property (including, without limitation, any
Production Payment, advance payment or similar arrangement with
respect to minerals in place). For purposes of the foregoing, a
Person shall be deemed to own subject to a Lien any Property that
it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or
other title retention agreement (other than an operating lease)
relating to such Property.
"Loans" shall mean the loans provided for by
-----
Section 2.01 hereof, which may be Base Rate Loans and/or
Eurodollar Loans.
"Majority Lenders" shall mean Lenders holding at least
----------------
66 2/3% of the aggregate amount of the Commitments or, if the
Commitments shall have terminated, Lenders holding at least
66 2/3% of the aggregate unpaid principal amount of the Loans.
"Margin Stock" shall mean "margin stock" within the
------------
meaning of Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
-----------------------
effect on any of: (a) the condition (financial or otherwise),
business, operations, assets, nature of assets or liabilities of
any of (i) YPF and its Subsidiaries taken as a whole (including,
without limitation, the investment ratings of any of
YPF's securities being downgraded or being put on "credit watch"
or "credit review" with negative implications by any nationally
recognized statistical rating organization), (ii) Maxus and its
Subsidiaries taken as a whole, (iii) Midgard or any of its
Subsidiaries (other than any of such Subsidiaries all of the
capital stock or other ownership interests of or in which are to
be transferred to Maxus or other Subsidiaries of Maxus prior to
the Merger Closing Date) or (iv) Maxus Indonesia, Maxus Java or
Maxus Sumatra or any of their respective Subsidiaries (including,
without limitation, the investment ratings of the Republic of
Indonesia being downgraded or being put on "credit watch" or
"credit review" with negative implications by a nationally
recognized statistical rating organization at any time after the
consummation of the Merger); (b) the ability of any of the
Persons referred to in clause (a) above which is or is intended
to be a party to any of the agreements and other documents
providing for or otherwise relating to any of the Acquisition
Financing Transactions to pay and perform its obligations under
any of such documents when required to be paid or performed;
(c) the validity or enforceability of any of such documents;
(d) any of the rights and remedies of the lenders (or the agent)
under any of such documents; or (e) the timely payment of any of
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 10 -
the loans and other extensions of credit or other amounts payable
to the lenders under any of such documents.
"Material Subsidiary" shall mean (a) any of the
-------------------
Refinancing Subsidiaries and their respective Subsidiaries,
(b) any of Maxus International Energy Corporation and (c) any
other Subsidiary of Maxus the assets of which (determined on a
consolidated basis with any consolidated Subsidiaries of such
Subsidiary) were equal to or more than 2 1/2% of the consolidated
total assets of Maxus and its consolidated Subsidiaries at the
end of the preceding fiscal year of Maxus.
"Maturity Date" shall mean the earlier of (a) June 12,
-------------
1995 and (b) the Merger Closing Date.
"Maxus" shall mean Maxus Energy Corporation, a Delaware
-----
corporation.
"Maxus Indonesia" shall mean Maxus Indonesia, Inc., a
---------------
Delaware corporation and a wholly-owned subsidiary of Maxus.
"Maxus Indonesia Group" shall mean Maxus Indonesia and
---------------------
its Subsidiaries.
"Maxus Indonesia Refinancing Facility" shall mean the
------------------------------------
loans in an aggregate amount up to $175,000,000 to be made
available to Maxus Java and Maxus Sumatra as contemplated by Term
Sheet - Java/Sumatra Facility attached as Schedule VI hereto, the
proceeds of which are to be used to pay or prepay a portion of
the Loans.
"Maxus Java" shall mean Maxus Northwest Java, Inc., a
----------
Delaware corporation and a Wholly Owned Subsidiary of Maxus.
"Maxus Material Adverse Effect" shall mean a material
-----------------------------
adverse effect on any of: (a) the financial condition, business
or operations of Maxus and its Subsidiaries taken as a whole;
(b) the ability of Maxus or any of the Refinancing Subsidiaries
or any Subsidiary of any of the Refinancing Subsidiaries (other
than any such Subsidiary all of the capital stock or other
ownership interests of or in which are to be transferred to Maxus
or other Subsidiaries of Maxus prior to the Merger Closing Date)
to perform any of its payment or any of its other material
obligations under any of the Basic Documents to which it is or is
intended to be a party or the Refinancing Facilities (including
the agreements and other documents providing for or relating to
such Refinancing Facilities to which it is or is intended to be a
party) or, in the case of Maxus, any of its material obligations
under the Merger Agreement; (c) the validity or enforceability of
any of the obligations referred to in clause (b) above; (d) the
ability of the lenders (or the agent) under any of the documents
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 11 -
referred to in clause (b) above to enforce their respective
rights and remedies against any of the Persons referred to in
clause (b) above under any of such documents to which such Person
is or is intended to be a party; or (e) the timely payment of any
of the payment obligations referred to in clause (b) above.
"Maxus Preferred Shares" shall mean, collectively, the
----------------------
$4.00 Cumulative Convertible Preferred Stock par value $1.00 per
share, the $9.75 Cumulative Convertible Preferred Stock par value
$1.00 per share, and the $2.50 Cumulative Preferred Stock par
value $1.00 per share, in each case, of Maxus.
"Maxus Public Debt Documents" shall mean, collectively,
---------------------------
(a) the Indenture dated as of November 1, 1990 between Maxus and
Chemical Bank, as trustee and the Securities (as defined therein)
issued thereunder, (b) the Indenture date as of April 1, 1978
between Diamond Shamrock Corporation (as predecessor in interest
to Maxus) and Chemical Bank, as trustee, and the Debentures (as
defined therein) issued thereunder, (c) the Indenture dated as of
May 1, 1983 between Diamond Shamrock Corporation (as predecessor
in interest to Maxus) and NationsBank, N.A., as trustee, and the
Securities (as defined therein) issued thereunder, (d) the
Indenture dated as of November 1, 1985 between Maxus and
NationsBank, N.A., as trustee, and the Securities (as defined
therein) issued thereunder, and (e) the Indenture dated as of
April 1, 1988 between Maxus and Chemical Bank, as trustee, and
the Securities (as defined therein) issued thereunder, in each
case, as such agreements and instruments have heretofore and
shall, subject to Section 9.18 hereof, be hereafter modified and
supplemented and in effect from time to time.
"Maxus Shares" shall mean shares of common stock of
------------
Maxus, par value $1.00.
"Maxus Sumatra" shall mean Maxus Southeast Sumatra
-------------
Inc., a Delaware corporation and a Wholly Owned Subsidiary of
Maxus.
"Merger" shall mean the merger of YPF Acquisition with
------
and into Maxus pursuant to the Merger Agreement.
"Merger Agreement" shall mean the Agreement of Merger
----------------
dated as of February 28, 1995 among YPF, YPF Acquisition and
Maxus, as the same shall, subject to Section 9.18 hereof, be
modified and supplemented and in effect from time to time.
"Merger Closing Date" shall mean the date on which the
-------------------
Merger shall become effective.
"Midgard" shall mean Midgard Energy Company, a Delaware
-------
corporation and a Wholly Owned Subsidiary of Maxus.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 12 -
"Midgard Group" shall mean Midgard and its
-------------
Subsidiaries.
"Midgard Refinancing Facility" shall mean the loans in
----------------------------
an aggregate amount up to $250,000,000 to be made available to
Midgard as contemplated by Term Sheet - Midgard Facility attached
as Schedule V hereto, the proceeds of which are to be used to pay
or prepay a portion of the Loans.
"Multiemployer Plan" shall mean a multiemployer plan
------------------
defined as such in Section 3(37) of ERISA to which contributions
have been made by the Company or any ERISA Affiliate and that is
covered by Title IV of ERISA.
"Notes" shall mean the promissory notes provided for by
-----
Section 2.06 hereof and all promissory notes delivered in
substitution or exchange therefor, in each case as the same shall
be modified and supplemented and in effect from time to time.
"Obligors" shall mean, collectively, the Company and
--------
YPF.
"Offer to Purchase" shall mean the Offer to Purchase
-----------------
For Cash All Outstanding Shares of Maxus at $5.50 Net Per Share
by YPF Acquisition dated March 3, 1995 made by YPF Acquisition in
connection with the Acquisition.
"PBGC" shall mean the Pension Benefit Guaranty
----
Corporation or any entity succeeding to any or all of its
functions under ERISA.
"Permitted Investments" shall mean: (a) direct
---------------------
obligations of the United States of America, or of any agency
thereof, or obligations guaranteed as to principal and interest
by the United States of America, or of any agency thereof, in
either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any
bank or trust company organized under the laws of the United
States of America or any state thereof and having capital,
surplus and undivided profits of at least $500,000,000, maturing
not more than 90 days from the date of acquisition thereof; and
(c) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Corporation or Moody's Investors Services, Inc.,
respectively, maturing not more than 90 days from the date of
acquisition thereof; in each case so long as the same (x) provide
for the payment of principal and interest (and not principal
alone or interest alone) and (y) are not subject to any
contingency regarding the payment of principal or interest.
"Permitted Maxus Investments" shall mean Permitted
---------------------------
Investments referred to in clause (a) of the definition of such
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 13 -
term in Section 1.01 hereof (without regard to the limitation on
maturity specified therein), other readily marketable short-term
investments held by Maxus and its Subsidiaries on the date hereof
and other readily marketable short-term investments having the
same or more favorable credit and other characteristics as such
short-term investments so held on the date hereof.
"Person" shall mean any individual, corporation,
------
company, voluntary association, partnership, joint venture,
trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
"Plan" shall mean an employee benefit or other plan
----
established or maintained by the Company or any ERISA Affiliate
and that is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Pledge Agreement" shall mean a Pledge Agreement
----------------
substantially in the form of Exhibit B hereto between YPF and the
Agent, as the same shall be modified and supplemented and in
effect from time to time.
"Post-Default Rate" shall mean, in respect of (a) any
-----------------
principal of any Loan that is not paid when due (whether at
stated maturity, by acceleration or otherwise), a rate per annum
during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to
3 1/2% plus the Base Rate as in effect from time to time plus the
---- ----
Applicable Margin for Base Rate Loans (provided that, if the
--------
amount so in default is principal of a Eurodollar Loan and the
due date thereof is a day other than the last day of the Interest
Period therefor, the "Post-Default Rate" for such principal shall
be, for the period from and including such due date to but
excluding the last day of such Interest Period, 3 1/2% plus the
----
interest rate for such Loan as provided in Section 3.02(b) hereof
and (b) interest on any Loan that is not paid when due (whether
at stated maturity, by acceleration or otherwise), a rate per
annum during the period from and including the due date to but
excluding the date on which such amount is paid in full equal to
3 1/2% plus the Base Rate as in effect from time to time plus the
---- ----
Applicable Margin for Base Rate Loans.
"Prime Rate" shall mean the rate of interest from time
----------
to time announced by Chase at the Principal Office as its prime
commercial lending rate.
"Principal Office" shall mean the principal office of
----------------
Chase, located on the date hereof at 1 Chase Manhattan Plaza, New
York, New York 10081.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 14 -
"Proceeds Production Payments" shall mean production
----------------------------
payment obligations of any Person payable in Dollars or other
currencies representing a specified share of proceeds received
from specific hydrocarbon Properties, together with all
undertakings and obligations in connection therewith.
"Process Agent" shall have the meaning assigned to such
-------------
term in Section 12.10(c) hereof.
"Production Payments" shall mean, collectively,
-------------------
Proceeds Production Payments and Volumetric Production Payments.
"Property" shall mean any right or interest in or to
--------
property of any kind whatsoever, whether real, personal or mixed
and whether tangible or intangible.
"Proved Reserves" shall mean reserves (to the extent of
---------------
the net interest of Maxus and its Subsidiaries therein) comprised
of quantities of hydrocarbons which geologic and engineering data
demonstrate with reasonable certainty to be recoverable in future
years from known reservoirs under existing economic and operating
conditions.
"Proxy Materials" shall mean all proxy materials, if
---------------
any, relating to the Acquisition and distributed to the
shareholders of Maxus.
"Reference Lenders" shall mean Chase and such other
-----------------
Lenders as may be agreed by Chase and the Company from time to
time (but in no event shall there be more than three Reference
Lenders at any time) or their respective Applicable Lending
Offices, as the case may be.
"Refinancing Balance Sheets" shall have the meaning
--------------------------
assigned to such term in Section 9.01(g) hereof.
"Refinancing Facilities" shall mean, collectively, the
----------------------
Midgard Refinancing Facility and the Maxus Indonesia Refinancing
Facility.
"Refinancing Subsidiaries" shall mean, collectively,
------------------------
Midgard, Maxus Java, Maxus Sumatra and Maxus Indonesia.
"Regulation A", "Regulation D", "Regulation U" and
-------------------------------------------------
"Regulation X" shall mean, respectively, Regulations A, D, U and
-------------
X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in
effect from time to time.
"Regulatory Change" shall mean, with respect to any
-----------------
Lender, any change after the date hereof in U.S. Federal, state
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 15 -
or foreign law or regulations (including, without limitation,
Regulation D) or the adoption or making after such date of any
interpretation, directive or request applying to a class of banks
including such Lender of or under any Federal, state or foreign
law or regulations (whether or not having the force of law and
whether or not failure to comply therewith would be unlawful) by
any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Relevant Information" shall mean information relating
--------------------
to any of the Acquisition, the Acquisition Financing
Transactions, YPF and its Subsidiaries and Maxus and its
Subsidiaries.
"Relevant Parties" shall have the meaning assigned to
----------------
such term in Section 10(e) hereof.
"Relevant Subsidiaries" shall mean YPF Acquisition and,
---------------------
on and after the Control Transfer Date, Maxus and the Material
Subsidiaries.
"Reserve Requirement" shall mean, for any Interest
-------------------
Period for any Eurodollar Loan, the average maximum rate at which
reserves (including, without limitation, any marginal,
supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of
the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency liabilities"
(as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Reserve Requirement shall include
any other reserves required to be maintained by such member banks
by reason of any Regulatory Change with respect to (i) any
category of liabilities that includes deposits by reference to
which the Eurodollar Base Rate is to be determined as provided in
the definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets that
includes Eurodollar Loans.
"SEC Reports" shall mean, with respect to any Person,
-----------
any regular periodic reports or any reports on Form 6-K or
Form 8-K (or any successor forms thereto) filed by such Person
with the Commission.
"Second Borrowing Date" shall mean the date on which
---------------------
the Second Loans are or shall have been made.
"Second Loans" shall mean the Loans made upon the
------------
satisfaction or waiver of the conditions precedent set forth in
Sections 7.02 and 7.03 hereof.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 16 -
"Subsidiary" shall mean, with respect to any Person,
----------
any corporation, partnership or other entity of which at least a
majority of the securities or other ownership interests having by
the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such
corporation, partnership or other entity shall have or might have
voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such
Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"Tender Offer" shall mean the offer by YPF Acquisition
------------
to purchase Maxus Shares for cash pursuant to the Tender Offer
Documents.
"Tender Offer Closing Date" shall mean the date of the
-------------------------
initial purchase by YPF Acquisition of the Maxus Shares tendered
pursuant to the Tender Offer.
"Tender Offer Documents" shall mean the Offer to
----------------------
Purchase and the Tender Offer Statement on Schedule 14D-1 filed
by YPF and YPF Acquisition with the Commission, the
Schedule 14D-9 filed by Maxus with respect to the Offer to
Purchase, and all amendments, exhibits and schedules thereto and
related documents distributed to the shareholders of Maxus or
filed by YPF, YPF Acquisition or Maxus with the Commission in
connection with the Acquisition, in each case, prior to the date
of this Agreement.
"Transaction Costs" shall mean all costs and expenses
-----------------
incurred by YPF and YPF Acquisition in connection with the
Acquisition and the other transactions contemplated hereby to
occur on or prior to the Initial Borrowing Date and the Second
Borrowing Date (exclusive of amounts paid or payable in respect
of Maxus Shares referred to in Sections 2.01(a)(i)(x) and
2.01(b)(i) hereof); provided, however, that, at the election of
the Obligors, "Transaction Costs" shall also include any so-
called "golden parachute" payments to be made to former officers
of Maxus, and/or "poison pill" payments under the Certificate of
Incorporation of Maxus.
"Transaction Documents" shall mean the Acquisition
---------------------
Documents and the Basic Documents.
"Type" shall have the meaning assigned to such term in
----
Section 1.03 hereof.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 17 -
"Volumetric Production Payments" shall mean production
------------------------------
payment obligations payable in the form of hydrocarbons
constituting a specified share of production from specific
hydrocarbon Properties, together with all undertakings and
obligations in connection therewith.
"Wholly Owned Subsidiary" shall mean, with respect to
-----------------------
any Person, any corporation, partnership or other entity of which
all of the equity securities or other ownership interests (other
than, in the case of a corporation, directors' qualifying shares)
are directly or indirectly owned or controlled by such Person or
one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
"YPF Acquisition Material Adverse Effect" shall mean a
---------------------------------------
material adverse effect on any of: (a) the financial condition,
business or operations of YPF Acquisition; (b) the ability of
YPF Acquisition to perform any of its payment or any of its other
material obligations under any of the Basic Documents to which it
is or is intended to be a party or any of its material payment or
other material obligations under either the Offer to Purchase or
the Merger Agreement; (c) the validity or enforceability of any
of the obligations referred to in clause (b) above; (d) the
ability of the Lenders or the Agent under any of the documents
referred to in clause (b) above to enforce their respective
rights and remedies against YPF Acquisition under any of the
Basic Documents to which it is or is intended to be a party; or
(e) the timely payment of any of the payment obligations referred
to in clause (b) above.
"YPF Affiliates" shall mean YPF and its Affiliates
--------------
(other than the Company and its Subsidiaries).
"YPF Debt Documents" shall mean, collectively, (a) the
------------------
Indenture dated as of February 2, 1994 between YPF, The Bank of
New York, as trustee, co-registrar and principal paying agent,
and The Bank of New York S.A., as registrar and paying agent and
the Securities (as defined therein) issued thereunder and (b) the
Indenture dated as of October 7, 1994 between YPF, The Bank of
New York, as trustee, co-registrar and principal paying agent and
The Bank of New York S.A., as registrar and paying agent and the
Debt Securities (as defined therein) issued thereunder and, in
each case, as such agreements and instruments may be modified and
supplemented and in effect from time to time.
"YPF Credit Agreement" shall mean the Trade Credit
--------------------
Agreement dated as of April 5, 1995 between YPF, the lenders
referred to therein and Chase as agent for said lenders, as such
agreement shall be modified and supplemented and in effect from
time to time.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 18 -
"YPF Material Adverse Effect" shall mean a material
---------------------------
adverse effect on any of: (a) the financial condition, business
or operations of YPF and its Subsidiaries taken as a whole;
(b) the ability of YPF to perform any of its payment or any of
its other material obligations under any of the Basic Documents
or the Refinancing Facilities (including the agreements and other
documents providing for or relating to such Refinancing
Facilities) to which it is or is intended to be a party or any of
its material payment or other material obligations under any of
the other Transaction Documents to which it is or is intended to
be a party; (c) the validity or enforceability of any of the
obligations referred to in clause (b) above; or (d) the ability
of the lenders (or the agent) under any of the documents referred
to in clause (b) above to enforce their rights and remedies
against YPF under any of such documents.
1.02 Accounting Terms and Determinations. Except as
-----------------------------------
otherwise expressly provided herein, all accounting terms used
herein relating to Maxus and its Subsidiaries shall be
interpreted, and all financial statements and certificates and
reports as to financial matters relating to Maxus and its
Subsidiaries required to be delivered to the Lenders hereunder
shall be prepared, in accordance with GAAP.
1.03 Types of Loans. Loans hereunder are
--------------
distinguished by "Type". The "Type" of a Loan refers to whether
such Loan is a Base Rate Loan or a Eurodollar Loan, each of which
constitutes a Type.
1.04 Copies of Documents. Whenever this Agreement
-------------------
provides that the Agent will distribute to the Lenders documents
provided by either Obligor, such Obligor shall furnish to the
Agent a copy of such document for each Lender.
Section 2. Commitments, Loans, Notes and Prepayments.
-----------------------------------------
2.01 Loans. Each Lender severally agrees, on the
-----
terms and conditions of this Agreement, to make loans to the
Company in Dollars on the Initial Borrowing Date and the Second
Borrowing Date (but in no event after the Commitment Termination
Date) in an aggregate principal amount up to but not exceeding
the amount of the Commitment of such Lender (subject to the last
sentence of this Section 2.01); provided that (a) the aggregate
--------
principal amount of the Loans made on the Initial Borrowing Date
shall not exceed an amount equal to the excess of (i) the sum of
(x) an amount equal to (A) the aggregate number of Maxus Shares
tendered pursuant to the Offer to Purchase times (B) $5.50 plus
----- ----
(y) the aggregate amount of Transaction Costs to be paid by YPF
and YPF Acquisition on or before (or within 30 days' after) the
Initial Borrowing Date over (ii) $250,000,000 and (b) the
----
aggregate principal amount of the Loans made on the Second
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 19 -
Borrowing Date shall not exceed an amount equal to the sum of
(i) the aggregate amount of cash to be paid by YPF Acquisition
pursuant to Section 2.4 of the Merger Agreement in respect of
Maxus Shares that are converted into a right to receive cash as
provided in Section 2.1.4 of the Merger Agreement upon the
consummation of the Merger in an amount equal to $5.50 per share
plus (ii) the aggregate amount of Transaction Costs to be paid by
----
YPF and YPF Acquisition on or before (or within 30 days' after)
the Second Borrowing Date (other than Transaction Costs referred
to in clause (a)(i)(y)) above. After the making of any Loans,
the Company may Convert Loans of one Type into Loans of another
Type (as provided in Section 2.07 hereof) or Continue Loans of
one Type as Loans of the same Type (as provided in Section 2.07
hereof); provided further that no more than four separate
-------- -------
Interest Periods in respect of Eurodollar Loans from each Lender
may be outstanding at any one time. In the event that (I) the
amount referred to in clause (a)(i)(x) of this Section 2.01 shall
be greater than (II) the aggregate amount of cash paid by
YPF Acquisition prior to the close of business on April 10, 1995
for the purchase of Maxus Shares pursuant to the Offer to
Purchase, the Company shall prepay the Loans on or before
April 11, 1995 in accordance with the provisions of Section 2.07
hereof in an aggregate principal amount equal to the excess of
the amount specified in clause (I) above over the amount
specified in clause (II) above (and shall hold the excess in the
form of cash or cash equivalents until applied to the payment of
the purchase price for Maxus Shares pursuant to the Offer to
Purchase or such prepayment). Subject to the terms and
conditions of this Agreement, any principal of the Loans so
prepaid may be reborrowed on the Second Borrowing Date.
2.02 Borrowings. The Company shall give the Agent
----------
notice of each borrowing hereunder as provided in Section 4.05
hereof. Not later than 1:00 p.m. New York time on the date
specified for each borrowing hereunder, each Lender shall make
available the amount of the Loan or Loans to be made by it on
such date to the Agent, at account number NYAO-DI-900-9-000002
maintained by the Agent with Chase at the Principal Office, in
immediately available funds, for account of the Company. The
amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an
account of the Company maintained with Chase at the Principal
Office designated by the Company.
2.03 Changes of Commitments.
----------------------
(a) The Company shall have the right at any time or
from time to time to terminate or reduce the aggregate unused
amount of the Commitments; provided that (x) the Company shall
--------
give notice of each such termination or reduction as provided in
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 20 -
Section 4.05 hereof and (y) each partial reduction shall be in an
aggregate amount at least equal to $10,000,000 (or a larger
multiple of $1,000,000).
