-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, B96LonGFFo7G7veUmgRP7TfQ7BXVS4FTmsZSoNbU1NQGnUugSckppnBFJ1Qtg0wW LxfkWbU0VLoX9u5Hr0cPxA== 0000950112-95-000554.txt : 19950609 0000950112-95-000554.hdr.sgml : 19950609 ACCESSION NUMBER: 0000950112-95-000554 CONFORMED SUBMISSION TYPE: SC 14D1 PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 19950303 SROS: NONE GROUP MEMBERS: YPF ACQUISITION CORP GROUP MEMBERS: YPF S.A. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAXUS ENERGY CORP /DE/ CENTRAL INDEX KEY: 0000724176 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 751891531 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 SEC ACT: 1934 Act SEC FILE NUMBER: 005-34421 FILM NUMBER: 95518585 BUSINESS ADDRESS: STREET 1: 717 N HARWOOD ST- RM 3147 CITY: DALLAS STATE: TX ZIP: 75201-6594 BUSINESS PHONE: 2149532000 FORMER COMPANY: FORMER CONFORMED NAME: DIAMOND SHAMROCK CORP /DE/ DATE OF NAME CHANGE: 19870518 FORMER COMPANY: FORMER CONFORMED NAME: NEW DIAMOND CORP DATE OF NAME CHANGE: 19830908 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: YPF ACQUISITION CORP CENTRAL INDEX KEY: 0000940179 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1 BUSINESS ADDRESS: STREET 1: AVENIDA PTE R SAENZ 777-8 PISO CITY: BUENOS AIRES 1364 AR BUSINESS PHONE: 5413267265 SC 14D1 1 YPF SOCIEDAD ANONIMA SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of the Securities and Exchange Act of 1934 ---------------------- Maxus Energy Corporation (Name of Subject Company) ---------------------- YPF Acquisition Corp. YPF S.A. (Bidders) ---------------------- Common Stock, Par Value $1.00 Per Share (Title of Class of Securities) ---------------------- 577730 10 4 (CUSIP Number of Class of Securities) ---------------------- Mr. Jose A. Estenssoro Avenida Roque Saenz Pena 777 1364 Buenos Aires, Argentina (54)(1) 329-2000 with a copy to: P. Dexter Peacock, Esq. Andrews & Kurth L.L.P. 4200 Texas Commerce Tower Houston, Texas 77002 (713) 220-4200 (Names, Addresses and Telephone Numbers of Persons Authorized to Receive Notices and Communications on Behalf of Bidders) ---------------------- Calculation of Filing Fee ------------------------------------------------------------------------- Transaction valuation: $745,237,378*Amount of filing fees: $149,048.00 ------------------------------------------------------------------------- * For purposes of calculating fee only. The amount assumes the purchase of 135,497,705 Shares (as defined herein) at $5.50 per Share in cash. The amount of the filing fee, calculated in accordance with Rule 0-11(d) of the Securities Exchange Act of 1934, as amended, equals 1/50 of one percent of the aggregate of the cash offered for such number of Shares. [ ] Check box if any part of the fee is offset by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid: Not applicable Filing Party: Not applicable Form or Registration No.: Not applicable Date Filed: Not applicable CUSIP No. 577730 10 4 14D-1 Page 2 of 9 Pages - ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON YPF Acquisition Corp. - ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------- 4 SOURCES OF FUNDS BK; AF - ------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 - ------------------------------------------------------------------------- 8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------- 9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 0.0% - ------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON CO 2 CUSIP No. 577730 10 4 14D-1 Page 3 of 9 Pages - ------------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON YPF S.A. - ------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [ ] - ------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------- 4 SOURCES OF FUNDS BK - ------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ] - ------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Republic of Argentina - ------------------------------------------------------------------------- 7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,000 Shares - ------------------------------------------------------------------------- 8 CHECK IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES [ ] - ------------------------------------------------------------------------- 9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 0.0% - ------------------------------------------------------------------------- 10 TYPE OF REPORTING PERSON CO 3 This Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") relates to the offer by YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of Argentina ("YPF"), to purchase all outstanding shares of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation (the "Company"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"), which are annexed to and filed with this Statement as Exhibits (a)(1) and (a)(2), respectively. Item 1 - Security and Subject Company (a) The name of the subject company is Maxus Energy Corporation, a Delaware corporation. The principal executive offices of the Company are located at 717 North Harwood Street, Dallas, Texas, 75201. (b) The class of equity securities to which this Schedule 14D-1 relates is the common stock, par value $1.00 per share, of the Company. The information set forth in "Introduction" of the Offer to Purchase is incorporated herein by reference. (c) The information set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer to Purchase is incorporated herein by reference. Item 2 - Identity and Background (a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser and YPF. The information set forth in "Introduction," Section 8 ("Certain Information Concerning the Purchaser and YPF") and in Schedule I ("Directors and Executive Officers of YPF and the Purchaser") of the Offer to Purchase is incorporated herein by reference. (e) and (f) During the last five years, neither the Purchaser nor YPF or, to the best of their knowledge, any of the persons listed in Schedule I ("Directors and Executive Officers of YPF and the Purchaser") to the Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining further violations of, or prohibiting activities subject to, federal or state securities laws or finding any violations of such laws. Item 3 - Past Contacts, Transactions or Negotiations with the Subject Company (a)-(b) The information set forth in "Introduction," Section 8 ("Certain Information Concerning the Purchaser and YPF"), Section 10 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company") and Section 11 ("Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company") of the Offer to Purchase is incorporated herein by reference. 4 Item 4 - Source and Amount of Funds or Other Consideration (a)-(b) The information set forth in Section 9 ("Source and Amount of Funds") of the Offer to Purchase is incorporated herein by reference. (c) Not applicable. Item 5 - Purpose of the Tender Offer and Plans or Proposals of the Bidder (a)-(e) The information set forth in "Introduction," Section 6 ("Price Range of Shares; Dividends"), Section 10 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company"), Section 11 ("Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company") and Section 13 ("Dividends and Distributions") of the Offer to Purchase is incorporated herein by reference. (f)-(g) The information set forth in Section 12 ("Effect of the Offer on the Market for Shares; Stock Exchange Listing; Registration Under the Exchange Act") of the Offer to Purchase is incorporated herein by reference. Item 6 - Interest in Securities of the Subject Company (a)-(b) The information set forth in "Introduction," Section 8 ("Certain Information Concerning the Purchaser and YPF"), Section 10 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company") and Section 11 ("Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company") of the Offer to Purchase is incorporated herein by reference. Item 7 - Contracts, Arrangements, Understandings or Relationships with Respect to the Subject Company's Securities The information set forth in "Introduction," Section 8 ("Certain Information Concerning the Purchaser and YPF"), Section 10 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company") and Section 11 ("Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company") of the Offer to Purchase is incorporated herein by reference. Item 8 - Persons Retained, Employed or to be Compensated The information set forth in "Introduction" and Section 16 ("Fees and Expenses") of the Offer to Purchase is incorporated herein by reference. Item 9 - Financial Statements of Certain Bidders The information set forth in Section 8 ("Certain Information Concerning the Purchaser and YPF") of the Offer to Purchase is incorporated herein by reference. The incorporation by reference herein of the above- referenced financial information does not constitute an admission that such information is material to a decision by a stockholder of the Company whether to sell, tender or hold Shares being sought in the Offer. 5 Item 10 - Additional Information (a) The information set forth in "Introduction," Section 8 ("Certain Information Concerning the Purchaser and YPF"), Section 10 ("Background of the Offer; Past Contacts, Transactions or Negotiations with the Company") and Section 11 ("Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company") of the Offer to Purchase is incorporated herein by reference. (b)-(c) The information set forth in Section 11 ("Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company") and Section 15 ("Certain Legal Matters; Required Regulatory Approvals") of the Offer to Purchase is incorporated herein by reference. (d) The information set forth in Section 12 ("Effect of the Offer on the Market for Shares; Stock Exchange Listing; Registration Under the Exchange Act") of the Offer to Purchase is incorporated herein by reference. (e) The information set forth in Section 15 ("Certain Legal Matters; Required Regulatory Approvals") of the Offer to Purchase is incorporated herein by reference. (f) The information set forth in the Offer to Purchase and the related Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively, is incorporated herein by reference in its entirety. Item 11 - Material to be Filed as Exhibits (a)(1) Offer to Purchase, dated March 3, 1995. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter from Salomon Brothers Inc to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated March 3, 1995. (a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) IRS Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement, dated March 3, 1995. (b)(1) Commitment Letter. 6 (c)(1) Agreement of Merger, dated as of February 28, 1995, among YPF S.A., YPF Acquisition Corp. and Maxus Energy Corporation. (c)(2) Guaranty Agreement, dated February 28, 1995, among YPF S.A. and The Prudential Insurance Company of America. (c)(3) Letter between Maxus Energy Corporation and The Prudential Insurance Company, dated February 28, 1995. (c)(4) Agreement Regarding Expenses, dated February 28, 1995. (d) Not applicable. (e) Not applicable. (f) Not applicable. 7 SIGNATURE After due inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: March 3, 1995 YPF S.A. By: -------------------------- Name: Title: YPF Acquisition Corp. By: -------------------------- Name: Title: 8 EXHIBIT INDEX Exhibit Exhibit Name - ------- ------------ (a)(1) Offer to Purchase, dated March 3, 1995. (a)(2) Letter of Transmittal. (a)(3) Notice of Guaranteed Delivery. (a)(4) Letter from Salomon Brothers Inc to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees, dated March 3, 1995. (a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (a)(6) IRS Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement, dated March 3, 1995. (b)(1) Commitment Letter. (c)(1) Agreement of Merger, dated February 28, 1995 among YPF S.A., YPF Acquisition Corp. and Maxus Energy Corporation. (c)(2) Guaranty Agreement, dated February 28, 1995 among YPF S.A. and the Prudential Insurance Company of America. (c)(3) Letter between Maxus Energy Corporation and The Prudential Insurance Company, dated February 28, 1995. (c)(4) Agreement Regarding Expenses, dated February 28, 1995. (d) Not applicable. (e) Not applicable. (f) Not applicable. 9 EX-99.(A)(1) 2 Exhibit (a)(1) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF MAXUS ENERGY CORPORATION AT $5.50 NET PER SHARE BY YPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YPF SOCIEDAD ANONIMA THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE A NUMBER OF SHARES THAT REPRESENTS NOT LESS THAN A MAJORITY OF THE COMPANY'S VOTING SHARES OUTSTANDING ON A FULLY DILUTED BASIS AND (2) FINANCING HAVING OCCURRED UNDER THE LOAN AGREEMENT CONTEMPLATED BY THE BANK COMMITMENT LETTER RECEIVED BY YPF. SEE SECTIONS 1, 14 AND 15. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. IMPORTANT Any stockholder desiring to tender all or any portion of such stockholder's Shares should either (a) complete and sign the enclosed Letter of Transmittal (or a facsimile copy thereof) in accordance with the instructions in the Letter of Transmittal and mail or deliver it together with the certificate(s) representing tendered Shares, and any other required documents, to the Depositary or tender such Shares pursuant to the procedure for book-entry transfer set forth in Section 3 or (b) request such stockholder's broker, dealer, commercial bank, trust company or other nominee to effect the transaction for such stockholder. A stockholder whose Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee must contact such broker, dealer, commercial bank, trust company or other nominee if such stockholder desires to tender such Shares. Any stockholder who desires to tender such stockholder's Shares and whose certificates representing such Shares are not immediately available or who cannot comply with the procedures for book-entry transfer on a timely basis may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3. Questions and requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent or from brokers, dealers, commercial banks and trust companies. ------------------- The Dealer Manager for the Offer is: SALOMON BROTHERS INC March 3, 1995 TABLE OF CONTENTS
PAGE ---- Introduction............................................................................ 1 1. Terms of the Offer............................................................ 2 2. Acceptance for Payment and Payment............................................ 3 3. Procedures for Tendering Shares............................................... 4 4. Withdrawal Rights............................................................. 7 5. Certain Tax Consequences...................................................... 7 6. Price Range of Shares; Dividends.............................................. 8 7. Certain Information Concerning the Company.................................... 9 8. Certain Information Concerning the Purchaser and YPF.......................... 12 9. Source and Amount of Funds.................................................... 15 10. Background of the Offer; Past Contacts, Transactions or Negotiations with the Company....................................................................... 18 11. Purpose of the Offer; the Merger; Merger Agreement; Plans for the Company..... 18 12. Effect of the Offer on the Market for Shares; Stock Exchange Listing; Registration Under the Exchange Act......................................... 25 13. Dividends and Distributions................................................... 26 14. Conditions to the Offer....................................................... 27 15. Certain Legal Matters; Required Regulatory Approvals.......................... 29 16. Fees and Expenses............................................................. 31 17. Miscellaneous................................................................. 31 Schedule I--Directors and Executive Officers of YPF and the Purchaser................... I-1
i To Holders of Common Stock of MAXUS ENERGY CORPORATION INTRODUCTION YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of Argentina ("YPF"), hereby offers to purchase all outstanding shares of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company"), at $5.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which together constitute the "Offer"). Tendering stockholders will not be obligated to pay brokerage commissions or, except as set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. However, any tendering stockholder or other payee who fails to complete and sign the Substitute Form W-9 that is included in the Letter of Transmittal may be subject to a required backup federal income tax withholding of 31% of the gross proceeds payable to such stockholder or other payee pursuant to the Offer. See Section 3. The Purchaser will pay all charges and expenses of Salomon Brothers Inc ("Salomon Brothers"), which is acting as Dealer Manager for the Offer (in such capacity, the "Dealer Manager"), D.F. King & Co., Inc., which is acting as the Information Agent (the "Information Agent"), and The Chase Manhattan Bank (National Association), which is acting as the Depositary (the "Depositary"), incurred in connection with the Offer. See Section 16. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN BY THE EXPIRATION DATE (AS HEREINAFTER DEFINED) A NUMBER OF SHARES WHICH REPRESENTS NOT LESS THAN A MAJORITY OF THE COMPANY'S VOTING SHARES OUTSTANDING ON A FULLY DILUTED BASIS AND (2) FINANCING HAVING OCCURRED UNDER THE LOAN AGREEMENT CONTEMPLATED BY THE BANK COMMITMENT LETTER RECEIVED BY YPF. SEE SECTIONS 1, 14 AND 15. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS AND RECOMMENDS THAT HOLDERS OF SHARES OF COMMON STOCK ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. THE BOARD OF DIRECTORS OF THE COMPANY HAS RECEIVED THE OPINION OF CS FIRST BOSTON CORPORATION, THE COMPANY'S FINANCIAL ADVISOR, THAT THE CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF SHARES OF COMMON STOCK PURSUANT TO THE OFFER AND THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW. The Offer is being made pursuant to the Agreement of Merger, dated as of February 28, 1995 (the "Merger Agreement"), among YPF, the Purchaser and the Company, pursuant to which, as promptly as practicable following the later of the Expiration Date and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company (the "Merger"), with the result that all of the outstanding common stock of the Company will be beneficially owned by YPF. At the effective time of the Merger, each then-outstanding Share (other than Shares held by YPF, the Purchaser or any of their subsidiaries, or in the treasury of the Company, all of which will be cancelled, and Shares held by stockholders who perfect their appraisal rights under Delaware law) will be converted into the right to receive $5.50 per Share in cash or any higher price per Share paid pursuant to the Offer. See Section 12. The Purchaser has been advised by the Company that, to the Company's knowledge, all of the Company's directors and executive officers currently intend to tender all Shares owned by them pursuant to the Offer. According to the Company, as of February 23, 1995, there were (i) 135,497,705 Shares outstanding, (ii) 8,000,000 warrants outstanding, each representing the right to purchase from the Company on or prior to October 10, 1997, one Share at a price of $13.00 per Share, (iii) 4,358,658 shares of $4.00 Preferred Stock ("$4.00 Preferred Stock") outstanding, each convertible into 2.29751 Shares (and, together with the Shares, the "Voting Shares"), and (iv) 875,000 shares of $9.75 Cumulative Convertible Preferred Stock ("$9.75 Preferred Stock") outstanding, each convertible into 9.04 Shares. The Company's preferred share purchase rights (the "Rights"), issued pursuant to the Rights Agreement, dated as of September 2, 1988, between the Company and Ameritrust Company National Association, as Rights Agent (the "Rights Agreement"), are evidenced by the certificates representing Shares. In the Merger Agreement, the Company agreed to take the steps necessary to redeem the Rights so that the Rights issued pursuant to the Rights Agreement will not become exercisable as a result of the consummation of the transactions contemplated in the Merger Agreement. The Purchaser announced on March 1, 1995 that the Board of Directors of the Company had taken all necessary action to redeem the Rights effective as of March 22, 1995, and that holders of record of Shares on such date will be entitled to receive the redemption price therefor ($0.10 per Right). See Section 1 and Section 7. THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION WHICH STOCKHOLDERS SHOULD READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE OFFER. 1. TERMS OF THE OFFER. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will accept for payment and pay for all Shares which are validly tendered prior to the Expiration Date and not withdrawn in accordance with Section 4. The term "Expiration Date" means 12:00 midnight, New York City time, on Thursday, March 30, 1995 unless and until the Purchaser (subject to the terms of the Merger Agreement) shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Purchaser, shall expire. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THE SATISFACTION OF THE MINIMUM SHARE CONDITION AND THE FINANCING CONDITION. The "Minimum Share Condition" is the condition to the Offer that the number of Shares being validly tendered and not withdrawn prior to the Expiration Date, when added to the Shares and $4.00 Preferred Stock, beneficially owned by YPF and the Purchaser represents not less than a majority of the Voting Shares outstanding on a Fully Diluted Basis. "Fully Diluted Basis" means the number of Voting Shares outstanding as of the close of business on February 23, 1995, increased by the number of Voting Shares (i) issued between such date and the Expiration Date, and (ii) issuable pursuant to the exercise of rights (other than the Rights) to purchase Voting Shares or upon conversion or exchange of other securities; reduced, however, by the number (if any) of employee stock options ("Company Options") and other rights cancelled as described in the Merger Agreement. The "Financing Condition" is the condition to the Offer that financing shall have occurred under the loan agreement contemplated by the bank commitment letter received by YPF. See Section 14 which sets forth the conditions to the Offer. If any condition to the Purchaser's obligation to purchase Shares under the Offer is not satisfied prior to the Expiration Date, the Purchaser reserves the right (but shall not be obligated) to (i) decline to purchase any of the Shares tendered and terminate the Offer, (ii) waive such unsatisfied condition, subject to the terms of the Merger Agreement and to compliance with applicable rules and regulations of the Securities and Exchange Commission (the "Commission"), and purchase all Shares validly tendered, (iii) extend the Offer and, subject to the right of stockholders to withdraw Shares as provided in Section 4, retain the Shares which have been tendered during the period or periods for which the Offer is extended, or (iv) subject to the terms of the Merger Agreement, amend the Offer. The Merger Agreement provides that the Purchaser reserves the right to increase the price per Share payable in the Offer or to otherwise amend the Offer; provided, however, that without the consent of the Company, the Purchaser shall make no amendment that decreases the price per Share payable in 2 the Offer, reduces the minimum number of Shares to be purchased in the Offer, imposes additional conditions to the Offer, or makes any other change in the terms and conditions of the Offer that is materially adverse to the holders of the Shares. Subject to the foregoing, the Purchaser expressly reserves the right, at any time or from time to time, subject to the terms of the Merger Agreement and regardless of whether or not any of the events set forth in Section 14 shall have occurred or shall have been determined by the Purchaser to have occurred, (i) to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and the payment for, any Shares, by giving oral or written notice of such extension to the Depositary, and (ii) to amend the Offer in any respect by giving oral or written notice of such amendment to the Depositary. The rights reserved by the Purchaser in this paragraph are in addition to the Purchaser's rights to terminate the Offer described in Section 14. There can be no assurance, however, that the Purchaser will exercise its rights to extend the Offer. Any extension, amendment or termination will be followed as promptly as practicable by public announcement thereof, the announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the announcement requirements of Rule 14d-4(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Without limiting the obligation of the Purchaser under such Rule or the manner in which the Purchaser may choose to make any public announcement, the Purchaser currently intends to make announcements by issuing a release to the Dow Jones News Service. If the Purchaser extends the Offer, or if the Purchaser (whether before or after its acceptance for payment of Shares) is delayed in its purchase of or payment for Shares or is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser's rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 4. However, the ability of the Purchaser to delay the payment for Shares which the Purchaser has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of holders of securities promptly after the termination or withdrawal of the Offer. If the Purchaser makes a material change in the terms of the Offer or the information concerning the Offer or waives a material condition of the Offer, the Purchaser will disseminate additional tender offer materials and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information. With respect to a change in price or a change in percentage of securities sought, a minimum period of ten business days is required to allow for adequate dissemination to stockholders and investor response. If prior to the Expiration Date, the Purchaser should decide to increase the price per Share being offered in the Offer, such increase will be applicable to all stockholders whose Shares are accepted for payment pursuant to the Offer. As used in this Offer to Purchase, "business day" has the meaning set forth in Rule 14d-1 under the Exchange Act. The Company has provided to the Purchaser its list of stockholder and security position listings for the purpose of disseminating the Offer to holders of Shares. This Offer to Purchase and the related Letter of Transmittal and other relevant materials will be mailed to record holders of Shares and furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares. 2. ACCEPTANCE FOR PAYMENT AND PAYMENT. Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), the Purchaser will purchase, by accepting for payment, and will pay for, all Shares validly 3 tendered prior to the Expiration Date (and not properly withdrawn in accordance with Section 4) promptly after the Expiration Date. Any determination concerning the satisfaction of such terms and conditions shall be within the sole discretion of the Purchaser. See Section 14. The Purchaser expressly reserves the right to delay acceptance for payment of, or, subject to Rule 14e-1(c) under the Exchange Act, payment for, Shares in order to comply, in whole or in part, with any applicable law, including the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"). See Sections 14 and 15. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Shares or timely confirmation of book-entry transfer (a "Book-Entry Confirmation") of such Shares into the Depositary's account at The Depository Trust Company, the Midwest Securities Trust Company or the Philadelphia Depository Trust Company (each, a "Book-Entry Transfer Facility") pursuant to the procedures set forth in Section 3, (ii) a properly completed and duly executed Letter of Transmittal (or facsimile thereof), or an Agent's Message (as defined below) in connection with a book-entry transfer, and (iii) any other documents required by the Letter of Transmittal. The term "Agent's Message" means a message, transmitted by a Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has received an express acknowledgement from the participant in such Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment (and thereby purchased) tendered Shares, if, as and when the Purchaser gives oral or written notice to the Depositary of the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all cases, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to tendering stockholders. Under no circumstances will interest on the purchase price of the Shares be paid by the Purchaser. If any tendered Shares are not purchased pursuant to the Offer for any reason, or if certificates submitted represent more Shares than are tendered, certificates for such Shares not purchased or tendered will be returned, without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary's account at a Book-Entry Transfer Facility pursuant to the procedures set forth in Section 3, such Shares will be credited to an account maintained at such Book-Entry Transfer Facility), promptly after the expiration, termination or withdrawal of the Offer. 3. PROCEDURES FOR TENDERING SHARES. For Shares to be validly tendered pursuant to the Offer, a properly completed and duly executed Letter of Transmittal or facsimile thereof, with any required signature guarantees, or an Agent's Message in connection with a book-entry delivery of Shares, and any other required documents, must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date. In addition, either (i) the certificates for Shares must be received by the Depositary along with the Letter of Transmittal or Shares must be tendered pursuant to the procedures for book-entry transfer described below and a Book-Entry Confirmation must be received by the Depositary, in each case prior to the Expiration Date, or (ii) the tendering stockholder must comply with the guaranteed delivery procedures described below. The Depositary will establish an account with respect to the Shares at each Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant in any of the Book-Entry Transfer Facilities' systems may make book-entry delivery of Shares by causing a Book-Entry Transfer Facility to transfer such Shares 4 into the Depositary's account at a Book-Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's procedures for transfer. However, although delivery of Shares may be effected through book-entry transfer at a Book-Entry Transfer Facility, the Letter of Transmittal or facsimile thereof, properly completed and duly executed, with any required signature guarantees, or an Agent's Message in connection with a book-entry transfer, and any other required documents, must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase prior to the Expiration Date or the tendering stockholder must comply with the guaranteed delivery procedures described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY. Signatures on all Letters of Transmittal must be guaranteed by a member firm of a registered national securities exchange, a member of the National Association of Securities Dealers, Inc. ("NASD") or a commercial bank or trust company having an office or correspondent in the United States (each of the foregoing being referred to as an "Eligible Institution"), unless the Shares tendered thereby are tendered (i) by a registered holder of Shares who has not completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" on the Letter of Transmittal, or (ii) for the account of an Eligible Institution. See Instruction 1 of the Letter of Transmittal. If the certificates are registered in the name of a person other than the signer of the Letter of Transmittal or if payment is to be made or certificates for Shares not accepted for payment or not tendered are to be returned to a person other than the registered holder, then the tendered certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered owner or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1 and 5 of the Letter of Transmittal. THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE THEREOF) AND ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH A BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. If a stockholder desires to tender Shares pursuant to the Offer and such stockholder's certificates for Shares are not immediately available or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, such Shares may nevertheless be tendered if all the following conditions are satisfied: (i) the tender is made by or through an Eligible Institution; (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser herewith, is received by the Depositary as provided below, on or prior to the Expiration Date as provided below; and (iii) the certificates for all tendered Shares, in proper form for transfer (or a Book-Entry Confirmation), together with a Letter of Transmittal or facsimile thereof, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by the Letter of Transmittal are received by the Depositary within five New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of such Notice of Guaranteed Delivery. Stockholders may not extend the foregoing time period for delivery of Shares to the Depositary by providing a second Notice of Guaranteed Delivery with respect to such Shares. 5 The Notice of Guaranteed Delivery may be sent by hand delivery, telegram, telex, facsimile transmission or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Notwithstanding any other provision hereof, payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of certificates for the Shares or a timely Book-Entry Confirmation of the delivery of such Shares, and a Letter of Transmittal (or manually signed facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by the Letter of Transmittal. Accordingly, payment might not be made to all tendering stockholders at the same time, and will depend upon when certificates for the Shares or Book-Entry Confirmations of the delivery of such Shares are received into the Depositary's account at a Book-Entry Transfer Facility. UNDER THE BACKUP FEDERAL INCOME TAX LAWS APPLICABLE TO CERTAIN STOCKHOLDERS (OTHER THAN CERTAIN EXEMPT STOCKHOLDERS, INCLUDING, AMONG OTHERS, ALL CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS), THE DEPOSITARY MAY BE REQUIRED TO WITHHOLD 31% OF THE AMOUNT OF ANY PAYMENTS MADE TO SUCH STOCKHOLDERS PURSUANT TO THE OFFER. TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES PURCHASED PURSUANT TO THE OFFER, A TENDERING STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY COMPLETING THE SUBSTITUTE FORM W-9 INCLUDED IN THE LETTER OF TRANSMITTAL. SEE INSTRUCTION 9 TO THE LETTER OF TRANSMITTAL. All questions as to the validity, form, eligibility (including time of receipt) and acceptance for payment of any tendered Shares pursuant to any of the procedures described above will be determined in the sole discretion of the Purchaser, whose determination shall be final and binding. The Purchaser reserves the absolute right to reject any or all tenders of any Shares determined by it not to be in proper form if the acceptance for payment of, or payment for, such Shares may, in the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the absolute right, in its sole discretion, subject to the Merger Agreement, to waive any of the conditions of the Offer or any defect or irregularity in any tender with respect to Shares of any particular stockholder, whether or not similar defects or irregularities are waived in the case of other stockholders. The Purchaser's interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the Instructions thereto) will be final and binding. Neither the Purchaser, YPF, the Company, the Depositary, the Information Agent, the Dealer Manager nor any other person or entity will be under any duty to give notification of any defects or irregularities in tenders or will incur any liability for failure to give any such notification. By executing a Letter of Transmittal or by causing the transmission of an Agent's Message as set forth above, a tendering stockholder irrevocably appoints designees of the Purchaser as the stockholder's attorneys-in-fact and proxies, in the manner set forth in the Letter of Transmittal, each with full power of substitution, to the full extent of the stockholder's rights with respect to the Shares tendered by the stockholder and accepted for payment by the Purchaser (and any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of the Merger Agreement). All such powers of attorney and proxies shall be considered to be coupled with an interest in the tendered Shares. This appointment will be effective when, and only to the extent that, the Purchaser accepts Shares for payment. Upon acceptance for payment, all prior powers of attorney and proxies given by the stockholder with respect to the Shares or other securities will, without further action, be revoked, and no subsequent powers of attorney proxies may be given nor any subsequent written consent executed by such stockholder (and, if given or executed, will not be deemed to be effective) with respect thereto. The designees of the Purchaser will, with respect to the Shares and other securities, be empowered to exercise all voting and other rights of such stockholder as they in their sole discretion may deem proper at any annual, special or adjourned meeting of the Company's stockholders, by written consent or otherwise. The Purchaser reserves the right to require that, in order for Shares to 6 be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser must be able to exercise full voting and other rights of a record and beneficial holder, including rights in respect of acting by written consent, with respect to such Shares. A tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder's acceptance of the terms and conditions of the Offer. The Purchaser's acceptance for payment for Shares tendered pursuant to the Offer will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer. 4. WITHDRAWAL RIGHTS. Except as otherwise provided in this Section 4, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Purchaser pursuant to the Offer, may also be withdrawn at any time after May 2, 1995 (or such later date as may apply in case the Offer is extended). For a withdrawal to be effective, a written, telegraphic, telex or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder, if different from that of the person who tendered such Shares. If certificates for Shares have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the serial numbers of the particular certificates evidencing the Shares to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an Eligible Institution, except in the case of Shares tendered for account of an Eligible Institution, must also be furnished to the Depositary as described above. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3, any notice of withdrawal must also specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares. ALL QUESTIONS AS TO THE FORM AND VALIDITY (INCLUDING TIME OF RECEIPT) OF NOTICES OF WITHDRAWAL WILL BE DETERMINED BY THE PURCHASER, IN ITS SOLE DISCRETION, WHOSE DETERMINATION WILL BE FINAL AND BINDING. NEITHER THE PURCHASER, YPF, THE COMPANY, THE DEALER MANAGER, THE DEPOSITARY, THE INFORMATION AGENT NOR ANY OTHER PERSON OR ENTITY WILL BE UNDER ANY DUTY TO GIVE NOTIFICATION OF ANY DEFECTS OR IRREGULARITIES IN ANY NOTICE OF WITHDRAWAL OR INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY NOTIFICATION. Any Shares properly withdrawn will be deemed to be not validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures described in Section 3 at any time prior to the Expiration Date. 5. CERTAIN TAX CONSEQUENCES. The receipt of cash for Shares pursuant to the Offer (or the Merger) will be a taxable transaction for federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. The tax consequences of such receipt pursuant to the Offer (or the Merger) may vary depending upon, among other things, the particular circumstances of the stockholder. In general, a stockholder who receives cash for Shares pursuant to the Offer (or the Merger) will recognize gain or loss for federal income tax purposes equal to the difference between the amount of cash received in exchange for the Shares sold and such stockholder's adjusted tax basis in such Shares. Provided that the Shares constitute capital assets in the hands of the stockholder, such gain or loss will be capital gain or loss, and will be long term capital gain or loss if the holder has held the Shares for more than one year at the time of sale. Gain or loss will be calculated separately for each block of Shares tendered pursuant to the Offer. The foregoing discussion may not be applicable to certain types of stockholders, including stockholders who acquired Shares pursuant to the exercise of employee stock options or otherwise as compensation, individuals who are not citizens or residents of the United States, foreign corporations 7 and entities that are otherwise subject to special tax treatment under the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), such as insurance companies, tax-exempt entities and regulated investment companies. The federal income tax discussion set forth above is included for general information only and is based upon present law. Stockholders are urged to consult their tax advisors with respect to the specific tax consequences of the Offer and the Merger to them, including the application and effect of the alternative minimum tax, and state, local and foreign tax laws. 6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and principally traded in the United States on the NYSE and the Pacific Stock Exchange under the symbol "MXS". The following table sets forth, for the calendar quarters indicated, the high and low sales price per Share on the NYSE Composite Tape. The Company did not pay a dividend on the Shares in 1992, 1993 or 1994. All prices set forth below are as reported in published financial sources:
HIGH LOW ------------ ----------- 1992 First Quarter............................................... 8 1/4 5 3/4 Second Quarter.............................................. 7 1/4 5 5/8 Third Quarter............................................... 7 3/8 5 1/2 Fourth Quarter.............................................. 7 1/2 6 1/4 1993 First Quarter............................................... 9 3/4 6 1/8 Second Quarter.............................................. 10 3/8 8 3/8 Third Quarter............................................... 9 3/4 7 3/8 Fourth Quarter.............................................. 7 3/8 4 1/2 1994 First Quarter............................................... 5 7/8 4 1/8 Second Quarter.............................................. 5 1/4 4 1/8 Third Quarter............................................... 5 7/8 4 1/2 Fourth Quarter.............................................. 4 3/4 3 1/4 1995 First Quarter (through February 27)......................... 4 1/4 3
On February 27, 1995, the last full trading day prior to the announcement of the Merger Agreement, the reported closing sales price per Share on the NYSE Composite Tape was $3 3/4. On March 2, 1995, the last full trading day prior to the commencement of the Offer, the reported closing sales price per Share on the NYSE Composite Tape was $5 7/16. Stockholders are urged to obtain a current market quotation for the Shares. 8 7. CERTAIN INFORMATION CONCERNING THE COMPANY. General. The Company is a Delaware corporation with its principal executive offices located at 717 North Harwood Street, Dallas, Texas 75201. According to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1993 (the "Company 10-K"), the Company was incorporated to hold the stock of various corporations, the oldest of which was founded in 1910. The Company, together with its subsidiaries, is one of the largest independent oil and gas exploration and production companies in the United States, with ongoing international activity in Indonesia and a number of other countries, and domestic activity primarily in the Mid-Continent region of the United States. Selected Consolidated Financial Data. With the exception of the 1994 year-end results, the following selected consolidated financial data relating to the Company have been taken or derived from the audited financial statements contained in the Company 10-K. More comprehensive financial information (including the notes to the Company's financial statements) is included in such Company 10-K and other documents filed by the Company with the Commission, and the financial data set forth below are qualified in their entirety by reference to such reports and other documents, including the financial statements (and notes thereto) contained therein. Such reports and other documents may be examined and copies may be obtained from the offices of the Commission in the manner set forth below. The 1994 year-end results, which are derived from the Company's earnings press release dated February 8, 1995, are unaudited. 9 MAXUS ENERGY CORPORATION SELECTED CONSOLIDATED FINANCIAL DATA (IN MILLIONS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, ----------------------------------------- 1994 1993 1992 1991 ----------- ------ ------ ------ (UNAUDITED) Revenues: Sales and operating revenues.......................... $ 682.1 $786.7 $718.4 $790.8 Settlement of litigation.............................. 0.8 6.8 120.8 Other revenues, net................................... 8.2 13.5 11.9 12.2 ----------- ------ ------ ------ 691.1 807.0 851.1 803.0 Costs and Expenses: Operating expenses.................................... 232.7 255.6 232.4 230.1 Gas purchase costs.................................... 116.9 155.6 65.5 44.3 Exploration, including exploratory dry holes.......... 32.6 56.8 64.6 66.5 Depreciation, depletion and amortization.............. 140.2 153.6 174.4 203.6 General and administrative expenses................... 35.4 34.8 34.7 34.1 Taxes other than income taxes......................... 12.9 15.9 15.9 17.1 Interest and debt expenses............................ 96.7 88.4 86.9 88.4 Environmental studies and remediation................. 60.5 Restructuring: Gain on sale of assets.............................. (201.9) Restructuring costs................................. 100.9 ----------- ------ ------ ------ 626.9 760.7 674.4 684.1 ----------- ------ ------ ------ Income Before Income Taxes, Extraordinary Item and Cumulative Effect of Change in Accounting Principles.............................................. 64.2 46.3 176.7 118.9 Income Taxes............................................ 86.9 84.2 102.5 130.1 ----------- ------ ------ ------ Net Income (Loss) Before Extraordinary Item and Cumulative Effect of Change in Accounting Principle............................................... (22.7) (37.9) 74.2 (11.2) Extraordinary item.................................... (7.1) Cumulative effect of change in accounting principle........................................... (22.7) (4.4) ----------- ------ ------ ------ Net Income (Loss)....................................... (49.4) 74.2 (11.2) Dividend requirement on Preferred Stock............... (43.6) (41.7) (41.7) (41.7) ----------- ------ ------ ------ Income (Loss) Applicable to Common Shares............... $ (66.3) $(91.1) $ 32.5 $(52.9) ----------- ------ ------ ------ ----------- ------ ------ ------ Income (Loss) Before Extraordinary Item and Cumulative Effect of Change in Accounting Principle................ $ (.49) $ (.60) $ .27 $ (.52) Extraordinary item.................................... (.05) Cumulative effect of change in accounting principle........................................... (.03) ----------- ------ ------ ------ Net Income (Loss) Per Common Share...................... $ (.49) $ (.68) $ .27 $ (.52) ----------- ------ ------ ------ ----------- ------ ------ ------ Average Common Shares Outstanding....................... 134.9 133.9 119.6 100.8
10 MAXUS ENERGY CORPORATION CONSOLIDATED BALANCE SHEET DATA (IN MILLIONS)
SEPTEMBER 31, 1994 DECEMBER 31, 1993 ------------------ ----------------- Total current assets..................... $ 448.5 $ 404.7 Total assets............................. 1,703.1 1,987.4 Total current liabilities................ 177.5 263.4 Long-term debt........................... 977.8 1,015.4 Total stockholders' equity............... 119.3 147.9
The Company is subject to the information and filing requirements of the Exchange Act and is required to file periodic reports, proxy statements and other information with the Commission relating to its business, financial condition and other matters. Information, as of particular dates, concerning the Company's directors and officers, their remuneration, options granted to them, the principal holders of the Company's securities and any material interest of such persons in transactions with the Company is required to be described in proxy statements distributed to the Company's stockholders and filed with the Commission. These reports, proxy statements and other information should be available for inspection and copying at the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of these materials may also be obtained by mail, upon payment of the Commission's customary fees, from the Commission's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material should also be available for inspection at the library of the NYSE, 20 Broad Street, New York, New York 10005. Other than as set forth below, the information concerning the Company contained in this section has been taken from or based upon publicly available documents on file with the Commission and other publicly available information. Although neither the Purchaser nor YPF has any knowledge that would indicate that statements contained herein based upon such documents are untrue, neither the Purchaser nor YPF takes any responsibility for the accuracy or completeness of the information contained in such documents or for any failure by the Company to disclose events that may have occurred and may affect the significance or accuracy of any such information but which are unknown to either the Purchaser or YPF. YPF and the Company engaged in preliminary discussions concerning a variety of possible transactions and transaction structures involving a possible alignment of the businesses of both the Company and YPF. YPF has conducted a financial due diligence investigation, and the Company and its representatives discussed with YPF and its representatives certain matters regarding the business and financial condition of the Company. See "Background of the Offer; Past Contacts; Transactions or Negotiations with the Company." The Company provided YPF with projected financial information of the Company for the fiscal year ending December 31, 1995. None of such projected financial information provided by the Company to YPF is publicly available. Such information was prepared for internal purposes. None of this information was prepared for publication or with a view to complying with the published guidelines of the Commission regarding projections or with the AICPA Guide for Prospective Financial Statements, and it is being included in this Offer to Purchase solely because it was furnished to YPF. The information necessarily reflects numerous assumptions with respect to the oil and gas exploration and production business, general business and economic conditions and other matters, many of which are inherently uncertain or beyond the Company's control, and does not take into account any change in ownership of the Company or any changes to Company operations or capital structure which may result therefrom. It is not possible to predict whether the assumptions made in preparing the projected financial information will be valid and actual results may prove to be materially higher or lower than those contained in the projections. The inclusion of this information should not be 11 regarded as an indication that YPF, the Purchaser, the Company, the Dealer Manager or anyone who received this information considered it a reliable predictor of future events, and this information should not be relied on as such. Neither YPF, the Purchaser, the Dealer Manager nor the Company assumes any responsibility for the validity, reasonableness, accuracy or completeness of the projected financial information, and the Company has made no representation to YPF or the Purchaser regarding such information. Set forth below is a summary of selected income statement, cash flow and balance sheet information which has been provided by the Company to YPF as described above. SELECTED PROJECTED INCOME STATEMENT AND CASH FLOW INFORMATION
FOR THE YEAR ENDING DECEMBER 31, 1995 (DOLLARS IN MILLIONS) ------------------- Revenues.................................................. $ 694.3 Cash operating and exploration expenses................... 389.4 Depreciation, depletion and amortization.................. 135.6 Interest, administration and other expenses............... 136.8 Income taxes.............................................. 72.2 Net income................................................ (39.7) Discretionary cash flow (1)............................... 107.6 Expenditures for property, plant and equipment............ 174.0
SELECTED PROJECTED BALANCE SHEET INFORMATION
AT DECEMBER 31, 1995 (DOLLARS IN MILLIONS) ------------------- Current assets............................................ $ 372.7 Total assets.............................................. 1,604.6 Current liabilities....................................... 195.1 Total debt................................................ 969.8 Stockholders' equity...................................... 34.2
- ------------ (1) Net income adjusted for depreciation, depletion, amortization, deferred taxes, other non-cash items and exploration expense, less preferred stock dividends. 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND YPF. The Purchaser is a newly incorporated Delaware corporation and a wholly owned subsidiary of YPF which to date has not conducted any business other than that incident to its formation, the execution and delivery of the Merger Agreement and the commencement of the Offer. Accordingly, no meaningful financial information with respect to the Purchaser is available. The principal executive offices of YPF and the Purchaser are located at Avenida Pte. Roque Saenz Pena 777, Buenos Aires, Argentina. YPF, a sociedad anonima organized under the laws of the Republic of Argentina, and the largest Argentine company, is an integrated oil and gas company engaged in the exploration, development and production of oil and natural gas and in the refining, marketing, transportation, and distribution of oil and a wide range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas. YPF's shares are listed and traded on the Buenos Aires Stock Exchange and American Depositary Receipts representing its American Depositary Shares are traded on the NYSE under the symbol "YPF". 12 The name, citizenship, business address, present principal occupation or employment and five-year employment history of each of the directors and executive officers of YPF and the Purchaser are set forth in Schedule I hereto. YPF is subject to the informational filing requirements of the Exchange Act and is required to file reports and other information with the Commission required by foreign law or otherwise under the Exchange Act relating to its business, financial condition and other matters. However, YPF is exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements and its officers, directors and principal stockholders are exempt from the reporting and the "short-swing" profit recovery provisions contained in Section 16 of the Exchange Act. Reports and other information may be inspected and copies may be obtained from the offices of the Commission in the same manner as set forth with respect to information concerning the Company in Section 7. The following selected consolidated financial data relating to YPF and its subsidiaries have been taken or derived from the audited financial statements contained in YPF's Annual Report on Form 20-F for the year ended December 31, 1993. Such statements were prepared in conformity with generally accepted accounting principles in Argentina ("Argentine GAAP"). Argentine GAAP differs in certain significant respects from generally accepted accounting principles in the United States ("U.S. GAAP"). Pursuant to Argentine GAAP, the consolidated financial statements and the selected financial data set forth below have been restated for general price level changes, based on changes in the Argentine general level whole price index. Argentine GAAP requires restatement of all financial statements to constant Argentine pesos ("Pesos") as of the end of each period reported. Accordingly, all financial accounts of YPF have been restated to constant Argentine pesos as of December 31, 1993. More comprehensive information concerning YPF is included in such reports and other documents filed with the Commission and the financial information that follows is qualified in its entirety by reference to such reports and other documents and all the financial information and notes contained therein. Argentine law currently obliges Banco Central de la Republica Argentina to sell U.S. dollars ("Dollars") at the rate of one Peso per Dollar . At February 28, 1995, the exchange rate between Pesos and Dollars was Ps.1.00 to US$1.00. 13 YPF AND CONTROLLED COMPANIES SELECTED CONSOLIDATED FINANCIAL DATA
