-----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, HSmMcvPjvJ9IfOXcUX4Yimbq47u1JWwNDn26ujBu2wSZ1Wfyk1wzzZTqCLD9twvK q0fFanegGfC5YlPWQr4Tjg== 0000950112-95-000963.txt : 19950414 0000950112-95-000963.hdr.sgml : 19950414 ACCESSION NUMBER: 0000950112-95-000963 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19950411 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 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-34421 FILM NUMBER: 95528211 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] STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 660 MADISON AVE STREET 2: 20TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10021 BUSINESS PHONE: 2128389400 MAIL ADDRESS: STREET 2: 660 MADISON AVE 20TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10021 SC 13D 1 YPF SOCIEDAD ANONIMA SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- SCHEDULE 13D Under the Securities Exchange Act of 1934* ----------------- Maxus Energy Corporation (Name of Issuer) ----------------- Common Stock, Par Value $1.00 Per Share (Title of Class of Securities) ----------------- 577730 10 4 (CUSIP Number) ----------------- Mr. Jose A. Estenssoro YPF Sociedad Anonima Avenida Pte. Roque Saenz Pena 777 1364 Buenos Aires, Argentina Telephone: (011) (541) 329-2000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copy to: P. Dexter Peacock, Esq. Andrews & Kurth L.L.P. 4200 Texas Commerce Tower Houston, Texas 77002 Telephone: (713) 220-4200 April 5, 1995 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ]. Check the following box if a fee is being paid with the statement [X]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Exchange Act") or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Exchange Act (however, see the Notes). SCHEDULE 13D CUSIP NO. 577730 10 4 PAGE 2 OF 20 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON YPF Acquisition Corp. 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* BK; AF; SC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF 119,339,683 SHARES BENEFICIALLY 8 SHARED VOTING POWER OWNED BY EACH 0 REPORTING PERSON WITH 9 SOLE DISPOSITIVE POWER 119,339,683 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 119,339,683 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 88.0% 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTION BEFORE FILLING OUT! SCHEDULE 13D CUSIP NO. 577730 10 4 PAGE 3 OF 20 Pages 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON YPF Sociedad Anonima 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) [ ] (b) [ ] 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] 6 CITIZENSHIP OR PLACE OF ORGANIZATION Argentina 7 SOLE VOTING POWER NUMBER OF SHARES 119,339,683 BENEFICIALLY OWNED BY EACH 8 SHARED VOTING POWER REPORTING PERSON 0 WITH 9 SOLE DISPOSITIVE POWER 119,339,683 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 119,339,683 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES* [ ] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 88.0% 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTION BEFORE FILLING OUT! Page 4 of 20 Item 1. Security and Issuer This statement relates to shares of Common Stock, par value $1.00 per share (the "Shares"), of Maxus Energy Corporation, a Delaware corporation (the "Company" or "Maxus"). The address of the Company's principal executive offices is 717 North Harwood Street, Dallas, Texas 75201. Item 2. Identity and Background This statement is filed on behalf of YPF Acquisition Corp., a Delaware corporation (the "Purchaser"), and YPF Sociedad Anonima, a sociedad anonima (stock corporation) organized under the laws of the Republic of Argentina ("YPF") The Purchaser and YPF are referred to herein collectively as the "Reporting Persons". YPF is an integrated oil and gas company engaged in the exploration, development and production of oil and natural gas and in the refining, marketing, transportation, and distribution of oil and a wide range of petroleum products, petroleum derivatives, petrochemicals and liquid petroleum gas. The Purchaser is a recently organized company that has not conducted any business except in connection with the transaction described in Item 3 below. YPF maintains its principal offices at Avenida Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina. The Purchaser maintains its principal executive offices at 600 Madison Avenue, 20th Floor, New York, New York 10021. The name, residence or business address, citizenship and present principal occupation or employment of each of the directors and executive officers of each of the Reporting Persons and the name, principal business and address of the organization in which such occupation or employment is conducted are set forth in Schedule I attached hereto. During the five years immediately prior to the date hereof, none of the Reporting Persons nor, to the best of their knowledge, any of the persons whose names are set forth in Schedule I, (i) has been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors), or (ii) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration On February 28, 1995, Maxus, the Purchaser and YPF entered into an Agreement of Merger (the "Merger Agreement") pursuant to which (i) the Purchaser agreed to make a cash tender offer (the "Offer") for all the issued and outstanding Shares for $5.50 per Share in cash and (ii) subject to the satisfaction of certain conditions, including the condition that Shares representing at least a majority of the Voting Shares (as defined below) of Maxus, on a fully diluted basis, were validly tendered pursuant to the Offer, the Purchaser and Maxus agreed that the Purchaser would be merged with and into Maxus (the "Merger") as soon as practicable following the satisfaction of such conditions. YPF, through its subsidiary the Purchaser, submitted the Offer to shareholders of Maxus on March 3, 1995. The Offer expired at midnight on March 30, 1995, at which time 119,339,683 Shares representing 88.0% of the issued and outstanding Shares as of such date, had been tendered. The Purchaser took delivery of all the Shares tendered and delivered the purchase price for them on April 5, 1995. The total amount of funds required by the Purchaser to acquire the entire common equity interest in the Company, including the purchase of Shares pursuant to the Offer and the payment for Shares converted into the right to receive cash pursuant to the Merger, and to pay related fees and expenses, is expected to be approximately $800 million. On April 5, 1995, the Purchaser entered into a credit agreement (the "Credit Agreement") with lenders for which The Chase Manhattan Bank (National Association) ("Chase") acts as agent, pursuant to which the lenders extended to the Purchaser a $550 million credit facility (the "Purchaser Facility"). On April 5, 1995, the Purchaser borrowed $442.2 million under the Page 5 of 20 Purchaser Facility and received a capital contribution of $250 million from YPF. On April 5, 1995, the Purchaser used such borrowings under the Purchaser Facility and the funds contributed to it from YPF to purchase 119,339,683 Shares pursuant to the Offer. Payment for Shares that are converted into the right to receive cash pursuant to the Merger will be made by the surviving corporation, Maxus, from additional borrowings by the Purchaser under the Purchaser Facility and from additional capital contributions from YPF. Pursuant to a commitment letter from Chase (the "Commitment Letter"), Chase has agreed to provide two additional credit facilities aggregating up to $425 million: (i) a credit facility of up to $250 million to be extended to Midgard Energy Company ("Midgard"), a wholly owned subsidiary of the Company (the "Midgard Facility"), and (ii) a credit facility of up to $175 million to be extended to certain other subsidiaries of the Company as described below (the "Subsidiaries Facility"). Revised term sheets for the Midgard Facility and the Subsidiaries Facility are annexed as Schedules V and VI, respectively, to the Credit Agreement for the Purchaser Facility, which is attached hereto as Exhibit A, and are incorporated herein by reference. The proceeds of the Midgard Facility and the Subsidiaries Facility will be used to repay, in part, the Purchaser Facility. Chase has confirmed that it is willing to provide the entire amount of these two additional facilities. Chase also has advised YPF that it intends to arrange one or more syndicates of commercial banks, financial institutions and other investors to provide a portion of these facilities and that it proposes to act as the agent for such lenders in connection with each of the facilities. The following is a description of the principal terms of the Purchaser Facility and a description of the proposed terms of the Midgard Facility and the Subsidiaries Facility. Purchaser Facility. The Purchaser Facility provides for loans in an aggregate amount of up to $550 million (collectively, the "Purchaser Loan") and will mature on the earlier of (i) the date and time of the filing of a Certificate of Merger with the Secretary of State of the State of Delaware (the "Effective Time") and (ii) June 12, 1995 (such earlier date being the "Purchaser Maturity Date"). The Purchaser borrowed $442.2 million under the Purchaser Facility on April 5, 1995, and may obtain one additional advance thereunder up to the remaining $107.8 million of credit available thereunder. At the Purchaser's option, the interest rate applicable to the Purchaser Loan is either (i) the one-month London Interbank Offered Rate plus a margin of 2 1/4% or (ii) the Base Rate (as defined in the Credit Agreement relating to the Purchaser Facility) plus a margin of 1 1/4%. The Purchaser Loan is guaranteed by YPF as described below. In addition, the Purchaser has agreed not to dispose of any Shares prior to the Merger, except for cash at fair market value. The lenders' obligation to fund the remaining amount of credit available under the Purchaser Facility is subject to certain conditions as described below. It is anticipated that up to $125 million of the Purchaser Loan, plus accrued interest on the Purchaser Loan, will be repaid on the Purchaser Maturity Date from cash held by the Company. Midgard Facility. The Reporting Persons currently anticipate that on the Purchaser Maturity Date, up to $250 million of the Purchaser Loan will be repaid with funds provided to the Company by Midgard. The Reporting Persons anticipate that Midgard will provide the funds from the proceeds of a loan of up to $250 million (the "Midgard Loan") pursuant to the Midgard Facility. The Midgard Loan will be made in a single drawing, will mature on December 31, 2003 and will be repaid in up to 28 consecutive quarterly installments commencing on March 31, 1997, subject to semi-annual borrowing base redeterminations. At Midgard's option, the interest rate applicable to the Midgard Loan will be, until March 31, 1997, either (i) the one-, two- or three-month London Interbank Offered Rate plus a margin of 1 3/4% or (ii) the Base Rate (to be defined in the credit agreement relating to the Midgard Facility) plus a margin of 3/4% and, thereafter, either (iii) the one-, two- or three-month London Interbank Offered Rate plus a margin of 2 1/4% or (iv) the Base Rate plus a margin of 1 1/4%. The Midgard Loan will not be secured but will be guaranteed by YPF and the Company. The agreement evidencing the Midgard Loan will contain, among other things, a negative pledge on all assets of Midgard, subject to customary exceptions. The lenders' obligation to fund the Midgard Loan will be subject to certain conditions as described below. It is anticipated that the Midgard Loan will be repaid with funds generated by Midgard's business operations. Subsidiaries Facility. The Reporting Persons currently anticipate that on or before the Purchaser Maturity Date, up to $175 million of the Purchaser Loan will be repaid with funds provided to the Page 6 of 20 Company by Maxus Northwest Java, Inc. ("Java") and Maxus Southeast Sumatra, Inc. ("Sumatra") (collectively, the "Designated Subsidiaries"). The Company anticipates that the Designated Subsidiaries will provide these funds from the proceeds of a loan of up to $175 million (the "Subsidiaries Loan") made to them pursuant to the Subsidiaries Facility. The Subsidiaries Loan will be made in a single drawing on the Purchaser Maturity Date, will mature on December 31, 2002 and will be repaid in up to 24 consecutive quarterly installments commencing on March 31, 1997, subject to semi-annual borrowing base redeterminations. At the option of the Designated Subsidiaries, the interest rates applicable to the Subsidiaries Loan will be, until March 31, 1997, either (i) the one-, two- or three-month London Interbank Offered Rate plus a margin of 2 1/4% or (ii) the Base Rate (to be defined in the credit agreement relating to the Subsidiaries Facility) plus a margin of 1 1/4% and, thereafter, either (iii) the one-, two- or three-month London Interbank Offered Rate plus a margin of 2 3/4% or (iv) the Base Rate plus a margin of 1 3/4%. The Subsidiaries Loan to Java and Sumatra will be secured by certain of the assets of Java and Sumatra, will be guaranteed by the Company and a new subsidiary formed to hold the stock of Java and Sumatra, and the guarantee by that new holding company will be secured by the stock of Java and Sumatra. The agreement evidencing the Subsidiaries Loan will contain a negative pledge on all of the other assets of the Designated Subsidiaries, subject to customary exceptions. The lenders' obligation to fund the Subsidiaries Loan will be subject to certain conditions as described below. It is anticipated that the Subsidiaries Loan will be repaid with funds generated by the Designated Subsidiaries' business operations. Upon further review of the value of the assets of Midgard and the Designated Subsidiaries, the terms of the Midgard Loan and the Subsidiaries Loan may be modified to provide for intercompany guarantees or other arrangements whereby Midgard and the Designated Subsidiaries provide support for each other's loans. Conditions to Funding. The obligation of the lenders to advance the remaining amount of credit available under the Purchaser Facility is subject to the fulfillment of certain conditions, including but not limited to, (i) the absence of any material adverse change in the condition (financial or otherwise), business operations, assets, nature of assets or liabilities of (a) YPF and its subsidiaries (taken as a whole), (b) the Purchaser and (c) the Company and its subsidiaries (taken as a whole) and (ii) the lenders' satisfaction that the Company will have sufficient cash available to pay the lesser of (a) $125 million or (b) the difference between (1) the principal amount of the Purchaser Loan outstanding on the Purchaser Maturity Date and (2) the lesser of $425 million or such other amount as is available under the Midgard Loan and the Subsidiaries Loan as described above. The obligation of the lenders to fund the Midgard Loan and the Subsidiaries Loan will be subject to certain additional conditions, including without limitation, (i) the effectiveness of the Merger, (ii) the absence of any material adverse change in the condition (financial or otherwise), business, operations, assets, nature of assets or liabilities of (a) YPF and it subsidiaries (taken as a whole), (b) the Company and its subsidiaries (taken as a whole) and (c) in the case of the Midgard Loan, Midgard and its subsidiaries taken as a whole, and (d) in the case of the Subsidiaries Loan, Java or Sumatra or their holding company, (iii) the payment in full of the Purchaser Loan and (iv) all indebtedness and other obligations of each of Midgard, Java and Sumatra to the Company and its other subsidiaries shall have been paid in full or satisfactorily subordinated to the repayment of the Midgard Loan and the Subsidiaries Loan. Prepayment. Each of the Purchaser Loan, the Midgard Loan and the Subsidiaries Loan (collectively, the "Loans") may be prepaid in whole or in part without premium or penalty, except for costs associated with the prepayment of any portion of a Loan bearing interest at a rate determined by reference to the London Interbank Offered Rate prior to the end of any applicable interest period. YPF Guarantee. YPF has guaranteed the repayment of the Purchaser Facility and will guarantee the repayment of the Midgard Facility and the Subsidiaries Facility. The YPF guarantee of the Purchaser Facility is secured by a pledge of all of the shares of capital stock of the Purchaser. The guarantee also Page 7 of 20 contains certain covenants including a limitation on YPF's debt level and a required level of tangible net worth. Certain Fees. YPF has agreed to pay to Chase customary fees in connection with each of the facilities. Covenant Regarding Financing. In the Merger Agreement, YPF and the Purchaser agreed that they will use their reasonable best efforts to obtain the financings contemplated by the Commitment Letter. Item 4. Purpose of Transaction In mid-1994, YPF's Board of Directors adopted the goals of becoming an internationally diversified oil and gas company with significant assets outside Argentina and obtaining management personnel skilled and experienced in exploring for and producing oil and gas internationally. YPF believes that Maxus presents a good fit with its goals. Accordingly, YPF and the Purchaser entered into the Merger Agreement, and made the Offer pursuant to the terms of the Merger Agreement, for the purpose of acquiring all of the outstanding Shares. (a) Acquisition and disposition of securities of Maxus. On February 28, 1995, Maxus, the Purchaser and YPF entered into the Merger Agreement pursuant to which, as described in Item 3 above, the Purchaser made the Offer. The Offer expired on March 30, 1995, at which time 119,339,683 Shares, representing 88.0% of the issued and outstanding Shares as of such date, had been tendered. The Purchaser took delivery of all the Shares tendered and delivered the purchase price for them on April 5, 1995. Pursuant to the Merger Agreement, Maxus, the Purchaser and YPF agreed to cause the merger of the Purchaser with and into Maxus as soon as practicable following the purchase of Shares pursuant to the Offer. Pursuant to the Delaware General Corporation Law ("DGCL") and the Company's Restated Certificate of Incorporation (the "Certificate"), the approval and adoption of the Merger require the affirmative vote of the holders of a majority of the combined voting power of the outstanding Shares and $4.00 Cumulative Convertible Preferred Stock (collectively, the "Voting Shares"), voting together as a single class. If the Merger is consummated, YPF will become the sole holder of the Shares (except to the extent that, following the Effective Time, holders of outstanding options and warrants exercise such options and warrants for Shares, or holders of shares of the Company's $4.00 Cumulative Convertible Preferred Stock (the "$4.00 Preferred Stock") exercise their rights to convert shares of $4.00 Preferred Stock into Shares), and the current holders of Shares other than YPF will no longer have an equity interest in the Company and will not share in its future earnings or growth, if any. Instead, each such stockholder (other than those who perfect appraisal rights under Section 262 of the DGCL will have the right to receive $5.50 in cash, without interest, for each Share held immediately prior to the Merger. All outstanding shares of the Company's preferred stock will remain outstanding and have the identical powers, preferences, rights, qualifications, limitations and restrictions as such shares of preferred stock currently have (including, in the case of the $4.00 Preferred Stock, the right to convert into Shares), except for certain changes to the terms of the $9.75 Cumulative Convertible Preferred Stock (the "$9.75 Preferred Stock") as agreed to by the holder of the $9.75 Preferred Stock as described below in Item 6. Any outstanding option or warrant to acquire Shares that is not exercised prior to the Effective Time, or surrendered in the case of employee or director stock options, will remain outstanding and have the identical terms as such options and warrants currently have. (b) Merger of Purchaser and Maxus. Pursuant to the terms of the Merger Agreement, YPF intends to seek the Merger of Purchaser and Maxus as soon as possible. Certain effects of the Merger Agreement and the Merger are described herein this Item 4. The Merger Agreement is attached hereto as Exhibit C. Page 8 of 20 (c) Sales or transfers of material amounts of assets of Maxus or its subsidiaries. While the Reporting Persons reserve the right to take or recommend such action as they may consider desirable in light of their ongoing review of the businesses and operations of Maxus and its subsidiaries, neither of the Reporting Persons has any present plans or proposals which relate to or would result in the sale or transfer of a material amount of assets of Maxus or any of its subsidiaries. (d) Change in the present Board of Directors and management of Maxus. The Merger Agreement provides, among other things, that upon the Purchaser's acquisition of a majority of the outstanding Voting Shares pursuant to the Offer, and from time to time thereafter so long as YPF and/or any of its direct or indirect wholly owned subsidiaries (including the Purchaser) own a majority of the outstanding Voting Shares, YPF is entitled, subject to compliance with applicable law and the Certificate, to designate at its option up to that number of directors, rounded up to the nearest whole number, of the Company's Board of Directors (the "Board") as will make the percentage of the Company's directors designated by YPF equal to the percentage of outstanding Voting Shares held by YPF and any of its direct or indirect wholly owned subsidiaries (including the Purchaser), including Shares accepted for payment pursuant to the Offer. The Company has agreed that it will, upon the request of YPF, promptly increase the size of its Board and/or use its reasonable best efforts to secure the resignation of such number of directors as is necessary to enable YPF's designees to be elected to the Board and will use its reasonable best efforts to cause YPF's designees to be so elected, subject to Section 14(f) of the Exchange Act; except that, prior to the Effective Time, the Company will use its reasonable best efforts to assure that the Board always has (at its election) at least three members who were directors of the Company as of February 28, 1995. At such times, the Company will use its reasonable best efforts, subject to any limitations imposed by applicable law or rules of the New York Stock Exchange (the "NYSE"), to cause persons designated by YPF to constitute the same percentage as such persons represent on the Board of (i) each committee of the Board, (ii) each board of directors or board of management of each subsidiary of the Company, and (iii) each committee of each such board. The Purchaser's ownership of 85.3% of the outstanding Voting Shares entitles it to be represented on the Board pursuant to the above-described provision, and the Purchaser has designated five persons, Messrs. Jose A. Estenssoro, Cedric Bridger, Peter Gaffney, James R. Lesch and P. Dexter Peacock (collectively, the "Designees") to serve on the Board. YPF and the Purchaser expect that all of the directors of the Company, except Messrs. Charles L. Blackburn, George L. Jackson and R.A. Walker, will submit their resignations from the Board on or about April 22, 1995 (the "Election Date") and that, effective upon such resignations, the remaining directors on the Board will elect the Designees to the Board to fill the vacancies created thereby. As a result of the foregoing, YPF and the Purchaser expect that the Board will consist of the five Designees, and Messrs. Blackburn, Jackson and Walker, with five vacancies. Certain additional information relating to the election of the Designees is contained in the information statement filed by the Company pursuant to Rule 14f-1 under the Exchange Act (the "14f-1 Information Statement") with the Securities and Exchange Commission (the "Commission") and mailed on or about April 11, 1995 to Stockholders of record as of April 4, 1995. Cedric Bridger presently is the sole director of the Purchaser. It is currently contemplated that prior to the Effective Time, each of the Designees and Messrs. Blackburn, Jackson and Walker will be elected to the Board of Directors of the Purchaser. Pursuant to the Merger Agreement, at the Effective Time, the directors of Purchaser immediately prior to the Effective Time will be the directors of the Company and the officers of the Company immediately prior to the Effective Time will be the officers of the Company, in each case until their successors have been duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the Company's Certificate, By-Laws and the DGCL. On April 7, 1995, all of the Company's executive officers gave notice of their intent to resign under circumstances in which they had the right to receive severance payments thereunder. In order to facilitate the transition following such event, the Company and its eight executive officers agreed that the executive officers would continue to work for the Company in their present positions at their current level of compensation until June 30, 1995 or otherwise mutually agreed. The Company also agreed to pay the executive officers such severance payments no later than April 15, 1995. The Reporting Persons have not yet made any decisions as to executive officers of the Company following the effectiveness of such resignations. It is expected that Mr. Charles L. Blackburn will resign as Chairman, President and Chief Executive Officer of the Company on the Page 9 of 20 Election Date. YPF has asked Mr. Blackburn to become an international consultant to YPF and to remain a director of the Company. Under the proposed two-year arrangement, Mr. Blackburn would be available to render consulting services for a minimum of 60 days per year and would be paid a retainer of $180,000 per year. Mr. Blackburn would also be paid $3,000 per day for each day in excess of 60 days per year in which he renders consulting services for YPF. He would also be provided offices in Dallas and Buenos Aires. Mr. Peter Gaffney, a Designee, is expected to be named the interim Chief Executive Officer of the Company on the Election Date. Mr. Gaffney is to receive $50,000 per month and will be eligible to participate in the Company's benefit plans for executive officers. This six-month arrangement between Mr. Gaffney and YPF is to be effective as of April 1,1995, is renewable upon mutual agreement and provides that, with respect to the period before Mr. Gaffney is named interim Chief Executive Officer, Mr. Gaffney will serve as an advisor to YPF with respect to the Company. (e) Material changes in present capitalization and dividend policy of Maxus. The Reporting Persons and the Company plan to engage in a material change in the present capitalization of the Company through the assumption of the debt described in Item 3 above. In addition, pursuant to the Merger Agreement, in the event that the Company is unable to meet its obligations as they come due, whether at maturity or otherwise, including, solely for the purposes of this undertaking, dividend and redemption payments with respect to the Preferred Stock, YPF has agreed to capitalize the Company in an amount necessary to permit the Company to meet such obligations; provided, however, that YPF's aggregate obligation will be (i) limited to the amount of debt service obligations under the Purchaser Facility, and to the extent the Purchaser Facility is replaced by the Midgard Facility and/or the Subsidiaries Facility, the amount of debt service obligations under the Midgard Facility and/or the Subsidiaries Facility and (ii) reduced by the amount, if any, of capital contributions received by the Company after the Effective Time and the net proceeds of any sale by the Company of common stock or non- redeemable preferred stock after the Effective Time. The foregoing obligations of YPF will survive until the ninth anniversary of the Effective Time. On March 7, 1995, YPF also announced that its board of directors authorized YPF to guarantee the Company's outstanding long-term debt as of the Effective Time. The long-term debt to be covered by the YPF guarantee is the Company's outstanding 11 1/4%, 11 1/2% and 8 1/2% Sinking Fund Debentures, its outstanding 9 7/8%, 9 1/2% and 9 3/8% Notes, and its outstanding medium-term notes. Neither of the Reporting Persons has any present plans or proposals which relate to or would result in a material change in the dividend policy of the Company. (f) Other material changes in the Company's business or corporate structure. The Company's business will continue to be conducted in its current corporate form. Various corporate overhead and administrative functions may be consolidated with those of YPF. While the Reporting Persons reserve the right to take or recommend such action as they may consider desirable in light of their ongoing review of the business and operations of Maxus and its subsidiaries, neither of the Reporting Persons has any present plans or proposals which relate to other material changes in the Company's business or corporate structure, including the sale of Maxus' material assets, entry into joint ventures, or the expansion or contraction of operations in various geographic areas. (g) Changes in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person. While the Reporting Persons reserve the right to take or recommend such actions as they may consider desirable in light of their ongoing review of the businesses and operations of Maxus and its subsidiaries, neither of the Reporting Persons has any present plans or proposals which relate to changes in the Company's Certificate, By-Laws or instruments corresponding thereto which may impede the acquisition of control of the Company by any person or other actions which may impede the acquisition of control of the Company by any person. Page 10 of 20 (h) and (i) Delisting of securities of the Company; Termination of registration pursuant to Section 12(g)(4) of the Act. Following completion of the Merger, it is expected that the Shares will be delisted from the NYSE, the Pacific Stock Exchange and any other securities exchanges on which the Shares are listed. The Shares are currently registered under the Exchange Act. Registration of the Shares under the Exchange Act may be terminated upon application by the Company to the Commission if the Shares are not listed on a national securities exchange and there are fewer than 300 record holders of the Shares. However, termination of registration of the Shares under the Exchange Act will not affect the registration of the $4.00 Preferred Stock and the $2.50 Preferred Stock under the Exchange Act, the holders of which will continue to be entitled to information required to be furnished to them thereunder. Termination of registration of the Shares would reduce substantially the information required to be furnished by the Company to holders of Shares and would make certain provisions of the Exchange Act, including the requirement of furnishing a proxy statement or information statement in connection with stockholders' meetings pursuant to Section 14(a) and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions, no longer applicable to the Shares. Furthermore, if the registration of the Shares under the Exchange Act were to be terminated, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), may be impaired or eliminated. If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be "margin securities" or be eligible for listing or National Association of Securities Dealers Automated Quotation ("NASDAQ") reporting. YPF may seek or cause the Company to make an application for termination of registration of the Shares as soon as possible following the Merger. In addition to the Shares, the Company's $4.00 Preferred Stock, the $2.50 Preferred Stock and the 8 1/2% Sinking Fund Debentures Due April 1, 2008 (the "8 1/2% Debentures") are registered under the Exchange Act and listed on the NYSE. If registration of the Shares under the Exchange Act were terminated, and registration under the Exchange Act of the $4.00 Preferred Stock, the $2.50 Preferred Stock, the 8 1/2% Debentures or other securities of the Company continued, the Exchange Act requirement that the Company file periodic reports would remain applicable. YPF and the Company have agreed to use their respective reasonable efforts to continue the listing on the NYSE of the series of Preferred Stock which are currently listed on such Exchange, or, if any such series is delisted, to cause such series of the Preferred Stock to be listed on another national securities exchange within the United States or admitted to trading on the NASDAQ and on other organized securities markets in such foreign jurisdictions in which such shares are presently traded. Notwithstanding anything in the Merger Agreement to the contrary, the obligations of the Company and YPF regarding continued listing of the Preferred Stock will survive the Effective Time with respect to any series of Preferred Stock until such time as the aggregate market value of all outstanding shares of such series is less than $2 million or the number of outstanding shares of such series is less than 100,000. The NYSE has informed the Company that the $4.00 Preferred Stock will be delisted from the NYSE when the Shares are delisted (which is expected to occur promptly after the Effective Time). On April 7, 1995, the Company received notice for the National Association of Securities Dealers that the $4.00 Preferred Stock had been accepted for trading on the NASDAQ. The Reporting Persons expect the $4.00 Preferred Stock will being trading on the NASDAQ promptly following the Effective Time. The Exchange Act provides that registration of the $4.00 Preferred Stock, the $2.50 Preferred Stock or the 8 1/2% Debentures may be terminated upon application by the Company to the Commission if such class of securities is not listed on a national securities exchange and there are fewer than 300 record holders of such class of securities. Termination of registration of any such class of securities would reduce substantially the information required to be furnished by the Company to holders of such class of securities. Termination of registration of the $4.00 Preferred Stock or the $2.50 Preferred Stock would make certain provisions of the Exchange Act, including the requirement of furnishing a proxy statement or information statement pursuant to Section 14(a) in connection with stockholders' meetings and the requirements of Rule 13e-3 under the Exchange Act with respect to "going private" transactions, no longer applicable to such class of securities. Furthermore, if the registration of any such class of securities under the Exchange Act Page 11 of 20 were to be terminated, the ability of "affiliates" of the Company and persons holding "restricted securities" of the Company to dispose of such securities pursuant to Rule 144 under the Securities Act may be impaired or eliminated. If registration of any such class of securities under the Exchange Act were to be terminated, such class of securities would no longer be "margin securities" or be eligible for listing on NASDAQ reporting. Item 5. Interest in Securities of the Issuer (a) and (b) The Purchaser has sole voting and dispositive power over 119,339,683 Shares, which represents approximately 88.0% of the outstanding Shares and 85.3% of the outstanding Voting Shares. YPF, by virtue of its ownership of all of the capital stock of the Purchaser, is a beneficial owner of all of the Shares owned by the Purchaser. If the Merger is consummated, YPF will own 100% of the then-outstanding Shares. (c) In connection with the Offer, Mr. James R. Lesch, a director of YPF tendered 2,000 Shares. Except as disclosed in this Schedule 13D, no Reporting Person has effected any other transactions in Shares in the 60 day period ended as of the date hereof. (d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Shares reported in this Item 5. (e) Inapplicable. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer (a) The Merger Agreement. The Merger Agreement provides for, and YPF has designated, various persons to the Board of Maxus as described in Item 4(d) above. Additional material terms of the Merger Agreement include: (i) The Merger. The Merger Agreement provides that, unless the Merger Agreement is terminated or abandoned (see "Termination" below), as soon as practicable following fulfillment or waiver, if permissible, of the conditions described below under "Conditions to the Merger," at the Effective Time, the Purchaser will be merged with and into the Company, whereupon the separate existence of the Purchaser will cease and the Company will be the surviving corporation in the Merger (as such, the "Surviving Corporation"). The Merger Agreement further provides that the Certificate and the By-Laws of the Company as in effect at the Effective Time will be the certificate and the by- laws of the Surviving Corporation. (ii) Consideration to be Paid in the Merger. The Merger Agreement provides that each Share outstanding immediately prior to the Effective Time (other than Shares held in the treasury of the Company, Shares owned by YPF, the Purchaser, and any other direct or indirect subsidiary of YPF, and other than Shares held by Stockholders who perfect their appraisal rights under Section 262 of the DGCL) will, at the Effective Time, be cancelled and retired and be converted into a right to receive $5.50 per Share in cash, without interest, upon the surrender of the Stock Certificates formerly representing such Shares, and each Share held in the treasury of the Company, and each Share held by YPF, the Purchaser or any other direct or indirect subsidiary of YPF immediately prior to the Effective Time will, at the Effective Time, be cancelled and retired and no payment will be made with respect thereto. Each share of common stock of the Purchaser issued and outstanding immediately prior to the Effective Time will, by virtue of the Merger and without any action on the part of the holder thereof, be converted into and become one share of common stock of the Surviving Corporation, and each outstanding share of preferred stock of the Company will remain outstanding and have the identical powers, preferences, rights, qualifications, limitations and restrictions as such shares of preferred stock currently have, except for such changes thereto as agreed to by the holder of the $9.75 Preferred Stock as described in "$9.75 Preferred Stock Page 12 of 20 Arrangements" below. The number of shares of outstanding common stock of the Purchaser immediately prior to the Effective Time will be equal to the number of outstanding shares of common stock of the Company at such time. (iii) Company Options and Restricted Shares. The Merger Agreement provides that the Company will cooperate with YPF and the Purchaser in an effort to obtain the surrender of all Options, in exchange for the payments set forth in Schedule 2.6 of the Merger Agreement. In addition, immediately prior to the Effective Time, the restrictions on certain restricted Shares, including Shares held by certain executive officers of the Company, will lapse without further action. (iv) Representations and Warranties. The Merger Agreement contains representations and warranties by the Company, relating to, among other things, (a) the organization of the Company and its subsidiaries and other corporate matters, (b) the capital structure of the Company, (c) the authorization, execution, delivery and consummation of the transactions contemplated by the Merger Agreement, (d) consents and approvals, (e) documents filed by the Company with the Commission and the accuracy of the information contained therein, (f) the absence of certain changes and events, (g) the accuracy of the information contained in documents filed with the Commission in connection with the Offer and the Merger, (h) litigation, (i) compliance with laws and certain environmental matters, (j) tax, insurance and labor matters, and (k) matters relating to Title IV of the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder. In addition, the Merger Agreement contains representations and warranties by YPF and the Purchaser related to, among other things, (a) the organization of YPF and the Purchaser and other corporate matters, (b) the authorization, execution, delivery and consummation of the transactions contemplated by the Merger Agreement, (c) consents and approvals, and (d) YPF's having no reason to believe that, following the Merger, the borrowings under the Purchaser Facility and the other financings contemplated by the Commitment Letter, the Company will not be able to meet its obligations as they come due including, solely for purposes of this representation and warranty, preferred stock dividends and redemption requirements. (v) Redemption of Rights. Pursuant to the Merger Agreement, effective as of March 22, 1995, the Company redeemed all of the outstanding rights (the "Rights") issued pursuant to the Rights Agreement dated September 2, 1988 between the Company and Society National Bank, as rights agent, so that the Rights did not become exercisable as a result of the Offer. (vi) Indemnification of Directors. Pursuant to the Merger Agreement, for a period of seven years following the Effective Time, YPF has agreed to cause the Surviving Corporation to indemnify, defend and hold harmless the present and former officers, directors, employees and agents of the Company and its subsidiaries as described herein. (vii) YPF's Undertaking. The Merger Agreement provides that whenever it requires the Purchaser to take any action, such requirements will be deemed to include an undertaking on the part of YPF to cause the Purchaser to take such action. (viii) Listing of Preferred Stock. Pursuant to the Merger Agreement, the Company will, and YPF will cause the Surviving Corporation to, subject to certain limitations, use their respective reasonable efforts to continue the listing on the NYSE of the shares of Preferred Stock which are currently listed on such Exchange as more fully described elsewhere herein, and if any such series is delisted, to cause such series of the Preferred Stock to be listed on another national securities exchange within the United States or admitted to trading on the NASDAQ and on other organized securities markets in such foreign jurisdictions in which such shares are presently traded. Notwithstanding anything in the Merger Agreement to the contrary, the obligations of the Company and YPF regarding continued listing of such shares of preferred stock will survive the Effective Time with respect to any such series of preferred stock until such time as the aggregate Page 13 of 20 market value of all outstanding shares of such series is less than $2 million or the number of outstanding shares of such series is less than 100,000. The NYSE has informed the Company that the $4.00 Preferred Stock will be delisted from the NYSE when the Shares are delisted (which is expected to occur promptly after the Effective Time). See also Item 4(h) and (i) above. (ix) Certain Obligations of YPF. Pursuant to the Merger Agreement, in the event that the Company is unable to meet its obligations as they come due, whether at maturity or otherwise, including, solely for the purposes of this undertaking, dividend and redemption payments with respect to the preferred stock, YPF has agreed to capitalize the Company in an amount necessary to permit the Company to meet such obligations; provided, however, that YPF's aggregate obligation will be (a) limited to the amount of debt service obligations under the Purchaser Facility, and to the extent the Purchaser Facility is replaced by the Midgard Facility and/or the Subsidiaries Facility, the amount of debt service obligations under the Midgard Facility and/or the Subsidiaries Facility and (b) reduced by the amount, if any, of capital contributions received by the Company after the Effective Time and the net proceeds of any sale by the Company of common stock or non-redeemable preferred stock after the Effective Time. The foregoing obligations of YPF will survive until the ninth anniversary of the Effective Time. In addition, on March 7, 1995, YPF announced that its board of directors authorized YPF to guarantee the Company's outstanding long-term debt as of the Effective Time. The long-term debt to be covered by the YPF guarantee is the Company's outstanding 11 1/4%, 11 1/2% and 8 1/2% Sinking Fund Debentures, its outstanding 9 7/8%, 9 1/2% and 9 3/8% Notes, and its outstanding medium-term notes. See also "Item 3 -- YPF Guarantee" above. Termination. The Merger Agreement provides that it may be terminated and the Merger contemplated thereby may be abandoned at any time prior to the Effective Time, whether before or after approval by the Stockholders of the Company: (i) by the mutual consent of the boards of directors of YPF, the Purchaser and the Company; (ii) by the Company if either YPF or the Purchaser materially breaches, or by YPF and the Purchaser if the Company materially breaches, any of the representations and warranties or covenants contained in the Merger Agreement; (iii) by either YPF and the Purchaser or the Company, if the Merger is not consummated prior to June 30, 1995; provided, however, that the right to terminate the Merger Agreement pursuant to this provision will not be available to any party whose failure to fulfill any obligation under the Merger Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur on or before such date; (iv) by either YPF and the Purchaser, on the one hand, or the Company, on the other hand, if either one (or any assignee permitted under the Merger Agreement) is restrained, enjoined or otherwise precluded by an order, decree, ruling or injunction (other than an order or injunction issued on a temporary or preliminary basis) of a court of competent jurisdiction, governmental authority or other regulatory or administrative agency or commission, from consummating the Merger or making the acquisition or holding by YPF or its subsidiaries of the Shares or shares of common stock of the Surviving Corporation illegal and all means of appeal and all appeals from such order, decree, ruling, injunction or other action have been finally exhausted; (v) by the Company if the Board determines that it will not recommend the approval of the Merger by the Company's Stockholders (or if such recommendation is withdrawn) based upon the advice of outside counsel that such action is necessary for the Board to comply with its fiduciary duties to stockholders under applicable law; or (vi) by YPF and the Purchaser, if: (a) the Board shall not have recommended or shall withdraw, modify or change its recommendation relating to the Merger in a manner materially adverse to YPF or shall have resolved to do any of the foregoing; (b) the Board shall have recommended to the stockholders of the Company that they accept or approve, or the Company or any of its subsidiaries shall have agreed to engage in, a Competing Transaction (as defined below). "Competing Transaction" is defined as any of the following involving the Company or any of its subsidiaries: (i) any merger, consolidation, share exchange, business combination or other similar transaction except for such of the foregoing in which the only parties are the Company or one or more subsidiaries of the Company; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other disposition of the assets of the Company or any of its subsidiaries constituting 5% or more of the consolidated assets of the Company or accounting for 5% or more of the consolidated revenues of the Company in a single transaction or series of related transactions Page 14 of 20 involving any person other than the Company or one or more subsidiaries of the Company; or (iii) any tender or exchange offer for 20% or more of the outstanding Voting Shares or the filing of a registration statement under the Securities Act in connection therewith. In the event of any termination and abandonment pursuant to the Merger Agreement, no party to the Merger Agreement (or any of its directors or officers) will have any liability or further obligation to any other party to the Merger Agreement, except for certain express obligations under the Merger Agreement and except that no party will be relieved from liability for any breach of the Merger Agreement. Any action by the Company to terminate the Merger Agreement as described herein will require only the approval of a majority of the directors of the Company then in office who were directors of the Company on the date of the Merger Agreement, or persons nominated or elected to succeed such directors by a majority of such directors. In the event the Merger Agreement is terminated, (i) YPF and the Purchaser will not, and will cause their subsidiaries and affiliates controlled by them not to, acquire or offer to acquire or request permission to acquire or offer to acquire (either directly or pursuant to a waiver of this or any other covenant in the Merger Agreement) any additional Voting Shares otherwise than pursuant to the Merger for a period of not less than 24 months after termination of the Merger Agreement without prior written approval of the Board, and (ii) the provisions of the confidentiality agreement previously entered into between the Company and YPF (or one of its affiliates) will continue to apply. Whether or not the Merger is consummated, all costs and expenses incurred in connection with the Offer, the Merger Agreement and the transactions contemplated thereby will be paid by the party incurring such costs and expenses; provided, however, that (i) in the event of a termination of the Merger Agreement by (a) the Company if the Board determines that it will not recommend the approval of the Merger by the Company's Stockholders (or if such recommendation is withdrawn) based upon the advice of outside counsel that such action is necessary for the Board to comply with its fiduciary duties to stockholders under applicable law and (b) YPF and the Purchaser if (1) the Board shall withdraw, modify or change its recommendation relating to the Merger in a manner materially adverse to YPF or shall have resolved to do any of the foregoing or (2) the Board shall have recommended to the stockholders of the Company that they accept or approve, or the Company or any of its subsidiaries shall have agreed to engage in, a Competing Transaction, the Company will be obligated to promptly pay to the Purchaser $20 million in cash, and (ii) in the event of a termination of the Merger Agreement by the Company or by YPF if at the date of such termination any condition to the funding of remaining available credit under the Purchaser Facility or the other loans contemplated by the Commitment Letter has not been satisfied, provided that at such time no other condition to YPF's obligation to consummate the Merger, is unsatisfied (other than the failure to meet the Minimum Share Condition as a result of the failure to obtain such funding), YPF and the Purchaser, jointly and severally, will be obligated to promptly pay to the Company $20 million in cash. (b) $9.75 Preferred Stock Arrangements. In accordance with the provisions of the Certificate, the holder of the $9.75 Preferred Stock was required to approve the Merger Agreement in order for the Merger to be consummated. To induce such holder to consent to the Merger and, effective upon the Effective Time, to (i) waive certain rights, including appraisal rights, conversion rights, rights under the Rights Agreement and the right to increased dividends under certain circumstances, (ii) waive certain covenants restricting the Company's ability to take certain actions, and (iii) terminate the registration rights associated with the $9.75 Preferred Stock, YPF has agreed, effective as of the Effective Time, to guarantee the payment and performance of each and every obligation of the Company to the registered owners of the Company's $9.75 Preferred Stock, including the obligation to pay quarterly dividend amounts and to redeem shares of the $9.75 Preferred Stock in certain circumstances. In addition, the Company has agreed, effective upon the Effective Time, to (i) waive certain rights, including the right to redeem the $9.75 Preferred Stock at its option and the right of first offer with Page 15 of 20 respect to the transfer of the shares of $9.75 Preferred Stock, (ii) waive certain transfer restrictions with respect to the $9.75 Preferred Stock, and (iii) pay to The Prudential Insurance Company of America ("Prudential"), which is the current holder of all of the outstanding shares of the $9.75 Preferred Stock, a restructuring fee of $250,000 upon the Effective Time. YPF has agreed to reimburse Prudential for all of its reasonable out-of- pocket expenses arising in connection with these agreements. See "Item 7--Exhibit D and Exhibit E," which constitute the arrangement with the holder of the Company's $9.75 Preferred Stock. (c) YPF Guarantee of Purchaser Obligations. YPF has guaranteed the obligations of the Purchaser under the Purchaser Facility, and in connection therewith YPF pledged all of the capital stock of the Purchaser to the lenders providing the Purchaser Facility. In the event of a foreclosure on such capital stock, the lender would be the beneficial owner of the Shares owned by the Purchaser or YPF, as the case may be. See "Item 3 -- YPF Guarantee" above. (d) Other Contracts and Arrangements. Except as described above, none of the Reporting Persons has any other contract, arrangement, understanding or relationship (whether or not legally enforceable) with any other person with respect to any securities of the Company, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. Item 7. Material to be Filed As Exhibits Exhibit A Credit Agreement, dated April 5, 1995, among the lenders specified therein for which The Chase Manhattan Bank (National Association) acts as agent, YPF Acquisition Corp. and YPF Sociedad Anonima. Exhibit B Commitment Letter, dated February 24, 1995, between The Chase Manhattan Bank (National Association) and YPF Sociedad Anonima. Exhibit C Agreement of Merger, dated February 28, 1995, among Maxus Energy Corporation, YPF Sociedad Anonima and YPF Acquisition Corp. Exhibit D Guarantee Agreement, dated February 28, 1995, between YPF Sociedad Anonima and The Prudential Insurance Company of America. Exhibit E Letter Agreement between Maxus Energy Corporation and The Prudential Insurance Company of America, dated February 28, 1995. Page 16 of 20 SIGNATURE After reasonable inquiry and to the best of our knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct. Dated: April 11, 1995 YPF SOCIEDAD ANONIMA By: /s/ Jose A. Estenssoro --------------------------- Jose A. Estenssoro President YPF ACQUISITION CORP. By: /s/ Jose A. Estenssoro --------------------------- Jose A. Estenssoro President Page 17 of 20 SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS 1. Directors and Executive Officers of the Purchaser. The following ------------------------------------------------- table sets forth the name, current business address and present principal occupation or employment and material occupations, positions, offices or employments for the past five years of each director and executive officer of YPF. Unless otherwise indicated, the current business address of each person is c/o YPF--Directorio, Avenida Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina and each occupation set forth opposite an individual's name refers to employment with the Purchaser. Each such person is a citizen of the Republic of Argentina, unless otherwise indicated. Present Principal Occupation Or Employment and Current Business Address; Material Positions Held Name During The Past Five Years and Business Addresses Thereof ---- --------------------------------------------------------- Jose A. Estenssoro President (see Directors and Executive Officers of YPF below). Cedric Bridger Director since April 4, 1995, Vice President, Assistant Secretary and Treasurer (See Directors and Executive Officers of YPF below). Carlos Olivieri Vice President and Assistant Secretary (See Directors and Executive Officers of YPF below). Darial R. Sneed Vice President. Since 1993, Ms. Sneed has served as Vice President and Manager, Investor Relations for YPF - U.S.A., Inc. From 1990 to 1993, she served as Associate Director, Investor Relations for BP America Inc. Her business address is YPF -- U.S.A., Inc., 660 Madison Avenue, 20th Floor, New York, New York 10021. Ms. Sneed is a citizen of the United States of America. Norberto Noblia Secretary (See Directors and Executive Officers of YPF below). 2. Directors and Executive Officers of YPF. The following table sets --------------------------------------- forth the name, business address and present principal occupation or employment, and material occupations, positions, offices or employments for the past five years of each director and executive officer of YPF. Unless otherwise indicated, the current business address of each such person is c/o YPF--Directorio, Avenida Pte. Roque Saenz Pena 777, 1364 Buenos Aires, Argentina, and each occupation set forth opposite an individual's name refers to employment with YPF. Each such person is a citizen of the Republic of Argentina, unless otherwise indicated. Present Principal Occupation Or Employment and Current Business Address; Material Positions Held Name During The Past Five Years and Business Addresses Thereof ---- --------------------------------------------------------- Jose A. Estenssoro Director since 1991, President since 1990. He has been associated with YPF since 1990, when he was appointed Trustee by the Argentine Government. From 1987 through 1989, he was President of Compania Sol Petroleo S.A. and previously, from 1962 to 1987, he occupied various executive positions with Hughes Tool Company, where he was named President in 1987. Nells Leon Director since 1991, Executive Vice President since 1990. He was Vice President of Operations of Sol Petroleo S.A. from 1987 to 1990. Page 18 of 20 Mario L. Pineiro Director since 1992. He retired in 1992 as CEO of Alejandro Llauro e Hijos S.A., where he served for many years. Mr. Pineiro is also a director of Transportadora de Gas del Sur S.A. Miguel Madanes Director since 1993. Presently involved in the cable television industry in Argentina and Brazil. Previously a Director of YPF from 1991 to 1992. He served as the CEO of Fate S.A. from 1971 until 1991. Bayless A. Manning Director since 1993. Director of IBJ Schroder Bank & Trust Company. Currently serves as a consultant. Partner of Paul, Weiss, Rifkind, Wharton & Garrison from 1977 until 1990. Mr. Manning is a citizen of the United States of America. Carlos de la Vega Director since 1993. Presently Director of Institutional Relations and Human Resources of CIBA-Geigy Argentina. President of the Argentine Chamber of Commerce from 1988 to 1993. He was also President of the Ibero-American Association of Chambers of Commerce from 1990 to 1992. James R. Lesch Director since 1993. Mr. Lesch is currently retired. He was Chief Executive Officer (1979-1986) and Chairman of the Board (1981-1986) of the Hughes Tool Company and he also served as Commissioner, State of Texas Department Commerce (1988-1992). He previously served as Director of the American Petroleum Institute. Mr. Lesch is a citizen of the United States of America. His business address is P. O. Box 4442, Houston, Texas 77210. Ernst Schneider Director since 1993. Chairman of the Board of Leu Holding and Bank Leu Ltd. and a member of the Board of Directors of CS Holding Ltd. since 1993. Previously, he served as Vice Chairman and member of the Board of Credit Suisse. Mr. Schneider is a dual citizen of Switzerland and the United States of America. Hector A. Domeniconi Director since 1993. Presently, Managing Director of DEXCOR, a consulting firm in Argentina. Held several positions in the Ministry of Economy of Argentina from 1990 through 1992. Luis A. Prol Director since 1993. President of YPF Gas S.A. Held several positions in both Argentine Federal and Provincial governments, serving as Minister of the Treasury and Finance of the Province of Formosa from 1987 to 1989 and as Secretary of Hydrocarbons and Mining of the Ministry of Economy from 1991 to 1992. Angel Cirasino Director since 1993. Assistant Secretary for Petrochemistry and Mining of the Ministry of Economy of the Province of Mendoza since 1991. He was Managing Partner of Motomar Cuyo Marketing S.R.L. from 1989 to 1991. Rodolfo Alejandro Diaz Director since 1994. Mr. Diaz is a lawyer and has private practices in Buenos Aires and Mendoza. He was Secretary of Labor from 1989 until 1991 and Labor Minister from 1991 until 1992. Eduardo Petazze Vice President, Refining and Marketing and Head of Restructuring Project since 1993. Previously, he served as Vice President of Exploration and Production from 1992 to 1993 and Head of the Restructuring Project since 1991. Joined YPF in 1983. Page 19 of 20 Marcelo Guiscardo Vice President, Exploration and Production since 1993. Previously, he was associated with Exxon Corporation from 1979 to 1993. Cedric Bridger Vice President, Finance and Corporate Development since 1992. Before joining YPF, he was Marketing Manager for CVB Industrias Mecanicas in Brazil from 1989. He was associated with Hughes Tool Company from 1964 to 1989. Carlos A. Olivieri Vice President and General Controller since 1993. He was Controller and Director of Aerolineas Argentinas S.A. from 1991 to 1992, a Director of the Central Bank of Argentina in 1991 and an accountant with Arthur Andersen & Co. from 1974 to 1986. Raul H. Oreste Vice President, Human Resources since 1990. He was previously associated with YPF from 1943 to 1963 and from 1965 to 1977. From 1978 to 1990, Mr. Oreste was associated with Compania Naviera Perez Companc. Juan A. Rodriguez Vice President of Engineering and Technology since 1992. He joined YPF in 1990. From 1968 to 1990, he was associated with Hughes Tool Company of Argentina. Juan J. Garacija Vice President, Purchasing, Contracts and Environmental Protection since 1992. Consultant from 1989 to 1990, when he joined YPF. He has previously served YPF in various capacities from 1941 to 1976 and from 1982 to 1988. Norberto Noblia Vice President, Legal Affairs since 1989. Previously, he was associated with the Sindicatura General de Empresas Publicas from 1975 to 1986. Martin Paez-Allende Vice President for Institutional Affairs since September 1994. From 1991 to 1994, he practiced law. Until 1991 he served as Vice President and member of the Board of Shell C.A.P.S.A. (Argentina). Page 20 of 20 Exhibit Index Exhibit Sequential Page Number ------- ---------------------- Exhibit A Credit Agreement, dated April 5, 1995, among the lenders specified therein for which The Chase Manhattan Bank (National Association) acts as agent, YPF Acquisition Corp. and YPF Sociedad Anonima. Exhibit B Commitment Letter, dated February 24, 1995, between The Chase Manhattan Bank (National Association) and YPF Sociedad Anonima. Exhibit C Agreement of Merger, dated February 28, 1995, among Maxus Energy Corporation, YPF Sociedad Anonima and YPF Acquisition Corp. Exhibit D Guarantee Agreement, dated February 28, 1995, between YPF Sociedad Anonima and The Prudential Insurance Company of America. Exhibit E Letter Agreement between Maxus Energy Corporation and The Prudential Insurance Company of America, dated February 28, 1995. EX-99.A 2 Exhibit A CONFORMED COPY File No. 33307 ____________________________ YPF ACQUISITION CORP. (To Be Merged With and Into MAXUS ENERGY CORPORATION) and YPF SOCIEDAD ANONIMA, as Guarantor _____________________________ CREDIT AGREEMENT Dated as of April 5, 1995 ______________________________ THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Agent BII\32161_1 04/07/95 10:16am TABLE OF CONTENTS This Table of Contents is not part of the Agreement to which it is attached but is inserted for convenience of reference only. Page ---- Section 1. Definitions and Accounting Matters . . . . . . . 1 1.01 Certain Defined Terms . . . . . . . . . . . . . . 1 1.02 Accounting Terms and Determinations . . . . . . . 18 1.03 Types of Loans . . . . . . . . . . . . . . . . . 18 1.04 Copies of Documents . . . . . . . . . . . . . . . 18 Section 2. Commitments, Loans, Notes and Prepayments . . . . 18 2.01 Loans . . . . . . . . . . . . . . . . . . . . . . 18 2.02 Borrowings . . . . . . . . . . . . . . . . . . . 19 2.03 Changes of Commitments . . . . . . . . . . . . . 19 2.04 Lending Offices . . . . . . . . . . . . . . . . . 20 2.05 Several Obligations; Remedies Independent . . . . 20 2.06 Notes . . . . . . . . . . . . . . . . . . . . . . 20 2.07 Prepayments and Conversions or Continuations of Loans . . . . . . . . . . . . . . . . . . . . . 21 Section 3. Payments of Principal and Interest . . . . . . . 21 3.01 Repayment of Loans . . . . . . . . . . . . . . . 21 3.02 Interest . . . . . . . . . . . . . . . . . . . . 21 Section 4. Payments; Pro Rata Treatment; Computations; Etc. . . . . . . . . . . . . . . . . . . . . . . 22 4.01 Payments . . . . . . . . . . . . . . . . . . . . 22 4.02 Pro Rata Treatment . . . . . . . . . . . . . . . 23 4.03 Computations . . . . . . . . . . . . . . . . . . 24 4.04 Minimum Amounts . . . . . . . . . . . . . . . . . 24 4.05 Certain Notices . . . . . . . . . . . . . . . . . 24 4.06 Non-Receipt of Funds by the Agent . . . . . . . . 25 4.07 Sharing of Payments, Etc. . . . . . . . . . . . . 26 Section 5. Yield Protection, Etc. . . . . . . . . . . . . . 27 5.01 Additional Costs . . . . . . . . . . . . . . . . 27 5.02 Limitation on Types of Loans . . . . . . . . . . 29 5.03 Illegality . . . . . . . . . . . . . . . . . . . 30 5.04 Treatment of Affected Loans . . . . . . . . . . . 30 5.05 Broken Funding . . . . . . . . . . . . . . . . . 31 5.06 U.S. Taxes . . . . . . . . . . . . . . . . . . . 32 5.07 Replacement of Certain Lenders . . . . . . . . . 33 Section 6. Guarantee . . . . . . . . . . . . . . . . . . . . 34 6.01 The Guarantee . . . . . . . . . . . . . . . . . . 34 6.02 Obligations Unconditional . . . . . . . . . . . . 34 BII\32161_1 04/07/95 10:16am (i) Page ---- 6.03 Reinstatement . . . . . . . . . . . . . . . . . . 35 6.04 Subrogation . . . . . . . . . . . . . . . . . . . 36 6.05 Remedies . . . . . . . . . . . . . . . . . . . . 36 6.06 Instrument for the Payment of Money . . . . . . . 36 6.07 Continuing Guarantee . . . . . . . . . . . . . . 36 6.08 Taxes . . . . . . . . . . . . . . . . . . . . . . 37 Section 7. Conditions Precedent . . . . . . . . . . . . . . 38 7.01 Initial Loans . . . . . . . . . . . . . . . . . . 38 7.02 Second Loans . . . . . . . . . . . . . . . . . . 43 7.03 Initial and Second Loans . . . . . . . . . . . . 45 Section 8. Representations and Warranties . . . . . . . . . 48 8.01 Corporate Existence . . . . . . . . . . . . . . . 48 8.02 Litigation . . . . . . . . . . . . . . . . . . . 48 8.03 No Breach . . . . . . . . . . . . . . . . . . . . 48 8.04 Action . . . . . . . . . . . . . . . . . . . . . 50 8.05 Approvals . . . . . . . . . . . . . . . . . . . . 50 8.06 Use of Credit . . . . . . . . . . . . . . . . . . 51 8.07 Investment Company Act . . . . . . . . . . . . . 51 8.08 Public Utility Holding Company Act . . . . . . . 51 8.09 Certain Documents . . . . . . . . . . . . . . . . 51 8.10 Capitalization of Company . . . . . . . . . . . . 51 8.11 True and Complete Disclosure . . . . . . . . . . 51 8.12 Pledge Agreement . . . . . . . . . . . . . . . . 52 8.13 Special Purpose Corporation . . . . . . . . . . . 52 8.14 Transaction Costs . . . . . . . . . . . . . . . . 52 8.15 YPF Representations . . . . . . . . . . . . . . . 52 Section 9. Covenants of Obligors . . . . . . . . . . . . . . 53 9.01 Financial Statements, Etc. . . . . . . . . . . . 53 9.02 Litigation; Etc. . . . . . . . . . . . . . . . . 56 9.03 Existence, Etc. . . . . . . . . . . . . . . . . . 57 9.04 Insurance . . . . . . . . . . . . . . . . . . . . 58 9.05 Prohibition of Fundamental Changes . . . . . . . 58 9.06 Limitation on Liens . . . . . . . . . . . . . . . 59 9.07 Indebtedness . . . . . . . . . . . . . . . . . . 61 9.08 Investments . . . . . . . . . . . . . . . . . . . 61 9.09 Dividend Payments . . . . . . . . . . . . . . . . 62 9.10 Maxus Cash . . . . . . . . . . . . . . . . . . . 62 9.11 Ownership of Refinancing Subsidiaries . . . . . . 62 9.12 Special Covenants relating to YPF Acquisition Prior to Merger . . . . . . . . . . . . . . . . 63 9.13 Special Covenants relating to Midgard Group and the Maxus Indonesia Group and their Subsidiaries . . . . . . . . . . . . . . . . . . 63 9.14 Payments of Maxus Indebtedness . . . . . . . . . 64 9.15 Lines of Business . . . . . . . . . . . . . . . . 65 9.16 Transactions with YPF Affiliates . . . . . . . . 65 9.17 Use of Proceeds . . . . . . . . . . . . . . . . . 65 9.18 Modifications of Certain Documents . . . . . . . 65 BII\32161_1 04/07/95 10:16am (ii) Page ---- 9.19 Consummation of the Merger . . . . . . . . . . . 66 9.20 Ownership of YPF Acquisition and Maxus . . . . . 66 9.21 Other Covenants of YPF . . . . . . . . . . . . . 66 Section 10. Events of Default . . . . . . . . . . . . . . . . 66 Section 11. The Agent . . . . . . . . . . . . . . . . . . . . 69 11.01 Appointment, Powers and Immunities . . . . . . . 69 11.02 Reliance by Agent . . . . . . . . . . . . . . . . 70 11.03 Defaults . . . . . . . . . . . . . . . . . . . . 71 11.04 Rights as a Lender . . . . . . . . . . . . . . . 71 11.05 Indemnification . . . . . . . . . . . . . . . . . 71 11.06 Non-Reliance on Agent and Other Lenders . . . . . 72 11.07 Failure to Act . . . . . . . . . . . . . . . . . 72 11.08 Resignation or Removal of Agent . . . . . . . . . 73 11.09 Consents under Other Basic Documents . . . . . . 73 Section 12. Miscellaneous . . . . . . . . . . . . . . . . . . 73 12.01 Waiver . . . . . . . . . . . . . . . . . . . . . 73 12.02 Notices . . . . . . . . . . . . . . . . . . . . . 74 12.03 Expenses, Etc. . . . . . . . . . . . . . . . . . 74 12.04 Amendments, Etc. . . . . . . . . . . . . . . . . 75 12.05 Successors and Assigns . . . . . . . . . . . . . 76 12.06 Assignments and Participations . . . . . . . . . 76 12.07 Survival . . . . . . . . . . . . . . . . . . . . 78 12.08 Captions . . . . . . . . . . . . . . . . . . . . 78 12.09 Counterparts . . . . . . . . . . . . . . . . . . 78 12.10 Jurisdiction, Venue, Immunity and Service of Process . . . . . . . . . . . . . . . . . . . . 79 12.11 Governing Law . . . . . . . . . . . . . . . . . . 80 12.12 Waiver of Jury Trial . . . . . . . . . . . . . . 80 12.13 Special Waiver . . . . . . . . . . . . . . . . . 80 12.14 Judgment Currency . . . . . . . . . . . . . . . . 80 12.15 Use of English Language . . . . . . . . . . . . . 82 12.16 Treatment of Certain Information; Confidentiality . . . . . . . . . . . . . . . . . 83 BII\32161_1 04/07/95 10:16am(iii) SCHEDULE I - Representations and Warranties of YPF SCHEDULE II - Covenants of YPF SCHEDULE III - Events of Default relating to YPF SCHEDULE IV - Litigation SCHEDULE V - Term Sheet - Midgard Facility SCHEDULE VI - Term Sheet - Java/Sumatra Facility SCHEDULE VII - Legal Requirements SCHEDULE VIII - Permitted Transactions EXHIBIT A - Form of Note EXHIBIT B - Form of Pledge Agreement EXHIBIT C - Form of Assumption Agreement EXHIBIT D-1 - Form of Opinion of Special New York Counsel to the Obligors, to be delivered on the Initial Borrowing Date EXHIBIT D-2 - Form of Opinion of Special Argentine Counsel to the Obligors, to be delivered on the Initial Borrowing Date EXHIBIT D-3 - Form of Opinion of Special Counsel to the Obligors, to be delivered on the Second Borrowing Date EXHIBIT D-4 - Form of Opinion of Special New York Counsel to Maxus, to be delivered on the Second Borrowing Date EXHIBIT D-5 - Form of Opinion of General Counsel of Maxus, to be delivered on the Second Borrowing Date EXHIBIT E-1 - Form of Opinion of Special New York Counsel to Chase, to be delivered on the Initial Borrowing Date EXHIBIT E-2 - Form of Opinion of Special Argentine Counsel to Chase, to be delivered on the Initial Borrowing Date EXHIBIT E-3 - Form of Opinion of Special New York Counsel to Chase, to be delivered on the Second Borrowing Date EXHIBIT F - Form of Confidentiality Agreement EXHIBIT G - Form of Notice of Assignment EXHIBIT H - Form of Process Agent Acceptance BII\32161_1 04/07/95 10:16am (iv) CREDIT AGREEMENT dated as of April 5, 1995, between: YPF ACQUISITION CORP., a corporation duly organized and validly existing under the laws of the State of Delaware ("YPF --- Acquisition"); YPF SOCIEDAD ANONIMA, an Argentine sociedad ----------- anonima duly organized and validly existing under the laws of the Republic of Argentina ("YPF"); each of the lenders that is a --- signatory hereto identified under the caption "LENDERS" on the signature pages hereto or that, pursuant to Section 12.06(b) hereof, shall become a "Lender" hereunder (individually, a "Lender" and, collectively, the "Lenders"); and THE CHASE ------ ------- MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association, as agent for the Lenders (in such capacity, together with its successors in such capacity, the "Agent"). ----- Each of YPF and YPF Acquisition has requested that the Lenders make loans to the Company (as defined in Section 1.01 hereof) in an aggregate principal amount not exceeding $550,000,000 and the Lenders are prepared to make such loans upon the terms and conditions hereof. Accordingly, the parties hereto agree as follows: Section 1. Definitions and Accounting Matters. ---------------------------------- 1.01 Certain Defined Terms. As used herein, the --------------------- following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa): ---- ----- "Acquisition" shall mean (a) the purchase by YPF ----------- Acquisition of Maxus Shares (at a price equal to $5.50 per share) for cash pursuant to the Tender Offer Documents and (b) the Merger. "Acquisition Documents" shall mean the Tender Offer --------------------- Documents, the Merger Agreement, the certificate of merger with respect to the Merger, all Proxy Materials and any other document sent by YPF, YPF Acquisition or Maxus to the stockholders of Maxus or filed by YPF, YPF Acquisition or Maxus with the Commission in connection with the Acquisition. "Acquisition Financing Transactions" shall mean (a) the ---------------------------------- loans and other extensions of credit made or contemplated to be made under this Agreement, the YPF Credit Agreement and each of the Refinancing Facilities, (b) the guarantees of any of such loans and other extensions of credit provided for by or contemplated in connection with this Agreement and each of the Refinancing Facilities and (c) any Liens provided for by or contemplated in connection with this Agreement and each of the Refinancing Facilities to secure any of such loans and other extensions of credit or guarantees. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 2 - "Affiliate" shall mean, with respect to any Person, any --------- other Person that directly or indirectly controls, or is under common control with, or is controlled by, such Person. As used in this definition, "control" (including, with its correlative ------- meanings, "controlled by" and "under common control with") shall ------------- ------------------------- mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any -------- event, any Person that owns directly or indirectly securities having 5% or more of the voting power for the election of directors or other governing body of a corporation or 5% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person or as an owner of an undivided fractional interest in hydrocarbon reserves or production with respect to which such Person is not the operator) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, no individual shall be an Affiliate of any Person solely by reason of his or her being a director, officer or employee of such Person. "Applicable Lending Office" shall mean, for each Lender ------------------------- and for each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender) designated for such Type of Loan on the signature pages hereof or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Agent and the Company as the office by which its Loans of such Type are to be made and maintained. "Applicable Margin" shall mean, with respect to Base ----------------- Rate Loans, 1-1/4% per annum and with respect to Eurodollar Loans, 2-1/4% per annum. "Argentina" shall mean the Republic of Argentina. --------- "Argentine Taxes" shall have the meaning assigned to --------------- such term in Section 6.08 hereof. "Assumption Agreement" shall mean an Assumption -------------------- Agreement, substantially in the form of Exhibit C hereto, dated as of the Second Borrowing Date and executed and delivered by Maxus, pursuant to which Maxus shall (among other things) expressly assume all of the obligations of YPF Acquisition under this Agreement and the other Basic Documents. "Bankruptcy Code" shall mean the U.S. Federal --------------- Bankruptcy Code of 1978, as amended from time to time. "Base Rate" shall mean, for any day, a rate per annum --------- equal to the higher of (a) the Federal Funds Rate for such day BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 3 - plus 1/2 of 1% and (b) the Prime Rate for such day. Each change in any interest rate provided for herein based upon the Base Rate resulting from a change in the Base Rate shall take effect at the time of such change in the Base Rate. "Base Rate Loans" shall mean Loans that bear interest --------------- at rates based upon the Base Rate. "Basic Documents" shall mean, collectively, this --------------- Agreement, the Notes, the Pledge Agreement and the Assumption Agreement. "Business Day" shall mean any day (a) on which ------------ commercial banks are not authorized or required to close in New York City and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice by the Company with respect to any such borrowing, payment, prepayment, Conversion or Interest Period, that is also a day on which dealings in Dollar deposits are carried out in the London interbank market. "Capital Lease Obligations" shall mean, for any Person, ------------------------- all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP. "Chase" shall mean The Chase Manhattan Bank (National ----- Association). "Code" shall mean the U.S. Internal Revenue Code of ---- 1986, as amended from time to time. "Commission" shall mean the Securities and Exchange ---------- Commission, or any regulatory body that succeeds to the functions thereof. "Commitment" shall mean, as to each Lender, the ---------- obligation of such Lender to make Loans pursuant to Section 2.01 hereof in an aggregate principal amount at any one time outstanding up to but not exceeding (a) in the case of a Lender that is a party to this Agreement as of the date hereof, the amount set opposite such Lender's name on the signature pages hereof under the caption "Commitment" or (b) in the case of any other Lender, the aggregate amount of the Commitments of such Lender acquired by it pursuant to Section 12.06(b) hereof (in each case, as the same may be reduced at any time or from time to BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 4 - time pursuant to Section 2.03 hereof or increased or reduced from time to time pursuant to said Section 12.06(b)). The original aggregate principal amount of the Commitments is $550,000,000. "Commitment Termination Date" shall mean June 12, 1995. --------------------------- "Commodity Hedging Agreement" shall mean, for any --------------------------- Person, an agreement or arrangement between such Person and one or more financial institutions or other entities providing for the transfer or mitigation of risks of fluctuations in the prices of hydrocarbons, either generally or under specific circumstances. "Company" shall mean (a) at all times up to the time ------- the Merger is consummated, YPF Acquisition and (b) at all times thereafter, Maxus (as successor by merger to YPF Acquisition). "Continue", "Continuation" and "Continued" shall refer -------- ------------ --------- to the continuation pursuant to Section 2.07 hereof of a Eurodollar Loan from one Interest Period to the next Interest Period. "Control Transfer Date" shall mean the earlier to occur --------------------- of (a) the date that the designees of YPF have been elected to, and constitute a majority of, the Board of Directors of Maxus pursuant to Section 1.4 of the Merger Agreement and (b) the Merger Closing Date. "Convert", "Conversion" and "Converted" shall refer to ------- ---------- --------- a conversion pursuant to Section 2.07 hereof of one Type of Loans into another Type of Loans, which may be accompanied by the transfer by a Lender (at its sole discretion) of a Loan from one Applicable Lending Office to another. "Default" shall mean an Event of Default or an event ------- that with notice or lapse of time or both would become an Event of Default. "Dividend Payment" shall mean, with respect to any ---------------- Person, dividends (in cash, Property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition of, any shares of any class of stock of such Person or of any warrants, options or other rights to acquire the same (or to make any payments to any other Person, such as "phantom stock" payments, where the amount thereof is calculated with reference to the fair market or equity value of such Person or any of its Subsidiaries), but excluding dividends payable solely in shares of common stock of such Person. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 5 - "Dollars" and "$" shall mean lawful money of the United ------- - States of America. "Equity Rights" shall mean, with respect to any Person, ------------- any subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including, without limitation, any stockholders' or voting trust agreements) for the issuance, sale, registration or voting of, or securities convertible into or exchangeable for, any additional shares of capital stock of any class, or partnership or other ownership interests of any type in, such Person. "ERISA" shall mean the Employee Retirement Income ----- Security Act of 1974, as amended from time to time. "ERISA Affiliate" shall mean any corporation or trade --------------- or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which the Company is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which the Company is a member. "Eurodollar Base Rate" shall mean, with respect to any -------------------- Eurodollar Loan for any Interest Period therefor, the arithmetic mean (rounded upwards, if necessary, to the nearest 1/16 of 1%), as determined by the Agent, of the rates per annum quoted by the respective Reference Lenders at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the date two Business Days prior to the first day of such Interest Period for the offering by the respective Reference Lenders to leading banks in the London interbank market of Dollar deposits having a term comparable to such Interest Period and in an amount comparable to the principal amount of the Eurodollar Loan to be made by the respective Reference Lenders for such Interest Period. If any Reference Lender is not participating in any Eurodollar Loans during any Interest Period therefor, the Eurodollar Base Rate for such Loans for such Interest Period shall be determined by reference to the amount of such Loans that such Reference Lender would have made or had outstanding had it been participating in such Loan during such Interest Period. "Eurodollar Loans" shall mean Loans that bear interest ---------------- at rates based on rates referred to in the definition of "Eurodollar Base Rate" in this Section 1.01. "Eurodollar Rate" shall mean, for any Eurodollar Loan --------------- for any Interest Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 6 - the Agent to be equal to the Eurodollar Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve Requirement (if any) for such Loan for such Interest Period. "Event of Default" shall have the meaning assigned to ---------------- such term in Section 10 hereof. "Exchange Act" shall mean the Securities and Exchange ------------ Act of 1934, as amended from time to time and the rules and regulations promulgated by the Commission thereunder. "Federal Funds Rate" shall mean, for any day, the rate ------------------ per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for -------- which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if such rate is not so published for any Business Day, the Federal Funds Rate for such Business Day shall be the average rate charged to Chase on such Business Day on such transactions as determined by the Agent. "GAAP" shall mean generally accepted accounting ---- principles as in effect from time to time as set forth in the opinions, statements and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, the Financial Accounting Standards Board and such other Persons who shall be approved by a significant segment of the accounting profession and concurred in by the independent certified public accountants certifying any audited financial statements delivered hereunder. "Guarantee" shall mean a guarantee, an endorsement, a --------- contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise to be or become contingently liable under or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or a guarantee of the payment of dividends or other distributions upon the stock or equity interests of any Person, or an agreement to purchase, sell or lease (as lessee or lessor) Property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of such debtor's obligations or an agreement to assure a creditor against loss, and including, without limitation, causing a bank or other financial institution to issue a letter of credit or other similar instrument for the benefit of another Person, but BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 7 - excluding endorsements for collection or deposit in the ordinary course of business. The terms "Guarantee" and "Guaranteed" used --------- ---------- as a verb shall have a correlative meaning. "Guaranteed Obligations" shall have the meaning ---------------------- assigned to such term in Section 6.01 hereof. "Indebtedness" shall mean, for any Person (without ------------ duplication): (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; (f) the unearned balance of any advance payment received by such Person under any contract to be performed in excess of $5,000,000 in the aggregate; and (g) Indebtedness of others Guaranteed by such Person. "Independent Petroleum Engineer" shall mean any firm of ------------------------------ independent petroleum engineers selected by the Company and satisfactory to the Majority Lenders. "Information Statement" shall mean the Information --------------------- Statement, if required, to be filed by Maxus with the Commission with respect to the Acquisition pursuant to Rule 14c-2 of the Exchange Act, together with all exhibits and schedules thereto. "Initial Borrowing Date" shall mean the date on which ---------------------- the Initial Loans are or shall have been made. "Initial Loans" shall mean the Loans made upon the ------------- satisfaction or waiver of the conditions precedent set forth in Section 7.01 and 7.03 hereof. "Interest Payment Date" shall mean the date three --------------------- months after the Initial Borrowing Date or, if such date is not a Business Day, the immediately preceding Business Day. "Interest Period" shall mean, with respect to any --------------- Eurodollar Loan, each period commencing on the date such Eurodollar Loan is made or Converted from a Base Rate Loan or the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 8 - last day of the next preceding Interest Period for such Loan and ending on the numerically corresponding day in the first calendar month thereafter, as the Company may select as provided in Section 4.05 hereof, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) no Interest Period may end after June 12, 1995; (ii) each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); (iii) no Interest Period shall have a duration of less than one month (notwithstanding clause (i) above) and, if the Interest Period for any Eurodollar Loan would otherwise be a shorter period, such Loan shall not be available as a Eurodollar Loan hereunder for such period. "Interest Rate Protection Agreement" shall mean, for ---------------------------------- any Person, an interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest risks, either generally or under specific contingencies. "Investment" shall mean, for any Person: (a) the ---------- acquisition (whether for cash, Property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (including, without limitation, any "short sale" or any sale of any securities at a time when such securities are not owned by the Person entering into such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person), but excluding any such advance, loan or extension of credit having a term not exceeding 90 days arising in connection with the sale of inventory or supplies or the providing of oil and gas operating, producing or marketing services by such Person in the ordinary course of business; and (c) the entering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such other Person (other than Guarantees included in the definition of Indebtedness in this Section 1.01). "Legal Requirements" shall have the meaning assigned to ------------------ such term in Section 8.03(b) hereof. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 9 - "Lien" shall mean, with respect to any Property, any ---- assignment in trust, mortgage, lien, pledge, charge, fiduciary or security assignment, security interest or encumbrance of any kind in respect of such Property (including, without limitation, any Production Payment, advance payment or similar arrangement with respect to minerals in place). For purposes of the foregoing, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property. "Loans" shall mean the loans provided for by ----- Section 2.01 hereof, which may be Base Rate Loans and/or Eurodollar Loans. "Majority Lenders" shall mean Lenders holding at least ---------------- 66 2/3% of the aggregate amount of the Commitments or, if the Commitments shall have terminated, Lenders holding at least 66 2/3% of the aggregate unpaid principal amount of the Loans. "Margin Stock" shall mean "margin stock" within the ------------ meaning of Regulations U and X. "Material Adverse Effect" shall mean a material adverse ----------------------- effect on any of: (a) the condition (financial or otherwise), business, operations, assets, nature of assets or liabilities of any of (i) YPF and its Subsidiaries taken as a whole (including, without limitation, the investment ratings of any of YPF's securities being downgraded or being put on "credit watch" or "credit review" with negative implications by any nationally recognized statistical rating organization), (ii) Maxus and its Subsidiaries taken as a whole, (iii) Midgard or any of its Subsidiaries (other than any of such Subsidiaries all of the capital stock or other ownership interests of or in which are to be transferred to Maxus or other Subsidiaries of Maxus prior to the Merger Closing Date) or (iv) Maxus Indonesia, Maxus Java or Maxus Sumatra or any of their respective Subsidiaries (including, without limitation, the investment ratings of the Republic of Indonesia being downgraded or being put on "credit watch" or "credit review" with negative implications by a nationally recognized statistical rating organization at any time after the consummation of the Merger); (b) the ability of any of the Persons referred to in clause (a) above which is or is intended to be a party to any of the agreements and other documents providing for or otherwise relating to any of the Acquisition Financing Transactions to pay and perform its obligations under any of such documents when required to be paid or performed; (c) the validity or enforceability of any of such documents; (d) any of the rights and remedies of the lenders (or the agent) under any of such documents; or (e) the timely payment of any of BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 10 - the loans and other extensions of credit or other amounts payable to the lenders under any of such documents. "Material Subsidiary" shall mean (a) any of the ------------------- Refinancing Subsidiaries and their respective Subsidiaries, (b) any of Maxus International Energy Corporation and (c) any other Subsidiary of Maxus the assets of which (determined on a consolidated basis with any consolidated Subsidiaries of such Subsidiary) were equal to or more than 2 1/2% of the consolidated total assets of Maxus and its consolidated Subsidiaries at the end of the preceding fiscal year of Maxus. "Maturity Date" shall mean the earlier of (a) June 12, ------------- 1995 and (b) the Merger Closing Date. "Maxus" shall mean Maxus Energy Corporation, a Delaware ----- corporation. "Maxus Indonesia" shall mean Maxus Indonesia, Inc., a --------------- Delaware corporation and a wholly-owned subsidiary of Maxus. "Maxus Indonesia Group" shall mean Maxus Indonesia and --------------------- its Subsidiaries. "Maxus Indonesia Refinancing Facility" shall mean the ------------------------------------ loans in an aggregate amount up to $175,000,000 to be made available to Maxus Java and Maxus Sumatra as contemplated by Term Sheet - Java/Sumatra Facility attached as Schedule VI hereto, the proceeds of which are to be used to pay or prepay a portion of the Loans. "Maxus Java" shall mean Maxus Northwest Java, Inc., a ---------- Delaware corporation and a Wholly Owned Subsidiary of Maxus. "Maxus Material Adverse Effect" shall mean a material ----------------------------- adverse effect on any of: (a) the financial condition, business or operations of Maxus and its Subsidiaries taken as a whole; (b) the ability of Maxus or any of the Refinancing Subsidiaries or any Subsidiary of any of the Refinancing Subsidiaries (other than any such Subsidiary all of the capital stock or other ownership interests of or in which are to be transferred to Maxus or other Subsidiaries of Maxus prior to the Merger Closing Date) to perform any of its payment or any of its other material obligations under any of the Basic Documents to which it is or is intended to be a party or the Refinancing Facilities (including the agreements and other documents providing for or relating to such Refinancing Facilities to which it is or is intended to be a party) or, in the case of Maxus, any of its material obligations under the Merger Agreement; (c) the validity or enforceability of any of the obligations referred to in clause (b) above; (d) the ability of the lenders (or the agent) under any of the documents BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 11 - referred to in clause (b) above to enforce their respective rights and remedies against any of the Persons referred to in clause (b) above under any of such documents to which such Person is or is intended to be a party; or (e) the timely payment of any of the payment obligations referred to in clause (b) above. "Maxus Preferred Shares" shall mean, collectively, the ---------------------- $4.00 Cumulative Convertible Preferred Stock par value $1.00 per share, the $9.75 Cumulative Convertible Preferred Stock par value $1.00 per share, and the $2.50 Cumulative Preferred Stock par value $1.00 per share, in each case, of Maxus. "Maxus Public Debt Documents" shall mean, collectively, --------------------------- (a) the Indenture dated as of November 1, 1990 between Maxus and Chemical Bank, as trustee and the Securities (as defined therein) issued thereunder, (b) the Indenture date as of April 1, 1978 between Diamond Shamrock Corporation (as predecessor in interest to Maxus) and Chemical Bank, as trustee, and the Debentures (as defined therein) issued thereunder, (c) the Indenture dated as of May 1, 1983 between Diamond Shamrock Corporation (as predecessor in interest to Maxus) and NationsBank, N.A., as trustee, and the Securities (as defined therein) issued thereunder, (d) the Indenture dated as of November 1, 1985 between Maxus and NationsBank, N.A., as trustee, and the Securities (as defined therein) issued thereunder, and (e) the Indenture dated as of April 1, 1988 between Maxus and Chemical Bank, as trustee, and the Securities (as defined therein) issued thereunder, in each case, as such agreements and instruments have heretofore and shall, subject to Section 9.18 hereof, be hereafter modified and supplemented and in effect from time to time. "Maxus Shares" shall mean shares of common stock of ------------ Maxus, par value $1.00. "Maxus Sumatra" shall mean Maxus Southeast Sumatra ------------- Inc., a Delaware corporation and a Wholly Owned Subsidiary of Maxus. "Merger" shall mean the merger of YPF Acquisition with ------ and into Maxus pursuant to the Merger Agreement. "Merger Agreement" shall mean the Agreement of Merger ---------------- dated as of February 28, 1995 among YPF, YPF Acquisition and Maxus, as the same shall, subject to Section 9.18 hereof, be modified and supplemented and in effect from time to time. "Merger Closing Date" shall mean the date on which the ------------------- Merger shall become effective. "Midgard" shall mean Midgard Energy Company, a Delaware ------- corporation and a Wholly Owned Subsidiary of Maxus. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 12 - "Midgard Group" shall mean Midgard and its ------------- Subsidiaries. "Midgard Refinancing Facility" shall mean the loans in ---------------------------- an aggregate amount up to $250,000,000 to be made available to Midgard as contemplated by Term Sheet - Midgard Facility attached as Schedule V hereto, the proceeds of which are to be used to pay or prepay a portion of the Loans. "Multiemployer Plan" shall mean a multiemployer plan ------------------ defined as such in Section 3(37) of ERISA to which contributions have been made by the Company or any ERISA Affiliate and that is covered by Title IV of ERISA. "Notes" shall mean the promissory notes provided for by ----- Section 2.06 hereof and all promissory notes delivered in substitution or exchange therefor, in each case as the same shall be modified and supplemented and in effect from time to time. "Obligors" shall mean, collectively, the Company and -------- YPF. "Offer to Purchase" shall mean the Offer to Purchase ----------------- For Cash All Outstanding Shares of Maxus at $5.50 Net Per Share by YPF Acquisition dated March 3, 1995 made by YPF Acquisition in connection with the Acquisition. "PBGC" shall mean the Pension Benefit Guaranty ---- Corporation or any entity succeeding to any or all of its functions under ERISA. "Permitted Investments" shall mean: (a) direct --------------------- obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition thereof; (b) certificates of deposit issued by any bank or trust company organized under the laws of the United States of America or any state thereof and having capital, surplus and undivided profits of at least $500,000,000, maturing not more than 90 days from the date of acquisition thereof; and (c) commercial paper rated A-1 or better or P-1 by Standard & Poor's Corporation or Moody's Investors Services, Inc., respectively, maturing not more than 90 days from the date of acquisition thereof; in each case so long as the same (x) provide for the payment of principal and interest (and not principal alone or interest alone) and (y) are not subject to any contingency regarding the payment of principal or interest. "Permitted Maxus Investments" shall mean Permitted --------------------------- Investments referred to in clause (a) of the definition of such BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 13 - term in Section 1.01 hereof (without regard to the limitation on maturity specified therein), other readily marketable short-term investments held by Maxus and its Subsidiaries on the date hereof and other readily marketable short-term investments having the same or more favorable credit and other characteristics as such short-term investments so held on the date hereof. "Person" shall mean any individual, corporation, ------ company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof). "Plan" shall mean an employee benefit or other plan ---- established or maintained by the Company or any ERISA Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer Plan. "Pledge Agreement" shall mean a Pledge Agreement ---------------- substantially in the form of Exhibit B hereto between YPF and the Agent, as the same shall be modified and supplemented and in effect from time to time. "Post-Default Rate" shall mean, in respect of (a) any ----------------- principal of any Loan that is not paid when due (whether at stated maturity, by acceleration or otherwise), a rate per annum during the period from and including the due date to but excluding the date on which such amount is paid in full equal to 3 1/2% plus the Base Rate as in effect from time to time plus the ---- ---- Applicable Margin for Base Rate Loans (provided that, if the -------- amount so in default is principal of a Eurodollar Loan and the due date thereof is a day other than the last day of the Interest Period therefor, the "Post-Default Rate" for such principal shall be, for the period from and including such due date to but excluding the last day of such Interest Period, 3 1/2% plus the ---- interest rate for such Loan as provided in Section 3.02(b) hereof and (b) interest on any Loan that is not paid when due (whether at stated maturity, by acceleration or otherwise), a rate per annum during the period from and including the due date to but excluding the date on which such amount is paid in full equal to 3 1/2% plus the Base Rate as in effect from time to time plus the ---- ---- Applicable Margin for Base Rate Loans. "Prime Rate" shall mean the rate of interest from time ---------- to time announced by Chase at the Principal Office as its prime commercial lending rate. "Principal Office" shall mean the principal office of ---------------- Chase, located on the date hereof at 1 Chase Manhattan Plaza, New York, New York 10081. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 14 - "Proceeds Production Payments" shall mean production ---------------------------- payment obligations of any Person payable in Dollars or other currencies representing a specified share of proceeds received from specific hydrocarbon Properties, together with all undertakings and obligations in connection therewith. "Process Agent" shall have the meaning assigned to such ------------- term in Section 12.10(c) hereof. "Production Payments" shall mean, collectively, ------------------- Proceeds Production Payments and Volumetric Production Payments. "Property" shall mean any right or interest in or to -------- property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible. "Proved Reserves" shall mean reserves (to the extent of --------------- the net interest of Maxus and its Subsidiaries therein) comprised of quantities of hydrocarbons which geologic and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions. "Proxy Materials" shall mean all proxy materials, if --------------- any, relating to the Acquisition and distributed to the shareholders of Maxus. "Reference Lenders" shall mean Chase and such other ----------------- Lenders as may be agreed by Chase and the Company from time to time (but in no event shall there be more than three Reference Lenders at any time) or their respective Applicable Lending Offices, as the case may be. "Refinancing Balance Sheets" shall have the meaning -------------------------- assigned to such term in Section 9.01(g) hereof. "Refinancing Facilities" shall mean, collectively, the ---------------------- Midgard Refinancing Facility and the Maxus Indonesia Refinancing Facility. "Refinancing Subsidiaries" shall mean, collectively, ------------------------ Midgard, Maxus Java, Maxus Sumatra and Maxus Indonesia. "Regulation A", "Regulation D", "Regulation U" and ------------------------------------------------- "Regulation X" shall mean, respectively, Regulations A, D, U and ------------- X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time. "Regulatory Change" shall mean, with respect to any ----------------- Lender, any change after the date hereof in U.S. Federal, state BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 15 - or foreign law or regulations (including, without limitation, Regulation D) or the adoption or making after such date of any interpretation, directive or request applying to a class of banks including such Lender of or under any Federal, state or foreign law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof. "Relevant Information" shall mean information relating -------------------- to any of the Acquisition, the Acquisition Financing Transactions, YPF and its Subsidiaries and Maxus and its Subsidiaries. "Relevant Parties" shall have the meaning assigned to ---------------- such term in Section 10(e) hereof. "Relevant Subsidiaries" shall mean YPF Acquisition and, --------------------- on and after the Control Transfer Date, Maxus and the Material Subsidiaries. "Reserve Requirement" shall mean, for any Interest ------------------- Period for any Eurodollar Loan, the average maximum rate at which reserves (including, without limitation, any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall include any other reserves required to be maintained by such member banks by reason of any Regulatory Change with respect to (i) any category of liabilities that includes deposits by reference to which the Eurodollar Base Rate is to be determined as provided in the definition of "Eurodollar Base Rate" in this Section 1.01 or (ii) any category of extensions of credit or other assets that includes Eurodollar Loans. "SEC Reports" shall mean, with respect to any Person, ----------- any regular periodic reports or any reports on Form 6-K or Form 8-K (or any successor forms thereto) filed by such Person with the Commission. "Second Borrowing Date" shall mean the date on which --------------------- the Second Loans are or shall have been made. "Second Loans" shall mean the Loans made upon the ------------ satisfaction or waiver of the conditions precedent set forth in Sections 7.02 and 7.03 hereof. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 16 - "Subsidiary" shall mean, with respect to any Person, ---------- any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person. "Tender Offer" shall mean the offer by YPF Acquisition ------------ to purchase Maxus Shares for cash pursuant to the Tender Offer Documents. "Tender Offer Closing Date" shall mean the date of the ------------------------- initial purchase by YPF Acquisition of the Maxus Shares tendered pursuant to the Tender Offer. "Tender Offer Documents" shall mean the Offer to ---------------------- Purchase and the Tender Offer Statement on Schedule 14D-1 filed by YPF and YPF Acquisition with the Commission, the Schedule 14D-9 filed by Maxus with respect to the Offer to Purchase, and all amendments, exhibits and schedules thereto and related documents distributed to the shareholders of Maxus or filed by YPF, YPF Acquisition or Maxus with the Commission in connection with the Acquisition, in each case, prior to the date of this Agreement. "Transaction Costs" shall mean all costs and expenses ----------------- incurred by YPF and YPF Acquisition in connection with the Acquisition and the other transactions contemplated hereby to occur on or prior to the Initial Borrowing Date and the Second Borrowing Date (exclusive of amounts paid or payable in respect of Maxus Shares referred to in Sections 2.01(a)(i)(x) and 2.01(b)(i) hereof); provided, however, that, at the election of the Obligors, "Transaction Costs" shall also include any so- called "golden parachute" payments to be made to former officers of Maxus, and/or "poison pill" payments under the Certificate of Incorporation of Maxus. "Transaction Documents" shall mean the Acquisition --------------------- Documents and the Basic Documents. "Type" shall have the meaning assigned to such term in ---- Section 1.03 hereof. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 17 - "Volumetric Production Payments" shall mean production ------------------------------ payment obligations payable in the form of hydrocarbons constituting a specified share of production from specific hydrocarbon Properties, together with all undertakings and obligations in connection therewith. "Wholly Owned Subsidiary" shall mean, with respect to ----------------------- any Person, any corporation, partnership or other entity of which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors' qualifying shares) are directly or indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person. "YPF Acquisition Material Adverse Effect" shall mean a --------------------------------------- material adverse effect on any of: (a) the financial condition, business or operations of YPF Acquisition; (b) the ability of YPF Acquisition to perform any of its payment or any of its other material obligations under any of the Basic Documents to which it is or is intended to be a party or any of its material payment or other material obligations under either the Offer to Purchase or the Merger Agreement; (c) the validity or enforceability of any of the obligations referred to in clause (b) above; (d) the ability of the Lenders or the Agent under any of the documents referred to in clause (b) above to enforce their respective rights and remedies against YPF Acquisition under any of the Basic Documents to which it is or is intended to be a party; or (e) the timely payment of any of the payment obligations referred to in clause (b) above. "YPF Affiliates" shall mean YPF and its Affiliates -------------- (other than the Company and its Subsidiaries). "YPF Debt Documents" shall mean, collectively, (a) the ------------------ Indenture dated as of February 2, 1994 between YPF, The Bank of New York, as trustee, co-registrar and principal paying agent, and The Bank of New York S.A., as registrar and paying agent and the Securities (as defined therein) issued thereunder and (b) the Indenture dated as of October 7, 1994 between YPF, The Bank of New York, as trustee, co-registrar and principal paying agent and The Bank of New York S.A., as registrar and paying agent and the Debt Securities (as defined therein) issued thereunder and, in each case, as such agreements and instruments may be modified and supplemented and in effect from time to time. "YPF Credit Agreement" shall mean the Trade Credit -------------------- Agreement dated as of April 5, 1995 between YPF, the lenders referred to therein and Chase as agent for said lenders, as such agreement shall be modified and supplemented and in effect from time to time. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 18 - "YPF Material Adverse Effect" shall mean a material --------------------------- adverse effect on any of: (a) the financial condition, business or operations of YPF and its Subsidiaries taken as a whole; (b) the ability of YPF to perform any of its payment or any of its other material obligations under any of the Basic Documents or the Refinancing Facilities (including the agreements and other documents providing for or relating to such Refinancing Facilities) to which it is or is intended to be a party or any of its material payment or other material obligations under any of the other Transaction Documents to which it is or is intended to be a party; (c) the validity or enforceability of any of the obligations referred to in clause (b) above; or (d) the ability of the lenders (or the agent) under any of the documents referred to in clause (b) above to enforce their rights and remedies against YPF under any of such documents. 1.02 Accounting Terms and Determinations. Except as ----------------------------------- otherwise expressly provided herein, all accounting terms used herein relating to Maxus and its Subsidiaries shall be interpreted, and all financial statements and certificates and reports as to financial matters relating to Maxus and its Subsidiaries required to be delivered to the Lenders hereunder shall be prepared, in accordance with GAAP. 1.03 Types of Loans. Loans hereunder are -------------- distinguished by "Type". The "Type" of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar Loan, each of which constitutes a Type. 1.04 Copies of Documents. Whenever this Agreement ------------------- provides that the Agent will distribute to the Lenders documents provided by either Obligor, such Obligor shall furnish to the Agent a copy of such document for each Lender. Section 2. Commitments, Loans, Notes and Prepayments. ----------------------------------------- 2.01 Loans. Each Lender severally agrees, on the ----- terms and conditions of this Agreement, to make loans to the Company in Dollars on the Initial Borrowing Date and the Second Borrowing Date (but in no event after the Commitment Termination Date) in an aggregate principal amount up to but not exceeding the amount of the Commitment of such Lender (subject to the last sentence of this Section 2.01); provided that (a) the aggregate -------- principal amount of the Loans made on the Initial Borrowing Date shall not exceed an amount equal to the excess of (i) the sum of (x) an amount equal to (A) the aggregate number of Maxus Shares tendered pursuant to the Offer to Purchase times (B) $5.50 plus ----- ---- (y) the aggregate amount of Transaction Costs to be paid by YPF and YPF Acquisition on or before (or within 30 days' after) the Initial Borrowing Date over (ii) $250,000,000 and (b) the ---- aggregate principal amount of the Loans made on the Second BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 19 - Borrowing Date shall not exceed an amount equal to the sum of (i) the aggregate amount of cash to be paid by YPF Acquisition pursuant to Section 2.4 of the Merger Agreement in respect of Maxus Shares that are converted into a right to receive cash as provided in Section 2.1.4 of the Merger Agreement upon the consummation of the Merger in an amount equal to $5.50 per share plus (ii) the aggregate amount of Transaction Costs to be paid by ---- YPF and YPF Acquisition on or before (or within 30 days' after) the Second Borrowing Date (other than Transaction Costs referred to in clause (a)(i)(y)) above. After the making of any Loans, the Company may Convert Loans of one Type into Loans of another Type (as provided in Section 2.07 hereof) or Continue Loans of one Type as Loans of the same Type (as provided in Section 2.07 hereof); provided further that no more than four separate -------- ------- Interest Periods in respect of Eurodollar Loans from each Lender may be outstanding at any one time. In the event that (I) the amount referred to in clause (a)(i)(x) of this Section 2.01 shall be greater than (II) the aggregate amount of cash paid by YPF Acquisition prior to the close of business on April 10, 1995 for the purchase of Maxus Shares pursuant to the Offer to Purchase, the Company shall prepay the Loans on or before April 11, 1995 in accordance with the provisions of Section 2.07 hereof in an aggregate principal amount equal to the excess of the amount specified in clause (I) above over the amount specified in clause (II) above (and shall hold the excess in the form of cash or cash equivalents until applied to the payment of the purchase price for Maxus Shares pursuant to the Offer to Purchase or such prepayment). Subject to the terms and conditions of this Agreement, any principal of the Loans so prepaid may be reborrowed on the Second Borrowing Date. 2.02 Borrowings. The Company shall give the Agent ---------- notice of each borrowing hereunder as provided in Section 4.05 hereof. Not later than 1:00 p.m. New York time on the date specified for each borrowing hereunder, each Lender shall make available the amount of the Loan or Loans to be made by it on such date to the Agent, at account number NYAO-DI-900-9-000002 maintained by the Agent with Chase at the Principal Office, in immediately available funds, for account of the Company. The amount so received by the Agent shall, subject to the terms and conditions of this Agreement, be made available to the Company by depositing the same, in immediately available funds, in an account of the Company maintained with Chase at the Principal Office designated by the Company. 2.03 Changes of Commitments. ---------------------- (a) The Company shall have the right at any time or from time to time to terminate or reduce the aggregate unused amount of the Commitments; provided that (x) the Company shall -------- give notice of each such termination or reduction as provided in BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 20 - Section 4.05 hereof and (y) each partial reduction shall be in an aggregate amount at least equal to $10,000,000 (or a larger multiple of $1,000,000). (b) Any portion of the Commitments not used on the Second Borrowing Date shall be automatically terminated. (c) The Commitments once terminated or reduced may not be reinstated. 