(b) Any portion of the Commitments not used on the
Second Borrowing Date shall be automatically terminated.
(c) The Commitments once terminated or reduced may not
be reinstated.
2.04 Lending Offices. The Loans of each Type made by
---------------
each Lender shall be made and maintained at such Lender's
Applicable Lending Office for Loans of such Type.
2.05 Several Obligations; Remedies Independent. The
-----------------------------------------
failure of any Lender to make any Loan to be made by it on the
date specified therefor shall not relieve any other Lender of its
obligation to make its Loan on such date, but neither any Lender
nor the Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender, and
(except as otherwise provided in Section 4.06 hereof) no Lender
shall have any obligation to the Agent or any other Lender for
the failure by such Lender to make any Loan required to be made
by such Lender. The amounts payable by the Company at any time
hereunder and under the Notes to each Lender shall be a separate
and independent debt and each Lender shall be entitled to protect
and enforce its rights arising out of this Agreement and the
Notes, and, to the extent permitted by law, it shall not be
necessary for any other Lender or the Agent to consent to, or be
joined as an additional party in, any proceedings for such
purposes, provided that in no event may the obligations hereunder
and under the Notes be accelerated except in accordance with
Section 10 hereof.
2.06 Notes.
-----
(a) The Loans made by each Lender shall be evidenced
by a single promissory note of the Company substantially in the
form of Exhibit A hereto, dated the date hereof, payable to such
Lender in a principal amount equal to the amount of its
Commitment as originally in effect and otherwise duly completed.
(b) The date, amount, Type, interest rate and duration
of Interest Period (if applicable) of each Loan made by each
Lender to the Company, and each payment made on account of the
principal thereof, shall be recorded by such Lender on its books
and, prior to any transfer of the Note held by it, endorsed by
such Lender on the schedule attached to such Note or any
continuation thereof; provided that the failure of such Lender to
--------
make any such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 21 -
amount owing hereunder or under such Note in respect of the
Loans.
(c) No Lender shall be entitled to have its Note
substituted or exchanged for any reason, or subdivided for
promissory notes of lesser denominations, except in connection
with a permitted assignment of all or any portion of such
Lender's Commitment, Loans and Note pursuant to Section 12.06
hereof or a required assignment of all of such Lender's Loans as
contemplated by Section 5.07 hereof (and (x) if requested by any
Lender, or in connection with any such required assignment, the
Company agrees to so exchange any Note and (y) promptly following
the delivery to any Lender of replacement Note(s), such Lender
(if such Lender is an assigning Lender) agrees to deliver to the
Company such Lender's existing Note marked canceled).
2.07 Prepayments and Conversions or Continuations of
-----------------------------------------------
Loans. Subject to Sections 2.01 and 4.04 hereof, the Company
-----
shall have the right to prepay Loans, or to Convert Loans of one
Type into Loans of another Type or Continue Loans of one Type as
Loans of the same Type, at any time or from time to time,
provided that: (a) the Company shall give the Agent notice of
--------
each such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such
notice of prepayment, the amount to be prepaid shall become due
and payable hereunder) and (b) Eurodollar Loans may be prepaid or
Converted only on the last day of an Interest Period for such
Loans. Notwithstanding the foregoing, and without limiting the
rights and remedies of the Lenders under Section 10 hereof, in
the event that any Event of Default shall have occurred and be
continuing, the Agent may (and at the request of the Majority
Lenders shall) suspend the right of the Company to Convert any
Loan into a Eurodollar Loan, or to Continue any Loan as a
Eurodollar Loan, in which event all Loans shall be Converted (on
the last day(s) of the respective Interest Periods therefor) or
Continued, as the case may be, as Base Rate Loans.
Section 3. Payments of Principal and Interest.
----------------------------------
3.01 Repayment of Loans. The Company hereby promises
------------------
to pay to the Agent for account of each Lender the principal of
such Lender's Loans on the Maturity Date.
3.02 Interest. The Company hereby promises to pay to
--------
the Agent for account of each Lender interest on the unpaid
principal amount of each Loan made by such Lender for the period
from and including the date of such Loan to but excluding the
date such Loan shall be paid in full, at the following rates per
annum:
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 22 -
(a) during such periods as such Loan is a Base Rate
Loan, the Base Rate (as in effect from time to time) plus
----
the Applicable Margin and
(b) during such periods as such Loan is a Eurodollar
Loan, for each Interest Period relating thereto, the
Eurodollar Rate for such Loan for such Interest Period plus
----
the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay
to the Agent for account of each Lender interest at the
applicable Post-Default Rate on the following:
(i) on any principal of any Loan held by such Lender
that shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise), for the period from
and including the due date thereof to but excluding the date
the same is paid in full; and
(ii) on any interest on any Loan that shall not be paid
in full when due for the period from the due date thereof to
but excluding the date the same is paid in full.
Accrued interest on each Loan shall be payable (i) in the case of
a Base Rate Loan, on the Interest Payment Date and on the
Maturity Date, (ii) in the case of a Eurodollar Loan, on the last
day of each Interest Period therefor and on the Maturity Date and
(iii) in the case of any Loan, upon the payment or prepayment
thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted),
except that interest payable at the Post-Default Rate shall be
payable from time to time on demand. Promptly after the
determination of any interest rate provided for herein or any
change therein, the Agent shall give notice thereof to the
Lenders and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations;
-------------------------------------------
Etc.
----
4.01 Payments.
--------
(a) Except to the extent otherwise provided herein,
all payments of principal, interest and other amounts to be made
by the Company under this Agreement and the Notes (and any
payments made by YPF of the Guaranteed Obligations), and, except
to the extent otherwise provided therein, all payments to be made
by the Obligors under any other Basic Document, shall be made in
Dollars, in immediately available funds, without deduction,
set-off or counterclaim, to the Agent at account number
NYAO-DI-900-9-000002 maintained by the Agent with Chase at the
Principal Office, not later than 1:00 p.m. New York time on the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 23 -
date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been
made on the next succeeding Business Day), provided that, if (and
only if) and to the extent so specified by the Agent (acting on
the instructions of the Majority Lenders) in a notice to YPF, YPF
shall make any such payment of the Guaranteed Obligations in
Dollars, in immediately available funds, without deduction, set-
off or counterclaim, for the account of the Agent to such office
of such bank in Buenos Aires, Argentina, as is specified by the
Agent in such notice no later than 2:00 p.m. Buenos Aires time on
the date for the payment specified in such notice (which date
shall be a day on which commercial banks in Buenos Aires,
Argentina are not authorized or required to close and shall be no
earlier than the date such payment is due hereunder) (each such
payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day).
(b) The Company shall, at the time of making each
payment under this Agreement or any Note for account of any
Lender, specify to the Agent (which shall so notify the intended
recipient(s) thereof) the Loans or other amounts payable by the
Company hereunder to which such payment is to be applied, except
that, if an Event of Default has occurred and is continuing, the
Agent may distribute such payment to the Lenders for application
in such manner as it or the Majority Lenders, subject to
Section 4.02 hereof, may determine to be appropriate).
(c) Each payment received by the Agent under this
Agreement or any Note for account of any Lender shall be paid by
the Agent promptly to such Lender, in immediately available
funds, for account of such Lender's Applicable Lending Office for
the Loan or other obligation in respect of which such payment is
made.
(d) If the due date of any payment under this
Agreement or any Note would otherwise fall on a day that is not a
Business Day, such date shall be extended to the next succeeding
Business Day, and interest shall be payable for any principal so
extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent
------------------
otherwise provided herein: (a) each borrowing from the Lenders
under Section 2.01 hereof shall be made from the Lenders, and
each termination or reduction of the amount of the Commitments
under Section 2.03 hereof shall be applied to the respective
Commitments of the Lenders, pro rata according to the amounts of
their respective Commitments; (b) except as otherwise provided in
Section 5.04 hereof, Eurodollar Loans having the same Interest
Period shall be allocated pro rata among the Lenders according to
the amounts of their respective Commitments (in the case of the
making of Loans) or their respective Loans (in the case of
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 24 -
Conversions and Continuations of Loans); (c) each payment or
prepayment of principal of Loans by the Company shall be made for
account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the Loans held by them; and (d) each
payment of interest on Loans by the Company shall be made for
account of the Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective
Lenders.
4.03 Computations. Interest on Eurodollar Loans shall
------------
be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable and interest on Base
Rate Loans shall be computed on the basis of a year of 365 or
366 days, as the case may be, and actual days elapsed (including
the first day but excluding the last day) occurring in the period
for which payable. Notwithstanding the foregoing, for each day
that the Base Rate is calculated by reference to the Federal
Funds Rate, interest on Base Rate Loans shall be computed on the
basis of a year of 360 days and actual days elapsed.
4.04 Minimum Amounts. Each borrowing, Conversion and
---------------
partial prepayment of principal of Loans shall be in an aggregate
amount at least equal to (x) in the case of Base Rate Loans,
$10,000,000 or a larger multiple of $1,000,000 and (y) in the
case of Eurodollar Loans, $10,000,000 or in larger multiples of
$5,000,000 (borrowings, Conversions or prepayments of or into
Loans of different Types or, in the case of Eurodollar Loans,
having different Interest Periods at the same time hereunder to
be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period),
provided that the aggregate principal amount of Eurodollar Loans
--------
having the same Interest Period shall be in an amount at least
equal to $20,000,000 or a larger multiple of $5,000,000 and, if
any Eurodollar Loans would otherwise be in a lesser principal
amount for any period, such Loans shall be Base Rate Loans during
such period.
4.05 Certain Notices. Notices by the Company to the
---------------
Agent of terminations or reductions of the Commitments and of
borrowings, Conversions, Continuations and optional prepayments
of Loans, of Types of Loans and of the duration of Interest
Periods shall be irrevocable and shall be effective only if
received by the Agent not later than 11:00 a.m. New York time on
the number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 25 -
Number of
Business
Notice Days Prior
------ ----------
Termination or reduction
of Commitments 3
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans same day
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the
amount of the Commitments to be terminated or reduced. Each such
notice of borrowing, Conversion, Continuation or optional
prepayment shall specify the Loans to be borrowed, Converted,
Continued or prepaid and the amount (subject to Section 4.04
hereof) and Type of each Loan to be borrowed, Converted,
Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business
Day). The Agent shall promptly notify the Lenders of the
contents of each such notice. In the event that the Company
fails to select the Type of Loan, or the duration of any Interest
Period for any Eurodollar Loan, within the time period and
otherwise as provided in this Section 4.05, such Loan (if
outstanding as a Eurodollar Loan) will be automatically Converted
into a Base Rate Loan on the last day of the then current
Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made
as, a Base Rate Loan.
4.06 Non-Receipt of Funds by the Agent. Unless the
---------------------------------
Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment
-----
to the Agent or (in the case of a Lender) the proceeds of a Loan
to be made by such Lender hereunder or (in the case of the
Company) a payment to the Agent for account of one or more of the
Lenders hereunder (such payment being herein called the "Required
--------
Payment"), which notice shall be effective upon receipt, that the
-------
Payor does not intend to make the Required Payment to the Agent,
the Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required
to), make the amount thereof available to the intended
recipient(s) on such date; and, if the Payor has not in fact made
the Required Payment to the Agent, the recipient(s) of such
payment shall, on demand, repay to the Agent the amount so made
available together with interest thereon in respect of each day
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 26 -
during the period commencing on the date (the "Advance Date")
------------
such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such day and, if such recipient(s) shall
fail promptly to make such payment, the Agent shall be entitled
to recover such amount, on demand, from the Payor, together with
interest as aforesaid.
4.07 Sharing of Payments, Etc.
-------------------------
(a) Each Obligor agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim a Lender may otherwise have, each Lender shall be
entitled, at its option (to the fullest extent permitted by law)
upon and during the continuance of an Event of Default, to set
off and apply any deposit (general or special, time or demand,
provisional or final), or other indebtedness, held by it for the
credit or account of such Obligor at any of its offices, in
Dollars or in any other currency, against any principal of or
interest on any of such Lender's Loans or any other amount
payable to such Lender hereunder, that is not paid when due
(regardless of whether such deposit or other indebtedness are
then due to such Obligor), in which case it shall promptly notify
such Obligor and the Agent thereof, provided that such Lender's
--------
failure to give such notice shall not affect the validity
thereof.
(b) If any Lender shall obtain from either Obligor
payment of any principal of or interest on any Loan owing to it
or payment of any other amount under this Agreement or any other
Basic Document through the exercise of any right of set-off,
banker's lien or counterclaim or similar right or otherwise
(other than from the Agent as provided herein), and, as a result
of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or such
other amounts then due hereunder or thereunder by such Obligor to
such Lender than the percentage received by any other Lender, it
shall promptly purchase from such other Lenders participations in
(or, if and to the extent specified by such Lender, direct
interests in) the Loans or such other amounts, respectively,
owing to such other Lenders (or in interest due thereon, as the
case may be) in such amounts, and make such other adjustments
from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of
any expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other
amounts, respectively, owing to each of the Lenders. To such end
all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if
such payment is rescinded or must otherwise be restored.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 27 -
(c) The Obligors agree that, to the extent permitted
by law, any Lender so purchasing such a participation (or direct
interest) may exercise all rights of set-off, banker's lien,
counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans or other
amounts (as the case may be) owing to such Lender in the amount
of such participation.
(d) Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any
Lender to exercise, and retain the benefits of exercising, any
such right with respect to any other indebtedness or obligation
of either Obligor. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.07 applies,
such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this Section 4.07 to share
in the benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
----------------------
5.01 Additional Costs.
----------------
(a) The Company shall pay directly to each Lender from
time to time such amounts as such Lender may determine to be
necessary to compensate such Lender for any costs that such
Lender determines are attributable to its making or maintaining
of any Eurodollar Loans or its obligation to make any Eurodollar
Loans hereunder, or any reduction in any amount receivable by
such Lender hereunder in respect of any of such Loans or such
obligation (such increases in costs and reductions in amounts
receivable, together with costs referred to in Section 5.01(b)
hereof, being herein called "Additional Costs"), resulting from
----------------
any Regulatory Change that:
(i) shall (without duplication of amounts paid
pursuant to Section 5.06, 6.08 or 12.03(c) hereof) subject
any Lender (or its Applicable Lending Office for any of such
Loans) to any tax, duty or other charge in respect of such
Loans or its Note or changes the basis of taxation of any
amounts payable to such Lender under this Agreement or its
Note in respect of any of such Loans (excluding, in each
case, any such changes in the rate of tax on the overall net
income of, or the rate at which franchise taxes are imposed
on, such Lender or such Applicable Lending Office by the
jurisdiction in which such Lender has its principal office
or such Applicable Lending Office); or
(ii) imposes or modifies any reserve, special deposit
or similar requirements (other than the Reserve Requirement
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 28 -
utilized in the determination of the Eurodollar Rate for
such Loan) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of,
such Lender (including, without limitation, any of such
Loans, or any commitment of such Lender (including, without
limitation, the Commitment of such Lender hereunder); or
(iii) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of credit
or liabilities) or its Commitment.
If any Lender requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to such Lender (with
a copy to the Agent), suspend the obligation of such Lender
thereafter to make or Continue Eurodollar Loans, or to Convert
Base Rate Loans into Eurodollar Loans, until the Regulatory
Change giving rise to such request ceases to be in effect (in
which case the provisions of Section 5.04 hereof shall be
applicable), provided that such suspension shall not affect the
--------
right of such Lender to receive the compensation so requested.
(b) Without limiting the effect of the foregoing
provisions of this Section 5.01 (but without duplication), the
Company shall pay directly to each Lender from time to time on
request such amounts as such Lender may determine to be necessary
to compensate such Lender (or, without duplication, the holding
company of which such Lender is a subsidiary) for any costs that
it determines are attributable to the maintenance by such Lender
(or any Applicable Lending Office or such bank holding company)
of capital in respect of its Commitment or Loans that it would
not have incurred but for a Regulatory Change (such compensation
to include, without limitation, an amount equal to any reduction
of the rate of return on assets or equity of such Lender (or any
Applicable Lending Office or such bank holding company) to a
level below that which such Lender (or any Applicable Lending
Office or such bank holding company) could have achieved but for
such Regulatory Change).
(c) Each Lender shall notify the Company of any event
occurring after the date hereof entitling such Lender to
compensation under paragraph (a) or (b) of this Section 5.01 as
promptly as practicable, but in any event within 30 days
(45 days, in the case of Additional Costs referred to in said
paragraph (b)), after such Lender obtains actual knowledge
thereof; provided that (i) if any Lender fails to give such
--------
notice within 30 days (45 days, in the case of Additional Costs
referred to in said paragraph (b)) after it obtains actual
knowledge of such an event, such Lender shall, with respect to
compensation payable pursuant to this Section 5.01 in respect of
any Additional Costs resulting from such event, only be entitled
to payment under this Section 5.01 for Additional Costs incurred
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 29 -
from and after the date 30 days (45 days, in the case of
Additional Costs referred to in said paragraph (b)) prior to the
date that such Lender does give such notice and (ii) each Lender
will make all reasonable efforts to avoid the need for or
minimize the amount of such compensation, including, without
limitation, designating a different Applicable Lending Office for
the Loans of such Lender affected by such event if such
designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable opinion of such
Lender, be disadvantageous to such Lender, except that such
Lender shall have no obligation to designate an Applicable
Lending Office located in the United States of America. Each
Lender will furnish to the Company a certificate setting forth
the basis and amount of each request by such Lender for
compensation under paragraph (a) or (b) of this Section 5.01
(which certificate, in the case of a request for compensation
under said paragraph (b), shall state that such Lender is
generally requesting such compensation from other similarly
situated borrowers under similar credit facilities).
Determinations and allocations by any Lender for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to
paragraph (a) of this Section 5.01, or of the effect of capital
maintained pursuant to paragraph (b) of this Section 5.01, on its
costs or rate of return of maintaining Loans or its obligation to
make Loans, or on amounts receivable by it in respect of Loans,
and of the amounts required to compensate such Lender under this
Section 5.01, shall be prima facie evidence of such Lender's
right to receive such compensation.
5.02 Limitation on Types of Loans. Anything herein to
----------------------------
the contrary notwithstanding, if, on or prior to the
determination of any Eurodollar Base Rate for any Interest
Period:
(a) the Agent determines, which determination shall be
conclusive, that quotations of interest rates for the
relevant deposits referred to in the definition of
"Eurodollar Base Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant
maturities for purposes of determining rates of interest for
Eurodollar Loans as provided herein; or
(b) the Majority Lenders determine, which
determination shall be conclusive, and notify the Agent that
the relevant rates of interest referred to in the definition
of "Eurodollar Base Rate" in Section 1.01 hereof upon the
basis of which the rate of interest for Eurodollar Loans for
such Interest Period is to be determined are not likely to
be adequate to cover the cost to such Lenders of making or
maintaining Eurodollar Loans for such Interest Period;
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 30 -
then the Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional
Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base
Rate Loans into Eurodollar Loans, and the Company shall, on the
last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert
such Loans into Base Rate Loans in accordance with Section 2.07
hereof.
5.03 Illegality. Notwithstanding any other provision
----------
of this Agreement, in the event that it becomes unlawful for any
Lender or its Applicable Lending Office to honor its obligation
to make or maintain Eurodollar Loans hereunder (and, in the
reasonable opinion of such Lender, the designation of a different
Applicable Lending Office would either not avoid such
unlawfulness or would be disadvantageous to such Lender), then
such Lender shall promptly notify the Company thereof (with a
copy to the Agent) and such Lender's obligation to make or
Continue, or to Convert Loans of any other Type into, Eurodollar
Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions
of Section 5.04 hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation
---------------------------
of any Lender to make Eurodollar Loans or to Continue, or to
Convert Base Rate Loans into, Eurodollar Loans shall be suspended
pursuant to Section 5.01 or 5.03 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on
the last day(s) of the then current Interest Period(s) for
Eurodollar Loans (or, in the case of a Conversion required by
Section 5.03 hereof, on such earlier date as such Lender may
specify to the Company with a copy to the Agent) and, unless and
until such Lender gives notice as provided below that the
circumstances specified in Section 5.01 or 5.03 hereof that gave
rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans
have been so Converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Eurodollar Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or
Continued by such Lender as Eurodollar Loans shall be made
or Continued instead as Base Rate Loans, and all Base Rate
Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the
Agent that the circumstances specified in Section 5.01 or 5.03
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 31 -
hereof that gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 5.04 no longer exist
(which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Eurodollar
Loans, to the extent necessary so that, after giving effect
thereto, all Loans held by the Lenders holding Eurodollar Loans
and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective
Commitments.
5.05 Broken Funding. The Company shall pay to the
--------------
Agent for account of each Lender, upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for
any loss, cost or expense that such Lender determines is
attributable to:
(a) any payment, prepayment or Conversion of a
Eurodollar Loan made by such Lender for any reason
(including, without limitation, the acceleration of the
Loans pursuant to Section 10 hereof but excluding any
Conversion pursuant to Section 5.04 hereof resulting from an
event referred to in Section 5.03 hereof) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason
(including, without limitation, the failure of any of the
conditions precedent specified in Section 7 hereof to be
satisfied) to borrow a Eurodollar Loan from such Lender on
the date for such borrowing specified in the relevant notice
of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if any,
of (i) the amount of interest that otherwise would have accrued
on the principal amount so paid, prepaid, Converted or not
borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the case
of a failure to borrow, the Interest Period for such Loan that
would have commenced on the date specified for such borrowing) at
the applicable rate of interest for such Loan provided for herein
(minus the relevant Applicable Margin) over (ii) the amount of
interest that otherwise would have accrued on such principal
amount at a rate per annum equal to the interest component of the
amount such Lender would have offered in the London interbank
market for Dollar deposits of leading banks in amounts comparable
to such principal amount and with maturities comparable to such
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 32 -
period (as reasonably determined by such Lender). Each Lender
claiming compensation under this Section 5.05 will furnish to the
Company through the Agent a certificate setting forth the basis
of the calculation and the amount of such compensation, which
certificate shall be prima facie evidence of such Lender's right
to receive the compensation claimed.
5.06 U.S. Taxes.
----------
(a) The Company agrees to pay to each Lender that is
not a U.S. Person such additional amounts as are necessary in
order that the net payment of any amount due to such
non-U.S. Person hereunder after deduction for or withholding in
respect of any U.S. Taxes imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Taxes by such
non-U.S. Person), will not be less than the amount stated herein
to be then due and payable, provided that the foregoing
--------
obligation to pay such additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless
such Lender is, on the date hereof (or on the date it
becomes a Lender hereunder as provided in Section 12.06(b)
hereof) and on the date of any change in the Applicable
Lending Office of such Lender, either entitled to submit a
Form 1001 (relating to such Lender and entitling it to a
complete exemption from withholding on all interest to be
received by it hereunder in respect of the Loans) or
Form 4224 (relating to all interest to be received by such
Lender hereunder in respect of the Loans), or
(ii) to any U.S. Taxes imposed solely by reason
of the failure by such non-U.S. Person to comply with
applicable certification, information, documentation or
other reporting requirements concerning the nationality,
residence, identity or connections with the United States of
America of such non-U.S. Person if such compliance is
required by statute or regulation of the United States of
America as a precondition to relief or exemption from such
U.S. Taxes.