YEAR ENDED DECEMBER 31, --------------------------- 1993 1992 1991 ----- ----- ----- (IN MILLIONS OF CONSTANT PESOS, EXCEPT FOR PER SHARE AND PER ADS DATA) CONSOLIDATED INCOME STATEMENT DATA AMOUNTS IN ACCORDANCE WITH ARGENTINE GAAP Net sales.................................................... 3,958 3,867 4,159 Gross profit................................................. 1,237 1,020 816 Administrative expenses...................................... (118) (240) (266) Selling expenses............................................. (303) (188) (185) Exploration expenses......................................... (104) (69) (102) Operating income (loss)...................................... 712 523 263 Other expenses, net.......................................... (115) (45) (161) Financial income (expense) and holding gains (losses), net... (41) (73) 324 Income from renegotiation of long-term contract.............. 212 -- -- Income before unusual and extraordinary gains (losses)....... 776 409 374 Unusual and extraordinary gains (losses), net................ (43) (153) (121) Income and assets tax........................................ (28) -- -- Net income (loss)............................................ 706 256 253 Income before unusual and extraordinary items per share and per ADS (1).................................................... 2.20 1.16 -- Actual and pro forma earnings per share and per ADS (1)...... 2.00 .73 -- Dividends per share and per ADS (1).......................... 68 .68 -- APPROXIMATE AMOUNTS IN ACCORDANCE WITH US GAAP Operating income (loss)...................................... 592 385 173 Income before extraordinary items............................ 686 277 384 Net income (loss)............................................ 717 169 278 Pro forma income before extraordinary items per share and per ADS (1)........................................................ 1.94 .78 -- Actual and pro forma earnings per share and per ADS (1)...... 2.03 .48 -- CONSOLIDATED BALANCE SHEET DATA (AT END OF PERIOD) AMOUNTS IN ACCORDANCE WITH ARGENTINE GAAP Cash......................................................... 77 75 99 Total assets................................................. 7,353 7,349 8,045 Total debt................................................... 757 795 762 Shareholders' equity......................................... 4,966 4,498 4,481 APPROXIMATE AMOUNTS IN ACCORDANCE WITH US GAAP Total assets................................................. 7,260 7,245 8,047 Total debt................................................... 1,019 2,662 2,498 Shareholders' equity......................................... 4,611 2,527 2,748 OTHER CONSOLIDATED FINANCIAL DATA AMOUNTS IN ACCORDANCE WITH ARGENTINE GAAP Depreciation and amortization................................ 539 628 667 Cash used in fixed asset acquisitions........................ 955 731 800
- ------------ (1) The pro forma earnings per share and per ADS and dividends per share and per ADS data are presented assuming that a weighted average of 353,000,000 shares were outstanding during each of the periods for which pro forma information is presented. 14 Except as provided in the Merger Agreement, and as otherwise described in this Offer to Purchase, neither YPF nor the Purchaser, nor to the best knowledge of YPF and the Purchaser, any of the persons listed on Schedule I hereto, has any contract, arrangement, understanding, or relationship with any other person with respect to any securities of the Company, including, but not limited to, any contract, arrangement, understanding or relationship concerning the transfer or the voting of any securities of the Company, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss of the giving or withholding of proxies. Except as set forth in this Offer to Purchase, neither YPF nor the Purchaser, nor, to the best of their knowledge, any of the persons listed on Schedule I hereto, has had, since January 1, 1991, any business relationships or transactions with the Company or any of its executive officers, directors, or affiliates that would require reporting under the rules of the Commission applicable to this Offer to Purchase. Except as set forth in this Offer to Purchase, since January 1, 1991, there have been no contacts, negotiations or transactions between the Purchaser, YPF or any of its subsidiaries or, to the best knowledge of YPF and the Purchaser, any of the persons listed on Schedule I hereto, and the Company or its affiliates, concerning a merger, consolidation or acquisition, tender offer or other acquisition of securities, election of directors or a sale or other transfer of a material amount of assets. Except as set forth in this Offer to Purchase, and except for the ownership by Mr. James Lesch, a director of YPF, of 2,000 Shares, neither YPF nor the Purchaser, nor, to the best knowledge of YPF or the Purchaser, any of the persons listed on Schedule I hereto, beneficially owns any Shares or has effected any transactions in the Shares in the past 60 days. 9. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the Purchaser to purchase all outstanding Shares and to pay related fees and expenses is estimated to be approximately $800 million. The funds necessary to purchase Shares pursuant to the Offer and to pay related fees and expenses will be furnished to the Purchaser (i) by YPF as a capital contribution and (ii) through the financings described below. YPF has received a commitment letter (the "Commitment Letter") from The Chase Manhattan Bank (National Association) ("Chase") pursuant to which Chase has agreed to provide four credit facilities aggregating up to $800,000,000: (i) a $200,000,000 credit facility to be extended to YPF (the "YPF Facility"), (ii) a credit facility of up to $600,000,000 to be extended to the Purchaser (the "Purchaser Facility"), (iii) a credit facility of up to $250,000,000 to be extended to Midgard Energy Company ("Midgard"), a wholly owned subsidiary of the Company (the "Midgard Facility"), and (iv) a credit facility of up to $250,000,000 to be extended to certain other subsidiaries of the Company as described below (the "Subsidiaries Facility"). The proceeds of the YPF Facility will be used to finance future exports of crude oil from Argentina. The proceeds of the Purchaser Facility will be used to acquire the Shares. The proceeds of the Midgard Facility and the Subsidiaries Facility will be used to repay, in part, the Purchaser Facility. Chase has confirmed that it is willing to provide the entire amount of these four facilities. Chase also has advised YPF that it intends to arrange one or more syndicates of commercial banks, financial institutions and other investors to provide a portion of these facilities (Chase, together with such other banks, institutions and investors, if any, are collectively referred to as the "Lenders") and that it proposes to act as the agent (the "Agent") for the Lenders in connection with each of the facilities. YPF Facility. The YPF Facility will be made in a single loan (the "YPF Loan") on or before the funding date of the Purchaser Loan described below and mature on the earlier of: (a) November 5, 1995 and (b) the date that is seven months from the date of its funding (such earlier date being the "YPF Maturity Date"). At YPF's option, the interest rate applicable to the YPF Loan will be the one, two or three-month London Interbank Offered Rate plus 1%. The YPF Loan will be repaid in three consecutive monthly installments: the first installment shall be due two months prior to the YPF Maturity Date and shall be in the amount of $50,000,000 and the second and third installments shall be due one month prior to the YPF Maturity Date and at the YPF Maturity Date and shall be in the amount of $75,000,000 each. It is anticipated that the YPF Loan will be repaid with funds generated by YPF's business operations, including crude oil export revenues. 15 Purchaser Facility. The Purchaser Facility will be made available in not more than two advances (collectively, the "Purchaser Loan") and mature on the earlier of: (a) the date that is 90 days after the expiration of the Tender Offer (the "Tender Offer Closing Date") and (b) July 5, 1995 (such earlier date being the "Purchaser Maturity Date"). At the Purchaser's option, the interest rate applicable to the Purchaser Loan will be (a) the one-month London Interbank Offered Rate plus a margin of (i) 1 3/4% until the date 60 days after the Tender Offer Closing Date and (ii) 2 1/2% thereafter on that portion of the aggregate outstanding principal amount of the Purchaser Loan equal to or less than $500,000,000 and 3 1/2% on the aggregate outstanding principal amount of the Purchaser Loan in excess of $500,000,000 or (b) Chase's base rate plus a margin of (i) 3/4% until the date 60 days after the Tender Offer Closing Date and (ii) 1 1/2% thereafter on that portion of the aggregate outstanding principal amount of the Purchaser Loan that is equal to or less than $500,000,000 and 2 1/2% on the aggregate outstanding principal amount of the Purchaser Loan in excess of $500,000,000. The Purchaser Loan will be guaranteed by YPF as described below. In addition, prior to the Merger, the Purchaser Loan will be secured by a pledge by the Purchaser of all of the Shares purchased pursuant to the Offer, or if such pledge is not permissible under the Federal Reserve Board's Margin Regulations, the Purchaser will agree not to dispose of any such Shares except for cash at fair market value. The Lenders' obligation to fund the Purchaser Loan is subject to certain conditions as described below. It is anticipated that up to $100,000,000 of the Purchaser Loan will be repaid on or before the Purchaser Maturity Date from cash held by the Company. Midgard Facility. YPF currently anticipates that on or before the Purchaser Maturity Date, up to $250,000,000 of the Purchaser Loan will be repaid with funds provided to the Company by Midgard. Midgard will provide the funds from the proceeds of a loan of up to $250,000,000 (the "Midgard Loan") to be extended by the Lenders pursuant to the Midgard Facility. The Midgard Loan will be made in a single drawing, will mature on the date that is seven years after the date the initial Purchaser Loan is funded (the "Purchaser Initial Funding Date") and will be repaid in up to 20 consecutive quarterly installments commencing on the date (the "Amortization Date") that is two years after the Purchaser Initial Funding Date. At Midgard's option, the interest rate applicable to the Midgard Loan will be (a) the one, two or three-month London Interbank Offered Rate plus a margin of (i) 1 3/8% until the Amortization Date and (ii) 1 7/8% thereafter until maturity or (b) Chase's base rate plus a margin of (i) 3/8% until the Amortization Date and (ii) 7/8% thereafter until maturity. The Midgard Loan will not be secured but will be guaranteed by YPF and the Company. The agreement evidencing the Midgard Loan (the "Midgard Loan Agreement") will contain, among other things, a negative pledge on all assets of Midgard. The Lenders' obligation to fund the Midgard Loan is subject to certain conditions as described below. It is anticipated that the Midgard Loan will be repaid with funds generated by Midgard's business operations. Subsidiaries Facility. YPF currently anticipates that on or before the Purchaser Maturity Date, up to $250,000,000 of the Purchaser Loan will be repaid with funds provided to the Company by Natomas Energy Company ("Natomas"), Maxus Northwest Java, Inc. ("Java") and Maxus Southeast Sumatra, Inc. ("Sumatra") (collectively, the "Designated Subsidiaries"). The Designated Subsidiaries will provide these funds from the proceeds of a loan of up to $250,000,000 (the "Subsidiaries Loan") made to them by the Lenders pursuant to the Subsidiaries Facility. The Subsidiaries Loan will be made in a single drawing on the Purchaser Maturity Date, will mature on the date that is six years after the Purchaser Initial Funding Date and will be repaid in up to 16 consecutive quarterly installments commencing on the Amortization Date. At the option of the Designated Subsidiaries, the interest rates applicable to the Subsidiaries Loan will be (a) the one, two or three-month London Interbank Offered Rate plus a margin of (i) 1 3/4% until the Amortization Date and (ii) 2 1/4% thereafter until maturity or (b) Chase's base rate plus a margin of (i) 3/4% until the Amortization Date and (ii) 1 1/4% thereafter until maturity. The Subsidiaries Loan will be guaranteed by YPF and the Company and will be secured by certain intangible assets and rights to payment of Java and Sumatra arising out of their respective operations in Indonesia. The agreement evidencing the Subsidiaries Loan (the "Subsidiaries Loan Agreement") will contain a negative pledge on all of the other assets of the Designated Subsidiaries. 16 The Lenders' obligation to fund the Subsidiaries Loan is subject to certain conditions as described below. It is anticipated that the Subsidiaries Loan will be repaid with funds generated by the Designated Subsidiaries business operations. Upon further review of the value of the assets of Midgard and the Designated Subsidiaries, the terms of the Midgard Loan and the Subsidiaries Loan may be modified to provide for intercompany guarantees or other arrangements whereby Midgard and the Designated Subsidiaries provide support for each other's loans. Conditions to Funding. The obligation of the Lenders to provide the YPF Facility, the Purchaser Facility, the Midgard Facility and the Subsidiaries Facility is subject to the fulfillment of certain conditions, including but not limited to, (a) the absence of any material adverse change in the condition (financial or otherwise), business operations, assets, nature of assets or liabilities of (i) YPF and its subsidiaries (taken as a whole), (ii) the Company and its subsidiaries (taken as a whole) or (iii) Midgard, Natomas, Java, and Sumatra, (b) the receipt by the Purchaser of at least $200,000,000 from the issuance of its common stock or a capital contribution from its immediate parent or both, (c) approval by the Board of Directors of the Company of the Offer and the Merger and recommendation that its shareholders tender their Shares, (d) the Lenders' satisfaction that $800,000,000 is sufficient to (and does not exceed the amount required to) consummate the Merger and to pay all related commissions and expenses and (e) the Lenders' satisfaction that the Company will have sufficient cash available to pay the lesser of (i) $100,000,000 or (ii) the difference between (A) the principal amount of the Purchaser Loan outstanding on the Purchaser Maturity Date and (B) the lesser of $500,000,000 or such other amount as is available under the Commitment Letter for the Midgard Loan and the Subsidiaries Loan as described above. The obligation of the Lenders to fund the Midgard Loan and the Subsidiaries Loan will be subject to certain additional conditions, including without limitation, (a) the effectiveness of the Merger, (b) the absence of any material adverse change in the condition (financial or otherwise), business, operations, assets, nature of assets or liabilities of (i) YPF and it subsidiaries (taken as a whole), (ii) the Company and its subsidiaries (taken as a whole) and (iii) Midgard, Natomas, Java or Sumatra, (c) the payment in full of the Purchaser Loan and (d) all indebtedness and other obligations of each of Midgard, Natomas, Java and Sumatra to the Company and its other subsidiaries shall have been paid in full or satisfactorily subordinated to the repayment of the Midgard Loan and the Subsidiaries Loan. Prepayment. Each of the YPF Loan, the Purchaser Loan, the Midgard Loan and the Subsidiaries Loan (collectively, the "Loans") may be prepaid in whole or in part without premium or penalty, except for costs associated with the prepayment of any portion of a Loan bearing interest at a rate determined by reference to the London Interbank Offered Rate prior to the end of any applicable interest period. YPF Guarantee. YPF will guarantee the repayment of the Purchaser Facility, the Midgard Facility and the Subsidiaries Facility. The YPF guarantee of the Purchaser Facility may be secured, prior to the Merger, by a pledge of the Purchaser's shares, and after the Merger by a pledge of the Company's shares. The guarantee will also contain certain covenants including a limitation on YPF's debt level and a required level of tangible net worth. Certain Fees. YPF has agreed to pay to Chase customary fees in connection with each of the Facilities. Covenant Regarding Financing. In the Merger Agreement, YPF and the Purchaser agreed that they will use their reasonable best efforts to obtain the financing contemplated by the Commitment Letter. A copy of the Commitment Letter has been filed with the Commission by the Purchaser as an exhibit to the Schedule 14D-1 filed by YPF and the Purchaser with the Commission. The foregoing summary of the financing to be provided pursuant to the Commitment Letter is qualified in its entirety by reference to the Commitment Letter. 17 10. BACKGROUND OF THE OFFER; PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE COMPANY. In mid-1994, YPF's Board of Directors adopted the goals of becoming an internationally diversified oil company with significant assets outside Argentina and obtaining management personnel skilled and experienced in exploring for and producing oil and gas internationally. YPF sought to identify a company that would permit it to further this goal. After analyzing several companies, YPF believed that the Company would potentially present a good fit with its goals. In December 1994, Jose Estenssoro, YPF's Chief Executive Officer, met with Charles Blackburn, Chairman, President and Chief Executive Officer of the Company. Messrs. Estenssoro and Blackburn had a wide-ranging discussion, including discussion of a possible substantial equity investment in the Company by YPF. Thereafter, representatives of YPF conducted due diligence at various locations of the Company and its subsidiaries and had numerous other contacts with representatives of the Company to obtain information throughout the period from mid-December 1994 through the end of February 1995. In mid-January 1995, YPF determined that it had a serious interest in exploring a possible transaction with the Company, and retained Salomon Brothers to advise it in connection with this interest. During the week of January 16, 1995, further due diligence was conducted with the Company in Dallas. Throughout this period, YPF, with Salomon Brothers' assistance, undertook analyses of various alternatives and eventually determined that the most advantageous alternative from the point of view of YPF and its stockholders was an acquisition of 100% of the Shares. Thereafter, YPF and other interested parties were advised that the Company wished to receive proposals from all parties interested in an investment in or purchase of all of the Company, or the purchase of Midgard, by January 27, 1995 and January 30, 1995, respectively, and YPF submitted a proposal to acquire all of the Shares for $5 per Share in cash, subject to arranging satisfactory financing, conducting further due diligence, the approval of YPF's Board of Directors, the cessation by the Company of its efforts to sell Midgard and the negotiation, approval and execution of definitive documents providing for the necessary transactions. On February 15, 1995, Mr. Estenssoro travelled to Dallas to discuss YPF's progress in satisfying these conditions with Mr. Blackburn, and to advise Mr. Blackburn that YPF was proceeding towards making a definitive proposal prior to the Company's regularly scheduled board meeting on February 28, 1995. On Saturday, February 25, 1995, YPF proposed to acquire all outstanding Shares pursuant to the Offer and the Merger. During the period proceeding and immediately following such proposal, representatives of YPF and the Company engaged in extensive negotiations relating to the terms of the Merger Agreement. On February 28, 1995, following approval by their respective Boards of Directors, the Company, YPF and the Purchaser entered into the Merger Agreement. A summary of the terms of the Merger Agreement is set forth in Section 11. A copy of the Merger Agreement has been filed as an Exhibit to the Schedule 14D-1 filed by YPF and the Purchaser with the Commission and is available for inspection and copy at the principal office of the Commission in the manner set forth in Section 7. On March 3, 1995, the Purchaser commenced the Offer. 11. PURPOSE OF THE OFFER; THE MERGER; MERGER AGREEMENT; PLANS FOR THE COMPANY. The purpose of the Offer, the Merger and the Merger Agreement is for YPF to acquire control of, and the entire common equity interest in, the Company. The Offer and the Merger Agreement are intended to increase the likelihood that the Merger will be effected as promptly as practicable. The Merger Agreement. The following summary of the Merger Agreement, a copy of which is filed as an exhibit to the Schedule 14D-1, is qualified by reference to the Merger Agreement. The Offer. The Merger Agreement provides for the making of the Offer. The obligation of the Purchaser to accept for payment or pay for Shares tendered pursuant to the Offer is subject to the satisfaction of the Minimum Share Condition, the Financing Condition and certain other conditions 18 that are set forth in Section 14 hereof. The Purchaser has reserved the right to waive any conditions of the Offer or to modify any of the terms and conditions of the Offer except that, without the consent of the Company, the Purchaser may not (i) decrease the price per Share payable in the Offer, (ii) reduce the minimum number of Shares to be purchased in the Offer, or (iii) impose additional conditions to the Offer or make any other change in the terms or conditions of the Offer that is materially adverse to the holders of the Shares. Recommendation. The Board of Directors of the Company, based in part upon the opinion of CS First Boston Corporation that the proposed consideration to be paid in the Offer and the Merger is fair from a financial point of view to the holders of Shares, determined that the Offer and the Merger are in the best interests of the Company and its stockholders, approved the Merger Agreement and the transactions contemplated thereby, and recommended that holders of Shares accept the Offer and tender their Shares pursuant to the Offer. The Merger Agreement provides that if the Board of Directors of the Company determines that it will not recommend acceptance of the Offer and approval of the Merger by the Company's stockholders (or if such recommendation is withdrawn) based upon the advice of legal counsel that such action is necessary for the Board of Directors to comply with its fiduciary duties to stockholders under applicable law, such non-recommendation or withdrawal of the recommendation shall not constitute a breach of the Merger Agreement but will entitle the Purchaser to receive a termination fee. See "Termination." Board Representation. The Merger Agreement provides that, upon the Purchaser's acquisition of a majority of the outstanding Voting Shares pursuant to the Offer, and from time to time thereafter so long as YPF and/or any of its direct or indirect wholly owned subsidiaries (including the Purchaser) owns a majority of the outstanding Voting Shares, YPF will be entitled, subject to compliance with applicable law and the Company's certificate of incorporation, to designate at its option up to that number of directors, rounded up to the nearest whole number, of the Company's Board of Directors as will make the percentage of the Company's directors designated by YPF equal to the percentage of outstanding Voting Shares held by YPF and any of its direct or indirect wholly owned subsidiaries (including the Purchaser), including Shares accepted for payment pursuant to the Offer. The Company has agreed that it will, upon the request of YPF, promptly increase the size of its Board of Directors and/or use its reasonable best efforts to secure the resignation of such number of directors as is necessary to enable YPF's designees to be elected to the Company's Board of Directors and will use its reasonable best efforts to cause YPF's designees to be so elected, subject to Section 14(f) of the Exchange Act; provided, that, prior to the Effective Time (as defined in the Merger Agreement) of the Merger, the Company will use its reasonable best efforts to assure that the Company's Board of Directors always has (at its election) at least three members who were directors of the Company as of the date of the commencement of the Offer. At such times, the Company will use its reasonable best efforts to cause persons designated by YPF to constitute the same percentage as such persons represent on the Company's Board of Directors of (i) each committee of the Board, (ii) each board of directors or board of management of each subsidiary of the Company, and (iii) each committee of each such board. The Merger. The Merger Agreement provides that, unless the Merger Agreement is terminated or abandoned (see "Termination" below), as soon as practicable following fulfillment or waiver of the conditions described below under "Conditions to the Merger," at the Effective Time, the Purchaser will be merged with and into the Company, whereupon the separate corporate existence of the Purchaser will cease and the Company will be the surviving corporation in the Merger. The Merger Agreement further provides that (i) the certificate of incorporation and the by-laws of the Company as in effect at the Effective Time shall be the certificate of incorporation and the by-laws of the surviving corporation, (ii) the directors of the Purchaser immediately prior to the Effective Time shall be the directors of the surviving corporation, and (iii) the officers of the Company immediately prior to the Effective Time shall be the officers of the surviving corporation. Consideration to be Paid in the Merger. The Merger Agreement provides that each Share outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the 19 Company, Shares owned by YPF, the Purchaser, any other direct or indirect subsidiary of YPF, and other than Dissenting Shares (as defined below under "Dissenters' Rights") shall, at the Effective Time, be cancelled and retired and be converted into a right to receive in cash an amount per Share equal to the highest price per Share paid by the Purchaser pursuant to the Offer, without interest, upon the surrender of the certificate formerly representing such Share and each Share held in the treasury of the Company, and each Share held by YPF, the Purchaser or any other direct or indirect subsidiary of YPF immediately prior to the Effective Time shall, at the Effective Time, be cancelled and retired and no payment will be made with respect thereto. Each share of common stock of the Purchaser issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one share of common stock of the surviving corporation, and each outstanding share of $4.00 Preferred Stock, $9.75 Preferred Stock , and $2.50 Cumulative Preferred Stock, par value $1.00 per share ("$2.50 Preferred Stock"), of the Company (collectively, the "Preferred Stock") will remain outstanding and have the identical powers, preferences, rights, qualifications, limitations and restrictions as such shares of Preferred Stock currently have, except as agreed to by the holder of the $9.75 Preferred Stock See "$9.75 Preferred Stock Arrangements" below. Company Options and Restricted Shares. The Merger Agreement provides that the Company will cooperate with YPF and the Purchaser in an effort to obtain the surrender of all Company Options in respect of Shares in accordance with the values set forth in Schedule 2.6 of the Merger Agreement. In addition, immediately prior to the Effective Time, the restrictions on certain restricted Shares held by certain officers of the Company will lapse without further action. Stockholders' Meeting. In the Merger Agreement, the Purchaser agreed to take all action necessary in accordance with applicable law and its certificate of incorporation and by-laws to convene a meeting of its stockholders as promptly as reasonably practicable following the date of the Merger Agreement to consider and vote upon the adoption of the Merger Agreement, if such shareholder approval is required by applicable law. At any such meeting, all Shares then owned by YPF, the Purchaser or any other direct or indirect subsidiary of YPF will be voted in favor of adoption of the Merger Agreement. Subject to its fiduciary duties under applicable law, the Board of Directors of the Company will recommend that the Company's stockholders approve adoption of the Merger Agreement, if such stockholder approval is required. Dissenters' Rights. Holders of Shares will not have appraisal rights as a result of the Offer. If the Merger is consummated, however, persons who hold Shares at the time would have the right to appraisal of their Shares in accordance with Section 262 of the Delaware General Corporation Law. Such appraisal rights, if the statutory procedures are complied with, would result in a judicial determination of the "fair value" of the Shares owned by such holders. Any such judicial determination of the fair value of the Shares could be based upon considerations other than or in addition to the price paid in the Offer and the Merger and the market value of the Shares, including asset values, the investment value of the Shares and any other valuation considerations generally accepted in the investment community. The value so determined for Shares could be more or less than the value of the consideration per Share to be paid pursuant to the Offer or the Merger and payment of such consideration would take place subsequent to payment pursuant to the Offer. In addition, several recent decisions by the Delaware courts have held that a controlling stockholder of a corporation involved in a merger has a fiduciary duty to the other stockholders which requires that the merger be fair to such other stockholders. In determining whether a merger is fair to minority stockholders, the Delaware courts have considered, among other things, the type and amount of consideration to be received by the stockholders and whether there was fair dealing among the parties. The Delaware Supreme Court indicated in Weinberger v. UOP, Inc. and Rabkin v. Philip A. Hunt Chemical Corp. that ordinarily the remedy available to stockholders in a merger that is found not to be "fair" to minority stockholders is the right to appraisal described above or a damages remedy based on essentially the same principles. 