2.04 Lending Offices. The Loans of each Type made by --------------- each Lender shall be made and maintained at such Lender's Applicable Lending Office for Loans of such Type. 2.05 Several Obligations; Remedies Independent. The ----------------------------------------- failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan on such date, but neither any Lender nor the Agent shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender, and (except as otherwise provided in Section 4.06 hereof) no Lender shall have any obligation to the Agent or any other Lender for the failure by such Lender to make any Loan required to be made by such Lender. The amounts payable by the Company at any time hereunder and under the Notes to each Lender shall be a separate and independent debt and each Lender shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes, and, to the extent permitted by law, it shall not be necessary for any other Lender or the Agent to consent to, or be joined as an additional party in, any proceedings for such purposes, provided that in no event may the obligations hereunder and under the Notes be accelerated except in accordance with Section 10 hereof. 2.06 Notes. ----- (a) The Loans made by each Lender shall be evidenced by a single promissory note of the Company substantially in the form of Exhibit A hereto, dated the date hereof, payable to such Lender in a principal amount equal to the amount of its Commitment as originally in effect and otherwise duly completed. (b) The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by each Lender to the Company, and each payment made on account of the principal thereof, shall be recorded by such Lender on its books and, prior to any transfer of the Note held by it, endorsed by such Lender on the schedule attached to such Note or any continuation thereof; provided that the failure of such Lender to -------- make any such recordation or endorsement shall not affect the obligations of the Company to make a payment when due of any BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 21 - amount owing hereunder or under such Note in respect of the Loans. (c) No Lender shall be entitled to have its Note substituted or exchanged for any reason, or subdivided for promissory notes of lesser denominations, except in connection with a permitted assignment of all or any portion of such Lender's Commitment, Loans and Note pursuant to Section 12.06 hereof or a required assignment of all of such Lender's Loans as contemplated by Section 5.07 hereof (and (x) if requested by any Lender, or in connection with any such required assignment, the Company agrees to so exchange any Note and (y) promptly following the delivery to any Lender of replacement Note(s), such Lender (if such Lender is an assigning Lender) agrees to deliver to the Company such Lender's existing Note marked canceled). 2.07 Prepayments and Conversions or Continuations of ----------------------------------------------- Loans. Subject to Sections 2.01 and 4.04 hereof, the Company ----- shall have the right to prepay Loans, or to Convert Loans of one Type into Loans of another Type or Continue Loans of one Type as Loans of the same Type, at any time or from time to time, provided that: (a) the Company shall give the Agent notice of -------- each such prepayment, Conversion or Continuation as provided in Section 4.05 hereof (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder) and (b) Eurodollar Loans may be prepaid or Converted only on the last day of an Interest Period for such Loans. Notwithstanding the foregoing, and without limiting the rights and remedies of the Lenders under Section 10 hereof, in the event that any Event of Default shall have occurred and be continuing, the Agent may (and at the request of the Majority Lenders shall) suspend the right of the Company to Convert any Loan into a Eurodollar Loan, or to Continue any Loan as a Eurodollar Loan, in which event all Loans shall be Converted (on the last day(s) of the respective Interest Periods therefor) or Continued, as the case may be, as Base Rate Loans. Section 3. Payments of Principal and Interest. ---------------------------------- 3.01 Repayment of Loans. The Company hereby promises ------------------ to pay to the Agent for account of each Lender the principal of such Lender's Loans on the Maturity Date. 3.02 Interest. The Company hereby promises to pay to -------- the Agent for account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full, at the following rates per annum: BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 22 - (a) during such periods as such Loan is a Base Rate Loan, the Base Rate (as in effect from time to time) plus ---- the Applicable Margin and (b) during such periods as such Loan is a Eurodollar Loan, for each Interest Period relating thereto, the Eurodollar Rate for such Loan for such Interest Period plus ---- the Applicable Margin. Notwithstanding the foregoing, the Company hereby promises to pay to the Agent for account of each Lender interest at the applicable Post-Default Rate on the following: (i) on any principal of any Loan held by such Lender that shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full; and (ii) on any interest on any Loan that shall not be paid in full when due for the period from the due date thereof to but excluding the date the same is paid in full. Accrued interest on each Loan shall be payable (i) in the case of a Base Rate Loan, on the Interest Payment Date and on the Maturity Date, (ii) in the case of a Eurodollar Loan, on the last day of each Interest Period therefor and on the Maturity Date and (iii) in the case of any Loan, upon the payment or prepayment thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or Converted), except that interest payable at the Post-Default Rate shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Agent shall give notice thereof to the Lenders and to the Company. Section 4. Payments; Pro Rata Treatment; Computations; ------------------------------------------- Etc. ---- 4.01 Payments. -------- (a) Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Company under this Agreement and the Notes (and any payments made by YPF of the Guaranteed Obligations), and, except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Basic Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Agent at account number NYAO-DI-900-9-000002 maintained by the Agent with Chase at the Principal Office, not later than 1:00 p.m. New York time on the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 23 - date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day), provided that, if (and only if) and to the extent so specified by the Agent (acting on the instructions of the Majority Lenders) in a notice to YPF, YPF shall make any such payment of the Guaranteed Obligations in Dollars, in immediately available funds, without deduction, set- off or counterclaim, for the account of the Agent to such office of such bank in Buenos Aires, Argentina, as is specified by the Agent in such notice no later than 2:00 p.m. Buenos Aires time on the date for the payment specified in such notice (which date shall be a day on which commercial banks in Buenos Aires, Argentina are not authorized or required to close and shall be no earlier than the date such payment is due hereunder) (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). (b) The Company shall, at the time of making each payment under this Agreement or any Note for account of any Lender, specify to the Agent (which shall so notify the intended recipient(s) thereof) the Loans or other amounts payable by the Company hereunder to which such payment is to be applied, except that, if an Event of Default has occurred and is continuing, the Agent may distribute such payment to the Lenders for application in such manner as it or the Majority Lenders, subject to Section 4.02 hereof, may determine to be appropriate). (c) Each payment received by the Agent under this Agreement or any Note for account of any Lender shall be paid by the Agent promptly to such Lender, in immediately available funds, for account of such Lender's Applicable Lending Office for the Loan or other obligation in respect of which such payment is made. (d) If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension. 4.02 Pro Rata Treatment. Except to the extent ------------------ otherwise provided herein: (a) each borrowing from the Lenders under Section 2.01 hereof shall be made from the Lenders, and each termination or reduction of the amount of the Commitments under Section 2.03 hereof shall be applied to the respective Commitments of the Lenders, pro rata according to the amounts of their respective Commitments; (b) except as otherwise provided in Section 5.04 hereof, Eurodollar Loans having the same Interest Period shall be allocated pro rata among the Lenders according to the amounts of their respective Commitments (in the case of the making of Loans) or their respective Loans (in the case of BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 24 - Conversions and Continuations of Loans); (c) each payment or prepayment of principal of Loans by the Company shall be made for account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; and (d) each payment of interest on Loans by the Company shall be made for account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders. 4.03 Computations. Interest on Eurodollar Loans shall ------------ be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable and interest on Base Rate Loans shall be computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. Notwithstanding the foregoing, for each day that the Base Rate is calculated by reference to the Federal Funds Rate, interest on Base Rate Loans shall be computed on the basis of a year of 360 days and actual days elapsed. 4.04 Minimum Amounts. Each borrowing, Conversion and --------------- partial prepayment of principal of Loans shall be in an aggregate amount at least equal to (x) in the case of Base Rate Loans, $10,000,000 or a larger multiple of $1,000,000 and (y) in the case of Eurodollar Loans, $10,000,000 or in larger multiples of $5,000,000 (borrowings, Conversions or prepayments of or into Loans of different Types or, in the case of Eurodollar Loans, having different Interest Periods at the same time hereunder to be deemed separate borrowings, Conversions and prepayments for purposes of the foregoing, one for each Type or Interest Period), provided that the aggregate principal amount of Eurodollar Loans -------- having the same Interest Period shall be in an amount at least equal to $20,000,000 or a larger multiple of $5,000,000 and, if any Eurodollar Loans would otherwise be in a lesser principal amount for any period, such Loans shall be Base Rate Loans during such period. 4.05 Certain Notices. Notices by the Company to the --------------- Agent of terminations or reductions of the Commitments and of borrowings, Conversions, Continuations and optional prepayments of Loans, of Types of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Agent not later than 11:00 a.m. New York time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, Conversion, Continuation or prepayment or the first day of such Interest Period specified below: BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 25 - Number of Business Notice Days Prior ------ ---------- Termination or reduction of Commitments 3 Borrowing or prepayment of, or Conversions into, Base Rate Loans same day Borrowing or prepayment of, Conversions into, Continuations as, or duration of Interest Period for, Eurodollar Loans 3 Each such notice of termination or reduction shall specify the amount of the Commitments to be terminated or reduced. Each such notice of borrowing, Conversion, Continuation or optional prepayment shall specify the Loans to be borrowed, Converted, Continued or prepaid and the amount (subject to Section 4.04 hereof) and Type of each Loan to be borrowed, Converted, Continued or prepaid and the date of borrowing, Conversion, Continuation or optional prepayment (which shall be a Business Day). The Agent shall promptly notify the Lenders of the contents of each such notice. In the event that the Company fails to select the Type of Loan, or the duration of any Interest Period for any Eurodollar Loan, within the time period and otherwise as provided in this Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be automatically Converted into a Base Rate Loan on the last day of the then current Interest Period for such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not then outstanding) will be made as, a Base Rate Loan. 4.06 Non-Receipt of Funds by the Agent. Unless the --------------------------------- Agent shall have been notified by a Lender or the Company (the "Payor") prior to the date on which the Payor is to make payment ----- to the Agent or (in the case of a Lender) the proceeds of a Loan to be made by such Lender hereunder or (in the case of the Company) a payment to the Agent for account of one or more of the Lenders hereunder (such payment being herein called the "Required -------- Payment"), which notice shall be effective upon receipt, that the ------- Payor does not intend to make the Required Payment to the Agent, the Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient(s) on such date; and, if the Payor has not in fact made the Required Payment to the Agent, the recipient(s) of such payment shall, on demand, repay to the Agent the amount so made available together with interest thereon in respect of each day BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 26 - during the period commencing on the date (the "Advance Date") ------------ such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to make such payment, the Agent shall be entitled to recover such amount, on demand, from the Payor, together with interest as aforesaid. 4.07 Sharing of Payments, Etc. ------------------------- (a) Each Obligor agrees that, in addition to (and without limitation of) any right of set-off, banker's lien or counterclaim a Lender may otherwise have, each Lender shall be entitled, at its option (to the fullest extent permitted by law) upon and during the continuance of an Event of Default, to set off and apply any deposit (general or special, time or demand, provisional or final), or other indebtedness, held by it for the credit or account of such Obligor at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender's Loans or any other amount payable to such Lender hereunder, that is not paid when due (regardless of whether such deposit or other indebtedness are then due to such Obligor), in which case it shall promptly notify such Obligor and the Agent thereof, provided that such Lender's -------- failure to give such notice shall not affect the validity thereof. (b) If any Lender shall obtain from either Obligor payment of any principal of or interest on any Loan owing to it or payment of any other amount under this Agreement or any other Basic Document through the exercise of any right of set-off, banker's lien or counterclaim or similar right or otherwise (other than from the Agent as provided herein), and, as a result of such payment, such Lender shall have received a greater percentage of the principal of or interest on the Loans or such other amounts then due hereunder or thereunder by such Obligor to such Lender than the percentage received by any other Lender, it shall promptly purchase from such other Lenders participations in (or, if and to the extent specified by such Lender, direct interests in) the Loans or such other amounts, respectively, owing to such other Lenders (or in interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Lenders shall share the benefit of such excess payment (net of any expenses that may be incurred by such Lender in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal of and/or interest on the Loans or such other amounts, respectively, owing to each of the Lenders. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 27 - (c) The Obligors agree that, to the extent permitted by law, any Lender so purchasing such a participation (or direct interest) may exercise all rights of set-off, banker's lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation. (d) Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of either Obligor. If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a set-off to which this Section 4.07 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section 4.07 to share in the benefits of any recovery on such secured claim. Section 5. Yield Protection, Etc. ---------------------- 5.01 Additional Costs. ---------------- (a) The Company shall pay directly to each Lender from time to time such amounts as such Lender may determine to be necessary to compensate such Lender for any costs that such Lender determines are attributable to its making or maintaining of any Eurodollar Loans or its obligation to make any Eurodollar Loans hereunder, or any reduction in any amount receivable by such Lender hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable, together with costs referred to in Section 5.01(b) hereof, being herein called "Additional Costs"), resulting from ---------------- any Regulatory Change that: (i) shall (without duplication of amounts paid pursuant to Section 5.06, 6.08 or 12.03(c) hereof) subject any Lender (or its Applicable Lending Office for any of such Loans) to any tax, duty or other charge in respect of such Loans or its Note or changes the basis of taxation of any amounts payable to such Lender under this Agreement or its Note in respect of any of such Loans (excluding, in each case, any such changes in the rate of tax on the overall net income of, or the rate at which franchise taxes are imposed on, such Lender or such Applicable Lending Office by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); or (ii) imposes or modifies any reserve, special deposit or similar requirements (other than the Reserve Requirement BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 28 - utilized in the determination of the Eurodollar Rate for such Loan) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender (including, without limitation, any of such Loans, or any commitment of such Lender (including, without limitation, the Commitment of such Lender hereunder); or (iii) imposes any other condition affecting this Agreement or its Note (or any of such extensions of credit or liabilities) or its Commitment. If any Lender requests compensation from the Company under this Section 5.01(a), the Company may, by notice to such Lender (with a copy to the Agent), suspend the obligation of such Lender thereafter to make or Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the Regulatory Change giving rise to such request ceases to be in effect (in which case the provisions of Section 5.04 hereof shall be applicable), provided that such suspension shall not affect the -------- right of such Lender to receive the compensation so requested. (b) Without limiting the effect of the foregoing provisions of this Section 5.01 (but without duplication), the Company shall pay directly to each Lender from time to time on request such amounts as such Lender may determine to be necessary to compensate such Lender (or, without duplication, the holding company of which such Lender is a subsidiary) for any costs that it determines are attributable to the maintenance by such Lender (or any Applicable Lending Office or such bank holding company) of capital in respect of its Commitment or Loans that it would not have incurred but for a Regulatory Change (such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of such Lender (or any Applicable Lending Office or such bank holding company) to a level below that which such Lender (or any Applicable Lending Office or such bank holding company) could have achieved but for such Regulatory Change). (c) Each Lender shall notify the Company of any event occurring after the date hereof entitling such Lender to compensation under paragraph (a) or (b) of this Section 5.01 as promptly as practicable, but in any event within 30 days (45 days, in the case of Additional Costs referred to in said paragraph (b)), after such Lender obtains actual knowledge thereof; provided that (i) if any Lender fails to give such -------- notice within 30 days (45 days, in the case of Additional Costs referred to in said paragraph (b)) after it obtains actual knowledge of such an event, such Lender shall, with respect to compensation payable pursuant to this Section 5.01 in respect of any Additional Costs resulting from such event, only be entitled to payment under this Section 5.01 for Additional Costs incurred BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 29 - from and after the date 30 days (45 days, in the case of Additional Costs referred to in said paragraph (b)) prior to the date that such Lender does give such notice and (ii) each Lender will make all reasonable efforts to avoid the need for or minimize the amount of such compensation, including, without limitation, designating a different Applicable Lending Office for the Loans of such Lender affected by such event if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the reasonable opinion of such Lender, be disadvantageous to such Lender, except that such Lender shall have no obligation to designate an Applicable Lending Office located in the United States of America. Each Lender will furnish to the Company a certificate setting forth the basis and amount of each request by such Lender for compensation under paragraph (a) or (b) of this Section 5.01 (which certificate, in the case of a request for compensation under said paragraph (b), shall state that such Lender is generally requesting such compensation from other similarly situated borrowers under similar credit facilities). Determinations and allocations by any Lender for purposes of this Section 5.01 of the effect of any Regulatory Change pursuant to paragraph (a) of this Section 5.01, or of the effect of capital maintained pursuant to paragraph (b) of this Section 5.01, on its costs or rate of return of maintaining Loans or its obligation to make Loans, or on amounts receivable by it in respect of Loans, and of the amounts required to compensate such Lender under this Section 5.01, shall be prima facie evidence of such Lender's right to receive such compensation. 5.02 Limitation on Types of Loans. Anything herein to ---------------------------- the contrary notwithstanding, if, on or prior to the determination of any Eurodollar Base Rate for any Interest Period: (a) the Agent determines, which determination shall be conclusive, that quotations of interest rates for the relevant deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.01 hereof are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for Eurodollar Loans as provided herein; or (b) the Majority Lenders determine, which determination shall be conclusive, and notify the Agent that the relevant rates of interest referred to in the definition of "Eurodollar Base Rate" in Section 1.01 hereof upon the basis of which the rate of interest for Eurodollar Loans for such Interest Period is to be determined are not likely to be adequate to cover the cost to such Lenders of making or maintaining Eurodollar Loans for such Interest Period; BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 30 - then the Agent shall give the Company and each Lender prompt notice thereof and, so long as such condition remains in effect, the Lenders shall be under no obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans, and the Company shall, on the last day(s) of the then current Interest Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans into Base Rate Loans in accordance with Section 2.07 hereof. 5.03 Illegality. Notwithstanding any other provision ---------- of this Agreement, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to honor its obligation to make or maintain Eurodollar Loans hereunder (and, in the reasonable opinion of such Lender, the designation of a different Applicable Lending Office would either not avoid such unlawfulness or would be disadvantageous to such Lender), then such Lender shall promptly notify the Company thereof (with a copy to the Agent) and such Lender's obligation to make or Continue, or to Convert Loans of any other Type into, Eurodollar Loans shall be suspended until such time as such Lender may again make and maintain Eurodollar Loans (in which case the provisions of Section 5.04 hereof shall be applicable). 5.04 Treatment of Affected Loans. If the obligation --------------------------- of any Lender to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof, such Lender's Eurodollar Loans shall be automatically Converted into Base Rate Loans on the last day(s) of the then current Interest Period(s) for Eurodollar Loans (or, in the case of a Conversion required by Section 5.03 hereof, on such earlier date as such Lender may specify to the Company with a copy to the Agent) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 5.01 or 5.03 hereof that gave rise to such Conversion no longer exist: (a) to the extent that such Lender's Eurodollar Loans have been so Converted, all payments and prepayments of principal that would otherwise be applied to such Lender's Eurodollar Loans shall be applied instead to its Base Rate Loans; and (b) all Loans that would otherwise be made or Continued by such Lender as Eurodollar Loans shall be made or Continued instead as Base Rate Loans, and all Base Rate Loans of such Lender that would otherwise be Converted into Eurodollar Loans shall remain as Base Rate Loans. If such Lender gives notice to the Company with a copy to the Agent that the circumstances specified in Section 5.01 or 5.03 BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 31 - hereof that gave rise to the Conversion of such Lender's Eurodollar Loans pursuant to this Section 5.04 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when Eurodollar Loans made by other Lenders are outstanding, such Lender's Base Rate Loans shall be automatically Converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments. 5.05 Broken Funding. The Company shall pay to the -------------- Agent for account of each Lender, upon the request of such Lender through the Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense that such Lender determines is attributable to: (a) any payment, prepayment or Conversion of a Eurodollar Loan made by such Lender for any reason (including, without limitation, the acceleration of the Loans pursuant to Section 10 hereof but excluding any Conversion pursuant to Section 5.04 hereof resulting from an event referred to in Section 5.03 hereof) on a date other than the last day of the Interest Period for such Loan; or (b) any failure by the Company for any reason (including, without limitation, the failure of any of the conditions precedent specified in Section 7 hereof to be satisfied) to borrow a Eurodollar Loan from such Lender on the date for such borrowing specified in the relevant notice of borrowing given pursuant to Section 2.02 hereof. Without limiting the effect of the preceding sentence, such compensation shall include an amount equal to the excess, if any, of (i) the amount of interest that otherwise would have accrued on the principal amount so paid, prepaid, Converted or not borrowed for the period from the date of such payment, prepayment, Conversion or failure to borrow to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein (minus the relevant Applicable Margin) over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount such Lender would have offered in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 32 - period (as reasonably determined by such Lender). Each Lender claiming compensation under this Section 5.05 will furnish to the Company through the Agent a certificate setting forth the basis of the calculation and the amount of such compensation, which certificate shall be prima facie evidence of such Lender's right to receive the compensation claimed. 5.06 U.S. Taxes. ---------- (a) The Company agrees to pay to each Lender that is not a U.S. Person such additional amounts as are necessary in order that the net payment of any amount due to such non-U.S. Person hereunder after deduction for or withholding in respect of any U.S. Taxes imposed with respect to such payment (or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person), will not be less than the amount stated herein to be then due and payable, provided that the foregoing -------- obligation to pay such additional amounts shall not apply: (i) to any payment to any Lender hereunder unless such Lender is, on the date hereof (or on the date it becomes a Lender hereunder as provided in Section 12.06(b) hereof) and on the date of any change in the Applicable Lending Office of such Lender, either entitled to submit a Form 1001 (relating to such Lender and entitling it to a complete exemption from withholding on all interest to be received by it hereunder in respect of the Loans) or Form 4224 (relating to all interest to be received by such Lender hereunder in respect of the Loans), or (ii) to any U.S. Taxes imposed solely by reason of the failure by such non-U.S. Person to comply with applicable certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of America of such non-U.S. Person if such compliance is required by statute or regulation of the United States of America as a precondition to relief or exemption from such U.S. Taxes. For the purposes of this Section 5.06(a), (A) "U.S. Person" shall ----------- mean a citizen, national or resident of the United States of America, a corporation, partnership or other entity created or organized in or under any laws of the United States of America or any State thereof, or any estate or trust that is subject to Federal income taxation regardless of the source of its income, (B) "U.S. Taxes" shall mean any present or future tax, assessment ---------- or other charge or levy imposed by or on behalf of the United States of America or any taxing authority thereof or therein, (C) "Form 1001" shall mean Form 1001 (Ownership, Exemption, or --------- Reduced Rate Certificate) of the Department of the Treasury of BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 33 - the United States of America and (D) "Form 4224" shall mean --------- Form 4224 (Exemption from Withholding of Tax on Income Effectively Connected with the Conduct of a Trade or Business in the United States) of the Department of the Treasury of the United States of America (or in relation to either such Form such successor and related forms as may from time to time be adopted by the relevant taxing authorities of the United States of America to document a claim to which such Form relates). Each of the Forms referred to in the foregoing clauses (C) and (D) shall include such successor and related forms as may from time to time be adopted by the relevant taxing authorities of the United States of America to document a claim to which such Form relates. (b) Within 30 days after paying any amount to the Agent or any Lender from which it is required by law to make any deduction or withholding, and within 30 days after it is required by law to remit such deduction or withholding to any relevant taxing or other authority, the Company shall deliver to the Agent for delivery to such non-U.S. Person evidence satisfactory to such Person of such deduction, withholding or payment (as the case may be). (c) Each Lender (including any lender that becomes a Lender pursuant to Section 12.06 hereof) represents and warrants to the Obligors and the Agent that on the date hereof (or, in the case of any such lender that becomes a Lender pursuant to said Section 12.06, on the date it becomes a Lender) such Lender is either organized under the laws of the United States or a State thereof or is entitled to submit either a Form 1001 (relating to such Lender and entitling it to a complete exemption from withholding on all interest to be received by it hereunder in respect of the Loans) or a Form 4224 (relating to all interest to be received by such Lender hereunder in respect of the Loans) and has delivered two copies of such form duly completed to each of the Agent and the Company. 5.07 Replacement of Certain Lenders. If (a) any ------------------------------ Lender improperly declines to make any Loan required to be made by it hereunder, becomes the subject of an insolvency proceeding, requests compensation under Section 5.01 hereof or gives notice under Section 5.03 hereof suspending its obligation to make or maintain Eurodollar Loans hereunder and (b) no Default shall have occurred and be continuing, then the Company, upon not less than three Business Days' prior notice to such Lender (with a copy to the Agent), may require that such Lender assign (in which case such Lender shall assign as provided in Section 12.06 hereof) its Loan(s) and Commitment to one or more other Lenders, or another lender (reasonably acceptable to the Agent), specified by the Company in such notice that are willing to accept such assignment for an amount equal to the sum of the outstanding aggregate principal amount of such Lender's Loan(s) and unpaid interest BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 34 - thereon accrued to the date of the consummation of such assignment (such assignment to be pursuant to documentation reasonably acceptable to the assigning Lender), provided that upon the consummation of such assignment the Company shall pay to such Lender (x) such amounts (if any) as are then owing to such Lender under this Section 5 (including, without limitation, amounts under Section 5.05 hereof, if any, that the Company would be required to pay to such Lender if the Loan(s) assigned by such Lender were being prepaid by the Company on the date of such consummation) and (y) all other amounts then owing by the Company hereunder to or for the account of such Lender. Section 6. Guarantee. --------- 6.01 The Guarantee. YPF hereby guarantees to each ------------- Lender and the Agent and their respective successors and assigns the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest on the Loans made by the Lenders to, and, without duplication, the Note held by each Lender of, the Company and all other amounts from time to time owing to the Lenders or the Agent by the Company under this Agreement and, without duplication, under the Notes and by the Company under any of the other Basic Documents, in each case strictly in accordance with the terms thereof (such obligations being herein collectively called the "Guaranteed ---------- Obligations"). YPF hereby further agrees that if the Company ----------- shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, YPF will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. 6.02 Obligations Unconditional. The obligations of ------------------------- YPF under Section 6.01 hereof are, to the fullest extent permitted by law, absolute and unconditional irrespective of the value, genuineness, validity, regularity or enforceability of the obligations of the Company under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or any security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor, it being the intent of this Section 6.02 that the obligations of YPF hereunder shall be absolute and unconditional under any and all circumstances (other than full and final payment of the Guaranteed Obligations). Without limiting the generality of the foregoing, it is agreed that, to the fullest BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 35 - extent permitted by law, the occurrence of any one or more of the following shall not alter or impair the liability of YPF hereunder which shall remain absolute and unconditional as described above: (i) at any time or from time to time, without notice to YPF, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended (subject to Section 12.04 hereof), or such performance or compliance shall be waived; (ii) any of the acts mentioned in any of the provisions of this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be done or omitted; (iii) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be modified, supplemented or amended in any respect (subject to Section 12.04 hereof), or any right under this Agreement or the Notes or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with; or (iv) any lien or security interest granted to, or in favor of, the Agent or any Lender or Lenders as security for any of the Guaranteed Obligations shall fail to be perfected. YPF hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any requirement that the Agent or any Lender exhaust any right, power or remedy or proceed against the Company under this Agreement or the Notes or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations. YPF hereby also irrevocably waives any right contemplated by Articles 480 (second paragraph), 481 and 482 of the Argentine Commercial Code as well as any rights and powers contemplated by Articles 1990, 1994, 2012, 2015, 2017, 2018, 2020, 2021, 2022, 2023, 2025, 2026, 2029, 2043, 2044, 2045, 2046, 2047, 2049 and 2050 of the Argentine Civil Code. 6.03 Reinstatement. The obligations of YPF under this ------------- Section 6 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Company in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 36 - or reorganization or otherwise and YPF agrees that it will indemnify the Agent and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees of counsel) incurred by the Agent or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law. 6.04 Subrogation. YPF hereby waives all rights of ----------- subrogation or contribution, whether arising by contract or operation of law (including, without limitation, any such right arising under the Bankruptcy Code) or otherwise by reason of any payment by it pursuant to the provisions of this Section 6 and further agrees with the Company for the benefit of each of its creditors (including, without limitation, each Lender and the Agent) that any such payment by it shall constitute a contribution of capital by YPF to the Company (or an investment in the equity capital of the Company by YPF). 6.05 Remedies. YPF agrees that, as between YPF and -------- the Lenders, to the fullest extent permitted by law, the obligations of the Company under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Section 10 hereof (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section 10) for purposes of Section 6.01 hereof notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Company and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by the Company) shall forthwith become due and payable by YPF for purposes of said Section 6.01. 6.06 Instrument for the Payment of Money. To the ----------------------------------- fullest extent permitted by law, YPF hereby (a) acknowledges that the guarantee in this Section 6 constitutes an instrument for the payment of money, and (b) consents and agrees that any Lender or the Agent, at its sole option, in the event of a dispute by YPF in the payment of any moneys due hereunder, shall have the right to bring motion-action under New York CPLR Section 3213. 6.07 Continuing Guarantee. The guarantee in this -------------------- Section 6 is a continuing guarantee, and shall apply to all Guaranteed Obligations whenever arising. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 37 - 6.08 Taxes. YPF covenants and agrees that: ----- (a) All payments on account of the Guaranteed Obligations by YPF to the Agent and the Lenders, including, without limitation, amounts payable under paragraph (b) of this Section 6.08, shall be made in Dollars, free and clear of and without reduction by reason of any and all present and future income, stamp, excise, asset, value added and other taxes and levies, imposts, deductions, charges, compulsory loans and withholdings whatsoever imposed, assessed, levied or collected by Argentina or any political subdivision or taxing authority thereof or therein, together with interest thereon and penalties with respect thereto, if any, on or in respect of this Agreement, the Pledge Agreement, the Guaranteed Obligations, the registration, notarization or other formalization of any thereof, and any payments of principal, interest, charges, fees or other amounts made on, under or in respect thereof (hereinafter called "Argentine Taxes"), all of which will be paid by YPF, for its own --------------- account, prior to the date on which penalties attach thereto. (b) YPF will indemnify the Agent and the Lenders against, and reimburse the Agent and the Lenders on demand for, any Argentine Taxes and any loss, liability, claim, or expense including interest, penalties, and legal fees which the Agent or the Lenders may incur at any time arising out of or in connection with any failure of YPF to make any payments of Argentine Taxes when due. (c) To the extent that YPF is required by applicable law, decree or regulation to deduct or withhold Argentine Taxes from any amounts payable on, under or in respect of this Agreement, the Pledge Agreement or the Guaranteed Obligations, YPF shall pay the Agent and the Lenders in Dollars such additional amounts as may be required, after the deduction or withholding of Argentine Taxes, to enable the Agent and the Lenders to receive from YPF an amount equal to the amount stated to be payable in respect of this Agreement, the Pledge Agreement or the Guaranteed Obligations. (d) YPF shall furnish to the Agent and the Lenders original tax receipts in respect of any withholding of Argentine Taxes required under this Section 6.08 within 30 days after the date of each payment of interest which is subject to any Argentine Taxes, and YPF shall promptly furnish to the Agent and the Lenders any other information, documents and receipts that the Agent and the Lenders may, in their sole discretion from time to time, require to establish to their satisfaction that full and timely payment has been made of all Argentine Taxes required to be paid under this Section 6.08. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 38 - (e) YPF shall pay all present and future Argentine Taxes, including but not limited to stamp taxes, imposts, contributions, charges, deductions, withholdings, court taxes, duties and fees which are imposed, assessed, levied or collected in connection with the execution, delivery, registration, notarization, enforcement or any other act related thereto, of any of the Basic Documents and any documents related thereto, and shall, upon notice from the Agent or any Lender, reimburse the Agent or any Lender or its assigns for any such taxes, imposts, contributions, charges, deductions, duties and fees. Section 7. Conditions Precedent. -------------------- 7.01 Initial Loans. The obligation of the Lenders to ------------- make the initial Loans to be made hereunder on the Initial Borrowing Date is subject to the prior or simultaneous satisfaction of the following conditions: (i) the aggregate principal amount of such Loans shall not exceed the amount specified in Section 2.01(a) hereof (and the Agent shall have received evidence thereof reasonably satisfactory to it) and (ii) the Agent shall have received the following documents or other evidence, all of such documents and evidence to be reasonably satisfactory to the Agent (or the Majority Lenders, to the extent specified below) in form and substance: (a) Corporate Documents. The following documents, ------------------- each certified as indicated below: (i) for YPF Acquisition, a copy of the charter, as in effect, certified as of a date reasonably close to the Initial Borrowing Date by the Secretary of State of Delaware, and a certificate from such Secretary of State dated as of a date reasonably close to the Initial Borrowing Date as to the good standing of and charter documents filed by, YPF Acquisition; (ii) for YPF Acquisition, a certificate of the Secretary or an Assistant Secretary of YPF Acquisition, dated the Initial Borrowing Date and certifying (A) that attached thereto is a true and complete copy of the by-laws of YPF Acquisition as amended and in effect at all times from the date on which the resolutions referred to in clause (B) below were adopted to and including the date of such certificate, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors of YPF Acquisition authorizing the execution, delivery and performance of such of the Basic Documents to which it is or is intended to be a party (including the borrowings hereunder), and that such resolutions have not been modified, rescinded or amended and are in full BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 39 - force and effect, (C) that the charter documents of YPF Acquisition have not been amended since the date one day prior to the certification thereto furnished pursuant to clause (i) above, and (D) as to the incumbency and specimen signature of each officer of YPF Acquisition executing such of the Basic Documents to which YPF Acquisition is or is intended to be a party and each other document to be delivered by YPF Acquisition from time to time in connection therewith (and the Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from YPF Acquisition); (iii) for YPF Acquisition, a certificate of another officer of YPF Acquisition, dated the Initial Borrowing Date, as to the incumbency and specimen signature of the Secretary or Assistant Secretary, as the case may be, of YPF Acquisition; and (iv) for YPF, certified copies, dated the Initial Borrowing Date, of the estatutos and other constitutive --------- documents of YPF and of all corporate authority for YPF (including, without limitation, board of director resolutions and evidence of the incumbency, including specimen signatures, of officers) with respect to the execution, delivery and performance of this Agreement and each other Basic Document to be executed and delivered by YPF from time to time in connection herewith and with the Loans hereunder (and the Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from YPF). (b) Notes. The Note for each Lender, duly completed ----- and executed for such Lender. (c) Opinions of Counsel to the Obligors. Opinions, ----------------------------------- dated the Initial Borrowing Date, of (i) Andrews & Kurth L.L.P., special New York counsel to the Obligors, substantially in the form of Exhibit D-1 hereto and covering such other matters as the Agent or any Lender may reasonably request, and (ii) Marval, O'Farrell & Mairal, special Argentine counsel to the Obligors, substantially in the form of Exhibit D-2 hereto and covering such other matters as the Agent or any Lender may reasonably request (and each Obligor hereby instructs each such counsel to deliver such opinion to the Lenders and the Agent). (d) Opinion of Special New York Counsel to Chase; --------------------------------------------- Opinion of Special Argentine Counsel to Chase. Opinions, dated --------------------------------------------- the Initial Borrowing Date, of (i) Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase, substantially in the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 40 - form of Exhibit E-1 hereto and (ii) Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel to Chase, substantially in the form of Exhibit E-2 hereto (and Chase hereby instructs each such counsel to deliver such opinion to the Lenders and the Agent). (e) Tender of Maxus Shares, Etc. Evidence (which, in ---------------------------- the case of clause (i) below, shall be a certificate of a senior officer of YPF Acquisition and in the case of clauses (ii) and (iii) below shall be a certificate of a senior officer of Maxus) that (i) the Maxus Shares tendered (as well as the aggregate amount thereof) and to be purchased pursuant to the Offer to Purchase have been tendered to YPF Acquisition, with no restrictions to purchase imposed by applicable law, and have not been withdrawn and are available for purchase in accordance with the terms and conditions of the Offer to Purchase, (ii) all actions to be taken by the Board of Directors of Maxus as specified in the third sentence of Section 1.2 of the Merger Agreement have been taken (and that the determination, approval and recommendation of such Board referred to in clauses (a), (b) and (c) of such sentence have not been materially modified or amended or withdrawn, except for (x) any such modification or amendment described in the parenthetical phrase in clause (v)(g) of Section 14 of the Offer to Purchase and (y) any such modification, amendment or withdrawal approved by the Majority Lenders, such approval not to be unreasonably withheld) and (iii) the actions to be taken by Maxus as specified in the last sentence of Section 1.2 of the Merger Agreement have been taken. (f) Tender Offer Documents, Governmental Approvals, ----------------------------------------------- Etc. (i) Copies (certified by a senior officer of ---- YPF Acquisition) of all Tender Offer Documents (including the Offer to Purchase), (ii) a copy (certified by a senior officer of YPF Acquisition) of the Notification and Report Form in respect of the Acquisition furnished to the Department of Justice and the Federal Trade Commission pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (iii) a certificate of a senior officer of YPF Acquisition dated the Initial Borrowing Date certifying that the Minimum Share Condition (as such term is defined in the Offer to Purchase) and all of the other conditions precedent to the purchase of the Maxus Shares contained in the Offer to Purchase have been satisfied without any modification or waiver (except for any such modification or waiver approved by the Majority Lenders, such approval not to be unreasonably withheld) and that the Offer to Purchase has been duly authorized by YPF Acquisition, (iv) if and to the extent requested by the Agent, evidence (reasonably satisfactory to the Agent) that all necessary governmental and third party consents and approvals in connection with the Acquisition and the other transactions contemplated hereby have been obtained and remain in full force and effect without the imposition of any conditions on any BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 41 - thereof (other than (x) any such conditions approved by the Majority Lenders, such approval not to be unreasonably withheld, and (y) any such governmental and third party consents and approvals that are required to be obtained in connection with the Merger but not prior to the date hereof (which approvals and consents the Obligors hereby represent they have no reason to believe will not be obtained on or prior to the date required to be obtained) and (v) if and to the extent requested by the Agent, evidence (reasonably satisfactory to the Agent) that all applicable waiting periods with respect to the Acquisition have expired without any action being taken by any competent authority that restricts, prevents or imposes materially adverse conditions upon the consummation of either the Tender Offer or the Merger. (g) Merger Agreement. A certificate of Maxus dated ---------------- the Initial Borrowing Date certifying that, as of such date, none of the events specified in clause (v)(e) of Section 14 of the Offer to Purchase shall have occurred. (h) Other Acquisition Documents. Copies (certified by --------------------------- a senior officer of YPF Acquisition) of all other Acquisition Documents as in effect of the date hereof. (i) Equity Contribution to YPF Acquisition. A -------------------------------------- certificate of a senior officer of YPF Acquisition that YPF Acquisition has received from YPF aggregate net cash proceeds of not less than $250,000,000 in respect of the issuance of the shares of common stock by YPF Acquisition to YPF and/or as additional paid in capital. (j) Maxus Shares. A certificate of a senior officer ------------ of YPF certifying that none of YPF or any of its Subsidiaries (other than YPF Acquisition) owns any Maxus Shares. (k) Pledge Agreement. The Pledge Agreement, duly ---------------- executed and delivered by YPF and the Agent, together with the certificate(s) representing all of the issued and outstanding shares of capital stock of YPF Acquisition accompanied by undated stock powers duly executed in blank. (l) Reserve Report, Projections, Etc. A reserve -------------------------------- report with respect to all of the oil and natural gas assets of Midgard, Maxus Java and Maxus Sumatra prepared by Gaffney, Cline & Associates, Inc. dated March 10, 1995, as audited by Miller & Lents, Ltd. (the results of such audit being set forth in a letter dated March 23, 1995 from Miller & Lents, Ltd. (such letter to be in form and substance satisfactory to the Majority Lenders)) and projections prepared by Miller & Lents, Ltd. with respect to future cash and cash flows of Maxus, Midgard, Maxus Indonesia, Maxus Java and Maxus Sumatra. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 42 - (m) Process Agent Acceptance. A process agent ------------------------ acceptance, duly executed and delivered by the Process Agent, in substantially the form of Exhibit H hereto. (n) Solvency of Maxus. A written opinion of Houlihan ----------------- Lokey Howard & Zukin, Inc. demonstrating that, after giving effect to the Merger (and the performance of the terms and conditions of the Merger Agreement), the Loans hereunder in the full amount of the Commitments, the assumption by Maxus of YPF Acquisition's obligations hereunder and under the Notes provided for by the Assumption Agreement and the other transactions contemplated hereby to occur on or prior to the Merger Closing Date or in connection with the Merger: (i) the fair saleable value of the assets of Maxus exceeds the amount that will be required to be paid on or in respect of the debts and other liabilities (including contingent, unmatured and subordinated liabilities) of Maxus as they mature; (ii) Maxus does not have unreasonably small capital to carry out its business as conducted or as proposed to be conducted; and (iii) Maxus has not incurred debts beyond its ability to pay such debts as they mature (references to Maxus in clauses (i), (ii) and (iii) above being to Maxus on each of a stand-alone and a consolidated basis). Also, the Agent shall have received (x) a certificate of Maxus certifying (A) as to the conclusions specified in clauses (i), (ii) and (iii) above, (B) that Maxus does not intend to, and does not believe that it will, incur debts beyond its ability to pay such debts as they mature and (C) as to such other matters relating to the subject matter of the opinion referred to in the preceding sentence as the Agent may reasonably request. (o) Environmental Liabilities. A certificate of a ------------------------- senior officer of Maxus as to the corporate structure of Midgard and its Subsidiaries in relation to Chemical Land Holdings, Inc. and environmental matters relating to Midgard. (p) Other Documents. Such other documents as the --------------- Agent or any Lender or special New York counsel to Chase reasonably request. The obligation of each Lender to make its Initial Loan hereunder is also subject to the payment by the Obligors of such fees as the Obligors shall have agreed to pay to any Lender, the Agent or Chase in connection herewith on or prior to the Initial Borrowing Date, including without limitation, the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase and Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel to Chase, in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Basic Documents and the documents providing for or relating to the other Acquisition Financing Transactions and the making of the Loans hereunder and BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 43 - thereunder (to the extent that statements for such fees and expenses have been delivered to the Obligors and, in the case of Milbank, Tweed, Hadley & McCloy, subject to the proviso in Section 12.03(a)(i) hereof). 7.02 Second Loans. The obligation of the Lenders to ------------ make the Second Loans to be made hereunder on the Second Borrowing Date is subject to the prior or simultaneous satisfaction of the following conditions: (i) the aggregate principal amount of such Loans shall not exceed the amount specified in Section 2.01(b) hereof (and the Agent shall have received evidence thereof satisfactory to it) and (ii) the Agent shall have received the following documents, or other evidence, all of which shall be satisfactory to the Agent (or the Majority Lenders, to the extent specified below) in form and substance: (a) Assumption Agreement. The Assumption Agreement, -------------------- duly executed and delivered by Maxus and the Agent. (b) Corporate Documents. The following documents, ------------------- each certified as indicated below: (i) the Articles of Merger relating to the merger of YPF Acquisition into Maxus as filed with the Secretary of State of Delaware certified as of the Second Borrowing Date by the Secretary or an Assistant Secretary of Maxus; (ii) a certificate of the Secretary or an Assistant Secretary of Maxus dated the Second Borrowing Date certifying (A) that attached thereto is a true and complete copy of the Certificate of Incorporation and by-laws of Maxus, as amended and in effect on the Second Borrowing Date (prior to giving effect to the Merger), (B) that attached thereto is a true and complete copy of resolutions duly adopted by the board of directors of Maxus authorizing the execution, delivery and performance of the Assumption Agreement and (C) as to the incumbency and specimen signature of each officer of Maxus that executed the Assumption Agreement (and the Agent and each Lender may conclusively rely on such certificate until it receives notice in writing from Maxus to the contrary); (iii) a certificate of another officer of Maxus, dated the Second Borrowing Date, as to the incumbency and specimen signature of the Secretary or an Assistant Secretary, as the case may be, of Maxus; (iv) certificates of (A) the Secretary of State of Delaware dated the Second Borrowing Date as to the good standing of and charter documents filed by Maxus, Midgard, Maxus Indonesia, Maxus Java and Maxus Sumatra and (B) the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 44 - Secretary of State or other appropriate official of the States of Alabama, Arkansas, Georgia, Oklahoma and Texas, each dated the Second Borrowing Date, as to the good standing of, and authority to transact business of, Maxus in such States; and (v) certificates of the Secretary of State or other appropriate official of the States of Texas and Oklahoma, each dated the Second Borrowing Date, as to the good standing of, and authority to transact business of, Midgard in such States. (c) Opinion of Counsel to the Obligors. Opinions, ---------------------------------- dated the Second Borrowing Date, of (i) Andrews & Kurth L.L.P., special counsel to YPF and YPF Acquisition, substantially in the form of Exhibit D-4 hereto and covering such other matters as the Agent or any Lender may reasonably request, (ii) Jones, Day, Reavis & Pogue, special counsel to Maxus, substantially in the form of Exhibit D-5 hereto and covering such other matters as the Agent or any Lender may reasonably request and (iii) McCarter Middlebrook, Esq., Vice President and General Counsel of Maxus, substantially in the form of Exhibit D-5 hereto and covering such other matters as the Agent or any Lender may reasonably request (and each Obligor hereby instructs each such counsel to deliver such opinion to the Lenders and the Agent). (d) Opinion of Special New York Counsel to Chase. An -------------------------------------------- opinion, dated the Second Borrowing Date, of Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase, substantially in the form of Exhibit E-3 hereto (and Chase hereby instructs each such counsel to deliver such opinion to the Lenders and the Agent). (e) Merger. Evidence (including a certificate of a ------ senior officer of YPF to the effect specified in the following clauses (i) and (ii)) that (i) all of the conditions precedent to the consummation of the Merger specified in the Merger Agreement have been satisfied without any modification or waiver (except for any such modification or waiver approved by the Majority Lenders, such approval not to be unreasonably withheld) and (ii) the Merger has been consummated with the effects specified in Sections 2.1.3 and 2.1.4 of the Merger Agreement; and certified copies of each document or instrument delivered by YPF, YPF Acquisition and Maxus and their respective Subsidiaries pursuant to or in connection with the Merger Agreement. (f) Governmental Approvals, Etc. If and to the extent --------------------------- requested by the Agent, evidence (reasonably satisfactory to the Agent) that the conditions precedent specified in Section 7.01(f)(iv) and (v) hereof continue to be satisfied. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 45 - (g) Solvency of Maxus. A certificate of Maxus and a ----------------- written opinion of Houlihan Lokey Howard & Zukin, Inc. (or another firm of recognized national standing in the field of solvency valuation acceptable to the Majority Lenders), each dated the Merger Closing Date, confirming that as of such date no fact has come to its attention that would lead it to believe that the analysis and conclusions stated in the certificate or opinion (as the case may be) furnished pursuant to Section 7.01(n) hereof are not true and correct in all material respects. (h) Midgard Facility. A credit agreement and other ---------------- documentation required by the Lenders for the extensions of credit contemplated to be made under the Midgard Facility shall be available for execution in form and substance satisfactory to the Lenders, the Agent, the Obligors and the Midgard Group. (i) Maxus Indonesia Facility. A credit agreement, ------------------------ security agreement and other documentation required by the Lenders for the extensions of credit contemplated to be made under the Maxus Indonesia Facility shall be available for execution in form and substance satisfactory to the Lenders, the Agent, the Obligors and the Maxus Indonesia Group. (j) Other Documents. Such other documents as the --------------- Agent or any Lender or special New York counsel to Chase may reasonably request. The obligation of each Lender to make its Second Loan hereunder is also subject to the payment by the Obligors of such fees as the Obligors shall have agreed to pay to any Lender, the Agent or Chase in connection herewith on or prior to the Second Borrowing Date (other than any such fees and expenses paid by the Obligors on the Initial Borrowing Date), including without limitation, the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase and Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel to Chase, in connection with the negotiation, preparation, execution and delivery of this Agreement and the other Basic Documents and the documents providing for the other Acquisition Financing Transactions and the making of the Loans hereunder and thereunder (to the extent that statements for such fees and expenses have been delivered to the Obligors and, in the case of Milbank, Tweed, Hadley & McCloy, subject to the proviso in Section 12.03(a)(i) hereof). 7.03 Initial and Second Loans. The obligation of the ------------------------ Lenders to make the Loans to be made on the occasion of each borrowing hereunder is subject to the further conditions precedent that: BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 46 - (a) Litigation, Etc. The Agent shall have received a --------------- certificate of a senior officer of each Obligor satisfactory to the Agent, dated the date of such borrowing, certifying that (except as described in such certificate, in Schedule IV hereto or in such Obligor's SEC Reports or Maxus' SEC Reports) there exists: (i) no order, injunction or decree described in clause (v)(a) of Section 14 of the Offer to Purchase and no statute, rule, regulation or order described in clause (v)(b) of said Section 14; (ii) no pending or threatened action, suit, litigation or other proceedings by or before any court or governmental or regulatory authority relating to the Acquisition that seeks to enjoin or otherwise prohibit or in any way modify or otherwise affect the Tender Offer or the Merger or any of the Acquisition Financing Transactions; and (iii) no other action, suit, litigation or other proceedings pending or threatened with respect to YPF or Maxus or any of their respective Subsidiaries that, individually or in the aggregate, if adversely determined, could have a Material Adverse Effect. In addition, no order, injunction, decree, statute, rule or regulation referred to in clause (i) above shall prohibit the Tender Offer, the Merger or any of the Acquisition Financing Transactions. Such certificate may be stated to be to the knowledge of the Obligors with respect to proceedings referred to in the preceding sentence that are threatened (but not pending) or to which neither Obligor is a party. (b) Material Adverse Effect, Etc. The Majority ----------------------------- Lenders shall not have determined that: (i) any changes in circumstances since December 31, 1994 (including, without limitation, any event specified in clauses (v)(a) through (h) of Section 14 of the Offer to Purchase and any matters described in the certificate delivered pursuant to Section 7.03(a) hereof in connection with such borrowing but excluding any proceedings referred to in clauses (ii) and (iii) of said Section 7.03(a) that are threatened but not pending) have had, or could reasonably be expected to have, (x) in the case of the initial borrowing hereunder, a Material Adverse Effect or (y) in the case of the second borrowing hereunder, a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or a Maxus Material Adverse Effect; (ii) any Relevant Information disclosed to or discovered by Chase or the other Lenders is materially adverse with respect to any of the matters referred to in the definition of Material Adverse Effect; or (iii) any Relevant Information furnished by or on behalf of the Obligors or, after the Initial Borrowing Date, Maxus, to Chase or any other Lender in writing (other than any thereof which, at the time furnished, either Obligor indicated in writing was inaccurate) that proves to have been inaccurate, incomplete or misleading at the time furnished is materially adverse with respect to either (x) the matters referred to in the definition of Material Adverse Effect taken as a whole or (y) any of such matters relating to any Refinancing BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 47 - Subsidiary or any of its Subsidiaries or the Acquisition Financing Transaction to which such Refinancing Subsidiary is intended to be a party. (c) No Conflicting Agreements. The Agent shall have ------------------------- received (i) a certificate of a senior officer of YPF satisfactory to the Agent in form and substance certifying that (and setting forth computations in reasonable detail demonstrating that), after giving effect to the borrowings hereunder, the Liens provided for by the Pledge Agreement and the other transactions contemplated hereby to occur in connection with the foregoing, YPF is in compliance with the provisions of (x) Section 4.7 of the Indenture dated February 2, 1994 between YPF and The Bank of New York, N.A., as trustee and (y) Section 1007 of the Indenture dated October 7, 1994 between YPF and The Bank of New York, N.A., as trustee, and (ii) a certificate of a senior officer of Maxus certifying that, after giving effect to such borrowings, the consummation of the Merger, the assumption provided for by the Assumption Agreement and the other transactions contemplated hereby to occur in connection with the foregoing, Maxus is in compliance with the provisions of each of the Maxus Public Debt Documents (and certifying calculations demonstrating compliance with Section 9.1 of the Indenture dated as of April 1, 1978 between Diamond Shamrock Corporation (as predecessor in interest to Maxus) and Mellon Bank, N.A., as trustee, as such Indenture has heretofore been modified and supplemented and in effect on the date hereof). (d) No Default, Etc. Both immediately prior to such ---------------- borrowing and also after giving effect thereto and to the intended use of the proceeds thereof: (i) no Default shall have occurred and be continuing; and (ii) the representations and warranties made by each Obligor in Section 8 hereof and in each other Basic Document to which such Obligor is a party, shall be true and complete in all material respects on and as of the date of such borrowing (and after giving effect thereto and, in the case of the borrowing on the Second Borrowing Date, to the Merger) with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and the Agent shall have received a certificate of a senior officer of YPF and, in the case of the second borrowing hereunder, Maxus, satisfactory to the Agent in form and substance to such effect. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 48 - (e) Cash held by Maxus. The Agent shall have received ------------------ evidence satisfactory to it that Maxus holds cash and cash equivalents and other Permitted Maxus Investments in the amounts specified in Section 9.10 hereof. Section 8. Representations and Warranties. Each ------------------------------ Obligor, with respect to Sections 8.01 through 8.14, and YPF, with respect to Section 8.15, represents and warrants to the Agent and the Lenders that: 8.01 Corporate Existence. The Company: (a) is a ------------------- corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (b) has all requisite corporate or other power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could reasonably be expected to (either individually or in the aggregate) have a YPF Acquisition Material Adverse Effect or (prior to the Control Transfer Date, to the knowledge of the Obligors) a Maxus Material Adverse Effect. 8.02 Litigation. Except as disclosed in Schedule IV ---------- hereto or in YPF's SEC Reports or Maxus' SEC Reports, there are no legal or arbitral proceedings, or any proceedings by or before any governmental or regulatory authority or agency, now pending or (to the knowledge of the Obligors) threatened, against (a) YPF or any of its Subsidiaries, (b) (prior to the Control Transfer Date, to the knowledge of the Obligors) Maxus or any of its Subsidiaries or (c) (prior to the Control Transfer Date, to the knowledge of the Obligors with respect to proceedings to which neither Obligor is a party) relating to the Tender Offer, the Merger or the other transactions contemplated hereby (including, without limitation, any of the Acquisition Financing Transactions) which could reasonably be expected to be adversely determined and, if adversely determined, could (individually or in the aggregate) have a YPF Material Adverse Effect, YPF Acquisition Material Adverse Effect or (prior to the Control Transfer Date, to the knowledge of the Obligors), a Maxus Material Adverse Effect. 8.03 No Breach. --------- (a) None of the Tender Offer, the Merger, the Acquisition Financing Transactions and the other transactions contemplated hereby or by the other Transaction Documents (including, without limitation, the execution, delivery and performance of any of the Transaction Documents by the respective BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 49 - parties thereto) will result in a breach of or require any modification, waiver or consent (other than any thereof already effected or obtained and certified copies of which have been furnished to the Agent and other than consents with respect to either of the Refinancing Facilities which are reasonably expected to be obtained at or prior to the initial loans thereunder) under, the charter or by-laws or equivalent documents of YPF or YPF Acquisition or (prior to the Control Transfer Date, to the knowledge of the Obligors) Maxus or any of Maxus' Subsidiaries or any agreement or instrument to which YPF or YPF Acquisition or (prior to the Control Transfer Date, to the knowledge of the Obligors) Maxus or any of Maxus' Subsidiaries is a party or by which any of such Persons or any of its Property is bound or to which it is subject, or constitute a default under, or require any of such Persons to prepay, purchase, redeem or otherwise acquire any Indebtedness or securities of or issued by such Person or any of its Subsidiaries under, any of such agreement or instrument, or (except for Liens referred to in the definition of Acquisition Financing Transactions) result in the creation or imposition of any Lien upon any Property of any of such Persons pursuant to the terms of any such agreement or instrument other than any such agreements and instruments evidencing, providing for or otherwise relating to Indebtedness and securities of YPF and its Subsidiaries (other than Maxus and its Subsidiaries) or Maxus and its Subsidiaries (other than the Refinancing Subsidiaries and their respective Subsidiaries) in an aggregate principal amount of (or, in the case of securities not evidencing Indebtedness that are required to be acquired as aforesaid, having an aggregate acquisition cost to YPF and its Subsidiaries or Maxus and its Subsidiaries, as the case may be) less than $5,000,000. (b) None of the execution, delivery and performance of this Agreement and the other Basic Documents (including, without limitation, borrowings hereunder and the Liens provided for by the Basic Documents) will violate any requirements of applicable law or regulation or any order, writ, injunction or decree of any court or governmental or regulatory authority or agency ("Legal ----- Requirements") other than any Legal Requirements the violation of ------------ which, individually or in the aggregate, could not reasonably be expected to have a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or (prior to the Control Transfer Date, to the knowledge of the Obligors) a Maxus Material Adverse Effect. (c) Except as specifically described in the Offer to Purchase or in Schedule VII hereto, none of the Tender Offer, the Merger and the other transactions contemplated by the Acquisition Documents (including, without limitation, the execution, delivery and performance of any of the Acquisition Documents by the respective parties thereto) will violate any Legal Requirements BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 50 - applicable to YPF or YPF Acquisition or (prior to the Control Transfer Date, to the knowledge of the Obligors) Maxus or any of its Subsidiaries other than any Legal Requirements the violation of which, individually or in the aggregate, could not reasonably be expected to have a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or a Maxus Material Adverse Effect. 8.04 Action. Each Obligor has all necessary corporate ------ power, authority and legal right to execute, deliver and perform its obligations under each of the Transaction Documents to which it is a party; the execution, delivery and performance by each Obligor of each of the Transaction Documents to which it is a party has been duly authorized by all necessary corporate action on its part (including, without limitation, any approvals of its shareholders); each of the Transaction Documents to which each of the Obligors is a party has been duly and validly executed and delivered by it; and each of this Agreement, the Offer to Purchase (in the case of YPF Acquisition) and the Merger Agreement constitutes, and each of the Notes and the other Transaction Documents to which each of the Obligors is or is intended to be a party when executed and delivered by it (in the case of the Notes, for value), will constitute, the legal, valid and binding obligation of such Obligor, enforceable against it in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors' rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 8.05 Approvals. No authorizations, approvals or --------- consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, are necessary for the execution, delivery or performance by either Obligor of any of the Basic Documents to which it is a party or for the legality, validity or enforceability thereof, except for any thereof the failure of which to be obtained or effected could not, individually or in the aggregate, reasonably be expected to have a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or a Maxus Material Adverse Effect. Except as specifically described in the Acquisition Documents or in Schedule VII hereto, no authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, are necessary for the execution, delivery and performance by either Obligor or (prior to the Control Transfer Date, to the knowledge of the Obligors) Maxus of any of the Acquisition Documents, the Acquisition or for any of the other transactions contemplated thereby, except for BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 51 - any thereof the failure of which to be obtained or effected could not, individually or in the aggregate, reasonably be expected to have a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or (prior to the Control Transfer Date, to the knowledge of the Obligors) a Maxus Material Adverse Effect. 8.06 Use of Credit. Neither Obligor is engaged ------------- principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock. Neither the making of any of the Loans hereunder nor the use of the proceeds thereof will violate or be inconsistent with the provisions of Regulation G, U or X. 8.07 Investment Company Act. Neither Obligor nor any ---------------------- of its Subsidiaries (including, without limitation, the Company) is an "investment company", or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended. 8.08 Public Utility Holding Company Act. Neither ---------------------------------- Obligor nor any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. 8.09 Certain Documents. Prior to the date hereof, the ----------------- Obligors have furnished to the Agent and the Lenders true and complete copies of the following documents, each as in effect on such date: (a) the Acquisition Documents, (b) the YPF Debt Documents, (c) the Maxus Public Debt Documents, and (d) the Certificate of Incorporation of Maxus. 8.10 Capitalization of Company. The authorized ------------------------- capital stock of YPF Acquisition consists, on the date hereof, of an aggregate of 155,000,000 shares of common stock, par value $.01 per share, of which 135,590,277 shares are duly and validly issued and outstanding, each of which shares is fully paid and nonassessable. As of the date hereof all of such issued and outstanding shares of common stock are owned beneficially and of record by YPF. As of the date hereof, there are no outstanding Equity Rights with respect to YPF Acquisition. 