For the purposes of this Section 5.06(a), (A) "U.S. Person" shall
-----------
mean a citizen, national or resident of the United States of
America, a corporation, partnership or other entity created or
organized in or under any laws of the United States of America or
any State thereof, or any estate or trust that is subject to
Federal income taxation regardless of the source of its income,
(B) "U.S. Taxes" shall mean any present or future tax, assessment
----------
or other charge or levy imposed by or on behalf of the United
States of America or any taxing authority thereof or therein,
(C) "Form 1001" shall mean Form 1001 (Ownership, Exemption, or
---------
Reduced Rate Certificate) of the Department of the Treasury of
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 33 -
the United States of America and (D) "Form 4224" shall mean
---------
Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in
the United States) of the Department of the Treasury of the
United States of America (or in relation to either such Form such
successor and related forms as may from time to time be adopted
by the relevant taxing authorities of the United States of
America to document a claim to which such Form relates). Each of
the Forms referred to in the foregoing clauses (C) and (D) shall
include such successor and related forms as may from time to time
be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates.
(b) Within 30 days after paying any amount to the
Agent or any Lender from which it is required by law to make any
deduction or withholding, and within 30 days after it is required
by law to remit such deduction or withholding to any relevant
taxing or other authority, the Company shall deliver to the Agent
for delivery to such non-U.S. Person evidence satisfactory to
such Person of such deduction, withholding or payment (as the
case may be).
(c) Each Lender (including any lender that becomes a
Lender pursuant to Section 12.06 hereof) represents and warrants
to the Obligors and the Agent that on the date hereof (or, in the
case of any such lender that becomes a Lender pursuant to said
Section 12.06, on the date it becomes a Lender) such Lender is
either organized under the laws of the United States or a State
thereof or is entitled to submit either a Form 1001 (relating to
such Lender and entitling it to a complete exemption from
withholding on all interest to be received by it hereunder in
respect of the Loans) or a Form 4224 (relating to all interest to
be received by such Lender hereunder in respect of the Loans) and
has delivered two copies of such form duly completed to each of
the Agent and the Company.
5.07 Replacement of Certain Lenders. If (a) any
------------------------------
Lender improperly declines to make any Loan required to be made
by it hereunder, becomes the subject of an insolvency proceeding,
requests compensation under Section 5.01 hereof or gives notice
under Section 5.03 hereof suspending its obligation to make or
maintain Eurodollar Loans hereunder and (b) no Default shall have
occurred and be continuing, then the Company, upon not less than
three Business Days' prior notice to such Lender (with a copy to
the Agent), may require that such Lender assign (in which case
such Lender shall assign as provided in Section 12.06 hereof) its
Loan(s) and Commitment to one or more other Lenders, or another
lender (reasonably acceptable to the Agent), specified by the
Company in such notice that are willing to accept such assignment
for an amount equal to the sum of the outstanding aggregate
principal amount of such Lender's Loan(s) and unpaid interest
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 34 -
thereon accrued to the date of the consummation of such
assignment (such assignment to be pursuant to documentation
reasonably acceptable to the assigning Lender), provided that
upon the consummation of such assignment the Company shall pay to
such Lender (x) such amounts (if any) as are then owing to such
Lender under this Section 5 (including, without limitation,
amounts under Section 5.05 hereof, if any, that the Company would
be required to pay to such Lender if the Loan(s) assigned by such
Lender were being prepaid by the Company on the date of such
consummation) and (y) all other amounts then owing by the Company
hereunder to or for the account of such Lender.
Section 6. Guarantee.
---------
6.01 The Guarantee. YPF hereby guarantees to each
-------------
Lender and the Agent and their respective successors and assigns
the prompt payment in full when due (whether at stated maturity,
by acceleration or otherwise) of the principal of and interest on
the Loans made by the Lenders to, and, without duplication, the
Note held by each Lender of, the Company and all other amounts
from time to time owing to the Lenders or the Agent by the
Company under this Agreement and, without duplication, under the
Notes and by the Company under any of the other Basic Documents,
in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the "Guaranteed
----------
Obligations"). YPF hereby further agrees that if the Company
-----------
shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations,
YPF will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended
maturity, by acceleration or otherwise) in accordance with the
terms of such extension or renewal.
6.02 Obligations Unconditional. The obligations of
-------------------------
YPF under Section 6.01 hereof are, to the fullest extent
permitted by law, absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of the
obligations of the Company under this Agreement, the Notes or any
other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of
or any security for any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of
any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 6.02 that the
obligations of YPF hereunder shall be absolute and unconditional
under any and all circumstances (other than full and final
payment of the Guaranteed Obligations). Without limiting the
generality of the foregoing, it is agreed that, to the fullest
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 35 -
extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of YPF
hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without
notice to YPF, the time for any performance of or compliance
with any of the Guaranteed Obligations shall be extended
(subject to Section 12.04 hereof), or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of this Agreement or the Notes or any other
agreement or instrument referred to herein or therein shall
be done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed
Obligations shall be modified, supplemented or amended in
any respect (subject to Section 12.04 hereof), or any right
under this Agreement or the Notes or any other agreement or
instrument referred to herein or therein shall be waived or
any other guarantee of any of the Guaranteed Obligations or
any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in
favor of, the Agent or any Lender or Lenders as security for
any of the Guaranteed Obligations shall fail to be
perfected.
YPF hereby expressly waives diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement
that the Agent or any Lender exhaust any right, power or remedy
or proceed against the Company under this Agreement or the Notes
or any other agreement or instrument referred to herein or
therein, or against any other Person under any other guarantee
of, or security for, any of the Guaranteed Obligations. YPF
hereby also irrevocably waives any right contemplated by
Articles 480 (second paragraph), 481 and 482 of the Argentine
Commercial Code as well as any rights and powers contemplated by
Articles 1990, 1994, 2012, 2015, 2017, 2018, 2020, 2021, 2022,
2023, 2025, 2026, 2029, 2043, 2044, 2045, 2046, 2047, 2049 and
2050 of the Argentine Civil Code.
6.03 Reinstatement. The obligations of YPF under this
-------------
Section 6 shall be automatically reinstated if and to the extent
that for any reason any payment by or on behalf of the Company in
respect of the Guaranteed Obligations is rescinded or must be
otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 36 -
or reorganization or otherwise and YPF agrees that it will
indemnify the Agent and each Lender on demand for all reasonable
costs and expenses (including, without limitation, fees of
counsel) incurred by the Agent or such Lender in connection with
such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
6.04 Subrogation. YPF hereby waives all rights of
-----------
subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right
arising under the Bankruptcy Code) or otherwise by reason of any
payment by it pursuant to the provisions of this Section 6 and
further agrees with the Company for the benefit of each of its
creditors (including, without limitation, each Lender and the
Agent) that any such payment by it shall constitute a
contribution of capital by YPF to the Company (or an investment
in the equity capital of the Company by YPF).
6.05 Remedies. YPF agrees that, as between YPF and
--------
the Lenders, to the fullest extent permitted by law, the
obligations of the Company under this Agreement and the Notes may
be declared to be forthwith due and payable as provided in
Section 10 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in
said Section 10) for purposes of Section 6.01 hereof
notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Company and that,
in the event of such declaration (or such obligations being
deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall
forthwith become due and payable by YPF for purposes of said
Section 6.01.
6.06 Instrument for the Payment of Money. To the
-----------------------------------
fullest extent permitted by law, YPF hereby (a) acknowledges that
the guarantee in this Section 6 constitutes an instrument for the
payment of money, and (b) consents and agrees that any Lender or
the Agent, at its sole option, in the event of a dispute by YPF
in the payment of any moneys due hereunder, shall have the right
to bring motion-action under New York CPLR Section 3213.
6.07 Continuing Guarantee. The guarantee in this
--------------------
Section 6 is a continuing guarantee, and shall apply to all
Guaranteed Obligations whenever arising.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 37 -
6.08 Taxes. YPF covenants and agrees that:
-----
(a) All payments on account of the Guaranteed
Obligations by YPF to the Agent and the Lenders, including,
without limitation, amounts payable under paragraph (b) of this
Section 6.08, shall be made in Dollars, free and clear of and
without reduction by reason of any and all present and future
income, stamp, excise, asset, value added and other taxes and
levies, imposts, deductions, charges, compulsory loans and
withholdings whatsoever imposed, assessed, levied or collected by
Argentina or any political subdivision or taxing authority
thereof or therein, together with interest thereon and penalties
with respect thereto, if any, on or in respect of this Agreement,
the Pledge Agreement, the Guaranteed Obligations, the
registration, notarization or other formalization of any thereof,
and any payments of principal, interest, charges, fees or other
amounts made on, under or in respect thereof (hereinafter called
"Argentine Taxes"), all of which will be paid by YPF, for its own
---------------
account, prior to the date on which penalties attach thereto.
(b) YPF will indemnify the Agent and the Lenders
against, and reimburse the Agent and the Lenders on demand for,
any Argentine Taxes and any loss, liability, claim, or expense
including interest, penalties, and legal fees which the Agent or
the Lenders may incur at any time arising out of or in connection
with any failure of YPF to make any payments of Argentine Taxes
when due.
(c) To the extent that YPF is required by applicable
law, decree or regulation to deduct or withhold Argentine Taxes
from any amounts payable on, under or in respect of this
Agreement, the Pledge Agreement or the Guaranteed Obligations,
YPF shall pay the Agent and the Lenders in Dollars such
additional amounts as may be required, after the deduction or
withholding of Argentine Taxes, to enable the Agent and the
Lenders to receive from YPF an amount equal to the amount stated
to be payable in respect of this Agreement, the Pledge Agreement
or the Guaranteed Obligations.
(d) YPF shall furnish to the Agent and the Lenders
original tax receipts in respect of any withholding of Argentine
Taxes required under this Section 6.08 within 30 days after the
date of each payment of interest which is subject to any
Argentine Taxes, and YPF shall promptly furnish to the Agent and
the Lenders any other information, documents and receipts that
the Agent and the Lenders may, in their sole discretion from time
to time, require to establish to their satisfaction that full and
timely payment has been made of all Argentine Taxes required to
be paid under this Section 6.08.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 38 -
(e) YPF shall pay all present and future Argentine
Taxes, including but not limited to stamp taxes, imposts,
contributions, charges, deductions, withholdings, court taxes,
duties and fees which are imposed, assessed, levied or collected
in connection with the execution, delivery, registration,
notarization, enforcement or any other act related thereto, of
any of the Basic Documents and any documents related thereto, and
shall, upon notice from the Agent or any Lender, reimburse the
Agent or any Lender or its assigns for any such taxes, imposts,
contributions, charges, deductions, duties and fees.
Section 7. Conditions Precedent.
--------------------
7.01 Initial Loans. The obligation of the Lenders to
-------------
make the initial Loans to be made hereunder on the Initial
Borrowing Date is subject to the prior or simultaneous
satisfaction of the following conditions: (i) the aggregate
principal amount of such Loans shall not exceed the amount
specified in Section 2.01(a) hereof (and the Agent shall have
received evidence thereof reasonably satisfactory to it) and
(ii) the Agent shall have received the following documents or
other evidence, all of such documents and evidence to be
reasonably satisfactory to the Agent (or the Majority Lenders, to
the extent specified below) in form and substance:
(a) Corporate Documents. The following documents,
-------------------
each certified as indicated below:
(i) for YPF Acquisition, a copy of the charter,
as in effect, certified as of a date reasonably close
to the Initial Borrowing Date by the Secretary of State
of Delaware, and a certificate from such Secretary of
State dated as of a date reasonably close to the
Initial Borrowing Date as to the good standing of and
charter documents filed by, YPF Acquisition;
(ii) for YPF Acquisition, a certificate of the
Secretary or an Assistant Secretary of YPF Acquisition,
dated the Initial Borrowing Date and certifying
(A) that attached thereto is a true and complete copy
of the by-laws of YPF Acquisition as amended and in
effect at all times from the date on which the
resolutions referred to in clause (B) below were
adopted to and including the date of such certificate,
(B) that attached thereto is a true and complete copy
of resolutions duly adopted by the board of directors
of YPF Acquisition authorizing the execution, delivery
and performance of such of the Basic Documents to which
it is or is intended to be a party (including the
borrowings hereunder), and that such resolutions have
not been modified, rescinded or amended and are in full
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 39 -
force and effect, (C) that the charter documents of
YPF Acquisition have not been amended since the date
one day prior to the certification thereto furnished
pursuant to clause (i) above, and (D) as to the
incumbency and specimen signature of each officer of
YPF Acquisition executing such of the Basic Documents
to which YPF Acquisition is or is intended to be a
party and each other document to be delivered by
YPF Acquisition from time to time in connection
therewith (and the Agent and each Lender may
conclusively rely on such certificate until it receives
notice in writing from YPF Acquisition);
(iii) for YPF Acquisition, a certificate of another
officer of YPF Acquisition, dated the Initial Borrowing
Date, as to the incumbency and specimen signature of
the Secretary or Assistant Secretary, as the case may
be, of YPF Acquisition; and
(iv) for YPF, certified copies, dated the Initial
Borrowing Date, of the estatutos and other constitutive
---------
documents of YPF and of all corporate authority for YPF
(including, without limitation, board of director
resolutions and evidence of the incumbency, including
specimen signatures, of officers) with respect to the
execution, delivery and performance of this Agreement
and each other Basic Document to be executed and
delivered by YPF from time to time in connection
herewith and with the Loans hereunder (and the Agent
and each Lender may conclusively rely on such
certificate until it receives notice in writing from
YPF).
(b) Notes. The Note for each Lender, duly completed
-----
and executed for such Lender.
(c) Opinions of Counsel to the Obligors. Opinions,
-----------------------------------
dated the Initial Borrowing Date, of (i) Andrews & Kurth L.L.P.,
special New York counsel to the Obligors, substantially in the
form of Exhibit D-1 hereto and covering such other matters as the
Agent or any Lender may reasonably request, and (ii) Marval,
O'Farrell & Mairal, special Argentine counsel to the Obligors,
substantially in the form of Exhibit D-2 hereto and covering such
other matters as the Agent or any Lender may reasonably request
(and each Obligor hereby instructs each such counsel to deliver
such opinion to the Lenders and the Agent).
(d) Opinion of Special New York Counsel to Chase;
---------------------------------------------
Opinion of Special Argentine Counsel to Chase. Opinions, dated
---------------------------------------------
the Initial Borrowing Date, of (i) Milbank, Tweed, Hadley &
McCloy, special New York counsel to Chase, substantially in the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 40 -
form of Exhibit E-1 hereto and (ii) Perez Alati, Grondona,
Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel
to Chase, substantially in the form of Exhibit E-2 hereto (and
Chase hereby instructs each such counsel to deliver such opinion
to the Lenders and the Agent).
(e) Tender of Maxus Shares, Etc. Evidence (which, in
----------------------------
the case of clause (i) below, shall be a certificate of a senior
officer of YPF Acquisition and in the case of clauses (ii) and
(iii) below shall be a certificate of a senior officer of Maxus)
that (i) the Maxus Shares tendered (as well as the aggregate
amount thereof) and to be purchased pursuant to the Offer to
Purchase have been tendered to YPF Acquisition, with no
restrictions to purchase imposed by applicable law, and have not
been withdrawn and are available for purchase in accordance with
the terms and conditions of the Offer to Purchase, (ii) all
actions to be taken by the Board of Directors of Maxus as
specified in the third sentence of Section 1.2 of the Merger
Agreement have been taken (and that the determination, approval
and recommendation of such Board referred to in clauses (a), (b)
and (c) of such sentence have not been materially modified or
amended or withdrawn, except for (x) any such modification or
amendment described in the parenthetical phrase in clause (v)(g)
of Section 14 of the Offer to Purchase and (y) any such
modification, amendment or withdrawal approved by the Majority
Lenders, such approval not to be unreasonably withheld) and
(iii) the actions to be taken by Maxus as specified in the last
sentence of Section 1.2 of the Merger Agreement have been taken.
(f) Tender Offer Documents, Governmental Approvals,
-----------------------------------------------
Etc. (i) Copies (certified by a senior officer of
----
YPF Acquisition) of all Tender Offer Documents (including the
Offer to Purchase), (ii) a copy (certified by a senior officer of
YPF Acquisition) of the Notification and Report Form in respect
of the Acquisition furnished to the Department of Justice and the
Federal Trade Commission pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, (iii) a certificate of a
senior officer of YPF Acquisition dated the Initial Borrowing
Date certifying that the Minimum Share Condition (as such term is
defined in the Offer to Purchase) and all of the other conditions
precedent to the purchase of the Maxus Shares contained in the
Offer to Purchase have been satisfied without any modification or
waiver (except for any such modification or waiver approved by
the Majority Lenders, such approval not to be unreasonably
withheld) and that the Offer to Purchase has been duly authorized
by YPF Acquisition, (iv) if and to the extent requested by the
Agent, evidence (reasonably satisfactory to the Agent) that all
necessary governmental and third party consents and approvals in
connection with the Acquisition and the other transactions
contemplated hereby have been obtained and remain in full force
and effect without the imposition of any conditions on any
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 41 -
thereof (other than (x) any such conditions approved by the
Majority Lenders, such approval not to be unreasonably withheld,
and (y) any such governmental and third party consents and
approvals that are required to be obtained in connection with the
Merger but not prior to the date hereof (which approvals and
consents the Obligors hereby represent they have no reason to
believe will not be obtained on or prior to the date required to
be obtained) and (v) if and to the extent requested by the Agent,
evidence (reasonably satisfactory to the Agent) that all
applicable waiting periods with respect to the Acquisition have
expired without any action being taken by any competent authority
that restricts, prevents or imposes materially adverse conditions
upon the consummation of either the Tender Offer or the Merger.
(g) Merger Agreement. A certificate of Maxus dated
----------------
the Initial Borrowing Date certifying that, as of such date, none
of the events specified in clause (v)(e) of Section 14 of the
Offer to Purchase shall have occurred.
(h) Other Acquisition Documents. Copies (certified by
---------------------------
a senior officer of YPF Acquisition) of all other Acquisition
Documents as in effect of the date hereof.
(i) Equity Contribution to YPF Acquisition. A
--------------------------------------
certificate of a senior officer of YPF Acquisition that
YPF Acquisition has received from YPF aggregate net cash proceeds
of not less than $250,000,000 in respect of the issuance of the
shares of common stock by YPF Acquisition to YPF and/or as
additional paid in capital.
(j) Maxus Shares. A certificate of a senior officer
------------
of YPF certifying that none of YPF or any of its Subsidiaries
(other than YPF Acquisition) owns any Maxus Shares.
(k) Pledge Agreement. The Pledge Agreement, duly
----------------
executed and delivered by YPF and the Agent, together with the
certificate(s) representing all of the issued and outstanding
shares of capital stock of YPF Acquisition accompanied by undated
stock powers duly executed in blank.
(l) Reserve Report, Projections, Etc. A reserve
--------------------------------
report with respect to all of the oil and natural gas assets of
Midgard, Maxus Java and Maxus Sumatra prepared by Gaffney,
Cline & Associates, Inc. dated March 10, 1995, as audited by
Miller & Lents, Ltd. (the results of such audit being set forth
in a letter dated March 23, 1995 from Miller & Lents, Ltd. (such
letter to be in form and substance satisfactory to the Majority
Lenders)) and projections prepared by Miller & Lents, Ltd. with
respect to future cash and cash flows of Maxus, Midgard, Maxus
Indonesia, Maxus Java and Maxus Sumatra.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 42 -
(m) Process Agent Acceptance. A process agent
------------------------
acceptance, duly executed and delivered by the Process Agent, in
substantially the form of Exhibit H hereto.
(n) Solvency of Maxus. A written opinion of Houlihan
-----------------
Lokey Howard & Zukin, Inc. demonstrating that, after giving
effect to the Merger (and the performance of the terms and
conditions of the Merger Agreement), the Loans hereunder in the
full amount of the Commitments, the assumption by Maxus of YPF
Acquisition's obligations hereunder and under the Notes provided
for by the Assumption Agreement and the other transactions
contemplated hereby to occur on or prior to the Merger Closing
Date or in connection with the Merger: (i) the fair saleable
value of the assets of Maxus exceeds the amount that will be
required to be paid on or in respect of the debts and other
liabilities (including contingent, unmatured and subordinated
liabilities) of Maxus as they mature; (ii) Maxus does not have
unreasonably small capital to carry out its business as conducted
or as proposed to be conducted; and (iii) Maxus has not incurred
debts beyond its ability to pay such debts as they mature
(references to Maxus in clauses (i), (ii) and (iii) above being
to Maxus on each of a stand-alone and a consolidated basis).
Also, the Agent shall have received (x) a certificate of Maxus
certifying (A) as to the conclusions specified in clauses (i),
(ii) and (iii) above, (B) that Maxus does not intend to, and does
not believe that it will, incur debts beyond its ability to pay
such debts as they mature and (C) as to such other matters
relating to the subject matter of the opinion referred to in the
preceding sentence as the Agent may reasonably request.
(o) Environmental Liabilities. A certificate of a
-------------------------
senior officer of Maxus as to the corporate structure of Midgard
and its Subsidiaries in relation to Chemical Land Holdings, Inc.
and environmental matters relating to Midgard.
(p) Other Documents. Such other documents as the
---------------
Agent or any Lender or special New York counsel to Chase
reasonably request.
The obligation of each Lender to make its Initial Loan hereunder
is also subject to the payment by the Obligors of such fees as
the Obligors shall have agreed to pay to any Lender, the Agent or
Chase in connection herewith on or prior to the Initial Borrowing
Date, including without limitation, the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy, special New York
counsel to Chase and Perez Alati, Grondona, Benites, Arntsen &
Martinez de Hoz (h), special Argentine counsel to Chase, in
connection with the negotiation, preparation, execution and
delivery of this Agreement and the other Basic Documents and the
documents providing for or relating to the other Acquisition
Financing Transactions and the making of the Loans hereunder and
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 43 -
thereunder (to the extent that statements for such fees and
expenses have been delivered to the Obligors and, in the case of
Milbank, Tweed, Hadley & McCloy, subject to the proviso in
Section 12.03(a)(i) hereof).
7.02 Second Loans. The obligation of the Lenders to
------------
make the Second Loans to be made hereunder on the Second
Borrowing Date is subject to the prior or simultaneous
satisfaction of the following conditions: (i) the aggregate
principal amount of such Loans shall not exceed the amount
specified in Section 2.01(b) hereof (and the Agent shall have
received evidence thereof satisfactory to it) and (ii) the Agent
shall have received the following documents, or other evidence,
all of which shall be satisfactory to the Agent (or the Majority
Lenders, to the extent specified below) in form and substance:
(a) Assumption Agreement. The Assumption Agreement,
--------------------
duly executed and delivered by Maxus and the Agent.
(b) Corporate Documents. The following documents,
-------------------
each certified as indicated below:
(i) the Articles of Merger relating to the merger of
YPF Acquisition into Maxus as filed with the Secretary of
State of Delaware certified as of the Second Borrowing Date
by the Secretary or an Assistant Secretary of Maxus;
(ii) a certificate of the Secretary or an Assistant
Secretary of Maxus dated the Second Borrowing Date
certifying (A) that attached thereto is a true and complete
copy of the Certificate of Incorporation and by-laws of
Maxus, as amended and in effect on the Second Borrowing Date
(prior to giving effect to the Merger), (B) that attached
thereto is a true and complete copy of resolutions duly
adopted by the board of directors of Maxus authorizing the
execution, delivery and performance of the Assumption
Agreement and (C) as to the incumbency and specimen
signature of each officer of Maxus that executed the
Assumption Agreement (and the Agent and each Lender may
conclusively rely on such certificate until it receives
notice in writing from Maxus to the contrary);
(iii) a certificate of another officer of Maxus, dated
the Second Borrowing Date, as to the incumbency and specimen
signature of the Secretary or an Assistant Secretary, as the
case may be, of Maxus;
(iv) certificates of (A) the Secretary of State of
Delaware dated the Second Borrowing Date as to the good
standing of and charter documents filed by Maxus, Midgard,
Maxus Indonesia, Maxus Java and Maxus Sumatra and (B) the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 44 -
Secretary of State or other appropriate official of the
States of Alabama, Arkansas, Georgia, Oklahoma and Texas,
each dated the Second Borrowing Date, as to the good
standing of, and authority to transact business of, Maxus in
such States; and
(v) certificates of the Secretary of State or other
appropriate official of the States of Texas and Oklahoma,
each dated the Second Borrowing Date, as to the good
standing of, and authority to transact business of, Midgard
in such States.