20 If the Purchaser purchases Shares pursuant to the Offer, and the Merger or another merger or other business combination is consummated more than one year after the completion of the Offer, or if such a merger or other business combination were to provide for the payment of consideration less than that paid pursuant to the Offer, compliance by the Purchaser with Rule 13e-3 under the Exchange Act would be required, unless the Shares were to be deregistered under the Exchange Act prior to such transaction. See Section 12. Rule 13e-3 would require, among other things, that certain financial information concerning the Company and certain information relating to the fairness of the proposed transaction and the consideration offered to minority stockholders therein be filed with the Commission and disclosed to minority stockholders prior to consummation of the transaction. Representations and Warranties. The Merger Agreement contains representations and warranties by the Company, relating to, among other things, (i) the organization of the Company and its subsidiaries and other corporate matters, (ii) the capital structure of the Company, (iii) the authorization, execution, delivery and consummation of the transactions contemplated by the Merger Agreement, (iv) consents and approvals, (v) documents filed by the Company with the Commission and the accuracy of the information contained therein, (vi) the absence of certain changes and events, (vii) the accuracy of the information contained in documents filed with the Commission in connection with the Offer and the Merger, (viii) litigation, (ix) environmental matters, (x) tax, insurance and labor matters, and (xi) matters relating to Title IV of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder. In addition, the Merger Agreement contains representations and warranties by YPF and the Purchaser related to, among other things, (i) the organization of YPF and the Purchaser and other corporate matters, (ii) the authorization, execution, delivery and consummation of the transactions contemplated by the Merger Agreement, (iii) consents and approvals, (iv) the execution of the Commitment Letter, and (v) YPF's having no reason to believe that, following the Merger and the financings contemplated by the Commitment Letter, the Company will not be able to meet its obligations as they come due. Redemption of Rights. The Company represented in the Merger Agreement that it has taken the necessary steps to redeem all of the outstanding Rights issued pursuant to the Rights Agreement so that the Rights will not become exercisable as a result of the consummation of the transactions contemplated by the Merger Agreement. Agreements with Respect to the Conduct of Business Pending the Merger. The Merger Agreement provides that except as specifically contemplated by the Merger Agreement, during the period from the date of the Merger Agreement to the earlier of the time that the designees of YPF have been elected to, and constitute a majority of, the Board of Directors of the Company or the Effective Time, the Company will, and will cause each of its subsidiaries to, conduct their respective business only in, and not take any action except in, the ordinary and usual course of business substantially consistent with past practice, and use reasonable efforts to preserve intact the business organization of the Company and each of its subsidiaries, to keep available the services of its and their present officers and key employees and to preserve the goodwill of those having business relationships with it or its subsidiaries. In addition, subject to certain exceptions, during such period, the Company will not, and will not permit any of its subsidiaries to (i) make or propose any change or amendment to their respective certificates of incorporation or by-laws (or comparable governing documents), except as may be required by law; (ii) authorize for issuance, issue, sell or deliver any shares of capital stock or any other securities of any of them (other than pursuant to the Company Options, the $4.00 Preferred Stock, the $9.75 Preferred Stock, the Company's 401(k) Plan or issuance of Shares issued under the terms of the Company's Director Plan in a manner consistent with any such plan or past practice) or issue any securities convertible into or exchangeable for, or options, warrants to purchase, scrip, rights to subscribe for, calls or commitments of any character whatsoever relating to, or enter into any contract with respect to the issuance of, any shares of capital stock or any other securities of any of them (other than pursuant to the Company Options, the $4.00 Preferred Stock, the $9.75 Preferred Stock, the 401(k) Plan (or in connection with the 401(k) Plan or the Director Plan, as aforesaid) purchase or otherwise acquire or 21 enter into any contract with respect to the purchase or voting of shares of their capital stock, or adjust, split, combine or reclassify any of their capital stock or other securities or make any other changes in their capital structures; (iii) declare, set aside, pay or make any dividend or other distribution or payment (whether in cash, stock or property) with respect to, or purchase or redeem, any shares of the capital stock of any of them other than (a) regular quarterly cash dividends on the $4.00 Preferred Stock, the $9.75 Preferred Stock and the $2.50 Preferred Stock, (b) dividends, distributions or payments paid by its subsidiaries to the Company or its subsidiaries with respect to their capital stock, (c) the Rights in accordance with the Rights Agreement and (d) loans and payments from the Company to any of its subsidiaries or from any of such subsidiaries to the Company or another such subsidiary; (iv) adopt or amend any bonus, profit sharing, compensation, severance, termination, stock option, pension, retirement, deferred compensation, welfare benefit plan, change in control agreement, restricted stock, performance unit, employment or other employee benefit agreements, trusts, plans, funds or other arrangements for the benefit or welfare of any director, officer, employee or former employee, or (except, other than with respect to certain senior executives of the Company, for normal increases in the ordinary course of business that are consistent with past practices and that, in the aggregate, do not result in a material increase in benefits or compensation expense to the Company or pursuant to collective bargaining agreements or other contracts presently in effect), increase in any manner the compensation or fringe benefits of any director or officer or pay any benefit not required by any existing plan, arrangement or contract (including without limitation the granting of stock options, stock appreciation rights, shares of restricted stock or performance units) or take any action or grant any benefit not expressly required under the terms of any existing contracts, trusts, plans, funds or other such arrangements or enter into any contract to do any of the foregoing; or (v) except in the ordinary course of business, (a) incur or assume any indebtedness, (b) assume, guarantee, endorse or otherwise become liable (whether directly, contingently or otherwise) for the obligation of any other person except in the ordinary course of business and consistent with past practices, or (c) make any loans, advances or capital contributions to, or investments (other than intercompany accounts and short-term investments pursuant to customary cash management systems of the Company in the ordinary course and consistent with past practices) in, any other person other than such of the foregoing as are made by the Company to or in a wholly owned subsidiary of the Company. In addition, the Company has agreed to use its reasonable best efforts to (a) exempt the Company, the Offer and the Merger from the requirements of any state takeover law, by action of the Company's Board of Directors or otherwise and (b) assist in any challenge by the Purchaser to the validity or applicable to the Offer or the Merger of any state takeover law. No Solicitation. The Merger Agreement provides that neither the Company nor any of its subsidiaries may, directly or indirectly, and each will instruct or otherwise use its reasonable best efforts to cause its affiliates that are controlled by the Company and the officers, directors, employees, agents or advisors or other representatives or consultants of the Company not to, encourage, solicit, initiate, engage or participate in discussions or negotiations with or provide information to, any Person (as defined in the Merger Agreement) (other than YPF, the Purchaser or subsidiaries, affiliates or representatives of any of the foregoing) in connection with any tender offer, exchange offer, merger, consolidation, business combination, sale of substantial assets, sale of securities, liquidation, dissolution or similar transaction involving the Company or any of its subsidiaries or divisions (including, without limitation, Midgard Energy Company). Notwithstanding the foregoing, the Company may do any of the foregoing if outside counsel to the Company advises the Company's Board of Directors that any action is required for the Company's directors to satisfy their fiduciary duties to the Company and its constituencies under applicable law. The Company will (i) promptly notify YPF in the event of any discussion, negotiation or proposal or offer of the type referred to in the first sentence of this paragraph or any decision to furnish information or take any other action referred to in the second sentence of this paragraph and (ii) promptly furnish YPF copies of all written information furnished to any corporation, partnership, person or other entity or group pursuant to the second sentence of this paragraph to the extent not previously furnished to YPF. 22 Indemnification of Directors. Pursuant to the Merger Agreement, YPF has agreed for a period of seven years after the Effective Time, to cause the surviving corporation to indemnify, defend and hold harmless the present and former officers, directors, employees and agents of the Company and its subsidiaries (an "Indemnified Party") against all losses, claims, damages or liabilities arising out of actions or omissions occurring on, prior to or after the Effective Time to the full extent provided under Delaware law, the certificate of incorporation and by-laws of the Company in effect at the date of the Merger Agreement and under all agreements to which the Company is a party as of the date of the Merger Agreement, provided that any determination required to be made with respect to whether an Indemnified Party's conduct complies with the standards set up under Delaware law, the certificate of incorporation or by-laws of the Company or under any such agreement will be made by independent counsel selected by the Indemnified Party and reasonably satisfactory to the surviving corporation. The surviving corporation will maintain the Company's existing officers' and directors' liability insurance ("D & O Insurance") in full force and effect without reduction of coverage for a period of seven years after the Effective Time, provided, however, that the surviving corporation will not be required to pay an annual premium therefor in excess of 250% of the last annual premium paid prior to the date of the Merger Agreement (the "Current Premium"), and provided, further, that if the existing D&O Insurance expires, is terminated or cancelled during such seven-year period, the surviving corporation will use its best efforts to obtain as much D&O Insurance as can be obtained for the remainder of such period for a premium on an annualized basis not in excess of 250% of the Current Premium. YPF's Undertaking. The Merger Agreement provides that whenever it requires the Purchaser to take any action, such requirements will be deemed to include an undertaking on the part of YPF to cause the Purchaser to take such action. Listing of Preferred Stock. Pursuant to the Merger Agreement, the Company will, and YPF will cause the surviving corporation to, use their respective reasonable efforts to continue the listing on the NYSE of the shares of Preferred Stock which are currently listed on such Exchange or, if such shares are delisted, to cause such shares of Preferred Stock to be listed on another national securities exchange within the United States or admitted to trading on the National Association of Securities Dealers Automated Quotation System and on other organized securities markets in such foreign jurisdictions in which such shares are presently traded. Notwithstanding anything in the Merger Agreement to the contrary, the obligations of the Company and YPF regarding continued listing of the Preferred Stock will survive the Effective Time with respect to any series of Preferred Stock until such time as the aggregate market value of all outstanding shares of such series is less than $2 million or the number of outstanding shares of such series is less than 100,000. Certain Obligations of YPF. Pursuant to the Merger Agreement, in the event that the Company is unable to meet its obligations as they come due, whether at maturity or otherwise, including solely for the purposes of this clause, dividend and redemption payments with respect to the Preferred Stock, YPF has agreed to capitalize the Company in an amount necessary to permit the Company to meet such obligations, provided that YPF's aggregate obligation will be (a) limited to the amount of debt service obligations under the Purchaser Facility of the loan agreement contemplated by the Commitment and, to the extent the Purchaser Facility is replaced by the Midgard Facility and/or the Subsidiaries Facility under the Commitment, the amount of debt service obligations under the Midgard Facility and/or the Subsidiaries Facility and (b) reduced by the amount, if any, of capital contributions received by the Company after the Effective Time and the net proceeds of any sale by the Company of common stock or non-redeemable preferred stock after the Effective Time. The foregoing obligations of YPF will survive until the ninth anniversary of the Effective Time. Termination. The Merger Agreement may be terminated and the Merger contemplated thereby may be abandoned at any time prior to the Effective Time, whether before or after approval by the stockholders of the Company: (a) by the mutual consent of the Boards of Directors of YPF, Purchaser and the Company; (b) by YPF and the Purchaser, on one hand, or the Company, on the other hand, if the Offer expires or is terminated or withdrawn in accordance with the terms of the Merger Agreement 23 without any Shares being purchased thereunder or the Offer is terminated, or if the Purchaser has not purchased Shares validly tendered and not withdrawn pursuant to the Offer in accordance with the terms of the Merger Agreement within 75 calendar days after commencement of the Offer; provided, however, that the party seeking to terminate the Merger Agreement is not in material breach of the Merger Agreement; (c) by the Company if either YPF or the Purchaser materially breaches, or by YPF and the Purchaser if the Company materially breaches, any of the representations and warranties or covenants contained in the Merger Agreement; (d) by either YPF and the Purchaser or the Company, if the Merger is not consummated prior to June 30, 1995; provided, however, that the right to terminate the Merger Agreement pursuant to this provision will not be available to any party whose failure to fulfill any obligation under the Merger Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date; (e) by either YPF and Purchaser, on the one hand, or the Company, on the other hand, if either one (or any assignee permitted under the Merger Agreement) is restrained, enjoined or otherwise precluded by an order, decree, ruling or injunction (other than an order or injunction issued on a temporary or preliminary basis) of a court of competent jurisdiction, governmental authority or other regulatory or administrative agency or commission, from consummating the Merger or making the acquisition or holding by YPF or its subsidiaries of the Shares or shares of common stock of the surviving corporation illegal and all means of appeal and all appeals from such order decree, ruling, injunction or other action have been finally exhausted; (f) by the Company if the Board of Directors of the Company determines that it must recommend the withdrawal of its acceptance of the Offer and approval of the Merger by the Company's stockholders based upon the advice of outside counsel that such action is necessary for the Board of Directors to comply with its fiduciary duties to stockholders under applicable law; or (g) by YPF and Purchaser, if: (i) the Board of Directors of the Company shall not have recommended or shall withdraw, modify or change its recommendation relating to the Merger or the Offer in a manner materially adverse to YPF or shall have resolved to do any of the foregoing; (ii) the Board of Directors of the Company shall have recommended to the stockholders of the Company that they accept or approve, or the Company or any of its subsidiaries shall have agreed to engage in, a Competing Transaction (as defined below); or (iii) any Person shall have acquired beneficial ownership or the right to acquire beneficial ownership or any "group" (as such term is defined under Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) shall have been formed which beneficially owns, or has the right to acquire "beneficial ownership" (as defined in the Rights Agreement) of, more than 20% of the then-outstanding Shares of the Company. "Competing Transaction" is defined as any of the following involving the Company or any of its subsidiaries: (i) any merger, consolidation, share exchange, business combination or other similar transaction except for such of the foregoing in which the only parties are the Company or one or more subsidiaries of the Company; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of the assets of the Company or any of its subsidiaries constituting 5% or more of the consolidated assets of the Company or accounting for 5% or more of the consolidated revenues of the Company in a single transaction or series of related transactions involving any person other than the Company or one or more subsidiaries of the Company; or (iii) any tender or exchange offer for 20% or more of the outstanding Voting Shares or the filing of a registration statement under the Securities Act in connection therewith. In the event of any termination and abandonment pursuant to the Merger Agreement, no party to the Merger Agreement (or any of its directors or officers) will have any liability or further obligation to any other party to the Merger Agreement, except for certain express obligations under the Merger Agreement and except that no party will be relieved from liability for any breach of the Merger Agreement. Any action by the Company to terminate the Merger Agreement as described herein will require only the approval of a majority of the directors of the Company then in office who are directors of the Company on the date hereof, or persons nominated or elected to succeed such directors by a majority of such directors (the "Continuing Directors"). 24 In the event the Merger Agreement is terminated, (i) YPF and the Purchaser will not, and will cause their subsidiaries and affiliates controlled by them not to, acquire or offer to acquire or request permission to acquire or offer to acquire (either directly or pursuant to a waiver of this or any other covenant in the Merger Agreement) Shares otherwise than pursuant to the Offer or the Merger for a period of not less than 24 months after termination of the Merger Agreement without prior written approval of the Board of Directors of the Company, and (ii) the provisions of the confidentiality agreement previously entered into (the "Confidentiality Agreement") between the Company and YPF (or one of its affiliates) will continue to apply. Whether or not the Offer or Merger is consummated, all costs and expenses incurred in connection with the Offer, the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring such costs and expenses; provided, however, that (i) in the event of a termination of Merger Agreement by the Company pursuant to clause (f) above or by YPF and the Purchaser pursuant to clauses (g)(i) or (ii) above, the Company will be obligated to promptly pay to the Purchaser $20 million in cash, and (ii) in the event of a termination of the Merger Agreement by the Company or by YPF if at the date of such termination any condition to the funding of the loans contemplated by the Commitment Letter has not been satisfied, provided that at such time no other condition to YPF's obligation to consummate the Offer or the Merger, as the case may be, is unsatisfied (other than the failure to meet the Minimum Share Condition as a result of the failure to obtain such funding), YPF and the Purchaser, jointly and severally, will be obligated to promptly pay to the Company $20 million in cash. Certain Employment Agreements. YPF has asked Mr. Charles L. Blackburn, the Chairman, President and Chief Executive Officer of the Company to become an international consultant to YPF and to remain a director of the Company. Among other things, Mr. Blackburn would be paid an annual salary of $500,000, under a proposed 2-year contract. He would have offices in Dallas and Buenos Aires, and be expected to spend 50-75% of his time working for YPF. In addition, YPF has announced that following the Merger Mr. Peter Gaffney, a founding partner of Gaffney, Cline and Associates, and a reservoir engineer who is currently also President of the Society of Petroleum Engineers, will become the interim Chief Executive Officer of the Company. The terms of Mr. Gaffney's employment have not yet been agreed. $9.75 Preferred Stock Arrangements. In accordance with the provisions of the Company's certificate of incorporation, the holder of the Company's $9.75 Preferred Stock must approve the Merger in order for the Merger to be consummated. To induce such holder to consent to the Merger and, effective upon the Effective Time, to (i) waive certain rights, including appraisal rights, conversion rights, rights under the Rights Plan and the right to increased dividends under certain circumstances, (ii) waive certain covenants restricting the Company's ability to take certain actions and (iii) terminate the registration rights associated with the $9.75 Preferred Stock, YPF has agreed, effective as of the Effective Time, to guarantee the payment and performance of each and every obligation of the Company to the registered owners of the Company's $9.75 Preferred Stock thereunder, including the obligation to pay quarterly dividend amounts and to redeem shares of the $9.75 Preferred Stock in certain circumstances. In addition, the Company has agreed, effective upon the Effective Time, (i) to waive certain rights, including the right to cause the Company to redeem the $9.75 Preferred Stock at its option and the right of first offer with respect to the transfer of the shares of $9.75 Preferred Stock, (ii) to waive certain transfer restrictions with respect to the $9.75 Preferred Stock, and (iii) to pay to The Prudential Insurance Company of America ("Prudential"), which is the current holder of all of the outstanding shares of $9.75 Preferred Stock, a restructuring fee of $250,000 upon the Effective Time. YPF has agreed to reimburse Prudential for all of its reasonable out-of-pocket expenses arising in connection with these agreements. 12. EFFECT OF THE OFFER ON THE MARKET FOR SHARES; STOCK EXCHANGE LISTING; REGISTRATION UNDER THE EXCHANGE ACT. The purchase of Shares pursuant to the Offer will reduce the number of Shares that 25 might otherwise trade publicly and the number of holders of Shares, which could adversely affect the liquidity and market value of the remaining shares held by stockholders other than the Purchaser. Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements of the NYSE for continued listing and may, therefore, be delisted from such exchange. According to the NYSE's published guidelines, the NYSE would consider delisting the Shares if, among other things, the number of publicly-held Shares (excluding Shares held by officers, directors, their immediate families and holders of 10% or more of the Shares) were less than 600,000, there were fewer than 1,200 holders of at least 100 Shares or the aggregate market value of publicly held Shares were less than $5 million. According to the Company 10-K, as of January 31, 1994 there were approximately 35,740 record holders of Shares. If, as a result of the purchase of Shares pursuant to the Offer, the Shares no longer meet the requirements of the NYSE for continued listing and the listing of Shares is discontinued, the market for the Shares could be adversely affected. If the NYSE were to delist the Shares (which the Purchaser intends to cause the Company to seek if it acquires control of the Company and the Shares no longer meet the NYSE listing requirements), it is possible that the Shares would trade on another securities exchange or in the over-the-counter market and that price quotations for the Shares would be reported by such exchange or through the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or other sources. The extent of the public market for the Shares and availability of such quotations would, however, depend upon such factors as the number of holders and/or the aggregate market value of the publicly-held Shares at such time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration of the Shares under the Exchange Act and other factors. The Shares are currently "margin securities" under the regulations of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board"), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding listing and market quotations, following the Offer it is possible that the Shares would no longer constitute "margin securities" for the purposes of the margin regulations of the Federal Reserve Board and therefore could no longer be used as collateral for loans made by brokers. The Shares are currently registered under the Exchange Act. Registration of the Shares under the Exchange Act may be terminated upon application by the Company to the Commission if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders of the Shares. Termination of registration of the Shares under the Exchange Act would reduce substantially the information required to be furnished by the Company to its stockholders and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b), the requirement of furnishing a proxy statement in connection with stockholders' meetings pursuant to Section 14(a) and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions no longer applicable to the Company. Furthermore, if the Purchaser acquires a substantial number of Shares or the registration of the Shares under the Exchange Act were to be terminated, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 under the Securities Act may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated prior to the consummation of the Merger, the Shares would no longer be "margin securities" or be eligible for listing or NASDAQ reporting. It is the present intention of the Purchaser to seek to cause the Company to make an application for termination of registration of the Shares as soon as possible following the Offer if the requirements for termination of registration are met. 13. DIVIDENDS AND DISTRIBUTIONS. If, on or after February 28, 1995 , the Company should, except as permitted under the Merger Agreement, (i) split or combine the Shares, or otherwise change the Shares or its capitalization, (ii) issue or sell any additional securities of the Company (other than Shares issued or sold upon the exercise (in accordance with the present terms thereof) of Company Options outstanding on February 28, 1995, or (iii) acquire currently outstanding Shares or otherwise cause a 26 reduction in the number of outstanding Shares, then, without prejudice to the Purchaser's rights under Sections 1 and 14, the Purchaser, in its sole discretion (subject to the terms of the Merger Agreement), may make such adjustments as it deems appropriate in the purchase price and other terms of the Offer and the Merger including, without limitation, the amount and type of securities offered to be purchased. If, on or after February 28, 1995 the Company should, except as permitted under the Merger Agreement, declare or pay any dividend on the Shares or make any distribution (including, without limitation, the issuance of additional Shares pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Shares that is payable or distributable to stockholders of record on a date prior to the transfer to the name of the Purchaser or its nominee or transferee on the Company's stock transfer records of the Shares purchased pursuant to the Offer, then, without prejudice to the Purchaser's rights under Sections 1 and 14, (i) the purchase price per Share payable by the Purchaser pursuant to the Offer will be reduced by the amount of any such cash dividend or cash distribution and (ii) any such non-cash dividend, distribution or right to be received by the tendering stockholders will be received and held by the tendering stockholders for the account of the Purchaser and will be required to be promptly remitted and transferred by each tendering stockholder to the Depositary for the account of the Purchaser, accompanied by appropriate documentation of transfer. Pending such remittance and subject to applicable law, the Purchaser will be entitled to all rights and privileges as owner of any such non-cash dividend, distribution or right and may withhold the entire purchase price or deduct from the purchase price the amount or value thereof, as determined by the Purchaser in its sole discretion. 14. CONDITIONS TO THE OFFER. Notwithstanding any other provision of the Offer, the Purchaser shall not be required to accept for payment, purchase or pay for any Shares tendered, and may postpone the acceptance for payment, the purchase of, and/or payment for, Shares, and/or may, subject to the terms of the Merger Agreement, amend or terminate the Offer if (i) the Minimum Share Condition has not been satisfied, (ii) the Company shall not have taken the steps necessary to redeem the Rights , (iii) the applicable waiting period under the HSR Act shall not have expired or been terminated, (iv) the Financing Condition shall not have been satisfied or (v) at any time at or before payment for any Shares tendered pursuant to the Offer (whether or not any Shares have theretofore been accepted for payment or paid for pursuant to the Offer), any of the following events shall have occurred and be continuing: (a) there shall be in effect any temporary restraining order, preliminary or final injunction or other order or decree issued by any United States federal or state court of competent jurisdiction or United States federal or state governmental, regulatory or administrative agency or authority, (1) enjoining, restraining or otherwise prohibiting the Offer, the Merger or the acquisition by YPF or the Purchaser of Shares; (2) prohibiting or materially limiting the ownership or operation by YPF or the Purchaser of all or any substantial portion of the business or material assets of the Company and its subsidiaries, taken as a whole, or, as a consequence of the Offer, the Merger or YPF's or the Purchaser's acquisition of Shares, of YPF or any of its subsidiaries, or compelling YPF or the Purchaser to dispose of or to hold separate all or any material portion of the business or material assets of the Company and its subsidiaries, taken as a whole, or of YPF or any of its subsidiaries, or imposing any material limitation on the ability of YPF or the Purchaser to conduct such business or own such assets, (3) imposing material limitations on the ability of YPF or the Purchaser (or any other affiliate of YPF) to acquire or hold or to exercise full rights of ownership of the Shares, including without limitation the right to vote the Shares purchased by them on all matters properly presented to the stockholders of the Company, or (4) requiring material divestitures by YPF or the Purchaser or any of their subsidiaries or affiliates of any Shares, as a consequence of the Offer, Merger or YPF or the Purchaser's acquisition of Shares; or (b) there shall be any statute, rule, regulation or order promulgated, enacted, entered or deemed applicable to the Offer or the Merger, or any other action shall have been taken, by any government or governmental authority or agency or any court domestic or foreign, that is 27 reasonably likely to result in any of the consequences referred to in clauses (1) through (4) of paragraph (a) above; or (c) there shall have occurred (1) any general suspension of trading in, or limitation on prices for, trading in securities on the NYSE or in the over-the-counter-market, (2) a declaration of a banking moratorium or any limitation or suspension of payments by United States authorities on the extension of credit by United States lending institutions, (3) a commencement of war, armed hostilities or other international or national calamity directly or indirectly involving the United States, (4) in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; or (d) it shall have been publicly disclosed or the Purchaser shall have learned that any person shall have entered into a definitive agreement or an agreement in principle with the Company with respect to a tender offer or exchange offer for any shares of capital stock of the Company (including without limitation the Shares or a merger, consolidation or other business combination or any acquisition or disposition of a material amount of assets or any comparable event with or involving the Company (other than such of the foregoing as is permitted by Merger Agreement); or (e) any of the representations and warranties of the Company in the Merger Agreement shall not have been, or shall cease to be, true and correct in all material respects (whether because of circumstances or events occurring in whole or in part prior to, on or after the date of the Merger Agreement), or the Company shall have not performed in all material respects the covenants to be performed by it pursuant to the Merger Agreement; or (f) the Merger Agreement shall have been terminated by the Company, on the one hand, or YPF and the Purchaser, on the other hand, in accordance with its terms or the Purchaser or YPF, on the one hand, and the Company, on the other hand, shall have reached an agreement providing for the termination of the Offer; or (g) the Company's Board of Directors shall have failed to recommend and approve, or shall no longer recommend and approve, the Offer or the adoption of the Merger Agreement, or shall materially modify or amend its recommendation and approval with respect thereto, or shall have resolved to do any of the foregoing (except that the foregoing shall not apply to a modification or amendment solely in the reasons for such recommendation and approval so long as the Board of Directors of the Company continues to recommend and approve acceptance of the Offer and adoption of the Merger Agreement by holders of the Company's Voting Shares); or (h) without limiting the generality or effect of paragraph (e) above, except as disclosed to YPF pursuant to the Agreement, there shall have been any material adverse change in the business, financial condition or results of operations of the Company and its subsidiaries, taken as a whole; which, in the sole judgment of the Purchaser, in any such case regardless of the circumstances (including any action or inaction by the Purchaser or any of its affiliates other than a material breach by the Purchaser or YPF of the Agreement) giving rise to any such condition, makes it inadvisable to proceed with the Offer or with such acceptance for payment or purchase of or payment for any of the Shares. The foregoing conditions (i) may be asserted by the Purchaser regardless of the circumstances (including any action or inaction by the Purchaser or any of its affiliates other than a breach by the Purchaser or YPF of the Merger Agreement) giving rise to such condition and (ii) other than the Minimum Share Condition, are for the sole benefit of the Purchaser and its affiliates. The foregoing conditions, other than the Minimum Share Condition, may be waived by the Purchaser in whole or in part at any time and from time to time in its sole discretion. The failure by the Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any other rights and each such right will be deemed an ongoing right which may be asserted at any time and from time to time. 28 15. CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS. Except as set forth in this Offer to Purchase, based on a review of publicly available filings by the Company with the Commission and other publicly available information regarding the Company, neither YPF nor the Purchaser is aware of any licenses or regulatory permits that appear to be material to the business of the Company and its subsidiaries, taken as a whole, and that might be adversely affected by the Purchaser's acquisition of Shares (and the indirect acquisition of the stock of the Company's subsidiaries) as contemplated herein, or any approvals or other actions by or with any domestic, foreign or supranational governmental authority or administrative or regulatory agency that would be required for the acquisition or ownership of the Shares (or the indirect acquisition of the stock of the Company's subsidiaries) by the Purchaser pursuant to the Offer as contemplated herein. Should any such approval or other action be required, it is presently contemplated that such approval or action would be sought except as described below under "State Takeover Laws". Should any such approval or other action be required, there can be no assurance that any such approval or action, if needed, would be obtained without substantial conditions or that adverse consequences might not result to the Company's or its subsidiaries' businesses, or that certain parts of the Company's, YPF's, the Purchaser's or any of their respective subsidiaries' businesses might not have to be disposed of or held separate or other substantial conditions complied with in order to obtain such approval or action or in the event that such approvals were not obtained or such actions were not taken. The Purchaser's obligation to purchase and pay for Shares is subject to certain conditions, including conditions with respect to injunctions and governmental actions. See the Introduction and Section 14 for a description thereof. State Takeover Laws. A number of states (including Delaware, where the Company is incorporated) have adopted takeover laws and regulations which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, stockholders, principal executive offices or principal places of business therein. To the extent that certain provisions of certain of these state takeover statutes purport to apply to the Offer or the Merger, the Purchaser believes that such laws conflict with federal law and constitute an unconstitutional burden on interstate commerce. In 1982, the Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on constitutional grounds the Illinois Business Takeover Statute which, as a matter of state securities law, made takeovers of corporations meeting certain requirements more difficult, and the reasoning in such decision is likely to apply to certain other state takeover statutes. In 1987, however, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court of the United States held that the State of Indiana could, as a matter of corporate law and, in particular, those aspects of corporate law concerning corporate governance, constitutionally disqualify a potential acquiror from voting on the affairs of a target corporation without the prior approval of the remaining stockholders, provided that such laws were applicable only under certain conditions. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a federal district court in Oklahoma ruled that the Oklahoma statutes were unconstitutional insofar as they apply to corporations incorporated outside Oklahoma in that they would subject such corporations to inconsistent regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a federal district court in Tennessee ruled that four Tennessee takeover statutes were unconstitutional as applied to corporations incorporated outside Tennessee. This decision was affirmed by the United States Court of Appeals for the Sixth Circuit. In December 1988, a federal district court in Florida held in Grand Metropolitan PLC v. Butterworth that the provisions of the Florida Affiliated Transactions Act and Florida Control Share Acquisition Act were unconstitutional as applied to corporations incorporated outside of Florida. The Purchaser has not attempted to comply with any state takeover statutes in connection with the Offer or the Merger. The Purchaser reserves the right to challenge the validity or applicability of any state law allegedly applicable to the Offer or the Merger and nothing in this Offer to Purchase nor any action taken in connection herewith is intended as a waiver of that right. In the event that it is asserted that one or more takeover statutes apply to the Offer or the Merger, and it is not determined by an appropriate court that such statute or statutes do not apply or are invalid as applied to the Offer or the Merger, as applicable, the Purchaser may be required to file certain documents with, or receive 29 approvals from, the relevant state authorities, and the Purchaser might be unable to accept for payment or purchase Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In such case, the Purchaser may not be obligated to accept for purchase, or pay for, any Shares tendered. See Section 14. Antitrust. The Offer and the Merger are subject to the HSR Act, which provides that certain acquisition transactions may not be consummated unless certain information has been furnished to the Antitrust Division of the Department of Justice (the "Antitrust Division") and the Federal Trade Commission ("FTC") and certain waiting period requirements have been satisfied. On March 2, 1995, YPF filed a Notification and Report Form with respect to the Offer (the "HSR Filing"). Under the provisions of the HSR Act applicable to the Offer, the purchase of Shares under the Offer may not be consummated until the expiration of a 15-calendar day waiting period following the filing by YPF. Accordingly, as such filing was made on March 3, 1995, the waiting period with respect to the Offer will expire at 11:59 p.m., New York City time, on March 18, 1995, unless YPF receives a request for additional information or documentary material, or the Antitrust Division and the FTC terminate the waiting period prior thereto. If, within such 15-calendar day waiting period, either the Antitrust Division or the FTC requests additional information or material from YPF concerning the Offer, the waiting period will be extended and would expire at 11:59 p.m., New York City time, on the tenth calendar day after the date of substantial compliance by YPF with such request. Only one extension of the waiting period pursuant to a request for additional information is authorized by the HSR Act. Thereafter, such waiting period may be extended only by court order or with the consent of YPF. The Purchaser will not accept for payment Shares tendered pursuant to the Offer unless and until the waiting period requirements imposed by the HSR Act with respect to the Offer have been satisfied. See Section 14. If the transaction to which the HSR Filing relates is abandoned prior to the expiration of the 15-calendar day waiting period or any extension thereof, then the purchase of Shares may not be consummated until 30 calendar days after receipt by the Antitrust Division and the FTC of the Notification and Report Forms of both YPF and the Company unless the 30-day period is earlier terminated by the Antitrust Division and the FTC. Within such 30-day period, the Antitrust Division or the FTC may request additional information or documentary materials from YPF or the Company. The acquisition of Shares pursuant to the Offer to Purchase may not be consummated until 20 days after such requests are substantially complied with by both YPF and the Company. Thereafter, the waiting period may be extended only by court order or with the consent of YPF and the Company. The FTC and the Antitrust Division frequently scrutinize the legality under the antitrust laws of transactions such as the Purchaser's acquisition of Shares pursuant to the Offer and the Merger. At any time before or after the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take such action under the antitrust laws as it deems necessary or desirable in the public interest, including seeking to enjoin the acquisition of Shares pursuant to the Offer or otherwise or seeking divestiture of Shares acquired by the Purchaser or divestiture of substantial assets of YPF or its subsidiaries. Private parties and state attorneys general may also bring legal action under the antitrust laws under certain circumstances. Based upon an examination of publicly available information relating to the businesses in which YPF and the Company are engaged, YPF and the Purchaser believe that the acquisition of Shares by the Purchaser will not violate the antitrust laws. Nevertheless, there can be no assurance that a challenge to the Offer or other acquisition of Shares by the Purchaser on antitrust grounds will not be made or, if such a challenge is made, of the result. See Section 14 for certain conditions to the Offer, including conditions with respect to injunctions and certain governmental actions. Certain Litigation. YPF and the Company have obtained copies of nine complaints filed on March 1, 1995 in the Chancery Court of the State of Delaware by alleged holders of Shares. In the various complaints, the plaintiffs purport to sue individually and on behalf of classes comprised of the holders of Shares, stockholders of the Company or all holders of the Company's securities. The 30 complaints name as defendants the Company, directors of the Company and certain officers of the Company, a former director of the Company, and, with respect to certain of the complaints, YPF, and allege, among other things, that the defendant directors and officers of the Company breached their fiduciary duties in approving the Offer and the Merger and that YPF aided and abetted the alleged breach of duties. The plaintiffs purport to seek orders enjoining the consummation of the Offer and the Merger (or the recission of those transactions) or, in the alternative, accountings for any damages to the alleged classes, together with their attorneys' fees and other relief. YPF intends to vigorously defend these lawsuits. The absence of an injunction, among other things, is a condition to Purchaser's obligation to purchase Shares tendered pursuant to the Offer. See Section 11. 16. FEES AND EXPENSES. Salomon Brothers is acting as Dealer Manager in connection with the Offer. In addition, Salomon Brothers has provided certain financial advisory services to YPF in connection with the proposed acquisition of the Company. As compensation for such services, YPF has to date paid Salomon Brothers a fee of $250,000, which fee was payable upon execution of the engagement letter with Salomon Brothers, and $750,000 which fee was payable upon execution of the Merger Agreement. YPF has also agreed to pay Salomon Brothers a fee of 0.5% of the aggregate consideration involved in the acquisition of the Company (less the $1,000,000 previously paid) contingent upon the consummation of such acquisition. YPF has also agreed to retain Salomon Brothers as lead underwriter or placement agent in connection with the possible issuance of debt or equity securities to refinance such acquisition, for which it would receive customary underwriting or placements fees or discounts. In addition, YPF has agreed to reimburse Salomon Brothers for its reasonable out-of-pocket expenses, including reasonable fees and disbursements of its counsel, incurred in connection with the Offer and the Proposed Merger or otherwise arising out of Salomon Brothers' engagement and to indemnify Salomon Brothers (and certain affiliated persons) against certain liabilities and expenses, including certain liabilities under the federal securities laws. Salomon Brothers may from time to time in the future render various investment banking services to YPF and its affiliates, for which it is expected it would be paid customary fees. D.F. King & Co., Inc. has been retained by the Purchaser as Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interview and may request brokers, dealers and other nominee stockholders to forward material relating to the Offer to beneficial owners of Shares. The Purchaser will pay the Information Agent reasonable and customary compensation for all such services in addition to reimbursing the Information Agent for reasonable out-of-pocket expenses in connection therewith. The Purchaser has agreed to indemnify the Information Agent against certain liabilities and expenses in connection with the Offer, including certain liabilities under the federal securities laws. In addition, Chase has been retained as the Depositary. The Purchaser will pay the Depositary reasonable and customary compensation for its services in connection with the Offer, will reimburse the Depositary for its reasonable out-of-pocket expenses in connection therewith and will indemnify the Depositary against certain liabilities and expenses in connection therewith, including certain liabilities under the federal securities laws. Except as set forth above, neither YPF nor the Purchaser will pay any fees or commissions to any broker, dealer or other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies and other nominees will, upon request, be reimbursed by YPF or the Purchaser for customary clerical and mailing expenses incurred by them in forwarding offering materials to their customers. 17. MISCELLANEOUS. The Purchaser is not aware of any jurisdiction in which the making of the Offer is not in compliance with applicable law. If the Purchaser becomes aware of any jurisdiction in which the making of the Offer would not be in compliance with applicable law, the Purchaser will make a good faith effort to comply with any such law. If, after such good faith effort, the Purchaser cannot comply with any such law, the Offer will not be made to (nor will tenders be accepted from or on behalf 31 of) the holders of Shares residing in such jurisdiction. In those jurisdictions whose securities or blue sky laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by one or more registered brokers or dealers which are licensed under the laws of such jurisdiction. No person has been authorized to give any information or make any representation on behalf of the Purchaser or YPF not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, such information or representation must not be relied upon as having been authorized. The Purchaser has filed with the Commission the Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional information with respect to the Offer, and may file amendments thereto. The Schedule 14D-1 and any amendments thereto, including exhibits, may be inspected and copies may be obtained at the same places and in the same manner as set forth in Section 7 (except that they will not be available at the regional offices of the Commission). YPF ACQUISITION CORP. 32 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER AND YPF 1. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The following table sets forth the name, current business address and present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of YPF. Unless otherwise indicated, the current business address of each person is c/o YPF-Directorio, Avenida Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina and each occupation set forth opposite an individual's name refers to employment with the Purchaser. Each such person is a citizen of the Republic of Argentina, unless otherwise indicated. DIRECTORS AND EXECUTIVE OFFICERS
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND CURRENT BUSINESS ADDRESS; MATERIAL POSITIONS HELD DURING THE PAST FIVE NAME YEARS AND BUSINESS ADDRESSES THEREOF - ----------------------------- ------------------------------------------------------------ Jose A. Estenssoro Director, President (see Directors and Executive Officers of YPF below) Cedric Bridger Vice President (See Directors and Executive Officers of YPF below) Carlos Olivieri Vice President (See Directors and Executive Officers of YPF below) Darial R. Sneed Vice President and Secretary. Since 1993, Ms. Sneed has served as Vice President and Manager, Investor Relations for YPF-- U.S.A., Inc. From 1990 to 1993, she served as Associate Director, Investor Relations for BP America Inc. Her business address is YPF-U.S.A., Inc., 660 Madison Avenue, 20th floor, New York, New York 10021. Ms. Sneed is a citizen of the United States of America.