8.11 True and Complete Disclosure. The information, ---------------------------- reports (including, without limitation, hydrocarbon engineering reports), financial statements, exhibits and schedules furnished in writing by or on behalf of the Obligors to the Agent or any Lender in connection with the negotiation, preparation or delivery of this Agreement and the other Basic Documents or included herein or therein or delivered pursuant hereto, when taken as a whole and when considered with respect to each of the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 52 - Refinancing Subsidiaries and their respective Subsidiaries, to the actual knowledge of each Obligor, do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. The Obligors have not delivered any information to the Agent or any Lender relating to general economic conditions in South America, and in particular, Argentina. All written information furnished after the date hereof by or on behalf of the Obligors to the Agent or the Lenders in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to either Obligor that could reasonably be expected to have a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or a Maxus Material Adverse Effect that has not been disclosed herein, in the other Basic Documents or in the Acquisition Documents (including in each case the exhibits and schedules thereto) or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Lenders for use in connection with the transactions contemplated hereby or thereby. 8.12 Pledge Agreement. The Pledge Agreement creates, ---------------- as security for the Secured Obligations (as defined in the Pledge Agreement), a valid and enforceable first priority perfected pledge and security interest in and to all of the Pledged Stock (as defined in the Pledge Agreement) in favor of the Agent for the benefit of the Lenders, subject to no other Liens. 8.13 Special Purpose Corporation. Prior to the Tender --------------------------- Offer Closing Date, YPF Acquisition will have (a) no material assets other than the cash proceeds referred to in Section 7.01(i) hereof and Investments referred to in Section 9.08(b) hereof and its rights and interests under the Acquisition Documents to which it is a party and (b) no Indebtedness, and no material obligations other than its obligations under the Transaction Documents. 8.14 Transaction Costs. The Transaction Costs, ----------------- exclusive of any payments (a) made by YPF or YPF Acquisition to former employees of Maxus with respect to so called "golden parachutes" and (b) made by YPF or YPF Acquisition with respect to the "poison pill" under the Certificate of Incorporation of Maxus, will not exceed $35,000,000. 8.15 YPF Representations. YPF hereby represents and ------------------- warrants to the Agent and the Lenders that each of the representations and warranties set forth in Schedule I hereto are true and complete. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 53 - Section 9. Covenants of Obligors. Each Obligor --------------------- covenants and agrees with the Lenders and the Agent that, so long as any Commitment or Loan is outstanding and until payment in full of all amounts payable by the Company hereunder: 9.01 Financial Statements, Etc. YPF shall deliver or -------------------------- cause to be delivered to the Agent (and the Agent shall deliver to each Lender) the following: (a) on and after the Control Transfer Date (or prior thereto, if either Obligor has received the same), as soon as available and in any event within 45 days after the end of the first quarterly fiscal period of the 1995 fiscal year of Maxus, (i) consolidated statements of income, retained earnings and cash flows of (A) Maxus and its Subsidiaries and (B) Midgard and (ii) consolidated and consolidating statements of income, retained earnings and cash flows of Maxus Indonesia for such period and for the period from the beginning of such fiscal year to the end of such period, and the related (i) consolidated balance sheets of (A) Maxus and its Subsidiaries and (B) Midgard and (ii) consolidated and consolidating balance sheets of Maxus Indonesia, respectively as at the end of such period, setting forth in each case in comparative form the corresponding consolidated and consolidating figures for the corresponding periods in the preceding fiscal year (except that, (i) in the case of balance sheets, such comparison shall be to the last day of the prior fiscal year and (ii) comparative consolidating figures shall not be required for any period prior to the Merger Closing Date), accompanied by a certificate of a senior officer of Maxus, which certificate shall state that said consolidated financial statements fairly present in all material respects the consolidated financial condition and results of operations of Maxus and its Subsidiaries, Midgard and Maxus Indonesia, as the case may be, and said consolidating financial statements fairly present in all material respects the respective individual unconsolidated financial condition and results of operations of Maxus Indonesia and of each of its Subsidiaries, in each case in accordance with GAAP (subject to normal year-end audit adjustments); (b) on and after the Control Transfer Date (or prior thereto, if either Obligor has received the same), promptly upon their becoming available, copies of all registration statements and regular periodic reports that Maxus shall have filed with the Commission or any national securities exchange; (c) on and after the Control Transfer Date (or prior thereto, if either Obligor has received the same), promptly upon the mailing thereof to the holders of any class or classes of shares of capital stock of Maxus generally (other than solely to YPF as holder of outstanding common stock of Maxus) or to holders BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 54 - of Indebtedness of Maxus under the Maxus Public Debt Documents generally, copies of all financial statements, reports and proxy statements so mailed (to the extent not delivered under paragraph (b) above); (d) on and after the Control Transfer Date (or prior thereto, if either Obligor actually becomes aware thereof), as soon as possible, and in any event within ten days after Maxus knows or has reason to believe that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a senior financial officer of Maxus setting forth details respecting such event or condition and the action, if any, that Maxus or an ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to the PBGC by Maxus or an ERISA Affiliate with respect to such event or condition): (i) any reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which the PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event (provided that a failure to meet -------- the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code); and any request for a waiver under Section 412(d) of the Code for any Plan; (ii) the distribution under Section 4041(c) of ERISA of a notice of intent to terminate any Plan or any action taken by Maxus or an ERISA Affiliate to terminate any Plan; (iii) the institution by the PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by Maxus or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; (iv) the complete or partial withdrawal from a Multiemployer Plan by Maxus or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by Maxus or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 55 - Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA; (v) the institution of a proceeding by a fiduciary of any Multiemployer Plan against Maxus or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days; and (vi) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if Maxus or an ERISA Affiliate fails to timely provide security to the Plan in accordance with the provisions of said Sections; (e) promptly after either Obligor becomes aware thereof, notice of the occurrence of (i) any event specified in clauses (v)(a) through and including (v)(h) of Section 14 of the Offer to Purchase or (ii) any other event, condition or circumstance that (individually or in the aggregate) has resulted in or could reasonably be expected to result in any of the consequences referred to in subclauses (1) through (4) of clause (v)(a) of said Section 14 or has or could have a Material Adverse Effect. (f) promptly after either Obligor knows or has reason to believe that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that the Obligors have taken or propose to take with respect thereto; (g) On or prior to the date immediately preceding the Merger Closing Date, YPF shall cause each of Midgard, Maxus Indonesia, Maxus Java and Maxus Sumatra, to deliver pro forma financial statements (including a pro forma balance sheet dated March 31, 1995 giving effect to the Merger, the recapitalization and reorganization of certain Subsidiaries of Maxus contemplated to occur on or prior to the Merger Closing Date and any other transactions or events contemplated to occur on or before the Merger Closing Date (other than in the ordinary course of business) reflecting the pro forma financial condition, income, expenses and cash flow for each of Maxus, Midgard, Maxus Indonesia, Maxus Java and Maxus Sumatra (as at said date and for the period from the beginning of the respective fiscal year of each such Person to such date), such financial statements to be in form and substance satisfactory to the Majority Lenders (collectively, the "Refinancing Balance Sheets"), in each case, -------------------------- accompanied by a certificate of a senior financial officer of each such Person, which shall state that said financial statements fairly present in all material respects the respective BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 56 - pro forma financial condition of such Person as at said date and for such period in accordance with GAAP; and (h) from time to time such other information regarding the Acquisition or the condition (financial or otherwise), business, operations, assets or liabilities of any of YPF Acquisition and (prior to the Control Transfer Date, to the extent either Obligor shall have access to such information) Maxus and its Subsidiaries as any Lender or the Agent may reasonably request. YPF will furnish or cause to be furnished to the Agent, at the time financial statements are furnished pursuant to paragraph (a) above, a certificate of a senior officer of YPF (i) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and describing the action that the Obligors have taken or propose to take with respect thereto) and (ii) setting forth in reasonable detail the computations necessary to determine whether the Obligors are in compliance with their obligations under Section 9.10 hereof (and under such of the other provisions of this Section 9 as the Agent may reasonably request) as of the end of the quarterly fiscal period covered by such statements. 9.02 Litigation; Etc. YPF will give or cause to be ---------------- given to the Agent, promptly upon becoming aware thereof, notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of any of such proceedings, relating to or affecting (a) the Acquisition or any of the Acquisition Financing Transactions or (b) YPF, YPF Acquisition or Maxus or any of its Subsidiaries, except proceedings that, if adversely determined, could not (either individually or in the aggregate) reasonably be expected to have a YPF Material Adverse Effect, a YPF Acquisition Material Adverse Effect or (prior to the Control Transfer Date, to the knowledge of the Obligors) a Maxus Material Adverse Effect. In addition, YPF will give or cause to be given to the Agent and each Lender, promptly upon becoming aware that the holder of any note or of any other evidence of Indebtedness of Maxus or any of its Subsidiaries having, individually or in the aggregate, an outstanding principal balance of $1,000,000 has given notice or taken any other action with respect to a claimed default or event of default (or similar event), notice of such event and specifying the notice given or action taken by such holder and the nature of the claimed default or event of default (or similar event) and BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 57 - any action being taken (or proposed to be taken) by YPF or Maxus to remedy the same. 9.03 Existence, Etc. Prior to and on and after the --------------- Control Transfer Date, YPF will cause YPF Acquisition, and on and after the Control Transfer Date, Maxus and each Material Subsidiary to: (a) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises provided that: (i) subject to Sections 9.12 and 9.13 hereof, -------- nothing in this Section 9.03(a) shall prohibit any transaction not prohibited by Sections 9.05, 9.12 or 9.13 hereof; and (ii) notwithstanding anything in this Section 9.03(a) or in Section 9.05 hereof or any other provision of this Agreement, any one or more members (whether one or more, a "Refinancing Party") ----------------- of the Midgard Group or the Maxus Indonesia Group (the "Related ------- Group") may merge with or into, or consolidate with or sell, ----- lease, transfer or otherwise dispose of all or substantially all its or their assets to, or engage in any joint venture or other transaction (otherwise hereby prohibited) with, any other Person or Persons (a "Permitted Transaction"), if (x) concurrently --------------------- therewith the Obligors, or either of them, shall prepay a principal amount of the Loans equal to that which would have been refinanced by the Refinancing Facility to which such Refinancing Party (or one or more other members of the Related Group) is intended to be a party, together with all accrued interest thereon, and (y) such Permitted Transaction does not have and could not reasonably be expected to have a Maxus Material Adverse Effect (other than with respect to such Refinancing Party (and/or one or more of such other members of the Related Group) and/or such Refinancing Facility, including, without limitation, the income of any such Person); (b) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities if failure to comply with such requirements could (either individually or in the aggregate) not reasonably be expected to have a Material Adverse Effect; (c) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained to the extent required by GAAP; (d) maintain all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted; BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 58 - (e) keep adequate records and books of account, in which complete entries will be made in accordance with GAAP; and (f) permit representatives of any Lender or the Agent, during normal business hours and at the expense of such Lender or the Agent (as the case may be), to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by such Lender or the Agent (as the case may be). 9.04 Insurance. On and after the Control Transfer --------- Date, YPF will cause Maxus and each Material Subsidiary to maintain insurance with financially sound and reputable insurance companies or to self insure, and with respect to Property and risks of a character usually maintained by corporations engaged in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such corporations. 9.05 Prohibition of Fundamental Changes. (a) On and ---------------------------------- after the Control Transfer Date, YPF will not permit any of Maxus and the Material Subsidiaries to enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), except for the Merger and except as described in Schedule VIII hereto. (b) On and after the Control Transfer Date YPF will cause: (i) Maxus and each of its Subsidiaries to, conduct their respective businesses only in, and not take any action except in, the ordinary and usual course of business substantially consistent with past practice, (ii) except as described in Schedule VIII hereto, Maxus to preserve intact the business organization of Maxus and each of the Material Subsidiaries, (iii) Maxus and each of the Material Subsidiaries to use their respective reasonable best efforts to preserve the goodwill of Persons having business relationships with it or its Material Subsidiaries, (iv) except as described in Schedule VIII hereto, each of the Material Subsidiaries not to permit or propose any change or amendment to their respective certificates of incorporation or by-laws (or comparable governing instruments), except as may be required by law, (v) Maxus or any Subsidiary of Maxus not to authorize for issuance, issue, sell or deliver any shares of capital stock or any other securities of any of them (other than, in the case of Maxus, pursuant to Equity Rights with respect to Maxus outstanding on the date hereof (after giving effect to the transactions contemplated hereby and under the Acquisition Documents to occur on the Initial Borrowing Date)) or issue any securities convertible into or exchangeable for, or options, warrants to purchase, scrip, rights to subscribe for, BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 59 - calls or commitments of any character whatsoever relating to, or enter into any contract with respect to the issuance of, any shares of capital stock or any other securities of any of them (other than Equity Rights with respect to Maxus outstanding on the date hereof (after giving effect to the transactions contemplated hereby and under the Acquisition Documents to occur on the Initial Borrowing Date)), purchase or otherwise acquire or enter into any contract with respect to the purchase or voting of shares of their capital stock, or adjust, split, combine or reclassify any of their capital stock or other securities, or make any other similar changes in their capital structures. 9.06 Limitation on Liens. On and after the Control ------------------- Transfer Date, YPF will not permit Maxus or any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of its Property, whether now owned or hereafter acquired, except (subject to Sections 9.12 and 9.13 hereof): (a) Liens provided for by the Basic Documents; (b) Liens in existence on the Control Transfer Date; (c) Liens imposed by any governmental authority for taxes, assessments or charges not yet due or that are being contested in good faith and by appropriate proceedings if, unless the amount thereof is not material, adequate reserves with respect thereto are maintained on the books of Maxus and its Subsidiaries in accordance with GAAP; (d) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings and Liens securing judgments but only to the extent for an amount and for a period not resulting in an Event of Default under Section 10(h) hereof; (e) pledges or deposits under worker's compensation, unemployment insurance and other social security legislation; (f) deposits to secure the performance of bids, trade contracts (other than for Indebtedness), leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business; (g) easements, rights-of-way, restrictions and other similar encumbrances incurred in the ordinary course of business and encumbrances consisting of zoning restrictions, BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 60 - easements, licenses, restrictions on the use of Property or minor imperfections in title thereto that, in the aggregate, are not material in amount, and that do not in any case materially detract from the value of the Property subject thereto or interfere with the ordinary conduct of the business of Maxus and its Subsidiaries; (h) Liens on Property of any corporation that becomes a Subsidiary of Maxus after the date hereof, provided that such Liens are in existence at the time such corporation becomes a Subsidiary of Maxus and were not created in anticipation thereof; (i) Liens upon real and/or tangible personal Property acquired after the date hereof (by purchase, construction or otherwise) by any of the Subsidiaries, each of which Liens either (A) existed on such Property before the time of its acquisition and was not created in anticipation thereof or (B) was created solely for the purpose of securing Indebtedness representing, or incurred to finance, refinance or refund, the cost (including the cost of construction) of such Property; provided that (i) no such Lien shall extend -------- to or cover any Property of any such Subsidiary other than the Property so acquired and improvements thereon, (ii) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 60% (except for Liens on crude oil to secure the Indebtedness to Caisse Nationale de Credit Agricole Geneva Branch permitted pursuant to Section 9.07(b) hereof) of the fair market value (as determined in good faith by a senior officer of Maxus) of such Property at the time it was acquired (by purchase, construction or otherwise) and (iii) no such Lien shall be incurred in connection with any Production Payment unless the Company, as promptly as reasonably practicable, and in any event within ten days after the creation of such Lien, provides the Agent with information concerning the Production Payment which gave rise to such Lien and delivers to the Agent, promptly upon request, such additional information concerning such Production Payment or such Lien as the Agent or any Lender may reasonably request; (j) licenses, leases or subleases granted to others in the ordinary course of business not materially interfering with the conduct of the business of Maxus and its Subsidiaries taken as a whole; (k) statutory and contractual landlords' liens under leases to which Maxus or any of its Subsidiaries is a party; BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 61 - (l) any interest or title of a lessor, sublessor, licensee or licensor under any lease or license agreement permitted by this Agreement; (m) Liens in favor of a banking institution arising as a matter of law encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business and which are within the general parameters customary in the banking industry; (n) Liens in favor of customs and revenue authorities arising as a matter of law to secure the payment of customs' duties in connection with the importation of goods; (o) Liens for farm-in, farm-out, joint operating, area of mutual interest agreements or similar agreements entered into by Maxus or any of its Subsidiaries in the ordinary course of business which such Person determines in good faith to be necessary for or advantageous to the economic development of their Properties; provided that no such Liens -------- shall be granted upon Property that has Proved Reserves exceeding 50% of the aggregate value of hydrocarbon reserves estimated to be contained in such Property; (p) any extension, renewal or replacement of the foregoing, provided that the Liens permitted hereunder shall -------- not be spread to cover any additional Indebtedness or Property (other than a substitution of like Property); and (q) Liens on Maxus Shares permitted by Section 9.12 hereof. 9.07 Indebtedness. On and after the Control Transfer ------------ Date, YPF will not permit Maxus or any of its Subsidiaries to create, incur or suffer to exist any Indebtedness except (subject to Sections 9.12 and 9.13 hereof): (a) Indebtedness to the Lenders hereunder and Indebtedness under the Refinancing Facilities; and (b) Indebtedness incurred in the ordinary course of business and consistent with past practices (including, without limitation, Indebtedness of Maxus, Maxus Energy Trading Company, Maxus Sumatra and Maxus Java to Caisse Nationale de Credit Agricole Geneva Branch under a certain letter agreement dated January 11, 1994 between such Persons in an amount up to but not exceeding $28,000,000 at any one time outstanding). 9.08 Investments. On and after the Control Transfer ----------- Date, YPF will not permit Maxus or any of the Material BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 62 - Subsidiaries to make or permit to remain outstanding any Investments except (subject to Sections 9.12 and 9.13 hereof): (a) Investments outstanding on the Control Transfer Date; and (b) additional Investments made in the ordinary course of business and consistent with past practices. 9.09 Dividend Payments. On and after the Control ----------------- Transfer Date, YPF will not permit Maxus to declare or make any Dividend Payment at any time other than regularly scheduled Dividend Payments made by Maxus in respect of Maxus Preferred Shares. Subject to Sections 9.12 and 9.13 hereof, nothing herein shall be deemed to prohibit Dividend Payments to any Relevant Subsidiary by any other Relevant Subsidiary that is a Subsidiary of such Relevant Subsidiary. 9.10 Maxus Cash. On and after the Control Transfer ---------- Date, YPF will not permit (a) the aggregate amount of cash and cash equivalents and other Permitted Maxus Investments of Maxus and its Subsidiaries to be less than $160,000,000 at any time and (b) the aggregate amount of Unrestricted cash and cash equivalents and other Permitted Maxus Investments of Maxus and its consolidated Subsidiaries to be less than $134,000,000 (or such lesser amount as shall be equal to the principal of the Loans, interest thereon and other amounts at the time of the determination thereof are estimated in reasonably good faith by Maxus to be paid by Maxus to the Agent and the Lenders hereunder on the Maturity Date other than from (i) the proceeds of the loans contemplated to be made under the Refinancing Facilities and (ii) any proceeds from any transaction permitted pursuant to the proviso at the end of Section 9.03(a) hereof). As used in this Section 9.10, "Unrestricted" shall mean, when used with respect to cash, cash equivalents and other Permitted Maxus Investments, that any of the foregoing is subject to no restrictions on the use thereof by Maxus and its Subsidiaries pursuant to any agreement or understanding with any other Person nor is set aside for nor dedicated to, any particular uses other than the payment of the principal of Loans, interest thereon and other amounts payable hereunder to the Agent and the Lenders on the Maturity Date. 9.11 Ownership of Refinancing Subsidiaries. On and ------------------------------------- after the Control Transfer Date, YPF shall, and shall cause the Company to, take such action from time to time as shall be necessary to ensure that each of the Refinancing Subsidiaries and its Subsidiaries is a Wholly-Owned Subsidiary of Maxus at all times. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 63 - 9.12 Special Covenants relating to YPF Acquisition --------------------------------------------- Prior to Merger. Notwithstanding anything contained in this --------------- Agreement to the contrary, YPF Acquisition will not, prior to the consummation of the Merger: (a) incur, assume or have outstanding any Indebtedness or other liabilities or obligations except for Indebtedness and other liabilities and obligations under the Basic Documents and liabilities or obligations not constituting Indebtedness which are incurred under or in connection with the Acquisition Documents, the Tender Offer or the Merger and the other transactions contemplated hereby; (b) sell or otherwise dispose of any Maxus Shares except for any such disposition for cash in Dollars at a price at least equal to the fair market value thereof, provided that YPF Acquisition shall pay the proceeds thereof to the Agent for credit to the collateral account referred to in the last sentence of this Section 9.12; (c) incur, assume or suffer to exist any Liens on its Property other than Liens on Maxus Shares; (d) make any Investment other than in Maxus Shares and in Investments in operating deposit accounts with money center banks located in the United States and Permitted Investments; (e) make any Dividend Payment; (f) engage in any business or transactions other than those associated with the Tender Offer, the Merger, borrowings hereunder and the other transactions contemplated hereby; or (g) merge or consolidate with any other entity except with Maxus pursuant to the Merger Agreement. All proceeds of dispositions of Maxus Shares permitted by clause (b) above paid to the Agent as provided in said clause (b) shall be credited by the Agent to a collateral account maintained by YPF Acquisition at the Principal Office and held by the Agent (together with the Permitted Investments referred to below) in pledge as security for the payment and performance by YPF Acquisition when due of its obligations hereunder and under the Notes (with the balance in such account to be invested and reinvested by the Agent in Permitted Investments (to be held in such account) specified by YPF Acquisition or, if an Event of Default has occurred and is continuing, by the Agent), all on terms and conditions, and pursuant to agreements executed and delivered by YPF Acquisition and the Agent, reasonably satisfactory to the Agent (and, YPF Acquisition agrees to execute and deliver such agreements to the Agent upon the request of the Agent). 9.13 Special Covenants relating to Midgard Group and ----------------------------------------------- the Maxus Indonesia Group and their Subsidiaries. ------------------------------------------------ Notwithstanding anything contained in this Agreement to the contrary (other than Section 9.03(a)(ii) hereof), on and after the Control Transfer Date, YPF will not permit any member of the Midgard Group or the Maxus Indonesia Group to enter into any of the following transactions with any Relevant Subsidiary that is not a member of such Group (a "Non-Member Subsidiary"): --------------------- BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 64 - (a) any merger or consolidation with any Non-Member Subsidiary; (b) any disposition of any Property to, or any acquisition of Property from, any Non-Member Subsidiary except in the ordinary course of business, provided that the monetary or business consideration arising therefrom is substantially as favorable to such member as the monetary or business consideration that would obtain in a comparable transaction with a Person other than an Affiliate of such member; (c) create any Lien on any of its Property to secure any Indebtedness or other obligation to a Non-Member Subsidiary; (d) incur, create or assume any Indebtedness to any Non-Member Subsidiary or purchase, redeem, retire or otherwise acquire, or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any of its Indebtedness to any Non-Member Subsidiary (other than any such payment or prepayment made with the proceeds of loans made under the Refinancing Facilities to provide funds to Maxus to pay or prepay the Loans); (e) make any advance to or other Investments in any Non-Member Subsidiary; and (f) make any Dividend Payments to any Non-Member Subsidiary; other than, in the case of clauses (d), (e) and (f) above, in the ordinary course of business, in a manner consistent with prudent business practices. Notwithstanding the foregoing, on and after the Control Transfer Date, YPF may and shall cause the Maxus Indonesia Group and the Midgard Group to engage in such transactions with Non- Member Subsidiaries as are reasonably required in order for each of Midgard, Java and Sumatra to be able to deliver the Refinancing Balance Sheets at the time required pursuant to Section 9.01(g) hereof; provided that each of Midgard, Java and -------- Sumatra shall at all times operate their respective businesses in a manner consistent with prudent business practices. 9.14 Payments of Maxus Indebtedness. On and after the ------------------------------ Control Transfer Date, YPF will not permit Maxus or any of its Material Subsidiaries to purchase, redeem, retire or otherwise acquire for value, or set apart any money for a sinking, defeasance or other analogous fund for the purchase, redemption, BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 65 - retirement or other acquisition of, or make any voluntary payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Indebtedness of Maxus or any Subsidiary of Maxus (other than Indebtedness hereunder and (subject to Section 9.13 hereof) Indebtedness owed by any such Subsidiary to Maxus), except for regularly scheduled payments or prepayments of principal and interest and other amounts in respect thereof required pursuant to the instruments evidencing such Indebtedness. 9.15 Lines of Business. On and after the Control ----------------- Transfer Date, YPF will not permit Maxus or any of the Material Subsidiaries to engage to any substantial extent in any line or lines of business activity other than the acquisition, exploration, development, production, processing, marketing, gathering and sale of hydrocarbons to the extent Maxus and its Subsidiaries are engaged in such activities on the date hereof. 9.16 Transactions with YPF Affiliates. Except as -------------------------------- contemplated by the Transaction Documents, YPF will not permit any of Maxus and its Subsidiaries to, directly or indirectly: (a) make any Investment in a YPF Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any Property to a YPF Affiliate; (c) merge into or consolidate with or purchase or acquire Property from a YPF Affiliate; or (d) enter into any other transaction directly or indirectly with or for the benefit of a YPF Affiliate; provided that (x) any YPF Affiliate who is an -------- individual may serve as a director, officer or employee of any of Maxus and its Subsidiaries and receive reasonable compensation for his or her services in such capacity and (y) any of Maxus and its Subsidiaries may enter into transactions (other than Investments by any of Maxus and its Subsidiaries in a YPF Affiliate) if the monetary or business consideration arising therefrom would be substantially as advantageous to such Person as the monetary or business consideration that would obtain in a comparable transaction with a Person not a YPF Affiliate. 9.17 Use of Proceeds. YPF Acquisition will use the --------------- proceeds of the Loans hereunder solely to consummate the Acquisition and to pay Transaction Costs (in compliance with all applicable legal and regulatory requirements, including, without limitation, Regulations U and X and the Securities Act of 1933, as amended and the Securities Act of 1934, as amended, and the regulations thereunder). 9.18 Modifications of Certain Documents. ---------------------------------- (a) Neither Obligor will agree or consent to any modification, supplement or waiver of any of the provisions of any of the Maxus Public Debt Documents (other than (x) any thereof that is not adverse to the interests of YPF, Maxus or the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 66 - Lenders and (y) any amendment thereof to facilitate the Guarantee by YPF of the Indebtedness of Maxus thereunder so long as such amendment is to exclude YPF from the definition of "obligor" thereunder) or the Acquisition Documents or, following the Initial Borrowing Date, terminate the Merger Agreement without the prior consent of the Majority Lenders. YPF will furnish or cause to be furnished to the Agent a copy of each such modification, supplement or waiver promptly after the execution and delivery thereof. (b) Except as set forth on Schedule VIII hereto, YPF will not take any action to modify or supplement the Certificate of Incorporation of Maxus after the Merger Closing Date (other than modifications that do not materially and adversely affect the interests of Maxus or adversely affect the interest of the Lenders), without the prior consent of the Majority Lenders; provided that, after the Control Transfer Date, YPF will not take -------- any action to modify or supplement any provision of the Certificate of Incorporation of Maxus relating to the Maxus Preferred Shares other than the amendments and waivers contemplated in Section 2C of the letter agreement dated February 28, 1995 between Maxus and The Prudential Insurance Company of America as in effect on the date hereof. 9.19 Consummation of the Merger. The Obligors will -------------------------- cause the Merger to be consummated, and the Control Transfer Date to occur, as promptly as practicable after the Tender Offer Closing Date, but not later than June 12, 1995. 9.20 Ownership of YPF Acquisition and Maxus. YPF -------------------------------------- will: (a) at all times prior to the consummation of the Merger cause (i) YPF Acquisition to be a Wholly Owned Subsidiary of YPF and (ii) any Maxus Shares owned by any of YPF and its Subsidiaries to be owned only by YPF Acquisition; and (b) at all times following the consummation of the Merger, own all Maxus Shares except for Excluded Maxus Shares. YPF will not own, and will not permit any of its Subsidiaries to own, at any time, any shares of capital stock of Maxus other than Maxus Shares. 