(c) Opinion of Counsel to the Obligors. Opinions,
----------------------------------
dated the Second Borrowing Date, of (i) Andrews & Kurth L.L.P.,
special counsel to YPF and YPF Acquisition, substantially in the
form of Exhibit D-4 hereto and covering such other matters as the
Agent or any Lender may reasonably request, (ii) Jones, Day,
Reavis & Pogue, special counsel to Maxus, substantially in the
form of Exhibit D-5 hereto and covering such other matters as the
Agent or any Lender may reasonably request and (iii) McCarter
Middlebrook, Esq., Vice President and General Counsel of Maxus,
substantially in the form of Exhibit D-5 hereto and covering such
other matters as the Agent or any Lender may reasonably request
(and each Obligor hereby instructs each such counsel to deliver
such opinion to the Lenders and the Agent).
(d) Opinion of Special New York Counsel to Chase. An
--------------------------------------------
opinion, dated the Second Borrowing Date, of Milbank, Tweed,
Hadley & McCloy, special New York counsel to Chase, substantially
in the form of Exhibit E-3 hereto (and Chase hereby instructs
each such counsel to deliver such opinion to the Lenders and the
Agent).
(e) Merger. Evidence (including a certificate of a
------
senior officer of YPF to the effect specified in the following
clauses (i) and (ii)) that (i) all of the conditions precedent to
the consummation of the Merger specified in the Merger Agreement
have been satisfied without any modification or waiver (except
for any such modification or waiver approved by the Majority
Lenders, such approval not to be unreasonably withheld) and
(ii) the Merger has been consummated with the effects specified
in Sections 2.1.3 and 2.1.4 of the Merger Agreement; and
certified copies of each document or instrument delivered by YPF,
YPF Acquisition and Maxus and their respective Subsidiaries
pursuant to or in connection with the Merger Agreement.
(f) Governmental Approvals, Etc. If and to the extent
---------------------------
requested by the Agent, evidence (reasonably satisfactory to the
Agent) that the conditions precedent specified in
Section 7.01(f)(iv) and (v) hereof continue to be satisfied.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 45 -
(g) Solvency of Maxus. A certificate of Maxus and a
-----------------
written opinion of Houlihan Lokey Howard & Zukin, Inc. (or
another firm of recognized national standing in the field of
solvency valuation acceptable to the Majority Lenders), each
dated the Merger Closing Date, confirming that as of such date no
fact has come to its attention that would lead it to believe that
the analysis and conclusions stated in the certificate or opinion
(as the case may be) furnished pursuant to Section 7.01(n) hereof
are not true and correct in all material respects.
(h) Midgard Facility. A credit agreement and other
----------------
documentation required by the Lenders for the extensions of
credit contemplated to be made under the Midgard Facility shall
be available for execution in form and substance satisfactory to
the Lenders, the Agent, the Obligors and the Midgard Group.
(i) Maxus Indonesia Facility. A credit agreement,
------------------------
security agreement and other documentation required by the
Lenders for the extensions of credit contemplated to be made
under the Maxus Indonesia Facility shall be available for
execution in form and substance satisfactory to the Lenders, the
Agent, the Obligors and the Maxus Indonesia Group.
(j) Other Documents. Such other documents as the
---------------
Agent or any Lender or special New York counsel to Chase may
reasonably request.
The obligation of each Lender to make its Second Loan hereunder
is also subject to the payment by the Obligors of such fees as
the Obligors shall have agreed to pay to any Lender, the Agent or
Chase in connection herewith on or prior to the Second Borrowing
Date (other than any such fees and expenses paid by the Obligors
on the Initial Borrowing Date), including without limitation, the
reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy,
special New York counsel to Chase and Perez Alati, Grondona,
Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel
to Chase, in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Basic
Documents and the documents providing for the other Acquisition
Financing Transactions and the making of the Loans hereunder and
thereunder (to the extent that statements for such fees and
expenses have been delivered to the Obligors and, in the case of
Milbank, Tweed, Hadley & McCloy, subject to the proviso in
Section 12.03(a)(i) hereof).
7.03 Initial and Second Loans. The obligation of the
------------------------
Lenders to make the Loans to be made on the occasion of each
borrowing hereunder is subject to the further conditions
precedent that:
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 46 -
(a) Litigation, Etc. The Agent shall have received a
---------------
certificate of a senior officer of each Obligor satisfactory to
the Agent, dated the date of such borrowing, certifying that
(except as described in such certificate, in Schedule IV hereto
or in such Obligor's SEC Reports or Maxus' SEC Reports) there
exists: (i) no order, injunction or decree described in
clause (v)(a) of Section 14 of the Offer to Purchase and no
statute, rule, regulation or order described in clause (v)(b) of
said Section 14; (ii) no pending or threatened action, suit,
litigation or other proceedings by or before any court or
governmental or regulatory authority relating to the Acquisition
that seeks to enjoin or otherwise prohibit or in any way modify
or otherwise affect the Tender Offer or the Merger or any of the
Acquisition Financing Transactions; and (iii) no other action,
suit, litigation or other proceedings pending or threatened with
respect to YPF or Maxus or any of their respective Subsidiaries
that, individually or in the aggregate, if adversely determined,
could have a Material Adverse Effect. In addition, no order,
injunction, decree, statute, rule or regulation referred to in
clause (i) above shall prohibit the Tender Offer, the Merger or
any of the Acquisition Financing Transactions. Such certificate
may be stated to be to the knowledge of the Obligors with respect
to proceedings referred to in the preceding sentence that are
threatened (but not pending) or to which neither Obligor is a
party.
(b) Material Adverse Effect, Etc. The Majority
-----------------------------
Lenders shall not have determined that: (i) any changes in
circumstances since December 31, 1994 (including, without
limitation, any event specified in clauses (v)(a) through (h) of
Section 14 of the Offer to Purchase and any matters described in
the certificate delivered pursuant to Section 7.03(a) hereof in
connection with such borrowing but excluding any proceedings
referred to in clauses (ii) and (iii) of said Section 7.03(a)
that are threatened but not pending) have had, or could
reasonably be expected to have, (x) in the case of the initial
borrowing hereunder, a Material Adverse Effect or (y) in the case
of the second borrowing hereunder, a YPF Material Adverse Effect,
a YPF Acquisition Material Adverse Effect or a Maxus Material
Adverse Effect; (ii) any Relevant Information disclosed to or
discovered by Chase or the other Lenders is materially adverse
with respect to any of the matters referred to in the definition
of Material Adverse Effect; or (iii) any Relevant Information
furnished by or on behalf of the Obligors or, after the Initial
Borrowing Date, Maxus, to Chase or any other Lender in writing
(other than any thereof which, at the time furnished, either
Obligor indicated in writing was inaccurate) that proves to have
been inaccurate, incomplete or misleading at the time furnished
is materially adverse with respect to either (x) the matters
referred to in the definition of Material Adverse Effect taken as
a whole or (y) any of such matters relating to any Refinancing
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 47 -
Subsidiary or any of its Subsidiaries or the Acquisition
Financing Transaction to which such Refinancing Subsidiary is
intended to be a party.
(c) No Conflicting Agreements. The Agent shall have
-------------------------
received (i) a certificate of a senior officer of YPF
satisfactory to the Agent in form and substance certifying that
(and setting forth computations in reasonable detail
demonstrating that), after giving effect to the borrowings
hereunder, the Liens provided for by the Pledge Agreement and the
other transactions contemplated hereby to occur in connection
with the foregoing, YPF is in compliance with the provisions of
(x) Section 4.7 of the Indenture dated February 2, 1994 between
YPF and The Bank of New York, N.A., as trustee and
(y) Section 1007 of the Indenture dated October 7, 1994 between
YPF and The Bank of New York, N.A., as trustee, and (ii) a
certificate of a senior officer of Maxus certifying that, after
giving effect to such borrowings, the consummation of the Merger,
the assumption provided for by the Assumption Agreement and the
other transactions contemplated hereby to occur in connection
with the foregoing, Maxus is in compliance with the provisions of
each of the Maxus Public Debt Documents (and certifying
calculations demonstrating compliance with Section 9.1 of the
Indenture dated as of April 1, 1978 between Diamond Shamrock
Corporation (as predecessor in interest to Maxus) and Mellon
Bank, N.A., as trustee, as such Indenture has heretofore been
modified and supplemented and in effect on the date hereof).
(d) No Default, Etc. Both immediately prior to such
----------------
borrowing and also after giving effect thereto and to the
intended use of the proceeds thereof:
(i) no Default shall have occurred and be continuing;
and
(ii) the representations and warranties made by each
Obligor in Section 8 hereof and in each other Basic Document
to which such Obligor is a party, shall be true and complete
in all material respects on and as of the date of such
borrowing (and after giving effect thereto and, in the case
of the borrowing on the Second Borrowing Date, to the
Merger) with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as
of such specific date);
and the Agent shall have received a certificate of a senior
officer of YPF and, in the case of the second borrowing
hereunder, Maxus, satisfactory to the Agent in form and substance
to such effect.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 48 -
(e) Cash held by Maxus. The Agent shall have received
------------------
evidence satisfactory to it that Maxus holds cash and cash
equivalents and other Permitted Maxus Investments in the amounts
specified in Section 9.10 hereof.
Section 8. Representations and Warranties. Each
------------------------------
Obligor, with respect to Sections 8.01 through 8.14, and YPF,
with respect to Section 8.15, represents and warrants to the
Agent and the Lenders that:
8.01 Corporate Existence. The Company: (a) is a
-------------------
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; (b) has all requisite
corporate or other power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed
to be conducted; and (c) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and
where failure so to qualify could reasonably be expected to
(either individually or in the aggregate) have a YPF Acquisition
Material Adverse Effect or (prior to the Control Transfer Date,
to the knowledge of the Obligors) a Maxus Material Adverse
Effect.
8.02 Litigation. Except as disclosed in Schedule IV
----------
hereto or in YPF's SEC Reports or Maxus' SEC Reports, there are
no legal or arbitral proceedings, or any proceedings by or before
any governmental or regulatory authority or agency, now pending
or (to the knowledge of the Obligors) threatened, against (a) YPF
or any of its Subsidiaries, (b) (prior to the Control Transfer
Date, to the knowledge of the Obligors) Maxus or any of its
Subsidiaries or (c) (prior to the Control Transfer Date, to the
knowledge of the Obligors with respect to proceedings to which
neither Obligor is a party) relating to the Tender Offer, the
Merger or the other transactions contemplated hereby (including,
without limitation, any of the Acquisition Financing
Transactions) which could reasonably be expected to be adversely
determined and, if adversely determined, could (individually or
in the aggregate) have a YPF Material Adverse Effect,
YPF Acquisition Material Adverse Effect or (prior to the Control
Transfer Date, to the knowledge of the Obligors), a Maxus
Material Adverse Effect.
8.03 No Breach.
---------
(a) None of the Tender Offer, the Merger, the
Acquisition Financing Transactions and the other transactions
contemplated hereby or by the other Transaction Documents
(including, without limitation, the execution, delivery and
performance of any of the Transaction Documents by the respective
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 49 -
parties thereto) will result in a breach of or require any
modification, waiver or consent (other than any thereof already
effected or obtained and certified copies of which have been
furnished to the Agent and other than consents with respect to
either of the Refinancing Facilities which are reasonably
expected to be obtained at or prior to the initial loans
thereunder) under, the charter or by-laws or equivalent documents
of YPF or YPF Acquisition or (prior to the Control Transfer Date,
to the knowledge of the Obligors) Maxus or any of Maxus'
Subsidiaries or any agreement or instrument to which YPF or
YPF Acquisition or (prior to the Control Transfer Date, to the
knowledge of the Obligors) Maxus or any of Maxus' Subsidiaries is
a party or by which any of such Persons or any of its Property is
bound or to which it is subject, or constitute a default under,
or require any of such Persons to prepay, purchase, redeem or
otherwise acquire any Indebtedness or securities of or issued by
such Person or any of its Subsidiaries under, any of such
agreement or instrument, or (except for Liens referred to in the
definition of Acquisition Financing Transactions) result in the
creation or imposition of any Lien upon any Property of any of
such Persons pursuant to the terms of any such agreement or
instrument other than any such agreements and instruments
evidencing, providing for or otherwise relating to Indebtedness
and securities of YPF and its Subsidiaries (other than Maxus and
its Subsidiaries) or Maxus and its Subsidiaries (other than the
Refinancing Subsidiaries and their respective Subsidiaries) in an
aggregate principal amount of (or, in the case of securities not
evidencing Indebtedness that are required to be acquired as
aforesaid, having an aggregate acquisition cost to YPF and its
Subsidiaries or Maxus and its Subsidiaries, as the case may be)
less than $5,000,000.
(b) None of the execution, delivery and performance of
this Agreement and the other Basic Documents (including, without
limitation, borrowings hereunder and the Liens provided for by
the Basic Documents) will violate any requirements of applicable
law or regulation or any order, writ, injunction or decree of any
court or governmental or regulatory authority or agency ("Legal
-----
Requirements") other than any Legal Requirements the violation of
------------
which, individually or in the aggregate, could not reasonably be
expected to have a YPF Material Adverse Effect, a YPF Acquisition
Material Adverse Effect or (prior to the Control Transfer Date,
to the knowledge of the Obligors) a Maxus Material Adverse
Effect.
(c) Except as specifically described in the Offer to
Purchase or in Schedule VII hereto, none of the Tender Offer, the
Merger and the other transactions contemplated by the Acquisition
Documents (including, without limitation, the execution, delivery
and performance of any of the Acquisition Documents by the
respective parties thereto) will violate any Legal Requirements
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 50 -
applicable to YPF or YPF Acquisition or (prior to the Control
Transfer Date, to the knowledge of the Obligors) Maxus or any of
its Subsidiaries other than any Legal Requirements the violation
of which, individually or in the aggregate, could not reasonably
be expected to have a YPF Material Adverse Effect, a
YPF Acquisition Material Adverse Effect or a Maxus Material
Adverse Effect.
8.04 Action. Each Obligor has all necessary corporate
------
power, authority and legal right to execute, deliver and perform
its obligations under each of the Transaction Documents to which
it is a party; the execution, delivery and performance by each
Obligor of each of the Transaction Documents to which it is a
party has been duly authorized by all necessary corporate action
on its part (including, without limitation, any approvals of its
shareholders); each of the Transaction Documents to which each of
the Obligors is a party has been duly and validly executed and
delivered by it; and each of this Agreement, the Offer to
Purchase (in the case of YPF Acquisition) and the Merger
Agreement constitutes, and each of the Notes and the other
Transaction Documents to which each of the Obligors is or is
intended to be a party when executed and delivered by it (in the
case of the Notes, for value), will constitute, the legal, valid
and binding obligation of such Obligor, enforceable against it in
accordance with its terms, except as such enforceability may be
limited by (a) bankruptcy, insolvency, reorganization, moratorium
or similar laws of general applicability affecting the
enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
8.05 Approvals. No authorizations, approvals or
---------
consents of, and no filings or registrations with, any
governmental or regulatory authority or agency, or any securities
exchange, are necessary for the execution, delivery or
performance by either Obligor of any of the Basic Documents to
which it is a party or for the legality, validity or
enforceability thereof, except for any thereof the failure of
which to be obtained or effected could not, individually or in
the aggregate, reasonably be expected to have a YPF Material
Adverse Effect, a YPF Acquisition Material Adverse Effect or a
Maxus Material Adverse Effect. Except as specifically described
in the Acquisition Documents or in Schedule VII hereto, no
authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the
execution, delivery and performance by either Obligor or (prior
to the Control Transfer Date, to the knowledge of the Obligors)
Maxus of any of the Acquisition Documents, the Acquisition or for
any of the other transactions contemplated thereby, except for
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 51 -
any thereof the failure of which to be obtained or effected could
not, individually or in the aggregate, reasonably be expected to
have a YPF Material Adverse Effect, a YPF Acquisition Material
Adverse Effect or (prior to the Control Transfer Date, to the
knowledge of the Obligors) a Maxus Material Adverse Effect.
8.06 Use of Credit. Neither Obligor is engaged
-------------
principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock.
Neither the making of any of the Loans hereunder nor the use of
the proceeds thereof will violate or be inconsistent with the
provisions of Regulation G, U or X.
8.07 Investment Company Act. Neither Obligor nor any
----------------------
of its Subsidiaries (including, without limitation, the Company)
is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended.
8.08 Public Utility Holding Company Act. Neither
----------------------------------
Obligor nor any of its Subsidiaries is a "holding company", or an
"affiliate" of a "holding company" or a "subsidiary company" of a
"holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
8.09 Certain Documents. Prior to the date hereof, the
-----------------
Obligors have furnished to the Agent and the Lenders true and
complete copies of the following documents, each as in effect on
such date: (a) the Acquisition Documents, (b) the YPF Debt
Documents, (c) the Maxus Public Debt Documents, and (d) the
Certificate of Incorporation of Maxus.
8.10 Capitalization of Company. The authorized
-------------------------
capital stock of YPF Acquisition consists, on the date hereof, of
an aggregate of 155,000,000 shares of common stock, par value
$.01 per share, of which 135,590,277 shares are duly and validly
issued and outstanding, each of which shares is fully paid and
nonassessable. As of the date hereof all of such issued and
outstanding shares of common stock are owned beneficially and of
record by YPF. As of the date hereof, there are no outstanding
Equity Rights with respect to YPF Acquisition.
8.11 True and Complete Disclosure. The information,
----------------------------
reports (including, without limitation, hydrocarbon engineering
reports), financial statements, exhibits and schedules furnished
in writing by or on behalf of the Obligors to the Agent or any
Lender in connection with the negotiation, preparation or
delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto, when
taken as a whole and when considered with respect to each of the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 52 -
Refinancing Subsidiaries and their respective Subsidiaries, to
the actual knowledge of each Obligor, do not contain any untrue
statement of material fact or omit to state any material fact
necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading.
The Obligors have not delivered any information to the Agent or
any Lender relating to general economic conditions in South
America, and in particular, Argentina. All written information
furnished after the date hereof by or on behalf of the Obligors
to the Agent or the Lenders in connection with this Agreement and
the other Basic Documents and the transactions contemplated
hereby and thereby will be true, complete and accurate in every
material respect, or (in the case of projections) based on
reasonable estimates, on the date as of which such information is
stated or certified. There is no fact known to either Obligor
that could reasonably be expected to have a YPF Material Adverse
Effect, a YPF Acquisition Material Adverse Effect or a Maxus
Material Adverse Effect that has not been disclosed herein, in
the other Basic Documents or in the Acquisition Documents
(including in each case the exhibits and schedules thereto) or in
a report, financial statement, exhibit, schedule, disclosure
letter or other writing furnished to the Lenders for use in
connection with the transactions contemplated hereby or thereby.
8.12 Pledge Agreement. The Pledge Agreement creates,
----------------
as security for the Secured Obligations (as defined in the Pledge
Agreement), a valid and enforceable first priority perfected
pledge and security interest in and to all of the Pledged Stock
(as defined in the Pledge Agreement) in favor of the Agent for
the benefit of the Lenders, subject to no other Liens.
8.13 Special Purpose Corporation. Prior to the Tender
---------------------------
Offer Closing Date, YPF Acquisition will have (a) no material
assets other than the cash proceeds referred to in
Section 7.01(i) hereof and Investments referred to in
Section 9.08(b) hereof and its rights and interests under the
Acquisition Documents to which it is a party and (b) no
Indebtedness, and no material obligations other than its
obligations under the Transaction Documents.
8.14 Transaction Costs. The Transaction Costs,
-----------------
exclusive of any payments (a) made by YPF or YPF Acquisition to
former employees of Maxus with respect to so called "golden
parachutes" and (b) made by YPF or YPF Acquisition with respect
to the "poison pill" under the Certificate of Incorporation of
Maxus, will not exceed $35,000,000.
8.15 YPF Representations. YPF hereby represents and
-------------------
warrants to the Agent and the Lenders that each of the
representations and warranties set forth in Schedule I hereto are
true and complete.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 53 -
Section 9. Covenants of Obligors. Each Obligor
---------------------
covenants and agrees with the Lenders and the Agent that, so long
as any Commitment or Loan is outstanding and until payment in
full of all amounts payable by the Company hereunder:
9.01 Financial Statements, Etc. YPF shall deliver or
--------------------------
cause to be delivered to the Agent (and the Agent shall deliver
to each Lender) the following:
(a) on and after the Control Transfer Date (or prior
thereto, if either Obligor has received the same), as soon as
available and in any event within 45 days after the end of the
first quarterly fiscal period of the 1995 fiscal year of Maxus,
(i) consolidated statements of income, retained earnings and cash
flows of (A) Maxus and its Subsidiaries and (B) Midgard and
(ii) consolidated and consolidating statements of income,
retained earnings and cash flows of Maxus Indonesia for such
period and for the period from the beginning of such fiscal year
to the end of such period, and the related (i) consolidated
balance sheets of (A) Maxus and its Subsidiaries and (B) Midgard
and (ii) consolidated and consolidating balance sheets of Maxus
Indonesia, respectively as at the end of such period, setting
forth in each case in comparative form the corresponding
consolidated and consolidating figures for the corresponding
periods in the preceding fiscal year (except that, (i) in the
case of balance sheets, such comparison shall be to the last day
of the prior fiscal year and (ii) comparative consolidating
figures shall not be required for any period prior to the Merger
Closing Date), accompanied by a certificate of a senior officer
of Maxus, which certificate shall state that said consolidated
financial statements fairly present in all material respects the
consolidated financial condition and results of operations of
Maxus and its Subsidiaries, Midgard and Maxus Indonesia, as the
case may be, and said consolidating financial statements fairly
present in all material respects the respective individual
unconsolidated financial condition and results of operations of
Maxus Indonesia and of each of its Subsidiaries, in each case in
accordance with GAAP (subject to normal year-end audit
adjustments);
(b) on and after the Control Transfer Date (or prior
thereto, if either Obligor has received the same), promptly upon
their becoming available, copies of all registration statements
and regular periodic reports that Maxus shall have filed with the
Commission or any national securities exchange;
(c) on and after the Control Transfer Date (or prior
thereto, if either Obligor has received the same), promptly upon
the mailing thereof to the holders of any class or classes of
shares of capital stock of Maxus generally (other than solely to
YPF as holder of outstanding common stock of Maxus) or to holders
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 54 -
of Indebtedness of Maxus under the Maxus Public Debt Documents
generally, copies of all financial statements, reports and proxy
statements so mailed (to the extent not delivered under
paragraph (b) above);
(d) on and after the Control Transfer Date (or prior
thereto, if either Obligor actually becomes aware thereof), as
soon as possible, and in any event within ten days after Maxus
knows or has reason to believe that any of the events or
conditions specified below with respect to any Plan or
Multiemployer Plan has occurred or exists, a statement signed by
a senior financial officer of Maxus setting forth details
respecting such event or condition and the action, if any, that
Maxus or an ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice required to be filed with or
given to the PBGC by Maxus or an ERISA Affiliate with respect to
such event or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA and the regulations issued
thereunder, with respect to a Plan, as to which the PBGC has
not by regulation waived the requirement of Section 4043(a)
of ERISA that it be notified within 30 days of the
occurrence of such event (provided that a failure to meet
--------
the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required
installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the Code); and any request for a waiver
under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041(c) of ERISA of
a notice of intent to terminate any Plan or any action taken
by Maxus or an ERISA Affiliate to terminate any Plan;
(iii) the institution by the PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan, or the
receipt by Maxus or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by the
PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by Maxus or any ERISA Affiliate that
results in liability under Section 4201 or 4204 of ERISA
(including the obligation to satisfy secondary liability as
a result of a purchaser default) or the receipt by Maxus or
any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 55 -
Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of
any Multiemployer Plan against Maxus or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the
trust of which such Plan is a part if Maxus or an ERISA
Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections;
(e) promptly after either Obligor becomes aware
thereof, notice of the occurrence of (i) any event specified in
clauses (v)(a) through and including (v)(h) of Section 14 of the
Offer to Purchase or (ii) any other event, condition or
circumstance that (individually or in the aggregate) has resulted
in or could reasonably be expected to result in any of the
consequences referred to in subclauses (1) through (4) of
clause (v)(a) of said Section 14 or has or could have a Material
Adverse Effect.