2. DIRECTORS AND EXECUTIVE OFFICERS OF YPF. The following table sets forth the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of YPF. Unless otherwise indicated, the current business address of each such person is c/o YPF--Directorio, Avenida Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina, and each occupation set forth opposite an individual's name refers to employment with YPF. Each such person is a citizen of the Republic of Argentina, unless otherwise indicated. I-1
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND CURRENT BUSINESS ADDRESS; MATERIAL POSITIONS HELD DURING THE PAST FIVE NAME 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. Mario L. Pineiro Director since 1992. He retired in 1992 as CEO of Alejandro Llauro e Hijos S.A., where he served for many years. Mr. Pineiro is also a director of Transportadora de Gas del Sur S.A. Miguel Madanes Director since 1993. Presently involved in the cable television industry in Argentina and Brazil. Previously a Director of YPF from 1991 to 1992. He served as the CEO of Fate S.A. from 1971 until 1991. Bayless A. Manning Director since 1993. Director of IBJ Schroder Bank & Trust Company. Currently serves as a consultant. Partner of Paul, Weiss, Rifkind, Wharton & Garrison from 1977 until 1990. Mr. Manning is a citizen of the United States of America. Carlos de la Vega Director since 1993. Presently Director of Institutional Relations and Human Resources of CIBA-Geigy Argentina. President of the Argentine Chamber of Commerce from 1988 to 1993. He was also President of the Ibero-American Association of Chambers of Commerce from 1990 to 1992. James R. Lesch Director since 1993. Currently retired. Chief Executive Officer (1979-1986) and Chairman of the Board (1981-1986) of the Hughes Tool Company. He also served as Commissioner, State of Texas Department Commerce (1988-1992) and previously as Director of the American Petroleum Institute. Mr. Lesch is a citizen of the United States of America. Ernst Schneider Director since 1993. Chairman of the Board of Leu Holding and Bank Leu Ltd. and a member of the Board of Directors of CS Holding Ltd. since 1993. Previously, he served as Vice Chairman and member of the Board of Credit Suisse. Mr. Schneider is a dual citizen of Switzerland and the United States of America. Hector A. Domeniconi Director since 1993. Presently, Managing Director of DEXCOR, a consulting firm in Argentina. Held several positions in the Ministry of Economy of Argentina from 1990 through 1992. Luis A. Prol Director since 1993. President of YPF Gas S.A. Held several positions in both Argentine Federal and Provincial governments, serving as Minister of the Treasury and Finance of the Province of Formosa from 1987 to 1989 and as Secretary of Hydrocarbons and Mining of the Ministry of Economy from 1991 to 1992.
I-2
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND CURRENT BUSINESS ADDRESS; MATERIAL POSITIONS HELD DURING THE PAST FIVE NAME YEARS AND BUSINESS ADDRESSES THEREOF - ----------------------------- ------------------------------------------------------------ Angel Cirasino Director since 1993. Assistant Secretary for Petrochemistry and Mining of the Ministry of Economy of the Province of Mendoza since 1991. He was Managing Partner of Motomar Cuyo Marketing S.R.L. from 1989 to 1991. Rodolfo Alejandro Diaz Director since 1994. Mr. Diaz is a lawyer and has private practices in Buenos Aires and Mendoza. He was Secretary of Labor from 1989 until 1991 and Labor Minister from 1991 until 1992. Eduardo Petazze Vice President, Refining and Marketing and Head of Restructuring Project since 1993. Previously, he served as Vice President of Exploration and Production from 1992 to 1993 and Head of the Restructuring Project since 1991. Joined YPF in 1983. Marcelo Guiscardo Vice President, Exploration and Production since 1993. Previously, he was associated with Exxon Corporation from 1979 to 1993. Cedric Bridger Vice President, Finance and Corporate Development since 1992. Before joining YPF, he was Marketing Manager for CVB Industrias Mecanicas in Brazil. Previously, he was associated with Hughes Tool Company from 1964 to 1989. Carlos A. Olivieri Vice President and General Controller since 1993. He was Controller and Director of Aerolineas Argentinas S.A. from 1991 to 1992, a Director of the Central Bank of Argentina in 1991 and an accountant with Arthur Andersen & Co. from 1974 to 1986. Raul H. Oreste Vice President, Human Resources since 1990. He was previously associated with YPF from 1943 to 1963 and from 1965 to 1977. From 1978 to 1990, Mr. Oreste was associated with Compania Naviera Perez Companc. Juan A. Rodriguez Vice President of Engineering and Technology since 1992. He joined YPF in 1990. From 1968 to 1990, he was associated with Hughes Tool Company of Argentina. Juan J. Garacija Vice President, Purchasing, Contracts and Environmental Protection since 1992. Consultant from 1989 to 1990, when he joined YPF. He has previously served YPF in various capacities from 1941 to 1976 and from 1982 to 1988. Norberto Noblia Vice President, Legal Affairs since 1989. Previously, he was associated with the Sindicatura General de Empresas Publicas from 1975 to 1986. Martin Paez-Allende Vice President for Institutional Affairs since September 1994. From 1991 to 1994, he practiced law. Until 1991 he served as Vice President and member of the Board of Shell C.A.P.S.A. (Argentina).
I-3 Facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of the company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth below: The Depositary for the Offer is: THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
By Mail: By Overnight Delivery: By Hand: Box 3032 c/o Chase Securities Processing Corp. (9:00a.m.-5:00p.m. 4 Chase MetroTech Center Ft. Lee Executive Park New York City Time) Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B Ft. Lee, NJ 07024 Nassau and Liberty Streets New York, NY 10081 By Facsimile Transmission: (201) 592-1674 Confirm by Telephone: (201) 592-4672
Any questions or requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers listed below. Additional copies of the Offer to Purchase, this Letter of Transmittal and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: D.F. KING & CO., INC. UNITED STATES EUROPE 77 Water Street Royex House, Aldermanbury Square New York, New York 10005 London, England EC2V 7HR (212) 269-5550 (Collect) (44) 71 600 5005 (Collect) (800) 488-8035 (Toll Free)
The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-6731 (call collect) EX-99.(A)(2) 3 Exhibit (a)(2) LETTER OF TRANSMITTAL TO TENDER SHARES OF COMMON STOCK OF MAXUS ENERGY CORPORATION PURSUANT TO THE OFFER TO PURCHASE DATED MARCH 3, 1995 BY YPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YPF SOCIEDAD ANONIMA THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED The Depositary for the Offer is: THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
By Mail: By Overnight Delivery: By Hand: Box 3032 c/o Chase Securities Processing Corp. (9:00a.m.-5:00p.m. 4 Chase MetroTech Center Ft. Lee Executive Park New York City Time) Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B Ft. Lee, NJ 07024 Nassau and Liberty Streets New York, NY 10081 By Facsimile Transmission: (201) 592-1674 Confirm by Telephone: (201) 592-4672
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSIONS OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. This Letter of Transmittal is to be completed by stockholders if certificates for Shares (as defined in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase")) are to be forwarded herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is utilized, if tenders of shares are made by book-entry transfer to an account maintained by The Chase Manhattan Bank (National Association) (the "Depositary") at The Depository Trust Company ("DTC"), Midwest Securities Trust Company ("MSTC") or Philadelphia Depository Trust Company ("PDTC") (each a "Book-Entry Transfer Facility" and collectively referred to as the "Book-Entry Transfer Facilities"), pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Stockholders who tender Shares by book-entry transfer are referred to herein as "Book-Entry Stockholders". Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available, or who cannot deliver their Share Certificates and all other required documents to the Depositary on or prior to the Expiration Date, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. See instruction 2. NOTE: SIGNATURES MUST BE PROVIDED ON THE INSIDE AND REVERSE BACK COVER. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY. / / CHECK HERE IF TENDERED COMMON SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING: Name of Tendering Institution:______________________________________________________________ Check Box of Book-Entry Transfer Facility: / / The Depository Trust Company / / Midwest Securities Trust Company / / Philadelphia Depository Trust Company Account No. _____________________ Transaction Code No. _________________ / / CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY. Name(s) of Registered Holder(s):___________________________________________________________ Window Ticket Number (if any):________________________________________________________________ Date of Execution of Notice of Guaranteed Delivery:____________________________________________________________ Name of Institution which Guaranteed Delivery:____________________________________________________________
DESCRIPTION OF SHARES TENDERED NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND (PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARE(S) TENDERED APPEAR(S) ON SHARE CERTIFICATES) (ATTACH ADDITIONAL LIST, IF NECESSARY) TOTAL NUMBER OF SHARES SHARE REPRESENTED NUMBER OF CERTIFICATE BY SHARE SHARES NUMBER(S) CERTIFICATE(S)* TENDERED** Total Shares
* Need not be completed by Book-Entry Stockholders. ** Unless otherwise indicated, it will be assumed that all Shares represented by certificates delivered to the Depositary are being tendered. See Instruction 4. Ladies and Gentlemen: The undersigned hereby tenders to YPF Acquisition Corp. (the "Purchaser"), a Delaware corporation and a wholly owned subsidiary of YPF Sociedad Anonima ("YPF"), an Argentine corporation, the described shares of Common Stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company"), at a price of $5.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together with the Offer to Purchase constitute the "Offer"). The undersigned understands that the Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to YPF or one or more of YPF's subsidiaries or affiliates, the right to purchase all or any portion of the Shares tendered pursuant to the Offer. Subject to, and effective upon, acceptance for payment of and payment for the Shares tendered herewith in accordance with the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the undersigned hereby sells, assigns, and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby and any and all dividends on the Shares or any distribution (including, without limitation, the issuance of additional Shares pursuant to a stock dividend or stock split, the issuance of other securities or the issuance of rights for the purchase of any securities) with respect to the Shares that is declared or paid by the Company on or after March 3, 1995 and is payable or distributable to stockholders of record on a date prior to the transfer into the name of the Purchaser or its nominees or transferees on the Company's stock transfer records of the Shares purchased pursuant to the Offer (a "Distribution"), and constitutes and irrevocably appoints the Depositary the true and lawful agent, attorney-in-fact and proxy of the undersigned to the full extent of the undersigned's rights with respect to such Shares (and any Distributions) with full power of substitution (such power of attorney and proxy being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates (and any Distributions) or transfer ownership of such Shares on the account books maintained by the Book-Entry Transfer Facilities, together in either such case with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser upon receipt by the Depositary, as the undersigned's agent, of the purchase price, (ii) present Shares (and any Distributions) for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of Shares (and any Distributions), all in accordance with the terms of the Offer. The undersigned hereby irrevocably appoints Jose A. Estenssoro, Cedric Bridger and Darial R. Sneed, and each of them individually, the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to vote in such manner as each such attorney and proxy or his substitute shall, in his sole discretion, deem proper, and otherwise act (including pursuant to written consent) with respect to all of the Shares tendered hereby which have been accepted for payment by the Purchaser prior to the time of such vote or action (and any Distributions) which the undersigned is entitled to vote at any meeting of stockholders (whether annual or special and whether or not an adjourned or postponed meeting) of the Company, or by consent in lieu of such meeting, or otherwise. This power of attorney and proxy is coupled with an interest in the tendered Shares and is irrevocable and is granted in consideration of, and is effective upon, the acceptance for payment of such Shares by the Purchaser in accordance with the terms of the Offer. Such acceptance for payment shall revoke, without further action, any other power of attorney or proxy granted by the undersigned at any time with respect to the Shares (and any Distributions) and no subsequent powers of attorney or proxies will be given (and if given will be deemed not to be effective) with respect thereto by the undersigned. The undersigned understands that the Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon the Purchaser's acceptance for payment of such Shares, the Purchaser or its designees is able to exercise full voting rights with respect to such Shares and other securities, including voting at any meeting of stockholders. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Shares tendered hereby (and any Distributions) and that, when the same are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and the same will not be subject to any adverse claim. The undersigned, upon request, will execute and deliver all additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of the Shares tendered hereby (and any Distributions). In addition, the undersigned shall promptly remit and transfer to the Depositary for the account of the Purchaser any and all other Distributions in respect of the Shares tendered hereby, accompanied by appropriate documentation of transfer and, pending such remittance or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of any such Distributions, and may withhold the entire purchase price or deduct from the purchase price of Shares tendered hereby the amount or value thereof, as determined by the Purchaser in its sole discretion. All authority herein conferred or herein agreed to be conferred shall not be affected by, and shall survive, the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, legal representatives, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable. The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer. Unless otherwise indicated herein under "Special Payment Instructions," please issue the check for the purchase price and/or return any Share Certificates not tendered or accepted for payment in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please mail the check for the purchase price and/or return any Share Certificates not tendered or accepted for payment (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature. In the event that either or both the "Special Delivery Instructions" and the "Special Payment Instructions" are completed, please issue the check for the purchase price and/or return any Share Certificates not tendered or accepted for payment in the name(s) of, and deliver said check and/or return Share Certificates to, the person or persons so indicated. The undersigned recognizes that the Purchaser has no obligation pursuant to the "Special Payment Instructions" to transfer any Shares from the name of the registered holder thereof if the Purchaser does not accept for payment any of such Shares. SPECIAL PAYMENT INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificates not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be issued in the name of someone other than the undersigned, or if Shares tendered by book-entry transfer which are not purchased are returned by credit to an account maintained at a Book-Entry Transfer Facility other than that designated on the front cover. Issue check and/or certificates to: Name:____________________________________________ (PLEASE PRINT) Address:_________________________________________ _________________________________________________ _________________________________________________ (INCLUDE ZIP CODE) _________________________________________________ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.) (SEE SUBSTITUTE FORM W-9 BELOW) / / Credit unpurchased Shares tendered by book-entry transfer to the Book-Entry Transfer Account set forth below: / / DTC / / MSTC / / PDTC ___________________________________________ (ACCOUNT NUMBER) SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5, 6 AND 7) To be completed ONLY if Share Certificates not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be sent to someone other than the undersigned, or to the undersigned at an address other than that shown on the front cover. Mail check and/or certificates to: Name:___________________________________________ (PLEASE PRINT) Address:________________________________________ ________________________________________________ ________________________________________________ (INCLUDE ZIP CODE) ________________________________________________ (TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.) SIGN HERE (PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW) SIGN HERE X____________________________________________________________________ <-- X____________________________________________________________________ SIGNATURE(S) OF OWNER(S) Dated: ______________________________________________________________ (Must be signed by the registered holder(s) exactly as name(s) appear(s) on the Share Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please provide the necessary information. See Instruction 5.) Name(s): ____________________________________________________________ _____________________________________________________________________ (PLEASE PRINT) Capacity (Full Title): ______________________________________________ Address: ____________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Number: _____________________________________ Tax Identification or Social Security No.: __________________________ (SEE SUBSTITUTE FORM W-9 BELOW) GUARANTEE OF SIGNATURE(S) (IF REQUIRED--SEE INSTRUCTIONS 1 AND 5) Authorized Signature: _______________________________________________ Name: _______________________________________________________________ Name of Firm: _______________________________________________________ Address: ____________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ (INCLUDE ZIP CODE) Area Code and Telephone Number: ___________________________________ Dated: ______________________________________________________________ INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER 1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required (a) if this Letter of Transmittal is signed by the registered holder of the Shares tendered herewith, unless such holder has completed either the box entitled "Special Delivery Instructions" or the box entitled "Special Payment Instructions" or (b) if such Shares are tendered for the account of a bank or trust company in the United States or by a firm that is a member of the National Association of Securities Dealers, Inc. or of a registered national securities exchange (an "Eligible Institution"). In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 5. 2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of Transmittal is to be used if Share Certificates are to be forwarded herewith or, unless an Agent's Message is utilized, if tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in Section 3 of the Offer to Purchase. Share Certificates, or timely confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such Shares into the Depositary's account at a Book-Entry Transfer Facility, as well as this Letter of Transmittal (or a facsimile hereof), properly completed and duly executed, with any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and any other documents required by this Letter of Transmittal, must be received by the Depositary at one of its addresses set forth herein prior to the Expiration Date and, if later, stockholders who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedures for delivery by book-entry transfer on a timely basis must tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Purchaser, must be received by the Depositary on or prior to the Expiration Date; and (c) the Share Certificates (or a Book-Entry Confirmation) representing all tendered Shares, in proper form for transfer together with a properly completed and duly executed Letter of Transmittal (or a facsimile hereof), with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and any other documents required by this Letter of Transmittal, must be received by the Depositary within five New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of such Notice of Guaranteed Delivery as provided in Section 3 of the Offer to Purchase. If Share Certificates are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal (or facsimile hereof) must accompany each such delivery. THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. No alternative, conditional or contingent tenders will be accepted. All tendering stockholders, by execution of this Letter of Transmittal or facsimile hereof, waive any right to receive any notice of the acceptance of their Shares for payment. 3. INADEQUATE SPACE. If the space provided herein under "Description of Shares Tendered" is inadequate, the certificate numbers and/or the number of Shares and any other required information should be listed on a separate schedule attached hereto and separately signed on each page thereof in the same manner as this Letter of Transmittal is signed. 4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If fewer than all the Shares evidenced by any certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the box entitled "Number of Shares Tendered." In such case, new certificate(s) for the remainder of the Shares that were evidenced by your old certificate(s) will be sent to you, unless otherwise provided in the appropriate box marked "Special Payment Instructions" and/or "Special Delivery Instructions" on this Letter of Transmittal, as soon as practicable after the Expiration Date. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated. 5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the certificate(s) without alteration, enlargement or any change whatsoever. If any of the Shares tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Shares are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates. If this Letter of Transmittal or any certificates or stock powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and proper evidence satisfactory to the Purchaser of their authority so to act must be submitted. If this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and transmitted hereby, no endorsements of Share Certificates or separate stock powers are required unless payment is to be made to, or certificates for Shares not tendered or purchased are to be issued in the name of, a person other than the registered holder(s). Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution. If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares listed, the Share Certificates must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holder(s) appear(s) on the certificates. Signatures on such Share Certificates or stock powers must be guaranteed by an Eligible Institution. 6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the Purchaser will pay or cause to be paid any stock transfer taxes with respect to the transfer and sale of purchased Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if certificates for Shares not tendered or purchased are to be registered in the name of, any person other than the registered holder, or if tendered Share Certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder or such person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES LISTED IN THIS LETTER OF TRANSMITTAL. 7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in the name of and/or certificates for unpurchased Shares are to be returned to a person other than the signer of this Letter of Transmittal or if a check is to be sent and/or such Share Certificates are to be returned to someone other than the signer of this Letter of Transmittal or to an address other than that shown on the front cover hereof, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer may request that Shares not purchased be credited to such account maintained at such Book-Entry Transfer Facility as such stockholder may designate hereon. If no such instructions are given, such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated above. See Instruction 1. 8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Information Agent at its address or telephone number set forth below. Requests for additional copies of the Offer to Purchase and this Letter of Transmittal may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. 9. 31% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S. Federal income tax law, a stockholder whose tendered Shares are accepted for payment is required to provide the Depositary with such stockholder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the Depositary is not provided with the correct TIN, the Internal Revenue Service may subject the stockholder or other payee to a $50 penalty. In addition, payments that are made to such stockholder or other payee with respect to Shares purchased pursuant to the Offer may be subject to 31% backup withholding. Certain stockholders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, the stockholder must submit a Form W-8, signed under penalties of perjury, attesting to that individual's exempt status. A Form W-8 can be obtained from the Depositary. See the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for more instructions. If backup withholding applies, the Depositary is required to withhold 31% of any such payments made to the stockholder or other payee. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the Internal Revenue Service. The stockholder is required to give the Depositary the TIN (e.g. social security number or employer identification number) of the record owner of the Shares or of the last transferee appearing on the transfers attached to, or endorsed on, the Shares. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report. 10. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s) representing Shares has (have) been lost, destroyed or stolen, the stockholder should promptly notify the Transfer Agent for the Company, Society National Bank. The stockholder will then be instructed as to the steps that must be taken in order to replace the certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN AGENT'S MESSAGE TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE EXPIRATION DATE. TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS (SEE INSTRUCTION 9)