9.21 Other Covenants of YPF. YPF will comply with the ---------------------- covenants set forth in Schedule II hereto. Section 10. Events of Default. If one or more of the ----------------- following events (herein called "Events of Default") shall occur ----------------- and be continuing: (a) The Company shall default in the payment when due (whether at stated maturity or upon optional or mandatory repayment or prepayment or otherwise) of any principal of or interest on any Loan, any fee or any other amount payable by it hereunder or under any other Basic Document, provided that any BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 67 - such default in the payment of such interest, fees or other amounts (other than principal of Loans) shall have continued unremedied for more than two Business Days; or (b) Any of YPF Acquisition or Maxus or any Material Subsidiary shall default in the payment when due of any principal of or interest on any of its other Indebtedness (or amounts payable under any Interest Rate Protection Agreements or Commodity Hedging Agreements) aggregating $5,000,000 or more; or any event specified in any note, agreement, indenture or other document evidencing or relating to any such Indebtedness shall occur if the effect of such event is to cause, or (with the giving of any notice or the lapse of time or both) to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such Indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity or to have the interest rate thereon reset to a level so that securities evidencing such Indebtedness trade at a level specified in relation to the par value thereof or, in the case of an Interest Rate Protection Agreement or Commodity Hedging Agreement, to permit payments owing under such Interest Rate Protection Agreement or Commodity Hedging Agreement, as the case may be, to be liquidated; or (c) Any representation, warranty or certification made or deemed made herein or in any other Transaction Document (or in any modification or supplement hereto or thereto) by or on behalf of YPF Acquisition or Maxus or any of the Refinancing Subsidiaries and their respective Subsidiaries or YPF, or any certificate furnished to any Lender or the Agent pursuant to the provisions hereof or thereof, shall prove to have been false or misleading as of the time made or furnished in any material respect; or (d) Either Obligor shall default in the performance of any of its obligations under any of Sections 9.01(f), 9.05 through and including 9.21 hereof; or either Obligor shall default in the performance of any of its other obligations in this Agreement or any other Basic Document and such default shall continue unremedied for a period of 30 or more days after notice thereof to the Company by the Agent or any Lender (through the Agent); or (e) Any of YPF Acquisition, Maxus or any Material Subsidiary (collectively, the "Relevant Parties") shall admit in ---------------- writing its inability to, or be generally unable to, pay its debts as such debts become due; or (f) Any Relevant Party shall (i) apply for or consent to the appointment of, or the taking of possession by, a BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 68 - receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, (iv) take any corporate action for the purpose of effecting any of the foregoing or (v) do the equivalent of any of the foregoing under any foreign laws; or (g) A proceeding or case shall be commenced, without the application or consent of the Relevant Party who is the subject thereof, in any court of competent jurisdiction, seeking (i) the reorganization, liquidation, dissolution, arrangement or winding-up of such Relevant Party, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of such Relevant Party or of all or any substantial part of its Property, (iii) similar relief in respect of such Relevant Party under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days or (iv) the equivalent of any of the foregoing under any foreign laws; or (h) A final judgment or order for the payment of money shall be entered against any Relevant Party (A) which, within 30 days after the entry thereof, has not been discharged or execution thereof has not been stayed pending appeal or (B) as to which any enforcement proceeding shall have been commenced (and not stayed) by any creditor thereon and (ii) the aggregate amount of all such final judgments or orders meeting the criteria set forth in A or B of clause (i) exceeds $10,000,000 (net of insurance coverage as to which the insurer has acknowledged coverage); or (i) At any time, on and after the Control Transfer Date, an event or condition specified in Section 9.01(d) hereof shall occur or exist with respect to any Plan or Multiemployer Plan and, as a result of such event or condition, together with all other such events or conditions, the Company or any ERISA Affiliate shall incur or in the reasonable opinion of the Majority Lenders is reasonably likely to incur a liability to a Plan, a Multiemployer Plan or the PBGC (or any combination of the foregoing) that, in the determination of the Majority Lenders, has or could reasonably be expected to have (either individually or in the aggregate) a Maxus Material Adverse Effect; or BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 69 - (j) Any of the Liens created by the Pledge Agreement (on and after the execution and delivery thereof) shall at any time not constitute a valid and perfected Lien on the collateral intended to be covered thereby (to the extent perfection by filing, registration, recordation or possession is required herein or therein) in favor of the Agent, free and clear of all other Liens except as a result of any action taken by the Agent or the Lenders, or the Pledge Agreement shall for any reason (other than any such action or the termination of the Pledge Agreement in accordance with its terms) be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by either Obligor; or (k) any event set forth in Schedule III hereto shall occur; THEREUPON: (1) in the case of an Event of Default other than one referred to in clause (f) or (g) of this Section 10 hereto with respect to the Company, the Agent may and, upon request of the Majority Lenders, will, by notice to the Company, terminate the Commitments and/or declare the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor; and (2) in the case of the occurrence of an Event of Default referred to in clause (f) or (g) of this Section 10 hereto with respect to the Company, the Commitments shall automatically be terminated and the principal amount then outstanding of, and the accrued interest on, the Loans and all other amounts payable by the Obligors hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.05 hereof) shall automatically become immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by each Obligor. Section 11. The Agent. --------- 11.01 Appointment, Powers and Immunities. Each Lender ---------------------------------- hereby appoints and authorizes the Agent to act as its agent hereunder and under the other Basic Documents with such powers as are specifically delegated to the Agent by the terms of this Agreement and of the other Basic Documents, together with such other powers as are reasonably incidental thereto. The Agent (which term as used in this sentence and in Section 11.05 and the first sentence of Section 11.06 hereof shall include reference to its affiliates and its own and its affiliates' officers, directors, employees and agents): BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 70 - (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Basic Documents, and shall not by reason of this Agreement or any other Basic Document be a trustee for any Lender; (b) shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or in any other Basic Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Basic Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, any Note or any other Basic Document or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person to perform any of its obligations hereunder or thereunder; (c) shall not, except to the extent expressly instructed by the Majority Lenders with respect to collateral security under the Pledge Agreement, be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Basic Document; and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Basic Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. The Agent may deem and treat the payee of a Note as the holder thereof for all purposes hereof unless and until a notice of the assignment or transfer thereof shall have been filed with the Agent, together with the consent of the Company to such assignment or transfer (to the extent provided in Section 12.06(b) hereof). 11.02 Reliance by Agent. The Agent shall be entitled ----------------- to rely upon any certification, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Agent. As to any matters not expressly provided for by this Agreement or any other Basic Document, the Agent shall in all cases be fully protected in acting, or in refraining from acting, BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 71 - hereunder or thereunder in accordance with instructions given by the Majority Lenders, and such instructions of the Majority Lenders and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. 11.03 Defaults. The Agent shall not be deemed to have -------- knowledge or notice of the occurrence of a Default unless the Agent has received notice from a Lender or either of the Obligors specifying such Default and stating that such notice is a "Notice of Default". In the event that the Agent receives such a notice of the occurrence of a Default, the Agent shall give prompt notice thereof to the Lenders. The Agent shall (subject to Section 11.07 hereof) take such action with respect to such Default as shall be directed by the Majority Lenders, provided -------- that, unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interest of the Lenders except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Majority Lenders or all of the Lenders. 11.04 Rights as a Lender. With respect to its ------------------ Commitment and the Loans made by it, Chase (and any successor acting as Agent) in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include the Agent in its individual capacity. Chase (and any successor acting as Agent) and its affiliates may (without having to account therefor to any Lender) accept deposits from, lend money to, make investments in and generally engage in any kind of banking, trust or other business with any of YPF and Maxus and their respective Subsidiaries or Affiliates) as if it were not acting as the Agent, and Chase (and any such successor) and its affiliates may accept fees and other consideration from any of such Persons for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 11.05 Indemnification. The Lenders agree to indemnify --------------- the Agent (to the extent not reimbursed under Section 12.03 hereof, but without limiting the obligations of the Company under said Section 12.03) ratably in accordance with the aggregate principal amount of the Loans held by the Lenders (or, if no Loans are at the time outstanding, ratably in accordance with their respective Commitments), for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 72 - against the Agent (including by any Lender) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Basic Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses that the Company is obligated to pay under Section 12.03 hereof, but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided -------- that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. 11.06 Non-Reliance on Agent and Other Lenders. Each --------------------------------------- Lender agrees that it has, independently and without reliance on the Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of YPF and Maxus and their respective Subsidiaries and decision to enter into this Agreement and that it will, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Basic Document. The Agent shall not be required to keep itself informed as to the performance or observance by either Obligor of this Agreement or any of the other Basic Documents or any other document referred to or provided for herein or therein or to inspect the Properties or books of any of YPF and Maxus and their respective Subsidiaries. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Agent hereunder or under the Pledge Agreement, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of any of YPF and Maxus and their respective Subsidiaries (or any of their affiliates) that may come into the possession of the Agent or any of its affiliates. 11.07 Failure to Act. Except for action expressly -------------- required of the Agent hereunder and under the other Basic Documents, the Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 11.05 hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 73 - 11.08 Resignation or Removal of Agent. Subject to the ------------------------------- appointment and acceptance of a successor Agent as provided below, the Agent may resign at any time by giving notice thereof to the Lenders and the Company, and the Agent may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Agent's giving of notice of resignation or the Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, that shall be a bank that has an office in New York, New York with a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent's resignation or removal hereunder as Agent, the provisions of this Section 11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Agent. 11.09 Consents under Other Basic Documents. Except as ------------------------------------ otherwise provided in Section 12.04 hereof with respect to this Agreement, the Agent may, with the prior consent of the Majority Lenders (but not otherwise), consent to any modification, supplement or waiver under any of the Basic Documents, provided -------- that, without the prior consent of each Lender, the Agent shall not (except as provided herein or in the Pledge Agreement) release any collateral or otherwise terminate any Lien under any Basic Document providing for collateral security, or agree to additional obligations being secured by such collateral security (unless the Lien for such additional obligations shall be junior to the Lien in favor of the other obligations secured by such Basic Document), except that no such consent shall be required, and the Agent is hereby authorized, to release any Lien covering Property that is the subject of a disposition of Property permitted hereunder or to which the Majority Lenders have consented. Section 12. Miscellaneous. ------------- 12.01 Waiver. No failure on the part of the Agent or ------ any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement or any Note shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement or any Note preclude any other or further exercise thereof or the exercise of any other right, BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 74 - power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 12.02 Notices. All notices, requests and other ------- communications provided for herein and under the Pledge Agreement (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof (below the name of the Company, in the case of YPF); or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopier or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 12.03 Expenses, Etc. The Company agrees to pay or -------------- reimburse each of the Lenders and the Agent (without duplication) for: (a) all reasonable out-of-pocket costs and expenses of the Agent (including, without limitation, the reasonable fees and expenses of Milbank, Tweed, Hadley & McCloy, special New York counsel to Chase, and Perez Alati, Grondona, Benites, Arntsen & Martinez de Hoz (h), special Argentine counsel to Chase) in connection with (i) the negotiation, preparation, execution, delivery of this Agreement and the other Basic Documents, the review of the other Transaction Documents and the making and syndication of the Loans hereunder and related matters (provided -------- that such fees and expenses of Milbank do not exceed the budgeted amounts indicated by Milbank, without the prior approval of YPF) and (ii) the negotiation or preparation of any modification, supplement or waiver of any of the terms of this Agreement or any of the other Transaction Documents (whether or not consummated); (b) all reasonable out-of-pocket costs and expenses of the Lenders and the Agent (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with (i) any Event of Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 12.03; and (c) without limiting the obligations of YPF under Section 6.08 hereof, and without duplication of any amounts payable by the Company under Section 5.06 hereof, all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any of the BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 75 - other Basic Documents or any other document referred to herein or therein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Basic Document or any other document referred to therein; provided that, if and only if YPF shall have indefeasibly paid in full to the Agent and the Lenders any amounts payable by it under Section 6.08 hereof and by the Company under this clause (c), the Company shall not be obligated to pay such amounts under this clause (c) to the Agent and the Lenders. The Company hereby agrees to indemnify the Agent and each Lender and their respective directors, officers, employees, attorneys and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages or expenses incurred by any of them (including, without limitation, any and all losses, liabilities, claims, damages or expenses incurred by the Agent to any Lender, whether or not the Agent or any Lender is a party thereto) arising out of or by reason of any investigation or litigation or other proceedings (including any threatened investigation or litigation or other proceedings) relating to the Loans hereunder or any actual or proposed use by the Company or any of its Subsidiaries of the proceeds of any of the Loans hereunder or any of the other transactions contemplated hereby or by any of the other Transactions Documents, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified). 12.04 Amendments, Etc. Except as otherwise expressly ---------------- provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Company, YPF, the Agent and the Majority Lenders, or by the Company, YPF and the Agent acting with the consent of the Majority Lenders, and any provision of this Agreement may be waived by the Majority Lenders or by the Agent acting with the consent of the Majority Lenders; provided that: (a) no -------- modification, supplement or waiver shall, unless by an instrument signed by all of the Lenders or by the Agent acting with the consent of all of the Lenders: (i) increase, or extend the term of the Commitments, or extend the time or waive any requirement for the reduction or termination of the Commitments, (ii) extend the date fixed for the payment of principal of or interest on any Loan or any fee hereunder, (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest or any fee is payable hereunder, (v) alter the rights or obligations of the Company to prepay Loans, (vi) alter the terms of this Section 12.04, (vii) modify the definition of the term "Majority BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 76 - Lenders" or modify in any other manner the number or percentage of the Lenders required to make any determinations or waive any rights hereunder or to modify any provision hereof, or (viii) waive any of the conditions precedent set forth in Section 7 hereof; and (b) any modification or supplement of Section 11 hereof shall require the consent of the Agent. 12.05 Successors and Assigns. This Agreement shall be ---------------------- binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 12.06 Assignments and Participations. ------------------------------ (a) Neither Obligor may assign any of its rights or obligations hereunder or under the Notes without the prior consent of all of the Lenders and the Agent. (b) Each Lender may (and each Lender shall, if required pursuant to Section 5.07 hereof) assign any of its Loans, its Note, and its Commitment with the consent of each of the Company and the Agent (provided that no such consent of the -------- Company shall be required if an Event of Default shall have occurred and be continuing and no such consent of either the Company or the Agent shall be unreasonably withheld or delayed); provided that -------- (i) no such consent by the Company or the Agent shall be required in the case of any assignment to another Lender; (ii) except to the extent the Company and the Agent shall otherwise consent, any such partial assignment (other than to another Lender) shall be in an amount at least equal to $5,000,000; (iii) each such assignment by a Lender of its Loans, Note or Commitment shall be made in such manner so that the same portion of its Loans, Note and Commitment is assigned to the respective assignee; and (iv) upon each such assignment, the assignor and assignee shall deliver to the Company and the Agent a Notice of Assignment in the form of Exhibit G hereto. Upon execution and delivery by the assignor and the assignee to the Company and the Agent of such Notice of Assignment, and upon consent thereto by the Company and the Agent to the extent required above, the assignee shall have, to the extent of such assignment (unless otherwise consented to by the Company and the Agent), the obligations, rights and benefits of a Lender hereunder holding the Commitment and Loans (or portions thereof) assigned to it and specified in such Notice of Assignment (in BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 77 - addition to the Commitment and Loans, if any, theretofore held by such assignee) and the assigning Lender shall, to the extent of such assignment, be released from the Commitment (or portion thereof) so assigned. Upon each such assignment the assigning Lender shall pay the Agent an assignment fee of $3,000. (c) A Lender may sell or agree to sell to one or more other Persons a participation in all or any part of any Loans held by it, or in its Commitment, in which event each purchaser of a participation (a "Participant") shall be entitled to the ----------- rights and benefits of the provisions of Section 9.01(h) hereof with respect to its participation in such Loans and Commitment as if (and the Company shall be directly obligated to such Participant under such provisions as if) such Participant were a "Lender" for purposes of said Section, but, except as otherwise provided in Section 4.07(c) hereof, shall not have any other rights or benefits under this Agreement or any Note or any other Basic Document (the Participant's rights against such Lender in respect of such participation to be those set forth in the agreements executed by such Lender in favor of the Participant). All amounts payable by the Company to any Lender under Section 5 hereof and Section 12.03 hereof in respect of Loans held by it, and its Commitment, shall be determined as if such Lender had not sold or agreed to sell any participations in such Loans and Commitment, and as if such Lender were funding such Loans and Commitment in the same way that it is funding the portion of such Loans and Commitment in which no participations have been sold. In no event shall a Lender that sells a participation agree with the Participant to take or refrain from taking any action hereunder or under any other Basic Document except that such Lender may agree with the Participant that it will not, without the consent of the Participant, agree to (i) increase or extend the term, or extend the time or waive any requirement for the reduction or termination, of such Lender's Commitment, (ii) extend the date fixed for the payment of principal of or interest on the related Loan or Loans or any portion of any fee hereunder payable to the Participant, (iii) reduce the amount of any such payment of principal, (iv) reduce the rate at which interest is payable thereon, or any fee hereunder payable to the Participant, to a level below the rate at which the Participant is entitled to receive such interest or fee, (v) alter the rights or obligations of the Company to prepay the related Loans or (vi) consent to any modification, supplement or waiver hereof or of any of the other Basic Documents to the extent that the same, under Section 11.09 or 12.04 hereof, requires the consent of each Lender. (d) In addition to the assignments and participations permitted under the foregoing provisions of this Section 12.06, any Lender may (without notice to or the consent of the Company, the Agent or any other Lender and without payment of any fee) BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 78 - (i) assign and pledge all or any portion of its Loans and its Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank and (ii) assign all or any portion of its rights under this Agreement and its Loans and its Note to an affiliate. No such assignment shall release the assigning Lender from its obligations hereunder. (e) A Lender may furnish any information concerning YPF or Maxus or any of their respective Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants), subject, however, to the provisions of Section 12.16 hereof. (f) Anything in this Section 12.06 to the contrary notwithstanding, no Lender may assign or participate any interest in any Loan held by it hereunder to the Company or any of its Affiliates or Subsidiaries without the prior consent of each Lender. 12.07 Survival. The obligations of the Company under -------- Sections 5.01, 5.05, 5.06 and 12.03 hereof, the obligations of YPF under Sections 6.03 and 6.08 hereof, and the obligations of the Lenders under Section 11.05 hereof, shall survive the repayment of the Loans and the termination of the Commitments and, in the case of any Lender that assigns any interest in its Commitment or Loans hereunder, shall survive the making of such assignment notwithstanding that such assigning Lender may cease to be a "Lender" hereunder. In addition, each representation and warranty made, or deemed to be made by a notice of any Loan, herein or pursuant hereto shall survive the making of such representation and warranty, and no Lender shall be deemed to have waived, by reason of making any Loan, any Default that may arise by reason of any such representation or warranty proving to have been false or misleading in any material respect, notwithstanding that such Lender or the Agent may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such Loan was made. 12.08 Captions. The table of contents and captions -------- and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 12.09 Counterparts. This Agreement may be executed in ------------ any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 79 - 12.10 Jurisdiction, Venue, Immunity and Service of -------------------------------------------- Process. ------- (a) YPF hereby consents to the non-exclusive jurisdiction of any court of the State of New York or any United States federal court sitting in the Borough of Manhattan, New York City, New York, United States, and any appellate court from any thereof, and waives any immunity from the jurisdiction of such courts over any suit, action or proceeding that may be brought in connection with any of this Agreement and the other Basic Documents and the transactions contemplated hereby or thereby. Each Obligor irrevocably waives, to the fullest extent permitted by law, any objection to any suit, action or proceeding that may be brought in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby or thereby in such courts whether on grounds of venue, residence or domicile or on the ground that any such suit, action or proceeding has been brought in an inconvenient forum. YPF agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon YPF and may be enforced in any court to the jurisdiction of which YPF is subject by a suit upon such judgment, provided that service of -------- process is effected upon YPF in the manner provided in this Section 12.10. Notwithstanding the foregoing, any suit, action or proceeding brought in connection with any of this Agreement and the other Basic Documents and the transactions contemplated hereby or thereby may be instituted in any competent court in Argentina. (b) To the extent that any Obligor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process, such Obligor hereby waives such immunity and agrees not to assert, by way of motion, as a defense or otherwise, in any suit, action or proceeding the defense of sovereign immunity or any claim that it is not personally subject to the jurisdiction of the above-named courts by reason of sovereign immunity or otherwise, or that it is immune from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property or from attachment either prior to judgment or in aid of execution by reason of sovereign immunity. (c) YPF hereby agrees that service of all writs, process and summonses in any such suit, action or proceeding brought in the State of New York may be made upon it by service upon CT Corporation System (the "Process Agent"), presently ------------- having an office at 1633 Broadway, New York, New York 10019, U.S.A., and YPF hereby irrevocably appoints the Process Agent its true and lawful agent and attorney-in-fact in its name, place and stead to accept such service of any and all such writs, process BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 80 - and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to YPF shall not impair or affect the validity of such service or of any judgment based thereon. If for any reason CT Corporation System ceases to act, or to be able to act, as a Process Agent as contemplated hereby, YPF will appoint a substitute therefor and agrees to maintain at all times an agent in the United States of America to act as its Process Agent. YPF hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the Agent or the Lender or any holder of any Note by registered or certified mail, postage prepaid, to YPF at the address given below its name on the signature pages hereto. (d) Nothing herein shall in any way be deemed to limit the ability of the Agent or any Lender to serve any such writs, process or summonses in any other manner permitted by applicable law or to obtain jurisdiction over the Obligors in such other jurisdictions, and in such manner, as may be permitted by applicable law. 12.11 Governing Law. This Agreement and the Notes ------------- shall be governed by, and construed in accordance with, the law of the State of New York. 12.12 Waiver of Jury Trial. EACH OF THE OBLIGORS, THE -------------------- AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. 12.13 Special Waiver. To the extent that YPF may be -------------- entitled to the benefit of any provision of law requiring the Agent or the Lender in any suit, action or proceeding brought in a court of Argentina or other jurisdiction arising out of or in connection with any of this Agreement and the other Basic Documents and the transactions contemplated hereby, to post security for litigation costs or otherwise post a performance bond or guaranty ("cautio judicatum solvi" or "excepcion de ---------------------- ------------ arraigo"), or to take any similar action, YPF hereby irrevocably ------- waives such benefit, in each case to the fullest extent now or hereafter permitted under the laws of Argentina or, as the case may be, such other jurisdiction. 12.14 Judgment Currency. (a) This is an ----------------- international loan transaction in which the specification of Dollars and payment in New York City is of the essence, and the obligations of each Obligor under any of this Agreement and the other Basic Documents to make payment to (or for the account of) the Agent or a Lender in Dollars shall not be discharged or satisfied by any tender or recovery pursuant to any judgment BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 81 - expressed in or converted into any other currency or in another place except to the extent that such tender or recovery results in the effective receipt by the Agent or such Lender in New York City of the full amount of Dollars payable to the Agent or such Lender thereunder. If for the purpose of obtaining judgment in any court it is necessary to convert a sum due under any of this Agreement and the other Basic Documents to the Agent, any Lender or any indemnified person in Dollars into another currency the rate of exchange used shall be that at which in accordance with normal banking procedures such party could purchase Dollars with such other currency in New York City on the business day in New York next preceding the day on which final judgment is rendered. The obligation of each Obligor in respect of any sum payable under any of this Agreement and the other Basic Documents by it to the Agent, any Lender or any indemnified person shall, notwithstanding any judgment in a currency (the "Judgment -------- Currency") other than Dollars, be discharged only to the extent -------- that on the business day in New York next following receipt by such payee of any sum adjusted to be so due in the Judgment Currency such payee may in accordance with normal banking procedures purchase and transfer to New York Dollars with the Judgment Currency; if the amount of Dollars which could have been so purchased and transferred is less than the sum originally due to the Agent, any Lender or any indemnified person, as the case may be, in Dollars each Obligor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such payee against the deficiency. (b) (i) Without limiting the obligation of YPF to pay Guaranteed Obligations hereunder in Dollars and otherwise in accordance with the provisions of this Agreement (but without duplication of any amounts paid by YPF in Dollars in respect of its Guaranteed Obligations), if foreign exchange restrictions are imposed in Argentina and, as a result thereof, YPF is prohibited from purchasing or otherwise obtaining Dollars or transferring Dollars to the account of the Agent specified in Section 4.01 hereof, then YPF will, if and to the extent requested to do so by the Agent (acting on the instructions of the Majority Lenders acting in their sole discretion): (1) pay to the Agent an amount of Argentine pesos sufficient to purchase the Argentine Public Debt Instruments (as defined below) identified in (and in the respective amounts specified in) such request having a value sufficient so that, upon the sale thereof for Dollars in New York (or, at the option of the Agent, in such other city as the Agent shall determine it is able to obtain a better price), the Agent will receive a sum in Dollars (net of any taxes, expenses and commissions payable in connection with the purchase and sale of such securities) equal to the aggregate Dollar amount owed by YPF to the Agent and the Lenders under this Agreement in respect of Guaranteed Obligations; or (2) deliver to the Agent Argentine Public Debt Instruments identified in (and in the respective BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 82 - amounts specified in) such request having a value sufficient so that upon the sale thereof for Dollars in New York (or, at the option of the Agent, in such other city as the Agent shall determine it is able to obtain a better price), the Agent will receive a sum in Dollars (net of any taxes, expenses and commissions payable in connection with the purchase and sale of such securities) equal to the aggregate Dollar amount owed by YPF to the Agent and the Lenders under this Agreement in respect of Guaranteed Obligations. The receipt by the Agent of Dollar proceeds from the sale of securities as provided in the preceding sentence shall not be deemed to constitute payment of amounts owed by YPF under this Agreement except to the extent credited to the account at the Principal Office referred to in Section 4.01(a) hereof. The Agent hereby agrees to use its best efforts to effect such purchase and/or sale, and to cause the proceeds of any such sale (net of any taxes, expenses and commissions that are payable in connection with such purchase and/or sale) to be credited to such account as promptly as practicable following the payment of Argentine pesos or delivery of Argentine Public Debt Instruments by YPF pursuant to the preceding sentence of this Section 12.14. As used herein, "Argentine Public Debt --------------------- Instruments" shall mean Argentine External Bonds issued by ----------- Argentina denominated in Dollars and other Argentine public foreign debt instruments denominated in Dollars. (ii) Nothing in this Section 12.14(b) shall impair any of the rights of the Agent and the Lenders in respect of the Guaranteed Obligations under this Agreement and nothing in this Section 12.14(b) shall be construed to entitle YPF to refuse to make payments in respect of the Guaranteed Obligations hereunder in Dollars in New York City for any reason whatsoever (other than full and final payment to the Agent of all amounts due hereunder in respect of the Guaranteed Obligations in Dollars in New York City), including without limitation if (i) the purchase of Dollars in Argentina by any means were to become more onerous or burdensome for YPF than as of the date hereof; or (ii) the exchange rate in force in Argentina as of the date hereof increases significantly; or (iii) the exchange ratio between the Argentine peso and the Dollar established by Law 23,928 is modified. 12.15 Use of English Language. This Agreement and the ----------------------- other Basic Documents have been negotiated and executed in the English language. Except as provided in Item 7 of Schedule II hereto, all certificates, reports, notices and other documents and communications given or delivered pursuant to this Agreement (including, without limitation, pursuant to any modifications or supplements hereto) shall be in the English language, or accompanied by a certified English translation thereof. Except in the case of laws or official communications of Argentina, in the case of any document originally issued in a language other BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 83 - than English, the English language version of any such document shall for purposes of this Agreement, and absent manifest error, control the meaning of the matters set forth therein. 12.16 Treatment of Certain Information; --------------------------------- Confidentiality. Each Lender and the Agent agrees (on behalf of --------------- itself and each of its affiliates, directors, officers, employees and representatives) to use its best efforts to keep confidential and not to disclose any non-public information supplied to it by YPF or the Company pursuant to this Agreement that is identified by such Person as being confidential at the time the same is delivered to the Lenders or the Agent, provided that nothing -------- herein shall limit the disclosure of any such information (i) to the extent required by statute, rule, regulation or judicial process, (ii) to counsel for any of the Lenders or the Agent, (iii) to bank examiners, auditors or accountants, (iv) to the Agent or any other Lender (or to Chase Securities, Inc., Chase Investment Bank, Ltd. and Chase Manhattan Asia Limited), (v) in connection with any litigation relating to any of the Transaction Documents or the transactions contemplated thereby or hereby to which any one or more of the Lenders or the Agent is a party, (vi) to a subsidiary or affiliate of such Lender in connection with the syndication, administration, management or booking of any Loans or (vii) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first executes and delivers to the respective Lender a Confidentiality Agreement substantially in the form of Exhibit F hereto (or executes and delivers to such Lender an acknowledgement to the effect that it is bound by the provisions of this Section 12.16, which acknowledgement may be included as part of the respective assignment or participation agreement pursuant to which such assignee or participant acquires an interest in the Loans hereunder). The obligations of each Lender under this Section 12.16 shall supersede and replace the obligations of such Lender under any confidentiality letter (i) in respect of this financing executed and delivered by such Lender to either or both of the Obligors prior to the date hereof and (ii) effective as of the Merger Closing Date, executed and delivered by such Lender to Maxus or any of its Subsidiaries prior to the date hereof; in addition, the obligations of any assignee that has executed a Confidentiality Agreement in the form of Exhibit F hereto shall be superseded by this Section 12.16 upon the date upon which such assignee becomes a Lender hereunder pursuant to Section 12.06 hereof. BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 84 - IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. YPF ACQUISITION CORP. By /s/ Cedric Bridger Title: Vice President, Assistant Secretary and Treasurer Address for Notices: 660 Madison Avenue 20th Floor New York, New York 10021 Attention: Jose A. Estenssoro Telecopier No.: (212) 838-9088 Telephone No.: (212) 838-9400 BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 85 - YPF SOCIEDAD ANONIMA By /s/ Cedric Bridger Title: Vice President, Finance and Corporate Development BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 86 - LENDERS ------- Commitment THE CHASE MANHATTAN BANK ---------- $550,000,000.00 (NATIONAL ASSOCIATION) By /s/ Ian Schottlaender Title: Managing Director Lending Office for all Loans: The Chase Manhattan Bank (National Association) 1 Chase Manhattan Plaza New York, New York 10081 Address for Notices: The Chase Manhattan Bank (National Association) 1 Chase Manhattan Plaza New York, New York 10081 Attention: Ian Shottlaender Managing Director Telecopier No.: 212-552-1687 Telephone No.: 212-552-5874 BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- - 87 - THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Agent By /s/ Ian Schottlaender Title: Managing Director Address for Notices to Chase as Agent: The Chase Manhattan Bank (National Association) 4 Chase Metrotech Center 13th Floor Brooklyn, New York 11245 Attention: New York Agency Telecopier No.: (718) 242-6910 Telephone No.: (718) 242-7979 BII\32161_1 04/07/95 10:16am Credit Agreement ---------------- SCHEDULE I Representations and Warranties of YPF ------------------------------------- Capitalized terms used in this Schedule I (unless otherwise defined in this Schedule I) shall have the meanings assigned to them in the Credit Agreement. In addition, as used in this Schedule I, any references to a Subsidiary or Subsidiaries of YPF shall be deemed (other than with respect to Item 3) to refer to a Subsidiary or Subsidiaries of YPF (as the case may be) other than YPF Acquisition and its Subsidiaries and Maxus and its Subsidiaries. 