(f) promptly after either Obligor knows or has reason
to believe that any Default has occurred, a notice of such
Default describing the same in reasonable detail and, together
with such notice or as soon thereafter as possible, a description
of the action that the Obligors have taken or propose to take
with respect thereto;
(g) On or prior to the date immediately preceding the
Merger Closing Date, YPF shall cause each of Midgard, Maxus
Indonesia, Maxus Java and Maxus Sumatra, to deliver pro forma
financial statements (including a pro forma balance sheet dated
March 31, 1995 giving effect to the Merger, the recapitalization
and reorganization of certain Subsidiaries of Maxus contemplated
to occur on or prior to the Merger Closing Date and any other
transactions or events contemplated to occur on or before the
Merger Closing Date (other than in the ordinary course of
business) reflecting the pro forma financial condition, income,
expenses and cash flow for each of Maxus, Midgard, Maxus
Indonesia, Maxus Java and Maxus Sumatra (as at said date and for
the period from the beginning of the respective fiscal year of
each such Person to such date), such financial statements to be
in form and substance satisfactory to the Majority Lenders
(collectively, the "Refinancing Balance Sheets"), in each case,
--------------------------
accompanied by a certificate of a senior financial officer of
each such Person, which shall state that said financial
statements fairly present in all material respects the respective
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 56 -
pro forma financial condition of such Person as at said date and
for such period in accordance with GAAP; and
(h) from time to time such other information regarding
the Acquisition or the condition (financial or otherwise),
business, operations, assets or liabilities of any of
YPF Acquisition and (prior to the Control Transfer Date, to the
extent either Obligor shall have access to such information)
Maxus and its Subsidiaries as any Lender or the Agent may
reasonably request.
YPF will furnish or cause to be furnished to the Agent, at the
time financial statements are furnished pursuant to paragraph (a)
above, a certificate of a senior officer of YPF (i) to the effect
that no Default has occurred and is continuing (or, if any
Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Obligors
have taken or propose to take with respect thereto) and
(ii) setting forth in reasonable detail the computations
necessary to determine whether the Obligors are in compliance
with their obligations under Section 9.10 hereof (and under such
of the other provisions of this Section 9 as the Agent may
reasonably request) as of the end of the quarterly fiscal period
covered by such statements.
9.02 Litigation; Etc. YPF will give or cause to be
----------------
given to the Agent, promptly upon becoming aware thereof, notice
of all legal or arbitral proceedings, and of all proceedings by
or before any governmental or regulatory authority or agency, and
any material development in respect of any of such proceedings,
relating to or affecting (a) the Acquisition or any of the
Acquisition Financing Transactions or (b) YPF, YPF Acquisition or
Maxus or any of its Subsidiaries, except proceedings that, if
adversely determined, could not (either individually or in the
aggregate) reasonably be expected to have a YPF Material Adverse
Effect, a YPF Acquisition Material Adverse Effect or (prior to
the Control Transfer Date, to the knowledge of the Obligors) a
Maxus Material Adverse Effect. In addition, YPF will give or
cause to be given to the Agent and each Lender, promptly upon
becoming aware that the holder of any note or of any other
evidence of Indebtedness of Maxus or any of its Subsidiaries
having, individually or in the aggregate, an outstanding
principal balance of $1,000,000 has given notice or taken any
other action with respect to a claimed default or event of
default (or similar event), notice of such event and specifying
the notice given or action taken by such holder and the nature of
the claimed default or event of default (or similar event) and
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 57 -
any action being taken (or proposed to be taken) by YPF or Maxus
to remedy the same.
9.03 Existence, Etc. Prior to and on and after the
---------------
Control Transfer Date, YPF will cause YPF Acquisition, and on and
after the Control Transfer Date, Maxus and each Material
Subsidiary to:
(a) preserve and maintain its legal existence and all
of its material rights, privileges, licenses and franchises
provided that: (i) subject to Sections 9.12 and 9.13 hereof,
--------
nothing in this Section 9.03(a) shall prohibit any transaction
not prohibited by Sections 9.05, 9.12 or 9.13 hereof; and
(ii) notwithstanding anything in this Section 9.03(a) or in
Section 9.05 hereof or any other provision of this Agreement, any
one or more members (whether one or more, a "Refinancing Party")
-----------------
of the Midgard Group or the Maxus Indonesia Group (the "Related
-------
Group") may merge with or into, or consolidate with or sell,
-----
lease, transfer or otherwise dispose of all or substantially all
its or their assets to, or engage in any joint venture or other
transaction (otherwise hereby prohibited) with, any other Person
or Persons (a "Permitted Transaction"), if (x) concurrently
---------------------
therewith the Obligors, or either of them, shall prepay a
principal amount of the Loans equal to that which would have been
refinanced by the Refinancing Facility to which such Refinancing
Party (or one or more other members of the Related Group) is
intended to be a party, together with all accrued interest
thereon, and (y) such Permitted Transaction does not have and
could not reasonably be expected to have a Maxus Material Adverse
Effect (other than with respect to such Refinancing Party (and/or
one or more of such other members of the Related Group) and/or
such Refinancing Facility, including, without limitation, the
income of any such Person);
(b) comply with the requirements of all applicable
laws, rules, regulations and orders of governmental or regulatory
authorities if failure to comply with such requirements could
(either individually or in the aggregate) not reasonably be
expected to have a Material Adverse Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or
profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment,
charge or levy the payment of which is being contested in good
faith and by proper proceedings and against which adequate
reserves are being maintained to the extent required by GAAP;
(d) maintain all of its Properties used or useful in
its business in good working order and condition, ordinary wear
and tear excepted;
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 58 -
(e) keep adequate records and books of account, in
which complete entries will be made in accordance with GAAP; and
(f) permit representatives of any Lender or the Agent,
during normal business hours and at the expense of such Lender or
the Agent (as the case may be), to examine, copy and make
extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender
or the Agent (as the case may be).
9.04 Insurance. On and after the Control Transfer
---------
Date, YPF will cause Maxus and each Material Subsidiary to
maintain insurance with financially sound and reputable insurance
companies or to self insure, and with respect to Property and
risks of a character usually maintained by corporations engaged
in the same or similar business similarly situated, against loss,
damage and liability of the kinds and in the amounts customarily
maintained by such corporations.
9.05 Prohibition of Fundamental Changes. (a) On and
----------------------------------
after the Control Transfer Date, YPF will not permit any of Maxus
and the Material Subsidiaries to enter into any transaction of
merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution),
except for the Merger and except as described in Schedule VIII
hereto.
(b) On and after the Control Transfer Date YPF will
cause: (i) Maxus and 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, (ii) except as described in
Schedule VIII hereto, Maxus to preserve intact the business
organization of Maxus and each of the Material Subsidiaries,
(iii) Maxus and each of the Material Subsidiaries to use their
respective reasonable best efforts to preserve the goodwill of
Persons having business relationships with it or its Material
Subsidiaries, (iv) except as described in Schedule VIII hereto,
each of the Material Subsidiaries not to permit 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, (v) Maxus or any Subsidiary of
Maxus not to authorize for issuance, issue, sell or deliver any
shares of capital stock or any other securities of any of them
(other than, in the case of Maxus, pursuant to Equity Rights with
respect to Maxus outstanding on the date hereof (after giving
effect to the transactions contemplated hereby and under the
Acquisition Documents to occur on the Initial Borrowing Date)) or
issue any securities convertible into or exchangeable for, or
options, warrants to purchase, scrip, rights to subscribe for,
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 59 -
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 Equity Rights with respect to Maxus outstanding on
the date hereof (after giving effect to the transactions
contemplated hereby and under the Acquisition Documents to occur
on the Initial Borrowing Date)), purchase or otherwise acquire or
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 similar changes in their capital structures.
9.06 Limitation on Liens. On and after the Control
-------------------
Transfer Date, YPF will not permit Maxus or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its Property, whether now owned or hereafter
acquired, except (subject to Sections 9.12 and 9.13 hereof):
(a) Liens provided for by the Basic Documents;
(b) Liens in existence on the Control Transfer Date;
(c) Liens imposed by any governmental authority for
taxes, assessments or charges not yet due or that are being
contested in good faith and by appropriate proceedings if,
unless the amount thereof is not material, adequate reserves
with respect thereto are maintained on the books of Maxus
and its Subsidiaries in accordance with GAAP;
(d) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in
the ordinary course of business that are not overdue for a
period of more than 30 days or that are being contested in
good faith and by appropriate proceedings and Liens securing
judgments but only to the extent for an amount and for a
period not resulting in an Event of Default under
Section 10(h) hereof;
(e) pledges or deposits under worker's compensation,
unemployment insurance and other social security
legislation;
(f) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, statutory
obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary
course of business;
(g) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of
business and encumbrances consisting of zoning restrictions,
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 60 -
easements, licenses, restrictions on the use of Property or
minor imperfections in title thereto that, in the aggregate,
are not material in amount, and that do not in any case
materially detract from the value of the Property subject
thereto or interfere with the ordinary conduct of the
business of Maxus and its Subsidiaries;
(h) Liens on Property of any corporation that becomes
a Subsidiary of Maxus after the date hereof, provided that
such Liens are in existence at the time such corporation
becomes a Subsidiary of Maxus and were not created in
anticipation thereof;
(i) Liens upon real and/or tangible personal Property
acquired after the date hereof (by purchase, construction or
otherwise) by any of the Subsidiaries, each of which Liens
either (A) existed on such Property before the time of its
acquisition and was not created in anticipation thereof or
(B) was created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance
or refund, the cost (including the cost of construction) of
such Property; provided that (i) no such Lien shall extend
--------
to or cover any Property of any such Subsidiary other than
the Property so acquired and improvements thereon, (ii) the
principal amount of Indebtedness secured by any such Lien
shall at no time exceed 60% (except for Liens on crude oil
to secure the Indebtedness to Caisse Nationale de Credit
Agricole Geneva Branch permitted pursuant to Section 9.07(b)
hereof) of the fair market value (as determined in good
faith by a senior officer of Maxus) of such Property at the
time it was acquired (by purchase, construction or
otherwise) and (iii) no such Lien shall be incurred in
connection with any Production Payment unless the Company,
as promptly as reasonably practicable, and in any event
within ten days after the creation of such Lien, provides
the Agent with information concerning the Production Payment
which gave rise to such Lien and delivers to the Agent,
promptly upon request, such additional information
concerning such Production Payment or such Lien as the Agent
or any Lender may reasonably request;
(j) licenses, leases or subleases granted to others in
the ordinary course of business not materially interfering
with the conduct of the business of Maxus and its
Subsidiaries taken as a whole;
(k) statutory and contractual landlords' liens under
leases to which Maxus or any of its Subsidiaries is a party;
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 61 -
(l) any interest or title of a lessor, sublessor,
licensee or licensor under any lease or license agreement
permitted by this Agreement;
(m) Liens in favor of a banking institution arising as
a matter of law encumbering deposits (including the right of
set-off) held by such banking institutions incurred in the
ordinary course of business and which are within the general
parameters customary in the banking industry;
(n) Liens in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs'
duties in connection with the importation of goods;
(o) Liens for farm-in, farm-out, joint operating, area
of mutual interest agreements or similar agreements entered
into by Maxus or any of its Subsidiaries in the ordinary
course of business which such Person determines in good
faith to be necessary for or advantageous to the economic
development of their Properties; provided that no such Liens
--------
shall be granted upon Property that has Proved Reserves
exceeding 50% of the aggregate value of hydrocarbon reserves
estimated to be contained in such Property;
(p) any extension, renewal or replacement of the
foregoing, provided that the Liens permitted hereunder shall
--------
not be spread to cover any additional Indebtedness or
Property (other than a substitution of like Property); and
(q) Liens on Maxus Shares permitted by Section 9.12
hereof.
9.07 Indebtedness. On and after the Control Transfer
------------
Date, YPF will not permit Maxus or any of its Subsidiaries to
create, incur or suffer to exist any Indebtedness except (subject
to Sections 9.12 and 9.13 hereof):
(a) Indebtedness to the Lenders hereunder and
Indebtedness under the Refinancing Facilities; and
(b) Indebtedness incurred in the ordinary course of
business and consistent with past practices (including,
without limitation, Indebtedness of Maxus, Maxus Energy
Trading Company, Maxus Sumatra and Maxus Java to Caisse
Nationale de Credit Agricole Geneva Branch under a certain
letter agreement dated January 11, 1994 between such Persons
in an amount up to but not exceeding $28,000,000 at any one
time outstanding).
9.08 Investments. On and after the Control Transfer
-----------
Date, YPF will not permit Maxus or any of the Material
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 62 -
Subsidiaries to make or permit to remain outstanding any
Investments except (subject to Sections 9.12 and 9.13 hereof):
(a) Investments outstanding on the Control Transfer
Date; and
(b) additional Investments made in the ordinary course
of business and consistent with past practices.
9.09 Dividend Payments. On and after the Control
-----------------
Transfer Date, YPF will not permit Maxus to declare or make any
Dividend Payment at any time other than regularly scheduled
Dividend Payments made by Maxus in respect of Maxus Preferred
Shares. Subject to Sections 9.12 and 9.13 hereof, nothing herein
shall be deemed to prohibit Dividend Payments to any Relevant
Subsidiary by any other Relevant Subsidiary that is a Subsidiary
of such Relevant Subsidiary.
9.10 Maxus Cash. On and after the Control Transfer
----------
Date, YPF will not permit (a) the aggregate amount of cash and
cash equivalents and other Permitted Maxus Investments of Maxus
and its Subsidiaries to be less than $160,000,000 at any time and
(b) the aggregate amount of Unrestricted cash and cash
equivalents and other Permitted Maxus Investments of Maxus and
its consolidated Subsidiaries to be less than $134,000,000 (or
such lesser amount as shall be equal to the principal of the
Loans, interest thereon and other amounts at the time of the
determination thereof are estimated in reasonably good faith by
Maxus to be paid by Maxus to the Agent and the Lenders hereunder
on the Maturity Date other than from (i) the proceeds of the
loans contemplated to be made under the Refinancing Facilities
and (ii) any proceeds from any transaction permitted pursuant to
the proviso at the end of Section 9.03(a) hereof). As used in
this Section 9.10, "Unrestricted" shall mean, when used with
respect to cash, cash equivalents and other Permitted Maxus
Investments, that any of the foregoing is subject to no
restrictions on the use thereof by Maxus and its Subsidiaries
pursuant to any agreement or understanding with any other Person
nor is set aside for nor dedicated to, any particular uses other
than the payment of the principal of Loans, interest thereon and
other amounts payable hereunder to the Agent and the Lenders on
the Maturity Date.
9.11 Ownership of Refinancing Subsidiaries. On and
-------------------------------------
after the Control Transfer Date, YPF shall, and shall cause the
Company to, take such action from time to time as shall be
necessary to ensure that each of the Refinancing Subsidiaries and
its Subsidiaries is a Wholly-Owned Subsidiary of Maxus at all
times.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 63 -
9.12 Special Covenants relating to YPF Acquisition
---------------------------------------------
Prior to Merger. Notwithstanding anything contained in this
---------------
Agreement to the contrary, YPF Acquisition will not, prior to the
consummation of the Merger: (a) incur, assume or have
outstanding any Indebtedness or other liabilities or obligations
except for Indebtedness and other liabilities and obligations
under the Basic Documents and liabilities or obligations not
constituting Indebtedness which are incurred under or in
connection with the Acquisition Documents, the Tender Offer or
the Merger and the other transactions contemplated hereby;
(b) sell or otherwise dispose of any Maxus Shares except for any
such disposition for cash in Dollars at a price at least equal to
the fair market value thereof, provided that YPF Acquisition
shall pay the proceeds thereof to the Agent for credit to the
collateral account referred to in the last sentence of this
Section 9.12; (c) incur, assume or suffer to exist any Liens on
its Property other than Liens on Maxus Shares; (d) make any
Investment other than in Maxus Shares and in Investments in
operating deposit accounts with money center banks located in the
United States and Permitted Investments; (e) make any Dividend
Payment; (f) engage in any business or transactions other than
those associated with the Tender Offer, the Merger, borrowings
hereunder and the other transactions contemplated hereby; or
(g) merge or consolidate with any other entity except with Maxus
pursuant to the Merger Agreement. All proceeds of dispositions
of Maxus Shares permitted by clause (b) above paid to the Agent
as provided in said clause (b) shall be credited by the Agent to
a collateral account maintained by YPF Acquisition at the
Principal Office and held by the Agent (together with the
Permitted Investments referred to below) in pledge as security
for the payment and performance by YPF Acquisition when due of
its obligations hereunder and under the Notes (with the balance
in such account to be invested and reinvested by the Agent in
Permitted Investments (to be held in such account) specified by
YPF Acquisition or, if an Event of Default has occurred and is
continuing, by the Agent), all on terms and conditions, and
pursuant to agreements executed and delivered by YPF Acquisition
and the Agent, reasonably satisfactory to the Agent (and,
YPF Acquisition agrees to execute and deliver such agreements to
the Agent upon the request of the Agent).
9.13 Special Covenants relating to Midgard Group and
-----------------------------------------------
the Maxus Indonesia Group and their Subsidiaries.
------------------------------------------------
Notwithstanding anything contained in this Agreement to the
contrary (other than Section 9.03(a)(ii) hereof), on and after
the Control Transfer Date, YPF will not permit any member of the
Midgard Group or the Maxus Indonesia Group to enter into any of
the following transactions with any Relevant Subsidiary that is
not a member of such Group (a "Non-Member Subsidiary"):
---------------------
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 64 -
(a) any merger or consolidation with any Non-Member
Subsidiary;
(b) any disposition of any Property to, or any
acquisition of Property from, any Non-Member Subsidiary
except in the ordinary course of business, provided that the
monetary or business consideration arising therefrom is
substantially as favorable to such member as the monetary or
business consideration that would obtain in a comparable
transaction with a Person other than an Affiliate of such
member;
(c) create any Lien on any of its Property to secure
any Indebtedness or other obligation to a Non-Member
Subsidiary;
(d) incur, create or assume any Indebtedness to any
Non-Member Subsidiary or purchase, redeem, retire or
otherwise acquire, or make any voluntary payment or
prepayment of the principal of or interest on, or any other
amount owing in respect of, any of its Indebtedness to any
Non-Member Subsidiary (other than any such payment or
prepayment made with the proceeds of loans made under the
Refinancing Facilities to provide funds to Maxus to pay or
prepay the Loans);
(e) make any advance to or other Investments in any
Non-Member Subsidiary; and
(f) make any Dividend Payments to any Non-Member
Subsidiary;
other than, in the case of clauses (d), (e) and (f) above, in the
ordinary course of business, in a manner consistent with prudent
business practices.
Notwithstanding the foregoing, on and after the Control
Transfer Date, YPF may and shall cause the Maxus Indonesia Group
and the Midgard Group to engage in such transactions with Non-
Member Subsidiaries as are reasonably required in order for each
of Midgard, Java and Sumatra to be able to deliver the
Refinancing Balance Sheets at the time required pursuant to
Section 9.01(g) hereof; provided that each of Midgard, Java and
--------
Sumatra shall at all times operate their respective businesses in
a manner consistent with prudent business practices.
9.14 Payments of Maxus Indebtedness. On and after the
------------------------------
Control Transfer Date, YPF will not permit Maxus or any of its
Material Subsidiaries to purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for the purchase, redemption,
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 65 -
retirement or other acquisition of, or make any voluntary payment
or prepayment of the principal of or interest on, or any other
amount owing in respect of, any Indebtedness of Maxus or any
Subsidiary of Maxus (other than Indebtedness hereunder and
(subject to Section 9.13 hereof) Indebtedness owed by any such
Subsidiary to Maxus), except for regularly scheduled payments or
prepayments of principal and interest and other amounts in
respect thereof required pursuant to the instruments evidencing
such Indebtedness.
9.15 Lines of Business. On and after the Control
-----------------
Transfer Date, YPF will not permit Maxus or any of the Material
Subsidiaries to engage to any substantial extent in any line or
lines of business activity other than the acquisition,
exploration, development, production, processing, marketing,
gathering and sale of hydrocarbons to the extent Maxus and its
Subsidiaries are engaged in such activities on the date hereof.
9.16 Transactions with YPF Affiliates. Except as
--------------------------------
contemplated by the Transaction Documents, YPF will not permit
any of Maxus and its Subsidiaries to, directly or indirectly:
(a) make any Investment in a YPF Affiliate; (b) transfer, sell,
lease, assign or otherwise dispose of any Property to a
YPF Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from a YPF Affiliate; or (d) enter into any
other transaction directly or indirectly with or for the benefit
of a YPF Affiliate; provided that (x) any YPF Affiliate who is an
--------
individual may serve as a director, officer or employee of any of
Maxus and its Subsidiaries and receive reasonable compensation
for his or her services in such capacity and (y) any of Maxus and
its Subsidiaries may enter into transactions (other than
Investments by any of Maxus and its Subsidiaries in a
YPF Affiliate) if the monetary or business consideration arising
therefrom would be substantially as advantageous to such Person
as the monetary or business consideration that would obtain in a
comparable transaction with a Person not a YPF Affiliate.
9.17 Use of Proceeds. YPF Acquisition will use the
---------------
proceeds of the Loans hereunder solely to consummate the
Acquisition and to pay Transaction Costs (in compliance with all
applicable legal and regulatory requirements, including, without
limitation, Regulations U and X and the Securities Act of 1933,
as amended and the Securities Act of 1934, as amended, and the
regulations thereunder).
9.18 Modifications of Certain Documents.
----------------------------------
(a) Neither Obligor will agree or consent to any
modification, supplement or waiver of any of the provisions of
any of the Maxus Public Debt Documents (other than (x) any
thereof that is not adverse to the interests of YPF, Maxus or the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 66 -
Lenders and (y) any amendment thereof to facilitate the Guarantee
by YPF of the Indebtedness of Maxus thereunder so long as such
amendment is to exclude YPF from the definition of "obligor"
thereunder) or the Acquisition Documents or, following the
Initial Borrowing Date, terminate the Merger Agreement without
the prior consent of the Majority Lenders. YPF will furnish or
cause to be furnished to the Agent a copy of each such
modification, supplement or waiver promptly after the execution
and delivery thereof.