PAYER'S NAME: CHASE MANHATTAN BANK, N.A. PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND ------------------------- SUBSTITUTE CERTIFY BY SIGNING AND DATING BELOW. Social Security Number or FORM W-9 ------------------------- Department of the Treasury Employer Identification Number Internal Revenue Service PART 2--Certification--Under penalties of perjury, I certify that: (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue PAYER'S REQUEST FOR Service (the "IRS") that I am subject TAXPAYER IDENTIFICATION to backup withholding as a result of a failure to NUMBER ("TIN") report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding. Certification Instructions--You must cross out item (2) above if you have been notified by the IRS that you are currently subject to backup withholding because of under-reporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you are no longer subject to backup withholding, do not cross out such Item (2). PART 3-- Signature________________________________________ Awaiting TIN / / Date ___________________________________________, 1995
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9. CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administration Office, or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of payment, 31% of all reportable payments made to me will be withheld, but that such amounts will be refunded to me if I then provide a Taxpayer Identification Number within sixty (60) days. Signature Date , 1995 ----------------------- ________________ Facsimile copies of the Letter of Transmittal, properly completed and duly executed, will be accepted. The Letter of Transmittal, certificates for Shares and any other required documents should be sent or delivered by each stockholder of the company or his broker, dealer, commercial bank, trust company or other nominee to the Depositary at its address set forth below: The Depositary for the Offer is: THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
By Mail: By Overnight Delivery: By Hand: Box 3032 c/o Chase Securities Processing Corp. (9:00a.m.-5:00p.m. 4 Chase MetroTech Center Ft. Lee Executive Park New York City Time) Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B Ft. Lee, NJ 07024 Nassau and Liberty Streets New York, NY 10081 By Facsimile Transmission: (201) 592-1674 Confirm by Telephone: (201) 592-4672
Any questions or requests for assistance may be directed to the Information Agent or the Dealer Manager at their respective addresses and telephone numbers listed below. Additional copies of the Offer to Purchase, this Letter of Transmittal and other tender offer materials may be obtained from the Information Agent as set forth below, and will be furnished promptly at the Purchaser's expense. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Offer. The Information Agent for the Offer is: D.F. KING & CO., INC. UNITED STATES EUROPE 77 Water Street Royex House, Aldermanbury Square New York, New York 10005 London, England EC2V 7HR (212) 269-5550 (Collect) (44) 71 600 5005 (Collect) (800) 488-8035 (Toll Free)
The Dealer Manager for the Offer is: SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 (212) 783-6731 (call collect) EX-99.(A)(3) 4 Exhibit (a)(3) NOTICE OF GUARANTEED DELIVERY FOR TENDER OF SHARES OF COMMON STOCK OF MAXUS ENERGY CORPORATION This Notice of Guaranteed Delivery or one substantially equivalent hereto must be used to accept the Offer (as defined below) if certificates representing shares of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company") are not immediately available or time will not permit all required documents to reach The Chase Manhattan Bank (National Association) (the "Depositary") on or prior to the Expiration Date (as defined in the Offer to Purchase), or the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand or sent by facsimile transmission or mail to the Depositary. See Section 3 of the Offer to Purchase. THE DEPOSITARY FOR THE OFFER IS: The Chase Manhattan Bank (National Association) (201) 592-4672
By Mail: By Overnight Delivery: By Hand: Box 3032 c/o Chase Securities Processing Corp. (9:00 a.m.-5:00 p.m. 4 Chase MetroTech Center Ft. Lee Executive Park New York City Time) Brooklyn, NY 11245 1 Executive Drive (6th Floor) 1 Chase Manhattan Plaza, Floor 1-B Ft. Lee, NJ 07024 Nassau and Liberty Streets New York, NY 10081 By Facsimile Transmission: (201) 592-1674 Confirm by Telephone: (201) 592-4672
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL. Ladies and Gentlemen: The undersigned hereby tenders to YPF Acquisition Corp., a Delaware corporation (the "Purchaser"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"), receipt of each of which is hereby acknowledged, the number of Shares indicated below pursuant to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Number of Shares: ________________ Shares Name(s) of Record Holder(s): _____________ Certificate No(s). (if available): ________________________________ ________________________________ Address(es):____________________ ________________________________ ________________________________ If Share(s) will be tendered by book-entry transfer, check one box. ________________________________ Area Code and Telephone Number(s): ______ / / The Depository Trust Company ________________________________ / / Midwest Securities Trust Company / / Philadelphia Depository Trust Company Signature(s): __________________ ________________________________ ________________________________ THE GUARANTEE BELOW MUST BE COMPLETED GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE) The undersigned, a firm that is a bank, broker, dealer, credit union, savings association or other entity which is a member in good standing of the Securities Transfer Agents Medallion Program, hereby (1) represents that the tender of Shares effected hereby complies with Rule 14e-4 under the Securities Exchange Act of 1934, as amended, and (2) guarantees to deliver to the Depositary, at one of its addresses set forth above, the certificates representing all tendered Shares, in proper form for transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal (or facsimile thereof), with any required signature guarantees, or, in the case of book-entry transfer of Shares, an Agent's Message (as defined in the Offer to Purchase), and any other documents required by the Letter of Transmittal within five New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of this Notice of Guaranteed Delivery. Name of Firm (Authorized Signature) Address Title Name: (Please type or print) Area Code and Telephone Number Date:
NOTE: DO NOT SEND SHARE CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED DELIVERY. SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL. EX-99.(A)(4) 5 Exhibit (a)(4) SALOMON BROTHERS INC ------------------------ Seven World Trade Center SALOMON BROTHERS INC ------------------------ New York, New York 10048 (212) 783-6731 OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF MAXUS ENERGY CORPORATION AT $5.50 NET PER SHARE BY YPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YPF SOCIEDAD ANONIMA THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED March 3, 1995 To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees: We have been appointed by YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of Argentina ("YPF"), to act as financial advisor and Dealer Manager in connection with the Purchaser's offer to purchase all outstanding shares of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company"), at a purchase price of $5.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute "Offer") enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. Please furnish copies of the enclosed materials to those of your clients for whose accounts you hold Shares registered in your name or in the name of your nominee. The Offer is conditioned upon, among other things, (a) Shares representing not less than a majority of the Company's Voting Shares (as defined in the Offer to Purchase) on a Fully Diluted Basis (as defined in the Offer to Purchase) being validly tendered and not withdrawn prior to the expiration of the Offer (the "Minimum Share Condition"), (b) the Company redeeming the Rights (as defined in the Offer to Purchase) so that the Rights issued pursuant to the Rights Agreement (as defined in the Offer to Purchase) will not become exercisable, (c) the expiration or termination of the applicable waiting period under the HSR Act (as defined in the Offer to Purchase), and (d) financing occurring under the Loan Agreement contemplated by the commitment letter, dated February 24, 1995, addressed to YPF and the Purchaser from The Chase Manhattan Bank (National Association). The Offer is also subject to other terms and conditions contained in the Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to Purchase. Enclosed herewith for your information and forwarding to your clients are copies of the following documents: 1. The Offer to Purchase, dated March 3, 1995. 2. The Letter of Transmittal to tender Shares for your use and for the information of your clients. Facsimile copies of the Letter of Transmittal may be used to tender Shares. 3. The Notice of Guaranteed Delivery for Shares to be used to accept the Offer if certificates for Shares are not immediately available or if such certificates and all other required documents cannot be delivered to The Chase Manhattan Bank (National Association) (the "Depositary") by the Expiration Date or if the procedure for book-entry transfer cannot be completed by the Expiration Date. 4. A letter to stockholders of the Company from Charles L. Blackburn, Chairman, President and Chief Executive Officer of the Company, together with the Solicitation/Recommendation Statement on Schedule 14D-9 filed with the Securities and Exchange Commission by the Company. 5. A printed form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients' instructions with regard to the Offer. 6. Guidelines of the Internal Revenue Service for Certification of Taxpayer Identification Number on Substitute Form W-9. 7. A return envelope addressed to the Depositary. YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED. In order to accept the Offer, a duly executed and properly completed Letter of Transmittal and any required signature guarantees, or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry delivery of Shares, and any other required documents should be sent to the Depositary and Share Certificates representing the tendered Shares should be delivered to the Depositary or such Shares should be tendered by book-entry transfer into the Depositary's account maintained at one of the Book Entry Transfer Facilities (as described in the Offer to Purchase), all in accordance with the instructions set forth in the Letter of Transmittal and the Offer to Purchase. If holders of Shares wish to tender, but it is impracticable for them to forward their Share Certificates or other required documents on or prior to the Expiration Date or to comply with the book-entry transfer procedures on a timely basis, a tender of Shares may be effected by following the guaranteed delivery procedures specified in Section 3 of the Offer to Purchase. The Purchaser will not pay any commission or fees to any broker, dealer or other person (other than the Dealer Manager and the Information Agent, as described in the Offer to Purchase) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse you for customary clerical and mailing expenses incurred by you in forwarding any of the enclosed 2 materials to your clients. The Purchaser will pay or cause to be paid any stock transfer taxes payable on the transfers of Shares to it, except as otherwise provided in Instruction 6 of the Letter of Transmittal. Any inquiries you may have with respect to the Offer should be addressed to the Dealer Manager or the Information Agent, at their respective addresses and telephone numbers set forth on the back cover of the Offer to Purchase. Requests for additional copies of the enclosed materials may be directed to the Information Agent. Very truly yours, SALOMON BROTHERS INC Dealer Manager NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, THE DEALER MANAGER, THE COMPANY, THE DEPOSITARY OR THE INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN. 3 EX-99.(A)(5) 6 Exhibit (a)(5) OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK OF MAXUS ENERGY CORPORATION AT $5.50 NET PER SHARE BY YPF ACQUISITION CORP. A WHOLLY OWNED SUBSIDIARY OF YPF SOCIEDAD ANONIMA THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995, UNLESS THE OFFER IS EXTENDED To our Clients: Enclosed for your consideration are the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer") relating to the offer by YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of Argentina ("YPF"), to purchase all outstanding shares of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company") at a purchase price of $5.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase and in the related Letter of Transmittal enclosed herewith. Holders of Shares whose certificates for such Shares (the "Share Certificates") are not immediately available or who cannot deliver all required documents to the Depositary on or prior to the Expiration Date, or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Shares according to the guaranteed delivery procedures set forth in Section 3 of the Offer to Purchase. WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT. Accordingly, we request instructions as to whether you wish to have us tender on your behalf any or all Shares held by us for your account pursuant to the terms and conditions set forth in the Offer. Please note the following: 1. The tender price is $5.50 per Share, net to you in cash without interest thereon, upon the terms and subject to the conditions set forth in the Offer. 2. The Offer is being made for all Shares. 3. The Offer is conditioned upon, among other things, (a) Shares representing not less than a majority of the Company's Voting Shares (as defined in the Offer to Purchase) on a Fully Diluted Basis (as defined in the Offer to Purchase) being validly tendered and not withdrawn prior to the expiration of the Offer (the "Minimum Share Condition"), (b) the Company redeeming the Rights (as defined in the Offer to Purchase) so that the Rights issued pursuant to the Rights Agreement (as defined in the Offer to Purchase) will not become exercisable, (c) the expiration or termination of the applicable waiting period under the HSR Act (as defined in the Offer to Purchase), and (d) financing occurring under the Loan Agreement contemplated by the commitment letter, dated February 24, 1995, addressed to YPF and the Purchaser from The Chase Manhattan Bank (National Association). The Offer is also subject to other terms and conditions contained in the Offer to Purchase. See the Introduction and Sections 1, 14 and 15 of the Offer to Purchase. 4. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 6 of the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer. 5. The Offer and withdrawal rights will expire at 12:00 midnight, New York City time, on Thursday, March 30, 1995, unless the Offer is extended. 6. Payment for Shares purchased pursuant to the Offer will in all cases be made only after timely receipt by The Chase Manhattan Bank (National Association) (the "Depositary") of (a) Share Certificates for such Shares or timely confirmation of the book-entry transfer of such Shares into the account maintained by the Depositary at The Depository Trust Company, Midwest Securities Trust Company or Philadelphia Depository Trust Company (collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (b) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase), in connection with a book-entry transfer, and (c) any other documents required by the Letter of Transmittal. Accordingly, payment may not be made to all tendering stockholders at the same time depending upon when Share Certificates or confirmations of book-entry transfer of such Shares into the Depositary's account at a Book-Entry Transfer Facility are actually received by the Depositary. If you wish to have us tender any or all of the Shares held by us for your account, please so instruct us by completing, executing, detaching and returning to us the instruction form set forth below. If you authorize the tender of your Shares, all such Shares will be tendered unless otherwise specified below. An envelope to return your instructions to us is enclosed. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf prior to the expiration of the Offer. The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares residing in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. However, the Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer in any jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer is being made on behalf of the Purchaser by Salomon Brothers Inc, the Dealer Manager for the Offer, or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction. INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL SHARES OF COMMON STOCK OF MAXUS ENERGY CORPORATION The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and the related Letter of Transmittal (which together constitute the "Offer") in connection with the offer by YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of Argentina, to purchase all outstanding shares of common stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company") at a purchase price of $5.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase. This will instruct you to tender to the Purchaser the number of Shares indicated below (or if no number is indicated below, all Shares), which are held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. Number of Shares to Be Tendered: _________________________ Shares SIGN HERE Signature(s): __________________________________________________________________ Print Name(s): _______________________________________________________________________ Print Address(es): ___________________________________________________________________ Area Code and Telephone Number(s): ____________________________________________________ Taxpayer Identification or Social Security Number(s): ______________________________________ EX-99.(A)(6) 7 Exhibit (a)(6) GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINATION THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.--Social Security numbers have nine digits separate by two hyphens: i.e. 000-00-0000. Employer identification numbers have digits separated by only one hyphen: i.e. 00-0000000. The table below will help determine the number to give the payer. - ----------------------------------------------------- GIVE THE SOCIAL SECURITY NUMBER OF-- FOR THIS TYPE OF ACCOUNT: - ----------------------------------------------------- 1. An individual's The individual account 2. Two or more The actual owner of individuals (joint the account or, if account) combined funds, any one of the individuals(1) 3. Husband and wife The actual owner of (joint account) the account or, if joint funds, either person(1) 4. Custodian account of The minor(2) a minor (Uniform Gift to Minors Act) 5. Adult and minor The adult or, if the (joint account) minor is the only contributor, the minor(1) 6. Account in the name The ward, minor, or of guardian or incompetent person(3) committee for a designated ward, minor, or incompetent person 7. A. The usual The grantor-trustee(1) revocable savings trust account (grantor is also trustee) B. So-called trust The actual owner(1) account that is not a legal or valid trust under State law - ----------------------------------------------------- GIVE THE EMPLOYER IDENTIFICATION NUMBER OF-- FOR THIS TYPE OF ACCOUNT: - ----------------------------------------------------- 8. Sole proprietorship The owner(4) account 9. A valid trust, Legal entity (Do not estate, or pension furnish the trust identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, The organization charitable, or educational organization account 12. Partnership account The partnership held in the name of the business 13. Association, club, or The organization other tax exempt organization 14. A broker or The broker or registered nominee nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments - ----------------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) Show the name of the owner. (5) List first and circle the name of the legal trust, estate or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you don't have a taxpayer identification number or you don't know your number, obtain Form SS-5, Application for a Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the "IRS") and apply for a number. PAYEES EXEMPT FROM BACKUP WITHHOLDING Payees specifically exempted from backup withholding on ALL payments include the following: . A corporation. . A financial institution. . An organization exempt from tax under section 501(a), or an individual retirement plan. . The United States or any agency or instrumentality thereof. . A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. . A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. . An international organization or any agency or instru mentality thereof. . A registered dealer in securities or commodities reg istered in the U.S. or a possession of the U.S. . A real estate investment trust. . A common trust fund operated by a bank under sec tion 584(a). . An exempt charitable remainder trust, or a non- exempt trust described in section 4947(a)(1). . An entity registered at all times under the Investment Company Act of 1940. . A foreign central bank of issue. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: . Payments to nonresident aliens subject to withholding under section 1441. . Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. . Payments of patronage dividends where the amount received is not paid in money. . Payments made by certain foreign organizations. . Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: . Payments of interest on obligations issued by individuals. NOTE: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification num ber to the payer. . Payments of tax-exempt interest (including exempt- interest dividends under section 852). . Payments described in section 6049(b)(5) to nonresi dent aliens. . Payments on tax-free covenant bonds under section 1451. . Payments made by certain foreign organizations. . Payments made to a nominee. Exempt payees described above should file Form W-9 to avoid possible erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM. Certain payments other than interest, dividends, and patronage dividends that are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under sections 6041, 6041A(a), 6045, and 6050A. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to the IRS. The IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1984, payers must generally withhold 20% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 5% on any portion of any under-payment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE EX-99.(A)(7) 8 Exhibit (a)(7) This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated March 3, 1995, and the related Letter of Transmittal, and is being made to all holders of Shares. The Purchaser is not aware of any state where the making of the Offer is prohibited by administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a good faith effort to comply with any such state statute or seek to have such statute declared inapplicable to the Offer. If, after such good faith effort, the Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) holders of Shares in such state. In any jurisdiction where the securities, blue sky or other laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the law of such jurisdiction. Notice of Offer to Purchase for Cash All Outstanding Shares of Common Stock of Maxus Energy Corporation at $5.50 Net Per Share by YPF Acquisition Corp. a wholly owned subsidiary of YPF Sociedad Anonima YPF Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly owned subsidiary of YPF Sociedad Anonima, a sociedad anonima organized under the laws of the Republic of Argentina ("YPF"), is offering to purchase all outstanding shares of Common Stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company"), at $5.50 per Share, net to the seller in cash, without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated March 3, 1995 (the "Offer to Purchase"), and in the related Letter of Transmittal (which together constitute the "Offer"). Following the Offer, the Purchaser intends to effect the Merger described below. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, MARCH 30, 1995 UNLESS EXTENDED. The Offer is conditioned upon, among other things, there being validly tendered and not withdrawn by the Expiration Date (as defined below) a number of Shares which represents not less than a majority of the Company's Voting Shares outstanding on a fully diluted basis. "Voting Shares" is defined to mean the Shares and the Company's $4.00 Cumulative Convertible Preferred Stock, par value $1.00 per Share (the "$4.00 Preferred Stock"). The Offer is also subject to certain other conditions contained in the Offer to Purchase, including that funding shall have occurred under a Loan Agreement contemplated by the bank commitment letter received by YPF and the Purchaser. The purpose of the Offer and the Merger is to enable YPF to acquire control of, and the entire common equity interest in, the Company. The Offer is being made pursuant to an Agreement of Merger, dated as of February 28, 1995 (the "Merger Agreement"), among YPF, the Purchaser and the Company. The Merger Agreement provides, among other things, for the commencement of the Offer by the Purchaser and further provides that, subject to the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company (the "Merger"), with the Company surviving the Merger. Pursuant to the Merger, each then-outstanding Share not owned by YPF, the Purchaser or any other direct or indirect subsidiary of YPF (other than Shares held in the treasury of the Company and Shares held by holders who perfect their appraisal rights as described in the Offer to Purchase) will be converted into a right to receive in cash an amount per Share equal to the highest price per Share paid pursuant to the Offer, without interest thereon, upon surrender of the certificate formerly representing such Share. Pursuant to the Merger, each share of $4.00 Preferred Stock, $9.75 Cumulative Convertible Preferred Stock, and $2.50 Cumulative Preferred Stock will remain outstanding, and have the identical powers, preferences, rights, qualifications, limitations and restrictions as such shares of Preferred Stock presently have, except, in the case of the $9.75 Preferred Stock, as described in the Offer to Purchase. The Board of Directors of the Company has determined that the Offer and the Merger are in the best interests of the Company and its stockholders and recommends that holders of shares accept the Offer and tender their Shares pursuant to the Offer. For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered, if and when the Purchaser gives oral or written notice to The Chase Manhattan Bank (National Association), as the Depositary, of the Purchaser's acceptance of such Shares for payment pursuant to the Offer. In all cases, upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to validly tendering stockholders. Under no circumstances will interest on the purchase price for Shares be paid by the Purchaser. In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing Shares (the "Share Certificates") (or a timely Book-Entry confirmation), pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees or an Agent's Message (as defined in the Offer to Purchase) in connection with a book-entry transfer, and (iii) any other documents required by the Letter of Transmittal. Upon the terms and subject to the conditions of the Offer, all Shares validly tendered will be accepted for purchase on the Expiration Date. The term "Expiration Date" means 12:00 midnight, New York City time, on Thursday, March 30, 1995, unless and until the Purchaser (subject to the terms of the Merger Agreement) shall have extended the period of time during which the Offer is open, in which event the term "Expiration Date" shall refer to the latest time and date at which the Offer, as so extended by the Purchaser, will expire. The Purchaser expressly reserves the right, at any time or from time to time, subject to the terms of the Merger Agreement, to extend the period of time during which the Offer is open and thereby delay acceptance for payment of, and the payment for, any Shares, by giving oral or written notice of such extension to the Depositary and by making a public announcement thereof by no later than 9:00 a.m. New York City time, on the next business day after the previously scheduled Expiration Date in accordance with the announcement requirements of Rule 14d-4(c) under the Securities Exchange Act of 1934, as amended. During any such extension, all Shares previously tendered and not withdrawn will remain subject to the Offer, subject to the right of a tendering stockholder to withdraw such stockholder's Shares. Without limiting the manner in which the Purchaser may choose to make any public announcement, the Purchaser currently intends to make such announcement by issuing a press release to the Dow Jones News Service. Except as otherwise provided below, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date and, unless theretofore accepted for payment by the Purchaser, may also be withdrawn at any time after May 1, 1995. For a withdrawal to be effective, a written, telegraphic or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of shares to be withdrawn, and the name of the registered holder, if different from that of the person who tendered such Shares. If certificates for the Shares have been delivered or otherwise identified to the Depositary, then (except in the case of Shares tendered for the account of an Eligible Institution, as defined under "Procedures for Tendering Shares" in the Offer to Purchase) prior to the release of such certificates, the tendering stockholder must also submit the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn, and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer set forth under "Procedures for Tendering Shares" in the Offer to Purchase, the notice of withdrawal must also specify the name and number of the account at the appropriate Book-Entry Transfer Facility to be credited with the withdrawn Shares. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination shall be final and binding. None of the Purchaser, YPF, the Company, the Dealer Manager (as set forth below), the Depositary, the Information Agent (as set forth below) or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failing to give such notification. Any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer. However, withdrawn Shares may be tendered again by following any of the procedures described under "Procedures for Tendering Shares" in the Offer to Purchase. The Company has provided the Purchaser with the Company's stockholder list and security position listings for the purpose of disseminating the Offer to holders of Shares. The Offer to Purchase, the related Letter of Transmittal and other relevant materials will be mailed to record holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the Company's stockholder list or, if applicable, who are listed as participants in a clearing agency's security position listing, for subsequent transmittal to beneficial owners of Shares by the Purchaser. The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Offer to Purchase and the related Letter of Transmittal contain important information which should be read carefully before any decision is made with respect to the Offer. Requests for copies of the Offer to Purchase, the Letter of Transmittal and other tender offer documents may be directed to the Information Agent, and copies will be furnished promptly at the Purchaser's expense. Questions or requests for assistance may be directed to the Information Agent or the Dealer Manager. Except as set forth under "Fees and Expenses" in the Offer to Purchase, the Purchaser will not pay any fees or commissions to any broker or dealer or other person (other than the Dealer Manger, the Depositary and the Information Agent) in connection with the solicitation of tenders of Shares pursuant to the Offer. The Information Agent for the Offer is: D. F. King & Co., Inc. United States 77 Water Street New York, New York 10005 (212) 269-5550 (Collect) (800) 488-8035 (Toll Free) Europe Royex House, Aldermanbury Square London, England EC2V 7HR (44) 71 600 5005 (Collect) The Dealer Manager for the Offer is: Salomon Brothers Inc Seven World Trade Center New York, NY 10048 Call (212) 783-6731 (collect) March 3, 1995 EX-99.(B)(1) 9 Exhibit (b)(1) February 24, 1995 YPF Sociedad Anonima Avenida Pte R. Saenz Pena 777 1364 Buenos Aires, Argentina Ladies and Gentlemen: You ("Sponsor") have advised The Chase Manhattan Bank ------- (National Association) ("Chase" and, together with its ----- affiliates, the "Chase Entities") that you propose to acquire the -------------- company which we have code-named Cowboy (the "Target") in a ------ transaction pursuant to which a newly-formed indirect subsidiary of Sponsor (the "Company") will make a cash tender offer (the ------- "Tender Offer") for all of the issued and outstanding shares of ------------ common stock of Target (the "Target Shares"). All of the capital ------------- stock of the Company will be owned by a newly-formed corporation ("Holdings") and all of the capital stock of Holdings will be -------- owned by Sponsor. We understand that the Tender Offer is to be conditioned upon, among other things, there being validly tendered prior to the expiration of the Tender Offer, and not withdrawn, Target Shares representing not less than 50.1% (on a fully diluted basis) of the outstanding Target Shares and the Target's outstanding $4.00 Cumulative Convertible Preferred shares (the "Voting Preferred Shares"), but in an amount not less ----------------------- than the number of Target Shares and Voting Preferred Shares required to permit the Merger referred to below to occur promptly. - 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 - 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 - 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 - 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 - 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. - 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. - 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. - 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. - 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. - 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:_________________________ EX-99.(C)(1) 10 Exhibit (c)(1) ================================================================= AGREEMENT OF MERGER Among YPF Sociedad Anonima YPF Acquisition Corp. and Maxus Energy Corporation February 28, 1995 ================================================================= 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 ---- 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 ---- 7.13. Severability . . . . . . . . . . . . . . . . . 65 7.14. Consent to Jurisdiction and Service of Process 65 (iii) 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) 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) 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 (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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 (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 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 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 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 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 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 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 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 (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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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- 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- 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- (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- 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- 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- 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- 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- 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- EX-99.(C)(2) 11 Exhibit (c)(2) GUARANTEE AGREEMENT THIS GUARANTEE AGREEMENT, dated February 28, 1995, of YPF Sociedad Anonima, a corporation (sociedad anonima) organized and existing under the laws of the Republic of Argentina, with principal executive offices located at Avenida Pte. R. Saenz Pena 777, 1364 Buenos Aires, Argentina (hereinafter called the "Guarantor"), in favor of The Prudential Insurance Company of America (hereinafter called "Prudential") and Prudential's successors and assigns who are the registered owners of shares of $9.75 Cumulative Convertible Preferred Stock (hereinafter called the "Shares") of Maxus Energy Corporation, a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company") acquired in compliance with Section 3 of the 1995 Agreement hereinafter referred to (Prudential and all such successors and assigns being hereinafter sometimes collectively called the "Obligees"). RECITALS On February 1, 1987 Prudential and the Company entered into a Preferred Stock Purchase Agreement, dated February 1, 1987 (hereinafter called the "Original Stock Purchase Agreement") providing for the issuance to Prudential of 3,000,000 of the Shares. The Original Stock Purchase Agreement was subsequently amended by agreements between the Company and Prudential dated February 8, 1987 (hereinafter called the "First Amendment"), and April 12, 1990 (hereinafter called the "Existing Second Stock Purchase Agreement"), and pursuant to the Existing Second Stock Purchase Agreement (a) the Company reacquired from Prudential 500,000 of the Shares, and (b) Prudential executed and delivered a Waiver of Certain Equity Offering Rights dated as of April 12, 1990 and a Waiver of Certain Rights Relating to $9.75 Preferred Stock dated June 5, 1990 (hereinafter collectively called the "Waivers"). Prudential is currently the registered owner of all the outstanding Shares. In contemplation of certain Transactions (as said term is defined in the 1995 Agreement hereinafter referred to), including a cash tender offer by a wholly-owned subsidiary of the Guarantor for shares of Common Stock of the Company (the "Tender Offer") as a result of which the Company would become a subsidiary of the Guarantor, the Company and Prudential are entering into an agreement (the "1995 Agreement"), making provision, among other things, with respect to (a) certain consents and waivers by Prudential in connection with the Transactions, (b) certain further amendments of the Original Stock Purchase Agreement, as previously amended, (c) certain amendments of the Existing Second Stock Purchase Agreement, (d) consent to certain amendments of, or, at the request of the Company, waivers with respect to, the Certificate of Designations relating to the Shares, and (e) the termination of the Registration Rights Agreement referred to in the Original Stock Purchase Agreement. The Original Stock Purchase Agreement, as amended as aforesaid (including by the 1995 Agreement), and as the same may be further amended in accordance with the provisions thereof and be in effect from time to time is hereinafter called the "Stock 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 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 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 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 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 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 EX-99.(C)(3) 12 Exhibit (c)(3) MAXUS ENERGY CORPORATION 717 North Harwood Street Dallas, Texas 75201 February 28, 1995 The Prudential Insurance Company of America Three Gateway Center 100 Mulberry Street Newark, New Jersey 07102 Gentlemen: On February 1, 1987, the undersigned, MAXUS ENERGY CORPORATION (the "Company"), a Delaware corporation, and you entered into a Preferred Stock Purchase Agreement, dated February 1, 1987 (the "Original Stock Purchase Agreement"), providing for the issuance to you of 3,000,000 shares of $9.75 Cumulative Convertible Preferred Stock of the Company (the "Shares"). The Original Stock Purchase Agreement was subsequently amended by agreements between the undersigned and you dated February 8, 1987 (the "First Amendment"), and April 12, 1990 (the "Second Stock Purchase Agreement"), and pursuant to the Second Stock Purchase Agreement (a) the Company reacquired from you 500,000 of the Shares, and (b) you executed and delivered a Waiver of Certain Equity Offering Rights dated as of April 12, 1990 and a Waiver of Certain Rights Relating to $9.75 Preferred Stock dated June 5, 1990 (collectively the "Waivers"), relating to certain provisions of the Certificate of Designations, the Registration Rights Agreement and the Company's Preferred Stock Purchase Rights Plan. The Original Stock Purchase Agreement, as amended as aforesaid, is herein called the "Stock Purchase Agreement," and except as otherwise expressly provided herein, all capitalized terms used herein and defined in the Stock Purchase Agreement or the Second Stock Purchase Agreement, as the case may be, are used herein as so defined. The undersigned has advised you that it contemplates entering into the Transactions, including a cash tender offer by a wholly-owned subsidiary of Gaucho for shares of the Common Stock of the Company (the "Tender Offer"), as a result of which the Company would become a subsidiary of Gaucho, and in connection therewith has obtained the agreement of Gaucho, effective upon the merger into the Company of such wholly-owned subsidiary of Gaucho, to guarantee the Company's obligations under the Certificate of Designations, the Stock Purchase Agreement and the Second Stock Purchase Agreement (each as heretofore and hereby amended or to be amended or certain provisions thereof heretofore and hereby waived or to be waived, as the case may be), such guarantee to be substantially in the form annexed hereto as Exhibit A (the "Gaucho Guarantee"). In consideration of the execution and delivery to you of the Gaucho Guarantee, you have agreed to consent to the Transactions and waive all provisions of applicable agreements and other instruments necessary in connection therewith, effective upon the execution and delivery of 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 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 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 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 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 By: ------------------------ Name: Title: 7 EX-99.(C)(4) 13 Exhibit (c)(4) AGREEMENT REGARDING EXPENSES THIS AGREEMENT, dated February 28, 1995, of YPF Sociedad Anonima, a corporation (sociedad anonima) organized and existing under the laws of the Republic of Argentina, with principal executive offices located at Avenida Pte. R. Saenz Pena 777, 1364 Buenos Aires, Argentina (hereinafter called "YPF"), in favor of The Prudential Insurance Company of America (hereinafter called "Prudential") and Prudential's successors and assigns who are the registered owners of shares of $9.75 Cumulative Convertible Preferred Stock (hereinafter called the "Shares") of Maxus Energy Corporation, a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company") acquired in compliance with Section 3 of the 1995 Agreement hereinafter referred to (Prudential and all such successors and assigns being hereinafter sometimes collectively called the "Obligees"). In contemplation of certain Transactions (as said term is defined in the 1995 Agreement hereinafter referred to), including a cash tender offer by a wholly-owned subsidiary of YPF for shares of Common Stock of the Company as a result of which the Company would become a subsidiary of YPF, the Company and Prudential are entering into an agreement of even date herewith (the "1995 Agreement," all capitalized terms used herein without definition being used herein as the same are defined in the 1995 Agreement). In connection therewith Prudential has requested, among other things, that YPF make provision with respect to certain expenses of Prudential, and YPF is willing to do so, all on the terms and conditions hereinafter set forth. NOW, THEREFORE, this Agreement W I T N E S S E T H: For and in consideration of the execution and delivery by Prudential of the 1995 Agreement, and the taking by Prudential of the actions specified therein to be taken by it, YPF does hereby covenant and agree, for the benefit of Prudential and each of the other Obligees from time to time, as follows: 1. Expenses. YPF agrees, whether or not the --------- Transactions contemplated by the 1995 Agreement shall be consummated, to pay, and save the Obligees harmless against liability for the payment of, all reasonable out-of-pocket expenses arising in connection with the 1995 Agreement, and the Transactions contemplated thereby, including without limitation, all such expenses incurred with respect to the enforcement of any provision of any agreement or instrument, any amendments or waivers (whether or not the same become effective) under or in respect of any such agreement or instrument, and all reasonable expenses incurred in connection with the preparation of such agreements and instruments which may be payable in respect of the execution and delivery of such agreements or instruments, and the reasonable fees and expenses of special counsel and all local counsel retained in connection with such agreements and instruments, and the Transactions contemplated by the 1995 Agreement, including the enforcement of any provision thereof, and any such amendments or waivers, including without limitation costs and expenses incurred in any bankruptcy case. The obligations of YPF under this paragraph 1 shall survive the transfer or redemption of any Shares. 2. Consent to Jurisdiction and Service of Process. ---------------------------------------------- (a) YPF consents to the non-exclusive jurisdiction of any court of the State of New York or any United States federal court sitting in the Borough of Manhattan, New York City, New York, United States, and any appellate court from any thereof, and waives any immunity from the jurisdiction of such courts over any suit, action or proceeding that may be brought in connection with this Agreement. YPF irrevocably waives, to the fullest extent permitted by law, any objection to any suit, action, or proceeding that may be brought in connection with this Agreement in such courts whether on the grounds of venue, residence or domicile or on the ground that any such suit, action or proceeding has been brought in an inconvenient forum. YPF agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon YPF and may be enforced in any court to the jurisdiction of which YPF is subject by suit upon such judgment; provided that service of -------- process is effected upon YPF in the manner provided in this Agreement. Notwithstanding the foregoing, any suit, action or proceeding brought in connection with this Agreement may be instituted in any competent court in Argentina. (b) YPF agrees that service of all writs, process and summonses in any suit, action or proceeding brought in connection with this Agreement against YPF in any court sitting in the Borough of Manhattan, New York City may be made upon CT Corporation System at 1633 Broadway, New York, New York 10019, whom YPF irrevocably appoints as its authorized agent for service of process. YPF represents and warrants that CT Corporation System has agreed to act as YPF's agent for service of process. YPF agrees that such appointment shall be irrevocable so long as this Agreement shall remain in effect or until the irrevocable appointment by YPF of a successor in The City of New York as its authorized agent for such purpose and the acceptance of such appointment by such successor. YPF further agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect as aforesaid. If CT Corporation System shall cease to be YPF's agent for service of process, YPF shall appoint without delay another such agent and provide prompt written notice to the Obligees, to the extent known to it, of such appointment. With respect to any such action in any court of the State of New York or any United States federal court in the Borough of Manhattan, New York City, service of process upon CT Corporation System, as the authorized agent of YPF for service of process, and written notice of such service to YPF, shall be deemed, in every respect, effective service of process upon YPF. (c) Nothing in this paragraph 2 shall affect the right of any party to serve legal process in any other manner permitted by law or affect the right of any party to bring any action or proceeding against any other party or its property in the courts of other jurisdictions. 3. Payments of Additional Amounts. All payments in ------------------------------ respect of this Agreement shall be made by YPF without withholding or deduction for or on account of any present or future taxes, duties, levies, or other governmental charges of whatever nature in effect on the date of this Agreement or imposed or established in the future by or on behalf of Argentina or any authority in Argentina. In the event any such taxes or liabilities are so imposed or established, YPF shall pay such additional amounts as may be necessary in order that the net amounts receivable by the Obligees after any withholding or deduction in respect 2 of such tax or liability shall equal the amounts that would have been receivable in respect of this Agreement in the absence of such withholding or deduction; except that no such additional amounts will be payable with respect to any withholding or deduction on any security to, or to a third party on behalf of, an Obligee for or on account of any such taxes or liabilities that have been imposed by reason of the Obligee being a resident of Argentina or having some connection with Argentina other than the mere holding of the Shares or the receipt of payments hereunder. Furthermore, no additional amounts shall be paid with respect to any payment under this Agreement to an Obligee that is a fiduciary or partnership or other than the sole beneficial owner of such payment to the extent that a beneficiary or settlor with respect to such fiduciary or a member of such partnership or beneficial owner would not have been entitled to receive the additional amounts had such beneficiary, settlor, member or beneficial owner been the Obligee. 4. Governing Law. This Agreement is being delivered ------------- and is intended to be performed in the State of New York, and shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of such State. 5. Effectiveness. This Agreement shall take effect ------------- upon (and concurrently with) the execution and delivery by the Company and Prudential of the 1995 Agreement. 6. Successors and Assigns. All covenants and ---------------------- agreements in this Agreement contained shall bind and inure to the benefit of (a) YPF and its successors and assigns and (b) the Obligees. This Agreement shall not be assignable, in whole or in part by any Obligee, except to another Obligee, without the prior written consent of YPF. 7. Notices. All communications provided for ------- hereunder shall be sent by first class mail and (a) if to Prudential, addressed to it in care of Prudential Capital Group, 1201 Elm Street, Suite 4900, Dallas, Texas 75270, Attention: Managing Director, or to such other address as it may have designated to YPF in writing, (b) if to any other Obligee, addressed to such Obligee at the address of such Obligee in the stock record books of the Company, and (c) if to YPF, at its address set forth in the prefatory paragraph of this Agreement, Attention: President, or to such other address as it shall have designated to the Obligees in writing. IN WITNESS WHEREOF, YPF has caused this Agreement to be executed by its officer thereunto duly authorized, all as of the day and year first above written. YPF SOCIEDAD ANONIMA By: -------------------------- Name: Title: 3 -----END PRIVACY-ENHANCED MESSAGE-----