(b) Except as set forth on Schedule VIII hereto, YPF
will not take any action to modify or supplement the Certificate
of Incorporation of Maxus after the Merger Closing Date (other
than modifications that do not materially and adversely affect
the interests of Maxus or adversely affect the interest of the
Lenders), without the prior consent of the Majority Lenders;
provided that, after the Control Transfer Date, YPF will not take
--------
any action to modify or supplement any provision of the
Certificate of Incorporation of Maxus relating to the Maxus
Preferred Shares other than the amendments and waivers
contemplated in Section 2C of the letter agreement dated
February 28, 1995 between Maxus and The Prudential Insurance
Company of America as in effect on the date hereof.
9.19 Consummation of the Merger. The Obligors will
--------------------------
cause the Merger to be consummated, and the Control Transfer Date
to occur, as promptly as practicable after the Tender Offer
Closing Date, but not later than June 12, 1995.
9.20 Ownership of YPF Acquisition and Maxus. YPF
--------------------------------------
will: (a) at all times prior to the consummation of the Merger
cause (i) YPF Acquisition to be a Wholly Owned Subsidiary of YPF
and (ii) any Maxus Shares owned by any of YPF and its
Subsidiaries to be owned only by YPF Acquisition; and (b) at all
times following the consummation of the Merger, own all Maxus
Shares except for Excluded Maxus Shares. YPF will not own, and
will not permit any of its Subsidiaries to own, at any time, any
shares of capital stock of Maxus other than Maxus Shares.
9.21 Other Covenants of YPF. YPF will comply with the
----------------------
covenants set forth in Schedule II hereto.
Section 10. Events of Default. If one or more of the
-----------------
following events (herein called "Events of Default") shall occur
-----------------
and be continuing:
(a) The Company shall default in the payment when due
(whether at stated maturity or upon optional or mandatory
repayment or prepayment or otherwise) of any principal of or
interest on any Loan, any fee or any other amount payable by it
hereunder or under any other Basic Document, provided that any
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 67 -
such default in the payment of such interest, fees or other
amounts (other than principal of Loans) shall have continued
unremedied for more than two Business Days; or
(b) Any of YPF Acquisition or Maxus or any Material
Subsidiary shall default in the payment when due of any principal
of or interest on any of its other Indebtedness (or amounts
payable under any Interest Rate Protection Agreements or
Commodity Hedging Agreements) aggregating $5,000,000 or more; or
any event specified in any note, agreement, indenture or other
document evidencing or relating to any such Indebtedness shall
occur if the effect of such event is to cause, or (with the
giving of any notice or the lapse of time or both) to permit the
holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to
become due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise), prior to its stated
maturity or to have the interest rate thereon reset to a level so
that securities evidencing such Indebtedness trade at a level
specified in relation to the par value thereof or, in the case of
an Interest Rate Protection Agreement or Commodity Hedging
Agreement, to permit payments owing under such Interest Rate
Protection Agreement or Commodity Hedging Agreement, as the case
may be, to be liquidated; or
(c) Any representation, warranty or certification made
or deemed made herein or in any other Transaction Document (or in
any modification or supplement hereto or thereto) by or on behalf
of YPF Acquisition or Maxus or any of the Refinancing
Subsidiaries and their respective Subsidiaries or YPF, or any
certificate furnished to any Lender or the Agent pursuant to the
provisions hereof or thereof, shall prove to have been false or
misleading as of the time made or furnished in any material
respect; or
(d) Either Obligor shall default in the performance of
any of its obligations under any of Sections 9.01(f), 9.05
through and including 9.21 hereof; or either Obligor shall
default in the performance of any of its other obligations in
this Agreement or any other Basic Document and such default shall
continue unremedied for a period of 30 or more days after notice
thereof to the Company by the Agent or any Lender (through the
Agent); or
(e) Any of YPF Acquisition, Maxus or any Material
Subsidiary (collectively, the "Relevant Parties") shall admit in
----------------
writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(f) Any Relevant Party shall (i) apply for or consent
to the appointment of, or the taking of possession by, a
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 68 -
receiver, custodian, trustee, examiner or liquidator of itself or
of all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) file a
petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of
debts, (iv) take any corporate action for the purpose of
effecting any of the foregoing or (v) do the equivalent of any of
the foregoing under any foreign laws; or
(g) A proceeding or case shall be commenced, without
the application or consent of the Relevant Party who is the
subject thereof, in any court of competent jurisdiction, seeking
(i) the reorganization, liquidation, dissolution, arrangement or
winding-up of such Relevant Party, or the composition or
readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of such
Relevant Party or of all or any substantial part of its Property,
(iii) similar relief in respect of such Relevant Party under any
law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a
period of 60 or more days or (iv) the equivalent of any of the
foregoing under any foreign laws; or
(h) A final judgment or order for the payment of money
shall be entered against any Relevant Party (A) which, within
30 days after the entry thereof, has not been discharged or
execution thereof has not been stayed pending appeal or (B) as to
which any enforcement proceeding shall have been commenced (and
not stayed) by any creditor thereon and (ii) the aggregate amount
of all such final judgments or orders meeting the criteria set
forth in A or B of clause (i) exceeds $10,000,000 (net of
insurance coverage as to which the insurer has acknowledged
coverage); or
(i) At any time, on and after the Control Transfer
Date, an event or condition specified in Section 9.01(d) hereof
shall occur or exist with respect to any Plan or Multiemployer
Plan and, as a result of such event or condition, together with
all other such events or conditions, the Company or any ERISA
Affiliate shall incur or in the reasonable opinion of the
Majority Lenders is reasonably likely to incur a liability to a
Plan, a Multiemployer Plan or the PBGC (or any combination of the
foregoing) that, in the determination of the Majority Lenders,
has or could reasonably be expected to have (either individually
or in the aggregate) a Maxus Material Adverse Effect; or
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 69 -
(j) Any of the Liens created by the Pledge Agreement
(on and after the execution and delivery thereof) shall at any
time not constitute a valid and perfected Lien on the collateral
intended to be covered thereby (to the extent perfection by
filing, registration, recordation or possession is required
herein or therein) in favor of the Agent, free and clear of all
other Liens except as a result of any action taken by the Agent
or the Lenders, or the Pledge Agreement shall for any reason
(other than any such action or the termination of the Pledge
Agreement in accordance with its terms) be terminated or cease to
be in full force and effect, or the enforceability thereof shall
be contested by either Obligor; or
(k) any event set forth in Schedule III hereto shall
occur;
THEREUPON: (1) in the case of an Event of Default other than one
referred to in clause (f) or (g) of this Section 10 hereto with
respect to the Company, the Agent may and, upon request of the
Majority Lenders, will, by notice to the Company, terminate the
Commitments and/or declare the principal amount then outstanding
of, and the accrued interest on, the Loans and all other amounts
payable by the Obligors hereunder and under the Notes (including,
without limitation, any amounts payable under Section 5.05
hereof) to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby
expressly waived by each Obligor; and (2) in the case of the
occurrence of an Event of Default referred to in clause (f)
or (g) of this Section 10 hereto with respect to the Company, the
Commitments shall automatically be terminated and the principal
amount then outstanding of, and the accrued interest on, the
Loans and all other amounts payable by the Obligors hereunder and
under the Notes (including, without limitation, any amounts
payable under Section 5.05 hereof) shall automatically become
immediately due and payable without presentment, demand, protest
or other formalities of any kind, all of which are hereby
expressly waived by each Obligor.
Section 11. The Agent.
---------
11.01 Appointment, Powers and Immunities. Each Lender
----------------------------------
hereby appoints and authorizes the Agent to act as its agent
hereunder and under the other Basic Documents with such powers as
are specifically delegated to the Agent by the terms of this
Agreement and of the other Basic Documents, together with such
other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in Section 11.05 and the
first sentence of Section 11.06 hereof shall include reference to
its affiliates and its own and its affiliates' officers,
directors, employees and agents):
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 70 -
(a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other
Basic Documents, and shall not by reason of this Agreement
or any other Basic Document be a trustee for any Lender;
(b) shall not be responsible to the Lenders for any
recitals, statements, representations or warranties
contained in this Agreement or in any other Basic Document,
or in any certificate or other document referred to or
provided for in, or received by any of them under, this
Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any other Basic
Document or any other document referred to or provided for
herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or
thereunder;
(c) shall not, except to the extent expressly
instructed by the Majority Lenders with respect to
collateral security under the Pledge Agreement, be required
to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document; and
(d) shall not be responsible for any action taken or
omitted to be taken by it hereunder or under any other Basic
Document or under any other document or instrument referred
to or provided for herein or therein or in connection
herewith or therewith, except for its own gross negligence
or willful misconduct.
The Agent may employ agents and attorneys-in-fact and shall not
be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it in good faith. The
Agent may deem and treat the payee of a Note as the holder
thereof for all purposes hereof unless and until a notice of the
assignment or transfer thereof shall have been filed with the
Agent, together with the consent of the Company to such
assignment or transfer (to the extent provided in
Section 12.06(b) hereof).
11.02 Reliance by Agent. The Agent shall be entitled
-----------------
to rely upon any certification, notice or other communication
(including, without limitation, any thereof by telephone,
telecopy, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal
counsel, independent accountants and other experts selected by
the Agent. As to any matters not expressly provided for by this
Agreement or any other Basic Document, the Agent shall in all
cases be fully protected in acting, or in refraining from acting,
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 71 -
hereunder or thereunder in accordance with instructions given by
the Majority Lenders, and such instructions of the Majority
Lenders and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders.
11.03 Defaults. The Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of a Default unless the
Agent has received notice from a Lender or either of the Obligors
specifying such Default and stating that such notice is a "Notice
of Default". In the event that the Agent receives such a notice
of the occurrence of a Default, the Agent shall give prompt
notice thereof to the Lenders. The Agent shall (subject to
Section 11.07 hereof) take such action with respect to such
Default as shall be directed by the Majority Lenders, provided
--------
that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to
such Default as it shall deem advisable in the best interest of
the Lenders except to the extent that this Agreement expressly
requires that such action be taken, or not be taken, only with
the consent or upon the authorization of the Majority Lenders or
all of the Lenders.
11.04 Rights as a Lender. With respect to its
------------------
Commitment and the Loans made by it, Chase (and any successor
acting as Agent) in its capacity as a Lender hereunder shall have
the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context
otherwise indicates, include the Agent in its individual
capacity. Chase (and any successor acting as Agent) and its
affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, make investments in and
generally engage in any kind of banking, trust or other business
with any of YPF and Maxus and their respective Subsidiaries or
Affiliates) as if it were not acting as the Agent, and Chase (and
any such successor) and its affiliates may accept fees and other
consideration from any of such Persons for services in connection
with this Agreement or otherwise without having to account for
the same to the Lenders.
11.05 Indemnification. The Lenders agree to indemnify
---------------
the Agent (to the extent not reimbursed under Section 12.03
hereof, but without limiting the obligations of the Company under
said Section 12.03) ratably in accordance with the aggregate
principal amount of the Loans held by the Lenders (or, if no
Loans are at the time outstanding, ratably in accordance with
their respective Commitments), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 72 -
against the Agent (including by any Lender) arising out of or by
reason of any investigation in or in any way relating to or
arising out of this Agreement or any other Basic Document or any
other documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that the Company is
obligated to pay under Section 12.03 hereof, but excluding,
unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of
its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided
--------
that no Lender shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct
of the party to be indemnified.
11.06 Non-Reliance on Agent and Other Lenders. Each
---------------------------------------
Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit
analysis of YPF and Maxus and their respective Subsidiaries and
decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own analysis
and decisions in taking or not taking action under this Agreement
or under any other Basic Document. The Agent shall not be
required to keep itself informed as to the performance or
observance by either Obligor of this Agreement or any of the
other Basic Documents or any other document referred to or
provided for herein or therein or to inspect the Properties or
books of any of YPF and Maxus and their respective Subsidiaries.
Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent
hereunder or under the Pledge Agreement, the Agent shall not have
any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition
or business of any of YPF and Maxus and their respective
Subsidiaries (or any of their affiliates) that may come into the
possession of the Agent or any of its affiliates.
11.07 Failure to Act. Except for action expressly
--------------
required of the Agent hereunder and under the other Basic
Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 11.05
hereof against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such
action.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 73 -
11.08 Resignation or Removal of Agent. Subject to the
-------------------------------
appointment and acceptance of a successor Agent as provided
below, the Agent may resign at any time by giving notice thereof
to the Lenders and the Company, and the Agent may be removed at
any time with or without cause by the Majority Lenders. Upon any
such resignation or removal, the Majority Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Majority Lenders and shall have
accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, that shall be a
bank that has an office in New York, New York with a combined
capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor
Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Section 11 shall continue in effect for its benefit in respect of
any actions taken or omitted to be taken by it while it was
acting as the Agent.
11.09 Consents under Other Basic Documents. Except as
------------------------------------
otherwise provided in Section 12.04 hereof with respect to this
Agreement, the Agent may, with the prior consent of the Majority
Lenders (but not otherwise), consent to any modification,
supplement or waiver under any of the Basic Documents, provided
--------
that, without the prior consent of each Lender, the Agent shall
not (except as provided herein or in the Pledge Agreement)
release any collateral or otherwise terminate any Lien under any
Basic Document providing for collateral security, or agree to
additional obligations being secured by such collateral security
(unless the Lien for such additional obligations shall be junior
to the Lien in favor of the other obligations secured by such
Basic Document), except that no such consent shall be required,
and the Agent is hereby authorized, to release any Lien covering
Property that is the subject of a disposition of Property
permitted hereunder or to which the Majority Lenders have
consented.
Section 12. Miscellaneous.
-------------
12.01 Waiver. No failure on the part of the Agent or
------
any Lender to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or privilege under
this Agreement or any Note shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or
further exercise thereof or the exercise of any other right,
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 74 -
power or privilege. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
12.02 Notices. All notices, requests and other
-------
communications provided for herein and under the Pledge Agreement
(including, without limitation, any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or
made in writing (including, without limitation, by telecopy)
delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof (below the
name of the Company, in the case of YPF); or, as to any party, at
such other address as shall be designated by such party in a
notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case
given or addressed as aforesaid.
12.03 Expenses, Etc. The Company agrees to pay or
--------------
reimburse each of the Lenders and the Agent (without duplication)
for: (a) all reasonable out-of-pocket costs and expenses of the
Agent (including, without limitation, the reasonable fees and
expenses of Milbank, Tweed, Hadley & McCloy, special New York
counsel to Chase, and Perez Alati, Grondona, Benites, Arntsen &
Martinez de Hoz (h), special Argentine counsel to Chase) in
connection with (i) the negotiation, preparation, execution,
delivery of this Agreement and the other Basic Documents, the
review of the other Transaction Documents and the making and
syndication of the Loans hereunder and related matters (provided
--------
that such fees and expenses of Milbank do not exceed the budgeted
amounts indicated by Milbank, without the prior approval of YPF)
and (ii) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any
of the other Transaction Documents (whether or not consummated);
(b) all reasonable out-of-pocket costs and expenses of the
Lenders and the Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with
(i) any Event of Default and any enforcement or collection
proceedings resulting therefrom, including, without limitation,
all manner of participation in or other involvement with
(x) bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings, (y) judicial or regulatory
proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or
transaction contemplated thereby is consummated) and (ii) the
enforcement of this Section 12.03; and (c) without limiting the
obligations of YPF under Section 6.08 hereof, and without
duplication of any amounts payable by the Company under
Section 5.06 hereof, all transfer, stamp, documentary or other
similar taxes, assessments or charges levied by any governmental
or revenue authority in respect of this Agreement or any of the
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 75 -
other Basic Documents or any other document referred to herein or
therein and all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration,
recording or perfection of any security interest contemplated by
any Basic Document or any other document referred to therein;
provided that, if and only if YPF shall have indefeasibly paid in
full to the Agent and the Lenders any amounts payable by it under
Section 6.08 hereof and by the Company under this clause (c), the
Company shall not be obligated to pay such amounts under this
clause (c) to the Agent and the Lenders.
The Company hereby agrees to indemnify the Agent and
each Lender and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless
against, any and all losses, liabilities, claims, damages or
expenses incurred by any of them (including, without limitation,
any and all losses, liabilities, claims, damages or expenses
incurred by the Agent to any Lender, whether or not the Agent or
any Lender is a party thereto) arising out of or by reason of any
investigation or litigation or other proceedings (including any
threatened investigation or litigation or other proceedings)
relating to the Loans hereunder or any actual or proposed use by
the Company or any of its Subsidiaries of the proceeds of any of
the Loans hereunder or any of the other transactions contemplated
hereby or by any of the other Transactions Documents, including,
without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses,
liabilities, claims, damages or expenses incurred by reason of
the gross negligence or willful misconduct of the Person to be
indemnified).
12.04 Amendments, Etc. Except as otherwise expressly
----------------
provided in this Agreement, any provision of this Agreement may
be modified or supplemented only by an instrument in writing
signed by the Company, YPF, the Agent and the Majority Lenders,
or by the Company, YPF and the Agent acting with the consent of
the Majority Lenders, and any provision of this Agreement may be
waived by the Majority Lenders or by the Agent acting with the
consent of the Majority Lenders; provided that: (a) no
--------
modification, supplement or waiver shall, unless by an instrument
signed by all of the Lenders or by the Agent acting with the
consent of all of the Lenders: (i) increase, or extend the term
of the Commitments, or extend the time or waive any requirement
for the reduction or termination of the Commitments, (ii) extend
the date fixed for the payment of principal of or interest on any
Loan or any fee hereunder, (iii) reduce the amount of any such
payment of principal, (iv) reduce the rate at which interest or
any fee is payable hereunder, (v) alter the rights or obligations
of the Company to prepay Loans, (vi) alter the terms of this
Section 12.04, (vii) modify the definition of the term "Majority
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 76 -
Lenders" or modify in any other manner the number or percentage
of the Lenders required to make any determinations or waive any
rights hereunder or to modify any provision hereof, or
(viii) waive any of the conditions precedent set forth in
Section 7 hereof; and (b) any modification or supplement of
Section 11 hereof shall require the consent of the Agent.
12.05 Successors and Assigns. This Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
12.06 Assignments and Participations.
------------------------------
(a) Neither Obligor may assign any of its rights or
obligations hereunder or under the Notes without the prior
consent of all of the Lenders and the Agent.
(b) Each Lender may (and each Lender shall, if
required pursuant to Section 5.07 hereof) assign any of its
Loans, its Note, and its Commitment with the consent of each of
the Company and the Agent (provided that no such consent of the
--------
Company shall be required if an Event of Default shall have
occurred and be continuing and no such consent of either the
Company or the Agent shall be unreasonably withheld or delayed);
provided that
--------
(i) no such consent by the Company or the Agent shall
be required in the case of any assignment to another Lender;
(ii) except to the extent the Company and the Agent
shall otherwise consent, any such partial assignment (other
than to another Lender) shall be in an amount at least equal
to $5,000,000;
(iii) each such assignment by a Lender of its Loans,
Note or Commitment shall be made in such manner so that the
same portion of its Loans, Note and Commitment is assigned
to the respective assignee; and
(iv) upon each such assignment, the assignor and
assignee shall deliver to the Company and the Agent a Notice
of Assignment in the form of Exhibit G hereto.
Upon execution and delivery by the assignor and the assignee to
the Company and the Agent of such Notice of Assignment, and upon
consent thereto by the Company and the Agent to the extent
required above, the assignee shall have, to the extent of such
assignment (unless otherwise consented to by the Company and the
Agent), the obligations, rights and benefits of a Lender
hereunder holding the Commitment and Loans (or portions thereof)
assigned to it and specified in such Notice of Assignment (in
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 77 -
addition to the Commitment and Loans, if any, theretofore held by
such assignee) and the assigning Lender shall, to the extent of
such assignment, be released from the Commitment (or portion
thereof) so assigned. Upon each such assignment the assigning
Lender shall pay the Agent an assignment fee of $3,000.
(c) A Lender may sell or agree to sell to one or more
other Persons a participation in all or any part of any Loans
held by it, or in its Commitment, in which event each purchaser
of a participation (a "Participant") shall be entitled to the
-----------
rights and benefits of the provisions of Section 9.01(h) hereof
with respect to its participation in such Loans and Commitment as
if (and the Company shall be directly obligated to such
Participant under such provisions as if) such Participant were a
"Lender" for purposes of said Section, but, except as otherwise
provided in Section 4.07(c) hereof, shall not have any other
rights or benefits under this Agreement or any Note or any other
Basic Document (the Participant's rights against such Lender in
respect of such participation to be those set forth in the
agreements executed by such Lender in favor of the Participant).
All amounts payable by the Company to any Lender under Section 5
hereof and Section 12.03 hereof in respect of Loans held by it,
and its Commitment, shall be determined as if such Lender had not
sold or agreed to sell any participations in such Loans and
Commitment, and as if such Lender were funding such Loans and
Commitment in the same way that it is funding the portion of such
Loans and Commitment in which no participations have been sold.
In no event shall a Lender that sells a participation agree with
the Participant to take or refrain from taking any action
hereunder or under any other Basic Document except that such
Lender may agree with the Participant that it will not, without
the consent of the Participant, agree to (i) increase or extend
the term, or extend the time or waive any requirement for the
reduction or termination, of such Lender's Commitment,
(ii) extend the date fixed for the payment of principal of or
interest on the related Loan or Loans or any portion of any fee
hereunder payable to the Participant, (iii) reduce the amount of
any such payment of principal, (iv) reduce the rate at which
interest is payable thereon, or any fee hereunder payable to the
Participant, to a level below the rate at which the Participant
is entitled to receive such interest or fee, (v) alter the rights
or obligations of the Company to prepay the related Loans or
(vi) consent to any modification, supplement or waiver hereof or
of any of the other Basic Documents to the extent that the same,
under Section 11.09 or 12.04 hereof, requires the consent of each
Lender.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.06,
any Lender may (without notice to or the consent of the Company,
the Agent or any other Lender and without payment of any fee)
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 78 -
(i) assign and pledge all or any portion of its Loans and its
Note to any Federal Reserve Bank as collateral security pursuant
to Regulation A and any Operating Circular issued by such Federal
Reserve Bank and (ii) assign all or any portion of its rights
under this Agreement and its Loans and its Note to an affiliate.
No such assignment shall release the assigning Lender from its
obligations hereunder.
(e) A Lender may furnish any information concerning
YPF or Maxus or any of their respective Subsidiaries in the
possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants),
subject, however, to the provisions of Section 12.16 hereof.
(f) Anything in this Section 12.06 to the contrary
notwithstanding, no Lender may assign or participate any interest
in any Loan held by it hereunder to the Company or any of its
Affiliates or Subsidiaries without the prior consent of each
Lender.
12.07 Survival. The obligations of the Company under
--------
Sections 5.01, 5.05, 5.06 and 12.03 hereof, the obligations of
YPF under Sections 6.03 and 6.08 hereof, and the obligations of
the Lenders under Section 11.05 hereof, shall survive the
repayment of the Loans and the termination of the Commitments
and, in the case of any Lender that assigns any interest in its
Commitment or Loans hereunder, shall survive the making of such
assignment notwithstanding that such assigning Lender may cease
to be a "Lender" hereunder. In addition, each representation and
warranty made, or deemed to be made by a notice of any Loan,
herein or pursuant hereto shall survive the making of such
representation and warranty, and no Lender shall be deemed to
have waived, by reason of making any Loan, any Default that may
arise by reason of any such representation or warranty proving to
have been false or misleading in any material respect,
notwithstanding that such Lender or the Agent may have had notice
or knowledge or reason to believe that such representation or
warranty was false or misleading at the time such Loan was made.
12.08 Captions. The table of contents and captions
--------
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
12.09 Counterparts. This Agreement may be executed in
------------
any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 79 -
12.10 Jurisdiction, Venue, Immunity and Service of
--------------------------------------------
Process.
-------
(a) YPF hereby 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 any of this Agreement and the other
Basic Documents and the transactions contemplated hereby or
thereby. Each Obligor 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 and the
other Basic Documents and the transactions contemplated hereby or
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. 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 a suit upon such judgment, provided that service of
--------
process is effected upon YPF in the manner provided in this
Section 12.10. Notwithstanding the foregoing, any suit, action
or proceeding brought in connection with any of this Agreement
and the other Basic Documents and the transactions contemplated
hereby or thereby may be instituted in any competent court in
Argentina.
(b) To the extent that any Obligor has or hereafter
may acquire any immunity from jurisdiction of any court or from
any legal process, such Obligor 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 of 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.
(c) YPF hereby agrees that service of all writs,
process and summonses in any such suit, action or proceeding
brought in the State of New York may be made upon it by service
upon CT Corporation System (the "Process Agent"), presently
-------------
having an office at 1633 Broadway, New York, New York 10019,
U.S.A., and YPF hereby irrevocably appoints the Process Agent its
true and lawful agent and attorney-in-fact in its name, place and
stead to accept such service of any and all such writs, process
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 80 -
and summonses, and agrees that the failure of the Process Agent
to give any notice of any such service of process to YPF shall
not impair or affect the validity of such service or of any
judgment based thereon. If for any reason CT Corporation System
ceases to act, or to be able to act, as a Process Agent as
contemplated hereby, YPF will appoint a substitute therefor and
agrees to maintain at all times an agent in the United States of
America to act as its Process Agent. YPF hereby further
irrevocably consents to the service of process in any suit,
action or proceeding in said courts by the mailing thereof by the
Agent or the Lender or any holder of any Note by registered or
certified mail, postage prepaid, to YPF at the address given
below its name on the signature pages hereto.
(d) Nothing herein shall in any way be deemed to limit
the ability of the Agent or any Lender to serve any such writs,
process or summonses in any other manner permitted by applicable
law or to obtain jurisdiction over the Obligors in such other
jurisdictions, and in such manner, as may be permitted by
applicable law.
12.11 Governing Law. This Agreement and the Notes
-------------
shall be governed by, and construed in accordance with, the law
of the State of New York.
12.12 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE
--------------------
AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12.13 Special Waiver. To the extent that YPF may be
--------------
entitled to the benefit of any provision of law requiring the
Agent or the Lender in any suit, action or proceeding brought in
a court of Argentina or other jurisdiction arising out of or in
connection with any of this Agreement and the other Basic
Documents and the transactions contemplated hereby, to post
security for litigation costs or otherwise post a performance
bond or guaranty ("cautio judicatum solvi" or "excepcion de
---------------------- ------------
arraigo"), or to take any similar action, YPF hereby irrevocably
-------
waives such benefit, in each case to the fullest extent now or
hereafter permitted under the laws of Argentina or, as the case
may be, such other jurisdiction.
12.14 Judgment Currency. (a) This is an
-----------------
international loan transaction in which the specification of
Dollars and payment in New York City is of the essence, and the
obligations of each Obligor under any of this Agreement and the
other Basic Documents to make payment to (or for the account of)
the Agent or a Lender in Dollars shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 81 -
expressed in or converted into any other currency or in another
place except to the extent that such tender or recovery results
in the effective receipt by the Agent or such Lender in New York
City of the full amount of Dollars payable to the Agent or such
Lender thereunder. If for the purpose of obtaining judgment in
any court it is necessary to convert a sum due under any of this
Agreement and the other Basic Documents to the Agent, any Lender
or any indemnified person in Dollars into another currency the
rate of exchange used shall be that at which in accordance with
normal banking procedures such party could purchase 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 each Obligor in respect of any sum payable
under any of this Agreement and the other Basic Documents by it
to the Agent, any Lender or any indemnified person shall,
notwithstanding any judgment in a currency (the "Judgment
--------
Currency") other than Dollars, be discharged only to the extent
--------
that on the business day in New York next following receipt by
such payee of any sum adjusted to be so due in the Judgment
Currency such payee may in accordance with normal banking
procedures purchase and transfer to New York Dollars with the
Judgment Currency; if the amount of Dollars which could have been
so purchased and transferred is less than the sum originally due
to the Agent, any Lender or any indemnified person, as the case
may be, in Dollars each Obligor agrees, as a separate obligation
and notwithstanding any such judgment, to indemnify such payee
against the deficiency.
(b) (i) Without limiting the obligation of YPF to pay
Guaranteed Obligations hereunder in Dollars and otherwise in
accordance with the provisions of this Agreement (but without
duplication of any amounts paid by YPF in Dollars in respect of
its Guaranteed Obligations), if foreign exchange restrictions are
imposed in Argentina and, as a result thereof, YPF is prohibited
from purchasing or otherwise obtaining Dollars or transferring
Dollars to the account of the Agent specified in Section 4.01
hereof, then YPF will, if and to the extent requested to do so by
the Agent (acting on the instructions of the Majority Lenders
acting in their sole discretion): (1) pay to the Agent an amount
of Argentine pesos sufficient to purchase the Argentine Public
Debt Instruments (as defined below) identified in (and in the
respective amounts specified in) such request having a value
sufficient so that, upon the sale thereof for Dollars in New York
(or, at the option of the Agent, in such other city as the Agent
shall determine it is able to obtain a better price), the Agent
will receive a sum in Dollars (net of any taxes, expenses and
commissions payable in connection with the purchase and sale of
such securities) equal to the aggregate Dollar amount owed by YPF
to the Agent and the Lenders under this Agreement in respect of
Guaranteed Obligations; or (2) deliver to the Agent Argentine
Public Debt Instruments identified in (and in the respective
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 82 -
amounts specified in) such request having a value sufficient so
that upon the sale thereof for Dollars in New York (or, at the
option of the Agent, in such other city as the Agent shall
determine it is able to obtain a better price), the Agent will
receive a sum in Dollars (net of any taxes, expenses and
commissions payable in connection with the purchase and sale of
such securities) equal to the aggregate Dollar amount owed by YPF
to the Agent and the Lenders under this Agreement in respect of
Guaranteed Obligations. The receipt by the Agent of Dollar
proceeds from the sale of securities as provided in the preceding
sentence shall not be deemed to constitute payment of amounts
owed by YPF under this Agreement except to the extent credited to
the account at the Principal Office referred to in Section
4.01(a) hereof. The Agent hereby agrees to use its best efforts
to effect such purchase and/or sale, and to cause the proceeds of
any such sale (net of any taxes, expenses and commissions that
are payable in connection with such purchase and/or sale) to be
credited to such account as promptly as practicable following the
payment of Argentine pesos or delivery of Argentine Public Debt
Instruments by YPF pursuant to the preceding sentence of this
Section 12.14. As used herein, "Argentine Public Debt
---------------------
Instruments" shall mean Argentine External Bonds issued by
-----------
Argentina denominated in Dollars and other Argentine public
foreign debt instruments denominated in Dollars.
(ii) Nothing in this Section 12.14(b) shall impair any
of the rights of the Agent and the Lenders in respect of the
Guaranteed Obligations under this Agreement and nothing in this
Section 12.14(b) shall be construed to entitle YPF to refuse to
make payments in respect of the Guaranteed Obligations hereunder
in Dollars in New York City for any reason whatsoever (other than
full and final payment to the Agent of all amounts due hereunder
in respect of the Guaranteed Obligations in Dollars in New York
City), including without limitation if (i) the purchase of
Dollars in Argentina by any means were to become more onerous or
burdensome for YPF than as of the date hereof; or (ii) the
exchange rate in force in Argentina as of the date hereof
increases significantly; or (iii) the exchange ratio between the
Argentine peso and the Dollar established by Law 23,928 is
modified.
12.15 Use of English Language. This Agreement and the
-----------------------
other Basic Documents have been negotiated and executed in the
English language. Except as provided in Item 7 of Schedule II
hereto, all certificates, reports, notices and other documents
and communications given or delivered pursuant to this Agreement
(including, without limitation, pursuant to any modifications or
supplements hereto) shall be in the English language, or
accompanied by a certified English translation thereof. Except
in the case of laws or official communications of Argentina, in
the case of any document originally issued in a language other
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 83 -
than English, the English language version of any such document
shall for purposes of this Agreement, and absent manifest error,
control the meaning of the matters set forth therein.
12.16 Treatment of Certain Information;
---------------------------------
Confidentiality. Each Lender and the Agent agrees (on behalf of
---------------
itself and each of its affiliates, directors, officers, employees
and representatives) to use its best efforts to keep confidential
and not to disclose any non-public information supplied to it by
YPF or the Company pursuant to this Agreement that is identified
by such Person as being confidential at the time the same is
delivered to the Lenders or the Agent, 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 the Agent,
(iii) to bank examiners, auditors or accountants, (iv) to the
Agent or any other Lender (or to Chase Securities, Inc., Chase
Investment Bank, Ltd. and Chase Manhattan Asia Limited), (v) in
connection with any litigation relating to any of the Transaction
Documents or the transactions contemplated thereby or hereby to
which any one or more of the Lenders or the Agent is a party,
(vi) to a subsidiary or affiliate of such Lender in connection
with the syndication, administration, management or booking of
any Loans or (vii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant
(or prospective assignee or participant) first executes and
delivers to the respective Lender a Confidentiality Agreement
substantially in the form of Exhibit F hereto (or executes and
delivers to such Lender an acknowledgement to the effect that it
is bound by the provisions of this Section 12.16, which
acknowledgement may be included as part of the respective
assignment or participation agreement pursuant to which such
assignee or participant acquires an interest in the Loans
hereunder). The obligations of each Lender under this
Section 12.16 shall supersede and replace the obligations of such
Lender under any confidentiality letter (i) in respect of this
financing executed and delivered by such Lender to either or both
of the Obligors prior to the date hereof and (ii) effective as of
the Merger Closing Date, executed and delivered by such Lender to
Maxus or any of its Subsidiaries prior to the date hereof; in
addition, the obligations of any assignee that has executed a
Confidentiality Agreement in the form of Exhibit F hereto shall
be superseded by this Section 12.16 upon the date upon which such
assignee becomes a Lender hereunder pursuant to Section 12.06
hereof.
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 84 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and
year first above written.
YPF ACQUISITION CORP.
By /s/ Cedric Bridger
Title: Vice President, Assistant
Secretary and Treasurer
Address for Notices:
660 Madison Avenue
20th Floor
New York, New York 10021
Attention: Jose A. Estenssoro
Telecopier No.: (212) 838-9088
Telephone No.: (212) 838-9400
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 85 -
YPF SOCIEDAD ANONIMA
By /s/ Cedric Bridger
Title: Vice President, Finance
and Corporate Development
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 86 -
LENDERS
-------
Commitment THE CHASE MANHATTAN BANK
----------
$550,000,000.00 (NATIONAL ASSOCIATION)
By /s/ Ian Schottlaender
Title: Managing Director
Lending Office for all Loans:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Address for Notices:
The Chase Manhattan Bank
(National Association)
1 Chase Manhattan Plaza
New York, New York 10081
Attention: Ian Shottlaender
Managing Director
Telecopier No.: 212-552-1687
Telephone No.: 212-552-5874
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
- 87 -
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
as Agent
By /s/ Ian Schottlaender
Title: Managing Director
Address for Notices to
Chase as Agent:
The Chase Manhattan Bank
(National Association)
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Attention: New York Agency
Telecopier No.: (718) 242-6910
Telephone No.: (718) 242-7979
BII\32161_1 04/07/95 10:16am
Credit Agreement
----------------
<PAGE>
SCHEDULE I
Representations and Warranties of YPF
-------------------------------------
Capitalized terms used in this Schedule I (unless
otherwise defined in this Schedule I) shall have the meanings
assigned to them in the Credit Agreement. In addition, as used
in this Schedule I, any references to a Subsidiary or
Subsidiaries of YPF shall be deemed (other than with respect to
Item 3) to refer to a Subsidiary or Subsidiaries of YPF (as the
case may be) other than YPF Acquisition and its Subsidiaries and
Maxus and its Subsidiaries.
1. Organization, Standing, etc. YPF is a sociedad
---------------------------- --------
anonima (corporation) duly organized and existing and in good
-------
standing under the laws of Argentina, has full corporate power
and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to
enter into the Transaction Documents to which it is a party and
to carry out the terms thereof.
2. Qualification. YPF and each of its Subsidiaries is
-------------
duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction (other than the
jurisdiction of its incorporation or organization) in which the
nature of its activities or the character of the properties it
owns or leases makes such qualification necessary and in which
the failure so to qualify would have a Schedule YPF Material
Adverse Effect.
3. Financial Statements. The consolidated balance
--------------------
sheets of YPF and its Subsidiaries as at December 31, 1994, 1993
and 1992 and the related consolidated statements of income, cash
flows and changes in financial position of YPF and its
Subsidiaries for each of the fiscal years then ended, together
with related notes, such statements being accompanied by reports
thereon of Pistrelli, Diaz y Associados (associated with Arthur
Andersen & Co.), independent public accountants have been
delivered to the Lenders. The consolidated financial statements
of YPF and its Subsidiaries referred to above for the year ended
at December 31, 1994 will be submitted for approval by the
shareholders of YPF at a meeting to be held on April 28, 1995.
The Board of Directors of YPF has recommended approval of these
financial statements. All such financial statements (including
any related schedules or notes) have been prepared in accordance
with Argentine GAAP, present fairly the consolidated financial
position of YPF and its Subsidiaries as at the respective dates
of such consolidated balance sheets and the consolidated results
of operations, cash flows and changes in financial position of
YPF and its Subsidiaries for the fiscal periods ended on said
dates. Since December 31, 1994 there have been no changes in the
business, financial condition, operations, assets, liabilities or
prospects of YPF and its Subsidiaries from that set forth in the
BII\32161_1 04/07/95 10:16am
Schedule I
----------
<PAGE>
- 2 -
consolidated balance sheet as of that date, other than changes in
the ordinary course of business which have not, either
individually or in the aggregate, had a Schedule YPF Material
Adverse Effect.
4. Litigation, etc. There is no action, suit,
----------------
proceeding or investigation at law or in equity by or before any
court, governmental body, agency, commission or other tribunal
now pending or, to the best of YPF's knowledge after due inquiry,
threatened against or affecting YPF or its Subsidiaries or its or
its Subsidiaries' property or rights (a) which questions or would
question the validity of the Basic Documents to which it is a
party or (b) as to which there is a significant possibility of an
adverse determination and which if adversely determined (i) may
have a Schedule YPF Material Adverse Effect or (ii) could impair
the ability of YPF to perform its obligations under the Basic
Documents to which it is a party.
5. Governmental Consents. No consent, approval or
---------------------
authorization of, or declaration or filing with, any governmental
authority is required for the valid execution, delivery and
performance by YPF of the Basic Documents to which it is a party.
6. Taxes. Under the laws of Argentina, the execution,
-----
delivery and performance by YPF of its obligations under the
Basic Documents and all payments of principal, interest, fees and
other amounts thereunder are exempt from all income or
withholding taxes, stamp taxes, charges or contributions of
Argentina or any political subdivision or taxing authority
thereof, irrespective of the fact that the Agent or any of the
Lenders may have a representative office or subsidiary in
Argentina; provided, however, that all payments of interest under
-------- -------
the Basic Documents are subject to a withholding tax at the rate
of 12%; and provided further, that fees are not subject to
-------- -------
withholding taxes if they are paid for services rendered outside
of Argentina.
7. Authorization. YPF has all necessary corporate
-------------
power, authority and legal right to execute, deliver and perform
its obligations under the Basic Documents. The Basic Documents
to which YPF is or is intended to be a party have been duly
authorized by all requisite corporate and other actions and duly
executed and delivered by authorized officers of YPF, and are the
valid obligations of YPF, legally binding upon and enforceable
against YPF in accordance with their respective terms, except as
such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and
(b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
BII\32161_1 04/07/95 10:16am
Schedule I
----------
<PAGE>
- 3 -
8. No Conflicts. The execution, delivery and
------------
performance by YPF of the Basic Documents to which it is a party
do not and will not violate the provisions of any applicable law
or regulation of Argentina (or of any political subdivision
thereof) presently in effect or any order of any court,
regulatory body or arbitral tribunal or of the estatutos of YPF,
---------
other than violations that individually or collectively could not
have a Schedule YPF Material Adverse Effect, and do not and will
not constitute a breach or default or require any consent under,
or result in the creation of any Lien on any of the present or
future revenues and properties of YPF or any of its Subsidiaries
pursuant to, any agreement, instrument or document to which YPF
or any of its Subsidiaries is a party or by which YPF or any of
its or its Subsidiaries' respective properties or revenues may be
bound or affected except to the extent that such breaches,
defaults or Liens individually or collectively could not have a
Schedule YPF Material Adverse Effect.
9. Commercial Obligations. YPF is subject to civil
----------------------
and commercial law with respect to its obligations under the
Credit Agreement and the Pledge Agreement, and the execution,
delivery and performance by YPF of its obligations under the
Credit Agreement and the Pledge Agreement, constitute private and
commercial acts; and neither YPF nor any of its properties or
revenues is entitled to any right of immunity from suit, court
jurisdiction, attachment prior to judgment, attachment in aid of
execution of a judgment, set-off, execution of a judgment or from
any other legal process with respect to its obligations under the
Credit Agreement or the Pledge Agreement.
10. Enforceability. Each of the Credit Agreement and
--------------
the Pledge Agreement is in proper legal form under the laws of
Argentina for the enforcement thereof against YPF in the courts
of Argentina and it is not necessary, to ensure the
enforceability or admissibility in evidence of the Credit
Agreement and the Pledge Agreement, that the same be filed or
recorded with any court or other authority in Argentina except
that if any of the Basic Documents is enforced before the courts
of the city of Buenos Aires, the payment of a court tax of 3% on
the amount of the claim is required; and except further that an
official Spanish translation of the Basic Documents is required
to bring an action thereof in the courts of Argentina.
11. Ranking. YPF's obligations under Section 6 of the
-------
Credit Agreement will be direct and unconditional general
obligations of YPF and will rank in right of payment at least
pari passu with all other Indebtedness of YPF, except to the
---- -----
extent any such other Indebtedness is accorded preference by
reason of collateral security for such other Indebtedness.
12. Environmental Matters. YPF has obtained all
---------------------
permits, licenses and other authorizations which are required
under all environmental laws and regulations, except to the
BII\32161_1 04/07/95 10:16am
Schedule I
----------
<PAGE>
- 4 -
extent failure to have any such permit, license or authorization
would not have a Schedule YPF Material Adverse Effect. YPF is in
compliance with the terms and conditions of all such permits,
licenses and authorizations and of all other limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable
environmental law or in any regulation or code (as such laws,
regulations or codes are currently being interpreted or enforced)
or any plan, order, decree, judgment, injunction, notice or
demand letter issued, entered, promulgated or approved
thereunder, except to the extent failure to comply would not have
a Schedule YPF Material Adverse Effect.
13. Exploration, Permits, Etc. All oil and gas
--------------------------
exploration permits and production and transportation concessions
held by YPF are in effect and YPF is not in breach of any of its
obligations thereunder or in connection therewith that may
potentially cause the forfeiture of its rights under said permits
and concessions or impair or otherwise affect the exercise of its
rights thereunder except to the extent that any such breach would
not cause a Schedule YPF Material Adverse Effect.
For the purposes of this Schedule I, the following
terms shall have the following meanings:
"Argentine GAAP" shall mean generally accepted
--------------
accounting principles in Argentina as in effect from time to
time.
"Capital Lease Obligations" shall mean, for any Person,
-------------------------
all obligations of such Person to pay rent or other amounts
under a lease of (or other agreement conveying the right to
use) Property to the extent such obligations are required to
be classified and accounted for as a capital lease on a
balance sheet of such Person under Argentine GAAP, and, for
purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in
accordance with Argentine GAAP.
"Indebtedness" shall mean with respect to any Person,
------------
(a) any liability of such Person (i) for money borrowed, or
under any reimbursement obligation relating to a letter of
credit, (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses,
properties or assets of any kind (other than a trade payable
or a liability arising in the ordinary course of business,
so long as such trade payable or liability is payable within
90 days of the date the respective goods are delivered or
the respective services are rendered), or (iii) for Capital
Lease Obligations; (b) all Redeemable Stock issued by such
Person (the amount of Indebtedness being represented by any
involuntary liquidation preference plus accrued and unpaid
BII\32161_1 04/07/95 10:16am
Schedule I
----------
<PAGE>
- 5 -
dividends); (c) any liability of others described in the
preceding clause (a) that such Person has guaranteed; and
(d) (without duplication) any amendment, supplement,
modification, deferral, renewal, extension or refunding of
any liability of the types referred to in clauses (a), (b)
and (c) above. For purposes of determining any particular
amount of Indebtedness under this definition, Guarantees of
(or obligations with respect to letters of credit
supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Redeemable Stock" shall mean any class or series of
----------------
capital stock of any Person that by its terms or otherwise
is required to be redeemed prior to the final maturity of
the Notes (as defined in the YPF Credit Agreement), or is
redeemable at the option of the holder thereof at any time
prior to the final maturity of the Loans (as defined in the
YPF Credit Agreement).
"Schedule YPF Material Adverse Effect" shall mean the
------------------------------------
occurrence of any event or condition with respect to YPF
which has a material adverse effect on (a) the financial
condition, results of operations or the shareholders' equity
of YPF and its Subsidiaries taken as a whole, (b) the
ability of YPF to perform its payment and other material
obligations under any of the Basic Documents to which it is
or is intended to be a party, (c) the validity or
enforceability of the obligations of YPF under any of the
Basic Documents to which it is or is intended to be a party,
or (d) the ability of the Lenders and the Agent to enforce
their rights and remedies against YPF under any of the Basic
Documents to which it is or is intended to be a party.
"Subsidiary" shall mean, with respect to any Person,
----------
any corporation or other business entity of which such
Person owns or controls (either directly or through another
or other Subsidiaries) more than 50% of the issued share
capital or other ownership interest, in each case having
ordinary voting power to elect directors, managers or
trustees of such corporation or other business entity
(whether or not capital stock or other ownership interest of
any other class or classes shall or might have voting power
upon the occurrence of any contingency).
BII\32161_1 04/07/95 10:16am
Schedule I
----------
<PAGE>
SCHEDULE II
Covenants of YPF
----------------
Capitalized terms used in this Schedule II (unless
otherwise defined in this Schedule II) shall have the meanings
ascribed to them in the Credit Agreement. In addition, as used
in this Schedule II, any references to a Subsidiary or
Subsidiaries of YPF shall be deemed (other than with respect to
Item 7 and the definition of "Total Indebtedness") to refer to a
Subsidiary or Subsidiaries of YPF (as the case may be) other than
YPF Acquisition and its Subsidiaries and Maxus and its
Subsidiaries.
Section 8. Covenants of YPF.
----------------
1. Maintenance of Existence. YPF shall, and shall
------------------------
cause each of its Subsidiaries to, (i) maintain in effect its
corporate existence and all registrations necessary therefor and
(ii) take all reasonable actions to maintain all rights,
privileges, titles to property, franchises and the like necessary
or desirable in the normal conduct of its business, activities or
operations; provided, however, that this covenant shall not
-------- -------
prohibit any transaction by YPF or any of its Subsidiaries
otherwise permitted under Item 16 of this Schedule II and this
covenant shall not require YPF to maintain any such right,
privilege, title to property or franchise or to preserve the
corporate existence of any Subsidiary, if the Board of Directors
of YPF shall determine that (i) the maintenance or preservation
thereof is no longer desirable in the conduct of the business of
YPF and its Subsidiaries taken as a whole and (ii) the loss
thereof is not, and will not be, adverse in any material respect
to the Lenders.
2. Maintenance of Properties. YPF shall cause all
-------------------------
tangible Properties used or useful in the conduct of its business
or the business of any Subsidiary of YPF to be maintained and
kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements and improvements
thereof, all as in the judgment of YPF may be necessary so that
the business carried on in connection therewith may be properly
and advantageously conducted at all times; provided, however,
--------
that nothing shall prevent YPF from discontinuing the operation
or maintenance of any of such Properties if such discontinuance
is, as determined by the Board of Directors of YPF in good faith,
desirable in the conduct of the business of YPF and its
Subsidiaries taken as a whole and not adverse in any material
respect to the Lenders.
3. Payments of Taxes and Other Claims. YPF shall pay
----------------------------------
or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments, royalties
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 2 -
and governmental charges levied or imposed upon YPF or any of its
Subsidiaries, and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the
Property of YPF or any of its Subsidiaries; provided, however,
-------- -------
that YPF will not be required to pay or discharge or cause to be
paid or discharged any such tax, assessment, charge or claims
whose amount, applicability or validity is being contested in
good faith by appropriate proceedings.
4. Maintenance of Insurance. YPF shall, and shall
------------------------
cause each of its Subsidiaries to, keep at all times all of their
Properties which are of an insurable nature insured against loss
or damage with insurers believed by YPF to be responsible to the
extent that Property of similar characteristics is usually so
insured by corporations similarly situated and owing like
Properties in accordance with good business practice.
5. Negative Pledge. YPF shall not, and shall not
---------------
permit any of its Subsidiaries to, create or suffer to exist any
Lien on any of their present or future Property, in each case to
secure Indebtedness, unless all of the Guaranteed Obligations are
equally and ratably secured, except for:
(i) any Lien on any Property existing on the date of
the Credit Agreement;
(ii) any Lien on any asset securing Indebtedness
incurred or assumed solely for the purpose of financing all
or any part of the cost of acquiring or constructing such
asset;
(iii) any Lien on any Property existing thereon at the
time of acquisition of such Property and not created in
connection with such acquisition;
(iv) any Lien on any Property owned by a corporation or
other Person, which Lien exists at the time of the
acquisition of such corporation or other Person by YPF or
any of its Subsidiaries and which Lien is not created in
connection with such acquisition;
(v) any Lien on any Property securing an extension,
renewal or refunding of Indebtedness secured by a Lien
referred to in (i), (ii), (iii) or (iv) above, provided that
such new Lien is limited to the Property which was subject
to the prior Lien immediately before such extension, renewal
or refunding, and provided that the principal amount of
Indebtedness secured by the prior Lien immediately before
such extension, renewal or refunding is not increased;
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 3 -
(vi) any Lien in the form of a tax or other statutory
lien, provided that any such lien shall be discharged within
thirty (30) days after the date it is created or arises
(unless contested in good faith by YPF or a Subsidiary, in
which case it shall be discharged within thirty (30) days
after final adjudication); or
(vii) any other Lien on assets of YPF or any Subsidiary,
provided that the assets securing such Indebtedness together
with all other Property of YPF securing any Indebtedness
under this subparagraph (vii) do not exceed 15% of the total
assets of YPF; provided, however, for purposes of this
-------- -------
clause (vii) that (A) the value of such assets, Property and
total assets shall be determined by reference to the most
recent audited balance sheet of YPF prepared in accordance
with Argentine GAAP, and (B) the value of the assets and
Property securing Indebtedness shall not exceed the
outstanding principal amount of such Indebtedness.
6. Limitations on Sale and Leaseback Transactions.
----------------------------------------------
YPF shall not enter into, renew or extend, or permit any
Subsidiary to enter into, renew or extend, any transaction or
series of related transactions pursuant to which YPF or any such
Subsidiary sells or transfers any Property in connection with the
leasing, or the release against installment payments, or as part
of an arrangement involving the leasing or resale against
installment payments, of such Property to the seller or
transferor ("Sale and Leaseback Transaction") except (i) a Sale
------------------------------
and Leaseback Transaction that, had such Sale and Leaseback
Transaction been structured as a mortgage loan rather than as a
Sale and Leaseback Transaction, YPF would have been permitted to
enter into such transaction pursuant to the terms of the covenant
described in Item 5 of this Schedule II and (ii) a Sale and
Leaseback Transaction entered into prior to the date of the
Credit Agreement.
7. Financial Statements. YPF shall furnish or cause
--------------------
to be furnished to the Agent (with a copy for each Lender) (i)
annual reports in English, which will include a report of YPF's
statutory audit committee and annual audited financial statements
prepared in conformity with Argentine GAAP, together with a
reconciliation to generally accepted accounting principles as in
effect in the United States of America of net income and
shareholders' equity and (ii) quarterly reports in English which
will include unaudited interim financial information prepared in
conformity with Argentine GAAP. YPF will furnish to the Agent
(with a copy for each Lender), at the time it furnishes each set
of financial information, a certificate of the chief financial
officer of YPF to the effect that no Default has occurred and is
continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 4 -
action that YPF has taken or proposes to take with respect
thereto). YPF also shall furnish or cause to be furnished to the
Agent (with a copy for each Lender) in English (i) all notices of
shareholders' meetings and other reports and communications that
are made generally available to YPF's shareholders and (ii)
registration statements and regular and periodic reports which
YPF shall have filed with the Commission, any United States
securities exchange, the Argentine Securities Commission
("Comision Nacional de Valores"), the Buenos Aires Stock Exchange
----------------------------
or any other stock exchange in Argentina. Notwithstanding the
provisions of this Item 7, YPF shall have no obligation to
provide an English translation of any such report filed with the
Argentine Securities Commission, the Buenos Aires Stock Exchange
or any other stock exchange in Argentina if a report in English
providing substantially the same information (with no material
differences) has been furnished to the Agent in accordance with
this Item 7. From time to time YPF shall furnish to the Agent
such other information regarding the financial condition,
operations, business or prospects of YPF or any of its
Subsidiaries as the Agent or any Lender (through the Agent) may
reasonably request.
8. Compliance with Laws and Other Agreements. YPF
-----------------------------------------
shall, and shall cause each of its Subsidiaries to, comply with
all applicable laws, rules, regulations, orders and directions of
any governmental or regulatory authority or agency having
jurisdiction over it or its business and all of the covenants and
obligations contained in any agreements to which YPF or any
Subsidiary is a party, except where the failure to so comply
would not have a Schedule YPF Material Adverse Effect.
9. Maintenance of Books and Records. YPF shall, and
--------------------------------
shall cause each of its Argentine Subsidiaries to, maintain
books, accounts and records in accordance with Argentine GAAP.
10. Inspection. YPF shall permit representatives of
----------
the Agent or any Lender, during normal business hours and at the
expense of the Agent or such Lender (as the case may be), to
examine, copy and make extracts from its books and records, to
inspect any of its Properties, and to discuss its business and
affairs with its officers, all to the extent reasonably requested
by the Agent or such Lender.
11. Further Assurances. YPF will, at its own cost and
------------------
expense, execute and deliver to the Agent (with a copy for each
Lender, if requested by the Agent) all such documents,
instruments and agreements and do all such other acts and things
as may be reasonably required, in the opinion of the Agent or the
Majority Lenders (acting through the Agent), to enable the
Lenders to exercise and enforce their rights under the Basic
Documents.
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 5 -
12. Ranking. YPF will ensure that at all times its
-------
obligations under Section 6 of the Credit Agreement rank at least
pari passu (whether in priority of payment or otherwise) with all
---- -----
of its other Indebtedness, except to the extent any such other
Indebtedness is accorded preference by reason of collateral
security for such other Indebtedness.
13. Litigation. YPF will promptly give to the Agent
----------
notice of all legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory authority
or agency, and any material development in respect of such legal
or other proceedings, affecting YPF or any of its Subsidiaries,
except proceedings which, if adversely determined, would not have
a Schedule YPF Material Adverse Effect.
14. Total Indebtedness. YPF shall not permit at any
------------------
time Total Indebtedness to exceed 45% of Total Capitalization.
15. Tangible Net Worth. YPF shall not permit at any
------------------
time Tangible Net Worth (expressed in Argentine pesos) to be less
than 3,980,000,000 Argentine pesos which is equal to 80% of
Tangible Net Worth as at December 31, 1994.
16. Merger, Etc. YPF shall not, and shall not permit
------------
any of its Significant Subsidiaries to, merge or consolidate with
or into, or convey, transfer or lease their respective Properties
substantially as an entirety to, any Person, unless immediately
after giving effect to such transaction, (a) no Default shall
have occurred and be continuing, and (b) with respect to a merger
or consolidation of YPF with or into any Person, (i) any
corporation formed by any merger or consolidation with YPF or the
Person which acquires by conveyance or transfer, or which leases,
the Properties of YPF substantially as an entirety ("YPF's
-----
Successor Corporation") shall be an Argentine corporation and
---------------------
shall expressly assume the due and punctual payment of the
principal of, and interest on the Loans according to their terms,
and the due and punctual performance of all of the covenants and
obligations of YPF under the Transaction Documents; provided that
--------
nothing in this Item 16 shall prohibit the Merger.
17. Maintenance of Concessions, Permits, Leases and
-----------------------------------------------
Licenses. YPF shall maintain in full force and effect and good
--------
standing (and renew or extend when appropriate) all its rights
under any existing or future oil and gas exploration permits and
production and transportation concessions, leases or licenses and
to observe and perform all conditions or restrictions contained
or arising thereunder except to the extent any such failure
(i) to maintain, observe or perform would not have a Schedule YPF
Material Adverse Effect or (ii) arises from the scheduled
expiration thereof in accordance with its terms.
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 6 -
18. Maintenance of Sales Agreements. YPF shall
-------------------------------
maintain in place and renew or replace in accordance with sound
and prudent business and financial practices all of its crude oil
and other hydrocarbon sales agreements currently in force except
to the extent that any such failure to maintain, renew or replace
would not have a Schedule YPF Material Adverse Effect.
For purposes of this Schedule II, the following terms
shall have the following meanings:
"Argentine GAAP" shall mean generally accepted
--------------
accounting principles in Argentina as in effect from time to
time.
"Capital Lease Obligations" shall mean, for any Person,
-------------------------
all obligations of such Person to pay rent or other amounts
under a lease of (or other agreement conveying the right to
use) Property to the extent such obligations are required to
be classified and accounted for as a capital lease on a
balance sheet of such Person under Argentine GAAP, and, for
purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in
accordance with Argentine GAAP.
"Indebtedness" shall mean with respect to any Person,
------------
(a) any liability of such Person (i) for money borrowed, or
under any reimbursement obligation relating to a letter of
credit, (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses,
properties or assets of any kind (other than a trade payable
or a liability arising in the ordinary course of business,
so long as such trade payable or liability is payable within
90 days of the date the respective goods are delivered or
the respective services are rendered), or (iii) for Capital
Lease Obligations; (b) all Redeemable Stock issued by such
Person (the amount of Indebtedness being represented by any
involuntary liquidation preference plus accrued and unpaid
dividends); (c) any liability of others described in the
preceding clause (a) that such Person has guaranteed; and
(d) (without duplication) any amendment, supplement,
modification, deferral, renewal, extension or refunding of
any liability of the types referred to in clauses (a), (b)
and (c) above. For purposes of determining any particular
amount of Indebtedness under this definition, Guarantees of
(or obligations with respect to letters of credit
supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Redeemable Stock" shall mean any class or series of
----------------
capital stock of any Person that by its terms or otherwise
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 7 -
is required to be redeemed prior to the final maturity of
the Notes (as defined in the YPF Credit Agreement), or is
redeemable at the option of the holder thereof at any time
prior to the final maturity of the Loans (as defined in the
YPF Credit Agreement).
"Schedule YPF Material Adverse Effect" shall mean the
------------------------------------
occurrence of any event or condition with respect to YPF
which has a material adverse effect on (a) the financial
condition, results of operations or the shareholders' equity
of YPF and its Subsidiaries taken as a whole, (b) the
ability of YPF to perform its payment and other material
obligations under any of the Basic Documents to which it is
or is intended to be a party, (c) the validity or
enforceability of the obligations of YPF under any of the
Basic Documents to which it is or is intended to be a party,
or (d) the ability of the Lenders and the Agent to enforce
their rights and remedies against YPF under any of the Basic
Documents to which it is or is intended to be a party.
"Significant Subsidiary" shall mean a Subsidiary of YPF
----------------------
which is material to the condition, financial or otherwise,
or to the earnings, operations, business affairs or business
prospects of YPF and its Subsidiaries taken as a whole.
"Subsidiary" shall mean, with respect to any Person,
----------
any corporation or other business entity of which such
Person owns or controls (either directly or through another
or other Subsidiaries) more than 50% of the issued share
capital or other ownership interest, in each case having
ordinary voting power to elect directors, managers or
trustees of such corporation or other business entity
(whether or not capital stock or other ownership interest of
any other class or classes shall or might have voting power
upon the occurrence of any contingency).
"Tangible Net Worth" shall mean, as at any date, the
------------------
amount for YPF (determined in accordance with Argentine
GAAP) of (a) shareholders' equity as at such date minus
-----
(b) the sum of the following as at such date: the cost of
treasury shares and the book value of all assets that should
be classified as intangibles (without duplication of
deductions in respect of items already deducted in arriving
at surplus and retained earnings) but in any event including
goodwill, minority interests, research and development
costs, trademarks, trade names, copyrights, patents and
franchises, unamortized debt discount and expense, all
reserves for losses, contingencies, or other liabilities
(but only to the extent such reserves were not deducted in
arriving at shareholders' equity) and any write-up in the
book value of assets resulting from a revaluation thereof
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
- 8 -
subsequent to December 31, 1994 other than as a result of
the Merger.
"Total Capitalization" shall mean as at any date
--------------------
(a) Total Indebtedness as at such date plus (b)
shareholders' equity of YPF as at such date.
"Total Indebtedness" shall mean as at any date all
------------------
Indebtedness of YPF and its Subsidiaries as of such date,
determined on a consolidated basis in accordance with
Argentine GAAP.
BII\32161_1 04/07/95 10:16am
Schedule II
-----------
<PAGE>
SCHEDULE III
Events of Default with respect to YPF
-------------------------------------
Capitalized terms used in this Schedule III (unless
otherwise defined in this Schedule III) shall have the meanings
assigned to them in the Credit Agreement. In addition, as used
in this Schedule III, any references to a Subsidiary or
Subsidiaries of YPF shall be deemed to refer to a Subsidiary or
Subsidiaries of YPF (as the case may be) other than YPF
Acquisition and its Subsidiaries and Maxus and its Subsidiaries.
1. YPF shall default in the performance of any of its
obligations under any of Items 12, 14, 15 or 16 of Schedule
II to the Credit Agreement; or YPF shall default in the
performance of any of its other obligations under the Basic
Documents and such default shall continue unremedied for a
period of 30 or more days after notice thereof to YPF by the
Agent or any Lender (through the Agent).
2. An Event of Default (as defined in the YPF Credit
Agreement) under Section 9(a) of the YPF Trade Credit
Agreement shall occur.
3. YPF or any Subsidiary shall (a) default in the
payment of the principal of or interest on, any other note,
bond, coupon or other instrument evidencing Indebtedness in
an amount of $20,000,000 or more (other than the Notes, as
defined in the YPF Credit Agreement) issued, assumed or
guaranteed by it, when and as the same shall become due and
payable, if such default shall continue for more than the
period of grace, if any, originally applicable thereto and
the time for payment of such amount has not been expressly
extended, or (b) default in the observance of any other
terms and conditions relating to any such Indebtedness, if
the effect of such default is to cause such Indebtedness to
become due prior to its stated maturity.
4. Any government or governmental authority shall have
condemned, nationalized, seized, or otherwise expropriated
all or any substantial part of the Property of YPF or any
Subsidiary or the share capital of YPF or any such
Subsidiary, or shall have assumed custody or control of such
Property or of the business or operations of YPF or any such
Subsidiary or of the share capital of YPF or any such
Subsidiary, or shall have taken any action for the winding-
up or dissolution of YPF or any such Subsidiary or any
action that would prevent YPF or any such Subsidiary or its
officers from carrying on its business or operations or a
substantial part thereof for a period of longer than thirty
(30) days and the result of any such action shall materially
prejudice the ability of YPF to perform its obligations
under the Basic Documents to which it is a party.
BII\32161_1 04/07/95 10:16am
Schedule III
------------
<PAGE>
- 2 -
5. It becomes unlawful for YPF to perform any of its
obligations under any of the Basic Documents to which it is
a party, or any of its obligations thereunder ceases to be
valid, binding or enforceable.
6. A resolution is passed or adopted by the Board of
Directors or stockholders of YPF, or a judgment of a court
of competent jurisdiction is made, that YPF be wound up or
dissolved, other than for the purposes of or pursuant to a
merger or consolidation otherwise permitted under and in
accordance with the terms of Item 16 of Schedule II to the
Credit Agreement, and any winding up, dissolution or
liquidation proceedings remain undismissed for thirty (30)
days.
7. An attachment, execution, seizure before judgment
or other legal process is levied or enforced upon any part
of the Property of YPF or any Subsidiary which Property is
material to the condition, financial or otherwise, or to the
earnings, operations, business affairs or business prospects
of YPF and its Subsidiaries taken as a whole, and (a) such
attachment, execution, seizure before judgment or other
legal process is not discharged within thirty (30) days
thereof or (b) if such attachment, execution, seizure before
judgment or other legal process shall not have been
discharged within such 30-day period, YPF or such
Subsidiary, as the case may be, shall not have within such
30-day period contested such attachment, execution, seizure
before judgment or other legal process in good faith by
appropriate proceedings upon stay of execution of the
enforcement thereof or upon posting a bond in connection
therewith; provided, however, that in no event shall the
-------- -------
grace period provided by clause (b) above extend beyond the
60th day after the initiation of such proceedings.
8. A court having jurisdiction enters a decree or
order for (a) relief in respect of YPF or any Significant
Subsidiary in an involuntary case under Argentine Law No.
19,551 or any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or (b) appointment of
an administrator, receiver, trustee or intervenor for YPF or
any Significant Subsidiary for all or substantially all of
the Property of YPF or any Significant Subsidiary and, in
each case, such decree or order shall remain unstayed and in
effect for a period of thirty (30) consecutive days.
9. YPF or any Significant Subsidiary (a) commences a
voluntary case under Argentine Law No. 19,551 or any
applicable bankruptcy, insolvency or other similar law now
or hereafter in effect, (b) consents to the appointment of
or taking possession by an administrator, receiver, trustee
BII\32161_1 04/07/95 10:16am
Schedule III
------------
<PAGE>
- 3 -
or intervenor for YPF or any Significant Subsidiary for all
or substantially all of the Property of YPF or any
Significant Subsidiary or (c) effects any general assignment
for the benefit of creditors.
10. A moratorium is agreed or declared in respect of
any Indebtedness of YPF, or of any Significant Subsidiary,
or any government or governmental authority condemns,
seizes, compulsorily purchases or expropriates 10% or more
of the assets of YPF and its Subsidiaries considered as one
enterprise.
11. Any event occurs which under the laws of any
relevant jurisdiction has an analogous effect to any of the
events referred to in Item 9 of this Schedule III.
For purposes of this Schedule III, the following term
shall have the following meaning:
"Argentine GAAP" shall mean generally accepted
--------------
accounting principles in Argentina as in effect from time to
time.
"Capital Lease Obligations" shall mean, for any Person,
-------------------------
all obligations of such Person to pay rent or other amounts
under a lease of (or other agreement conveying the right to
use) Property to the extent such obligations are required to
be classified and accounted for as a capital lease on a
balance sheet of such Person under Argentine GAAP, and, for
purposes of this Agreement, the amount of such obligations
shall be the capitalized amount thereof, determined in
accordance with Argentine GAAP.
"Indebtedness" shall mean with respect to any Person,
------------
(a) any liability of such Person (i) for money borrowed, or
under any reimbursement obligation relating to a letter of
credit, (ii) evidenced by a bond, note, debenture or similar
instrument (including a purchase money obligation) given in
connection with the acquisition of any businesses,
properties or assets of any kind (other than a trade payable
or a liability arising in the ordinary course of business,
so long as such trade payable or liability is payable within
90 days of the date the respective goods are delivered or
the respective services are rendered), or (iii) for Capital
Lease Obligations; (b) all Redeemable Stock issued by such
Person (the amount of Indebtedness being represented by any
involuntary liquidation preference plus accrued and unpaid
dividends); (c) any liability of others described in the
preceding clause (a) that such Person has guaranteed; and
(d) (without duplication) any amendment, supplement,
modification, deferral, renewal, extension or refunding of
BII\32161_1 04/07/95 10:16am
Schedule III
------------
<PAGE>
- 4 -
any liability of the types referred to in clauses (a), (b)
and (c) above. For purposes of determining any particular
amount of Indebtedness under this definition, Guarantees of
(or obligations with respect to letters of credit
supporting) Indebtedness otherwise included in the
determination of such amount shall not also be included.
"Redeemable Stock" shall mean any class or series of
----------------
capital stock of any Person that by its terms or otherwise
is required to be redeemed prior to the final maturity of
the Notes (as defined in the YPF Credit Agreement), or is
redeemable at the option of the holder thereof at any time
prior to the final maturity of the Loans (as defined in the
YPF Credit Agreement).
"Schedule YPF Material Adverse Effect" shall mean the
------------------------------------
occurrence of any event or condition with respect to YPF
which has a material adverse effect on (a) the financial
condition, results of operations or the shareholders' equity
of YPF and its Subsidiaries taken as a whole, (b) the
ability of YPF to perform its payment and other material
obligations under any of the Basic Documents to which it is
or is intended to be a party, (c) the validity or
enforceability of the obligations of YPF under any of the
Basic Documents to which it is or is intended to be a party,
or (d) the ability of the Lenders and the Agent to enforce
their rights and remedies against YPF under any of the Basic
Documents to which it is or is intended to be a party.
"Significant Subsidiary" shall mean a Subsidiary of YPF
----------------------
which is material to the condition, financial or otherwise,
or to the earnings, operations, business affairs or business
prospects of YPF and its Subsidiaries taken as a whole.
"Subsidiary" shall mean, with respect to any Person,
----------
any corporation or other business entity of which such
Person owns or controls (either directly or through another
or other Subsidiaries) more than 50% of the issued share
capital or other ownership interest, in each case having
ordinary voting power to elect directors, managers or
trustees of such corporation or other business entity
(whether or not capital stock or other ownership interest of
any other class or classes shall or might have voting power
upon the occurrence of any contingency).
BII\32161_1 04/07/95 10:16am
Schedule III
------------
<PAGE>
SCHEDULE IV
Litigation
----------
[See Section 8.02]
BII\32161_1 04/07/95 10:16am
Schedule IV
-----------
Exhibit B
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
=================================================================
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 D
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 E
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