1. Organization, Standing, etc. YPF is a sociedad ---------------------------- -------- anonima (corporation) duly organized and existing and in good ------- standing under the laws of Argentina, has full corporate power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Transaction Documents to which it is a party and to carry out the terms thereof. 2. Qualification. YPF and each of its Subsidiaries is ------------- duly qualified and in good standing as a foreign corporation authorized to do business in each jurisdiction (other than the jurisdiction of its incorporation or organization) in which the nature of its activities or the character of the properties it owns or leases makes such qualification necessary and in which the failure so to qualify would have a Schedule YPF Material Adverse Effect. 3. Financial Statements. The consolidated balance -------------------- sheets of YPF and its Subsidiaries as at December 31, 1994, 1993 and 1992 and the related consolidated statements of income, cash flows and changes in financial position of YPF and its Subsidiaries for each of the fiscal years then ended, together with related notes, such statements being accompanied by reports thereon of Pistrelli, Diaz y Associados (associated with Arthur Andersen & Co.), independent public accountants have been delivered to the Lenders. The consolidated financial statements of YPF and its Subsidiaries referred to above for the year ended at December 31, 1994 will be submitted for approval by the shareholders of YPF at a meeting to be held on April 28, 1995. The Board of Directors of YPF has recommended approval of these financial statements. All such financial statements (including any related schedules or notes) have been prepared in accordance with Argentine GAAP, present fairly the consolidated financial position of YPF and its Subsidiaries as at the respective dates of such consolidated balance sheets and the consolidated results of operations, cash flows and changes in financial position of YPF and its Subsidiaries for the fiscal periods ended on said dates. Since December 31, 1994 there have been no changes in the business, financial condition, operations, assets, liabilities or prospects of YPF and its Subsidiaries from that set forth in the BII\32161_1 04/07/95 10:16am Schedule I ---------- - 2 - consolidated balance sheet as of that date, other than changes in the ordinary course of business which have not, either individually or in the aggregate, had a Schedule YPF Material Adverse Effect. 4. Litigation, etc. There is no action, suit, ---------------- proceeding or investigation at law or in equity by or before any court, governmental body, agency, commission or other tribunal now pending or, to the best of YPF's knowledge after due inquiry, threatened against or affecting YPF or its Subsidiaries or its or its Subsidiaries' property or rights (a) which questions or would question the validity of the Basic Documents to which it is a party or (b) as to which there is a significant possibility of an adverse determination and which if adversely determined (i) may have a Schedule YPF Material Adverse Effect or (ii) could impair the ability of YPF to perform its obligations under the Basic Documents to which it is a party. 5. Governmental Consents. No consent, approval or --------------------- authorization of, or declaration or filing with, any governmental authority is required for the valid execution, delivery and performance by YPF of the Basic Documents to which it is a party. 6. Taxes. Under the laws of Argentina, the execution, ----- delivery and performance by YPF of its obligations under the Basic Documents and all payments of principal, interest, fees and other amounts thereunder are exempt from all income or withholding taxes, stamp taxes, charges or contributions of Argentina or any political subdivision or taxing authority thereof, irrespective of the fact that the Agent or any of the Lenders may have a representative office or subsidiary in Argentina; provided, however, that all payments of interest under -------- ------- the Basic Documents are subject to a withholding tax at the rate of 12%; and provided further, that fees are not subject to -------- ------- withholding taxes if they are paid for services rendered outside of Argentina. 7. Authorization. YPF has all necessary corporate ------------- power, authority and legal right to execute, deliver and perform its obligations under the Basic Documents. The Basic Documents to which YPF is or is intended to be a party have been duly authorized by all requisite corporate and other actions and duly executed and delivered by authorized officers of YPF, and are the valid obligations of YPF, legally binding upon and enforceable against YPF in accordance with their respective terms, except as such enforceability may be limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). BII\32161_1 04/07/95 10:16am Schedule I ---------- - 3 - 8. No Conflicts. The execution, delivery and ------------ performance by YPF of the Basic Documents to which it is a party do not and will not violate the provisions of any applicable law or regulation of Argentina (or of any political subdivision thereof) presently in effect or any order of any court, regulatory body or arbitral tribunal or of the estatutos of YPF, --------- other than violations that individually or collectively could not have a Schedule YPF Material Adverse Effect, and do not and will not constitute a breach or default or require any consent under, or result in the creation of any Lien on any of the present or future revenues and properties of YPF or any of its Subsidiaries pursuant to, any agreement, instrument or document to which YPF or any of its Subsidiaries is a party or by which YPF or any of its or its Subsidiaries' respective properties or revenues may be bound or affected except to the extent that such breaches, defaults or Liens individually or collectively could not have a Schedule YPF Material Adverse Effect. 9. Commercial Obligations. YPF is subject to civil ---------------------- and commercial law with respect to its obligations under the Credit Agreement and the Pledge Agreement, and the execution, delivery and performance by YPF of its obligations under the Credit Agreement and the Pledge Agreement, constitute private and commercial acts; and neither YPF nor any of its properties or revenues is entitled to any right of immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, set-off, execution of a judgment or from any other legal process with respect to its obligations under the Credit Agreement or the Pledge Agreement. 10. Enforceability. Each of the Credit Agreement and -------------- the Pledge Agreement is in proper legal form under the laws of Argentina for the enforcement thereof against YPF in the courts of Argentina and it is not necessary, to ensure the enforceability or admissibility in evidence of the Credit Agreement and the Pledge Agreement, that the same be filed or recorded with any court or other authority in Argentina except that if any of the Basic Documents is enforced before the courts of the city of Buenos Aires, the payment of a court tax of 3% on the amount of the claim is required; and except further that an official Spanish translation of the Basic Documents is required to bring an action thereof in the courts of Argentina. 11. Ranking. YPF's obligations under Section 6 of the ------- Credit Agreement will be direct and unconditional general obligations of YPF and will rank in right of payment at least pari passu with all other Indebtedness of YPF, except to the ---- ----- extent any such other Indebtedness is accorded preference by reason of collateral security for such other Indebtedness. 12. Environmental Matters. YPF has obtained all --------------------- permits, licenses and other authorizations which are required under all environmental laws and regulations, except to the BII\32161_1 04/07/95 10:16am Schedule I ---------- - 4 - extent failure to have any such permit, license or authorization would not have a Schedule YPF Material Adverse Effect. YPF is in compliance with the terms and conditions of all such permits, licenses and authorizations and of all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in any applicable environmental law or in any regulation or code (as such laws, regulations or codes are currently being interpreted or enforced) or any plan, order, decree, judgment, injunction, notice or demand letter issued, entered, promulgated or approved thereunder, except to the extent failure to comply would not have a Schedule YPF Material Adverse Effect. 13. Exploration, Permits, Etc. All oil and gas -------------------------- exploration permits and production and transportation concessions held by YPF are in effect and YPF is not in breach of any of its obligations thereunder or in connection therewith that may potentially cause the forfeiture of its rights under said permits and concessions or impair or otherwise affect the exercise of its rights thereunder except to the extent that any such breach would not cause a Schedule YPF Material Adverse Effect. For the purposes of this Schedule I, the following terms shall have the following meanings: "Argentine GAAP" shall mean generally accepted -------------- accounting principles in Argentina as in effect from time to time. "Capital Lease Obligations" shall mean, for any Person, ------------------------- all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under Argentine GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with Argentine GAAP. "Indebtedness" shall mean with respect to any Person, ------------ (a) any liability of such Person (i) for money borrowed, or under any reimbursement obligation relating to a letter of credit, (ii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a liability arising in the ordinary course of business, so long as such trade payable or liability is payable within 90 days of the date the respective goods are delivered or the respective services are rendered), or (iii) for Capital Lease Obligations; (b) all Redeemable Stock issued by such Person (the amount of Indebtedness being represented by any involuntary liquidation preference plus accrued and unpaid BII\32161_1 04/07/95 10:16am Schedule I ---------- - 5 - dividends); (c) any liability of others described in the preceding clause (a) that such Person has guaranteed; and (d) (without duplication) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (a), (b) and (c) above. For purposes of determining any particular amount of Indebtedness under this definition, Guarantees of (or obligations with respect to letters of credit supporting) Indebtedness otherwise included in the determination of such amount shall not also be included. "Redeemable Stock" shall mean any class or series of ---------------- capital stock of any Person that by its terms or otherwise is required to be redeemed prior to the final maturity of the Notes (as defined in the YPF Credit Agreement), or is redeemable at the option of the holder thereof at any time prior to the final maturity of the Loans (as defined in the YPF Credit Agreement). "Schedule YPF Material Adverse Effect" shall mean the ------------------------------------ occurrence of any event or condition with respect to YPF which has a material adverse effect on (a) the financial condition, results of operations or the shareholders' equity of YPF and its Subsidiaries taken as a whole, (b) the ability of YPF to perform its payment and other material obligations under any of the Basic Documents to which it is or is intended to be a party, (c) the validity or enforceability of the obligations of YPF under any of the Basic Documents to which it is or is intended to be a party, or (d) the ability of the Lenders and the Agent to enforce their rights and remedies against YPF under any of the Basic Documents to which it is or is intended to be a party. "Subsidiary" shall mean, with respect to any Person, ---------- any corporation or other business entity of which such Person owns or controls (either directly or through another or other Subsidiaries) more than 50% of the issued share capital or other ownership interest, in each case having ordinary voting power to elect directors, managers or trustees of such corporation or other business entity (whether or not capital stock or other ownership interest of any other class or classes shall or might have voting power upon the occurrence of any contingency). BII\32161_1 04/07/95 10:16am Schedule I ---------- SCHEDULE II Covenants of YPF ---------------- Capitalized terms used in this Schedule II (unless otherwise defined in this Schedule II) shall have the meanings ascribed to them in the Credit Agreement. In addition, as used in this Schedule II, any references to a Subsidiary or Subsidiaries of YPF shall be deemed (other than with respect to Item 7 and the definition of "Total Indebtedness") to refer to a Subsidiary or Subsidiaries of YPF (as the case may be) other than YPF Acquisition and its Subsidiaries and Maxus and its Subsidiaries. Section 8. Covenants of YPF. ---------------- 1. Maintenance of Existence. YPF shall, and shall ------------------------ cause each of its Subsidiaries to, (i) maintain in effect its corporate existence and all registrations necessary therefor and (ii) take all reasonable actions to maintain all rights, privileges, titles to property, franchises and the like necessary or desirable in the normal conduct of its business, activities or operations; provided, however, that this covenant shall not -------- ------- prohibit any transaction by YPF or any of its Subsidiaries otherwise permitted under Item 16 of this Schedule II and this covenant shall not require YPF to maintain any such right, privilege, title to property or franchise or to preserve the corporate existence of any Subsidiary, if the Board of Directors of YPF shall determine that (i) the maintenance or preservation thereof is no longer desirable in the conduct of the business of YPF and its Subsidiaries taken as a whole and (ii) the loss thereof is not, and will not be, adverse in any material respect to the Lenders. 2. Maintenance of Properties. YPF shall cause all ------------------------- tangible Properties used or useful in the conduct of its business or the business of any Subsidiary of YPF to be maintained and kept in good condition, repair and working order and supplied with all necessary equipment and will cause to be made all necessary repairs, renewals, replacements and improvements thereof, all as in the judgment of YPF may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, -------- that nothing shall prevent YPF from discontinuing the operation or maintenance of any of such Properties if such discontinuance is, as determined by the Board of Directors of YPF in good faith, desirable in the conduct of the business of YPF and its Subsidiaries taken as a whole and not adverse in any material respect to the Lenders. 3. Payments of Taxes and Other Claims. YPF shall pay ---------------------------------- or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all taxes, assessments, royalties BII\32161_1 04/07/95 10:16am Schedule II ----------- - 2 - and governmental charges levied or imposed upon YPF or any of its Subsidiaries, and (ii) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien upon the Property of YPF or any of its Subsidiaries; provided, however, -------- ------- that YPF will not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claims whose amount, applicability or validity is being contested in good faith by appropriate proceedings. 4. Maintenance of Insurance. YPF shall, and shall ------------------------ cause each of its Subsidiaries to, keep at all times all of their Properties which are of an insurable nature insured against loss or damage with insurers believed by YPF to be responsible to the extent that Property of similar characteristics is usually so insured by corporations similarly situated and owing like Properties in accordance with good business practice. 5. Negative Pledge. YPF shall not, and shall not --------------- permit any of its Subsidiaries to, create or suffer to exist any Lien on any of their present or future Property, in each case to secure Indebtedness, unless all of the Guaranteed Obligations are equally and ratably secured, except for: (i) any Lien on any Property existing on the date of the Credit Agreement; (ii) any Lien on any asset securing Indebtedness incurred or assumed solely for the purpose of financing all or any part of the cost of acquiring or constructing such asset; (iii) any Lien on any Property existing thereon at the time of acquisition of such Property and not created in connection with such acquisition; (iv) any Lien on any Property owned by a corporation or other Person, which Lien exists at the time of the acquisition of such corporation or other Person by YPF or any of its Subsidiaries and which Lien is not created in connection with such acquisition; (v) any Lien on any Property securing an extension, renewal or refunding of Indebtedness secured by a Lien referred to in (i), (ii), (iii) or (iv) above, provided that such new Lien is limited to the Property which was subject to the prior Lien immediately before such extension, renewal or refunding, and provided that the principal amount of Indebtedness secured by the prior Lien immediately before such extension, renewal or refunding is not increased; BII\32161_1 04/07/95 10:16am Schedule II ----------- - 3 - (vi) any Lien in the form of a tax or other statutory lien, provided that any such lien shall be discharged within thirty (30) days after the date it is created or arises (unless contested in good faith by YPF or a Subsidiary, in which case it shall be discharged within thirty (30) days after final adjudication); or (vii) any other Lien on assets of YPF or any Subsidiary, provided that the assets securing such Indebtedness together with all other Property of YPF securing any Indebtedness under this subparagraph (vii) do not exceed 15% of the total assets of YPF; provided, however, for purposes of this -------- ------- clause (vii) that (A) the value of such assets, Property and total assets shall be determined by reference to the most recent audited balance sheet of YPF prepared in accordance with Argentine GAAP, and (B) the value of the assets and Property securing Indebtedness shall not exceed the outstanding principal amount of such Indebtedness. 6. Limitations on Sale and Leaseback Transactions. ---------------------------------------------- YPF shall not enter into, renew or extend, or permit any Subsidiary to enter into, renew or extend, any transaction or series of related transactions pursuant to which YPF or any such Subsidiary sells or transfers any Property in connection with the leasing, or the release against installment payments, or as part of an arrangement involving the leasing or resale against installment payments, of such Property to the seller or transferor ("Sale and Leaseback Transaction") except (i) a Sale ------------------------------ and Leaseback Transaction that, had such Sale and Leaseback Transaction been structured as a mortgage loan rather than as a Sale and Leaseback Transaction, YPF would have been permitted to enter into such transaction pursuant to the terms of the covenant described in Item 5 of this Schedule II and (ii) a Sale and Leaseback Transaction entered into prior to the date of the Credit Agreement. 7. Financial Statements. YPF shall furnish or cause -------------------- to be furnished to the Agent (with a copy for each Lender) (i) annual reports in English, which will include a report of YPF's statutory audit committee and annual audited financial statements prepared in conformity with Argentine GAAP, together with a reconciliation to generally accepted accounting principles as in effect in the United States of America of net income and shareholders' equity and (ii) quarterly reports in English which will include unaudited interim financial information prepared in conformity with Argentine GAAP. YPF will furnish to the Agent (with a copy for each Lender), at the time it furnishes each set of financial information, a certificate of the chief financial officer of YPF to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and describing the BII\32161_1 04/07/95 10:16am Schedule II ----------- - 4 - action that YPF has taken or proposes to take with respect thereto). YPF also shall furnish or cause to be furnished to the Agent (with a copy for each Lender) in English (i) all notices of shareholders' meetings and other reports and communications that are made generally available to YPF's shareholders and (ii) registration statements and regular and periodic reports which YPF shall have filed with the Commission, any United States securities exchange, the Argentine Securities Commission ("Comision Nacional de Valores"), the Buenos Aires Stock Exchange ---------------------------- or any other stock exchange in Argentina. Notwithstanding the provisions of this Item 7, YPF shall have no obligation to provide an English translation of any such report filed with the Argentine Securities Commission, the Buenos Aires Stock Exchange or any other stock exchange in Argentina if a report in English providing substantially the same information (with no material differences) has been furnished to the Agent in accordance with this Item 7. From time to time YPF shall furnish to the Agent such other information regarding the financial condition, operations, business or prospects of YPF or any of its Subsidiaries as the Agent or any Lender (through the Agent) may reasonably request. 8. Compliance with Laws and Other Agreements. YPF ----------------------------------------- shall, and shall cause each of its Subsidiaries to, comply with all applicable laws, rules, regulations, orders and directions of any governmental or regulatory authority or agency having jurisdiction over it or its business and all of the covenants and obligations contained in any agreements to which YPF or any Subsidiary is a party, except where the failure to so comply would not have a Schedule YPF Material Adverse Effect. 9. Maintenance of Books and Records. YPF shall, and -------------------------------- shall cause each of its Argentine Subsidiaries to, maintain books, accounts and records in accordance with Argentine GAAP. 10. Inspection. YPF shall permit representatives of ---------- the Agent or any Lender, during normal business hours and at the expense of the Agent or such Lender (as the case may be), to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by the Agent or such Lender. 11. Further Assurances. YPF will, at its own cost and ------------------ expense, execute and deliver to the Agent (with a copy for each Lender, if requested by the Agent) all such documents, instruments and agreements and do all such other acts and things as may be reasonably required, in the opinion of the Agent or the Majority Lenders (acting through the Agent), to enable the Lenders to exercise and enforce their rights under the Basic Documents. BII\32161_1 04/07/95 10:16am Schedule II ----------- - 5 - 12. Ranking. YPF will ensure that at all times its ------- obligations under Section 6 of the Credit Agreement rank at least pari passu (whether in priority of payment or otherwise) with all ---- ----- of its other Indebtedness, except to the extent any such other Indebtedness is accorded preference by reason of collateral security for such other Indebtedness. 13. Litigation. YPF will promptly give to the Agent ---------- notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of such legal or other proceedings, affecting YPF or any of its Subsidiaries, except proceedings which, if adversely determined, would not have a Schedule YPF Material Adverse Effect. 14. Total Indebtedness. YPF shall not permit at any ------------------ time Total Indebtedness to exceed 45% of Total Capitalization. 15. Tangible Net Worth. YPF shall not permit at any ------------------ time Tangible Net Worth (expressed in Argentine pesos) to be less than 3,980,000,000 Argentine pesos which is equal to 80% of Tangible Net Worth as at December 31, 1994. 16. Merger, Etc. YPF shall not, and shall not permit ------------ any of its Significant Subsidiaries to, merge or consolidate with or into, or convey, transfer or lease their respective Properties substantially as an entirety to, any Person, unless immediately after giving effect to such transaction, (a) no Default shall have occurred and be continuing, and (b) with respect to a merger or consolidation of YPF with or into any Person, (i) any corporation formed by any merger or consolidation with YPF or the Person which acquires by conveyance or transfer, or which leases, the Properties of YPF substantially as an entirety ("YPF's ----- Successor Corporation") shall be an Argentine corporation and --------------------- shall expressly assume the due and punctual payment of the principal of, and interest on the Loans according to their terms, and the due and punctual performance of all of the covenants and obligations of YPF under the Transaction Documents; provided that -------- nothing in this Item 16 shall prohibit the Merger. 17. Maintenance of Concessions, Permits, Leases and ----------------------------------------------- Licenses. YPF shall maintain in full force and effect and good -------- standing (and renew or extend when appropriate) all its rights under any existing or future oil and gas exploration permits and production and transportation concessions, leases or licenses and to observe and perform all conditions or restrictions contained or arising thereunder except to the extent any such failure (i) to maintain, observe or perform would not have a Schedule YPF Material Adverse Effect or (ii) arises from the scheduled expiration thereof in accordance with its terms. BII\32161_1 04/07/95 10:16am Schedule II ----------- - 6 - 18. Maintenance of Sales Agreements. YPF shall ------------------------------- maintain in place and renew or replace in accordance with sound and prudent business and financial practices all of its crude oil and other hydrocarbon sales agreements currently in force except to the extent that any such failure to maintain, renew or replace would not have a Schedule YPF Material Adverse Effect. For purposes of this Schedule II, the following terms shall have the following meanings: "Argentine GAAP" shall mean generally accepted -------------- accounting principles in Argentina as in effect from time to time. "Capital Lease Obligations" shall mean, for any Person, ------------------------- all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under Argentine GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with Argentine GAAP. "Indebtedness" shall mean with respect to any Person, ------------ (a) any liability of such Person (i) for money borrowed, or under any reimbursement obligation relating to a letter of credit, (ii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a liability arising in the ordinary course of business, so long as such trade payable or liability is payable within 90 days of the date the respective goods are delivered or the respective services are rendered), or (iii) for Capital Lease Obligations; (b) all Redeemable Stock issued by such Person (the amount of Indebtedness being represented by any involuntary liquidation preference plus accrued and unpaid dividends); (c) any liability of others described in the preceding clause (a) that such Person has guaranteed; and (d) (without duplication) any amendment, supplement, modification, deferral, renewal, extension or refunding of any liability of the types referred to in clauses (a), (b) and (c) above. For purposes of determining any particular amount of Indebtedness under this definition, Guarantees of (or obligations with respect to letters of credit supporting) Indebtedness otherwise included in the determination of such amount shall not also be included. "Redeemable Stock" shall mean any class or series of ---------------- capital stock of any Person that by its terms or otherwise BII\32161_1 04/07/95 10:16am Schedule II ----------- - 7 - is required to be redeemed prior to the final maturity of the Notes (as defined in the YPF Credit Agreement), or is redeemable at the option of the holder thereof at any time prior to the final maturity of the Loans (as defined in the YPF Credit Agreement). "Schedule YPF Material Adverse Effect" shall mean the ------------------------------------ occurrence of any event or condition with respect to YPF which has a material adverse effect on (a) the financial condition, results of operations or the shareholders' equity of YPF and its Subsidiaries taken as a whole, (b) the ability of YPF to perform its payment and other material obligations under any of the Basic Documents to which it is or is intended to be a party, (c) the validity or enforceability of the obligations of YPF under any of the Basic Documents to which it is or is intended to be a party, or (d) the ability of the Lenders and the Agent to enforce their rights and remedies against YPF under any of the Basic Documents to which it is or is intended to be a party. "Significant Subsidiary" shall mean a Subsidiary of YPF ---------------------- which is material to the condition, financial or otherwise, or to the earnings, operations, business affairs or business prospects of YPF and its Subsidiaries taken as a whole. "Subsidiary" shall mean, with respect to any Person, ---------- any corporation or other business entity of which such Person owns or controls (either directly or through another or other Subsidiaries) more than 50% of the issued share capital or other ownership interest, in each case having ordinary voting power to elect directors, managers or trustees of such corporation or other business entity (whether or not capital stock or other ownership interest of any other class or classes shall or might have voting power upon the occurrence of any contingency). "Tangible Net Worth" shall mean, as at any date, the ------------------ amount for YPF (determined in accordance with Argentine GAAP) of (a) shareholders' equity as at such date minus ----- (b) the sum of the following as at such date: the cost of treasury shares and the book value of all assets that should be classified as intangibles (without duplication of deductions in respect of items already deducted in arriving at surplus and retained earnings) but in any event including goodwill, minority interests, research and development costs, trademarks, trade names, copyrights, patents and franchises, unamortized debt discount and expense, all reserves for losses, contingencies, or other liabilities (but only to the extent such reserves were not deducted in arriving at shareholders' equity) and any write-up in the book value of assets resulting from a revaluation thereof BII\32161_1 04/07/95 10:16am Schedule II ----------- - 8 - subsequent to December 31, 1994 other than as a result of the Merger. "Total Capitalization" shall mean as at any date -------------------- (a) Total Indebtedness as at such date plus (b) shareholders' equity of YPF as at such date. "Total Indebtedness" shall mean as at any date all ------------------ Indebtedness of YPF and its Subsidiaries as of such date, determined on a consolidated basis in accordance with Argentine GAAP. BII\32161_1 04/07/95 10:16am Schedule II ----------- SCHEDULE III Events of Default with respect to YPF ------------------------------------- Capitalized terms used in this Schedule III (unless otherwise defined in this Schedule III) shall have the meanings assigned to them in the Credit Agreement. In addition, as used in this Schedule III, any references to a Subsidiary or Subsidiaries of YPF shall be deemed to refer to a Subsidiary or Subsidiaries of YPF (as the case may be) other than YPF Acquisition and its Subsidiaries and Maxus and its Subsidiaries. 1. YPF shall default in the performance of any of its obligations under any of Items 12, 14, 15 or 16 of Schedule II to the Credit Agreement; or YPF shall default in the performance of any of its other obligations under the Basic Documents and such default shall continue unremedied for a period of 30 or more days after notice thereof to YPF by the Agent or any Lender (through the Agent). 2. An Event of Default (as defined in the YPF Credit Agreement) under Section 9(a) of the YPF Trade Credit Agreement shall occur. 3. YPF or any Subsidiary shall (a) default in the payment of the principal of or interest on, any other note, bond, coupon or other instrument evidencing Indebtedness in an amount of $20,000,000 or more (other than the Notes, as defined in the YPF Credit Agreement) issued, assumed or guaranteed by it, when and as the same shall become due and payable, if such default shall continue for more than the period of grace, if any, originally applicable thereto and the time for payment of such amount has not been expressly extended, or (b) default in the observance of any other terms and conditions relating to any such Indebtedness, if the effect of such default is to cause such Indebtedness to become due prior to its stated maturity. 4. Any government or governmental authority shall have condemned, nationalized, seized, or otherwise expropriated all or any substantial part of the Property of YPF or any Subsidiary or the share capital of YPF or any such Subsidiary, or shall have assumed custody or control of such Property or of the business or operations of YPF or any such Subsidiary or of the share capital of YPF or any such Subsidiary, or shall have taken any action for the winding- up or dissolution of YPF or any such Subsidiary or any action that would prevent YPF or any such Subsidiary or its officers from carrying on its business or operations or a substantial part thereof for a period of longer than thirty (30) days and the result of any such action shall materially prejudice the ability of YPF to perform its obligations under the Basic Documents to which it is a party. BII\32161_1 04/07/95 10:16am Schedule III ------------ - 2 - 5. It becomes unlawful for YPF to perform any of its obligations under any of the Basic Documents to which it is a party, or any of its obligations thereunder ceases to be valid, binding or enforceable. 6. A resolution is passed or adopted by the Board of Directors or stockholders of YPF, or a judgment of a court of competent jurisdiction is made, that YPF be wound up or dissolved, other than for the purposes of or pursuant to a merger or consolidation otherwise permitted under and in accordance with the terms of Item 16 of Schedule II to the Credit Agreement, and any winding up, dissolution or liquidation proceedings remain undismissed for thirty (30) days. 7. An attachment, execution, seizure before judgment or other legal process is levied or enforced upon any part of the Property of YPF or any Subsidiary which Property is material to the condition, financial or otherwise, or to the earnings, operations, business affairs or business prospects of YPF and its Subsidiaries taken as a whole, and (a) such attachment, execution, seizure before judgment or other legal process is not discharged within thirty (30) days thereof or (b) if such attachment, execution, seizure before judgment or other legal process shall not have been discharged within such 30-day period, YPF or such Subsidiary, as the case may be, shall not have within such 30-day period contested such attachment, execution, seizure before judgment or other legal process in good faith by appropriate proceedings upon stay of execution of the enforcement thereof or upon posting a bond in connection therewith; provided, however, that in no event shall the -------- ------- grace period provided by clause (b) above extend beyond the 60th day after the initiation of such proceedings. 8. A court having jurisdiction enters a decree or order for (a) relief in respect of YPF or any Significant Subsidiary in an involuntary case under Argentine Law No. 19,551 or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect or (b) appointment of an administrator, receiver, trustee or intervenor for YPF or any Significant Subsidiary for all or substantially all of the Property of YPF or any Significant Subsidiary and, in each case, such decree or order shall remain unstayed and in effect for a period of thirty (30) consecutive days. 9. YPF or any Significant Subsidiary (a) commences a voluntary case under Argentine Law No. 19,551 or any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, (b) consents to the appointment of or taking possession by an administrator, receiver, trustee BII\32161_1 04/07/95 10:16am Schedule III ------------ - 3 - or intervenor for YPF or any Significant Subsidiary for all or substantially all of the Property of YPF or any Significant Subsidiary or (c) effects any general assignment for the benefit of creditors. 10. A moratorium is agreed or declared in respect of any Indebtedness of YPF, or of any Significant Subsidiary, or any government or governmental authority condemns, seizes, compulsorily purchases or expropriates 10% or more of the assets of YPF and its Subsidiaries considered as one enterprise. 11. Any event occurs which under the laws of any relevant jurisdiction has an analogous effect to any of the events referred to in Item 9 of this Schedule III. For purposes of this Schedule III, the following term shall have the following meaning: "Argentine GAAP" shall mean generally accepted -------------- accounting principles in Argentina as in effect from time to time. "Capital Lease Obligations" shall mean, for any Person, ------------------------- all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under Argentine GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with Argentine GAAP. "Indebtedness" shall mean with respect to any Person, ------------ (a) any liability of such Person (i) for money borrowed, or under any reimbursement obligation relating to a letter of credit, (ii) evidenced by a bond, note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any businesses, properties or assets of any kind (other than a trade payable or a liability arising in the ordinary course of business, so long as such trade payable or liability is payable within 90 days of the date the respective goods are delivered or the respective services are rendered), or (iii) for Capital Lease Obligations; (b) all Redeemable Stock issued by such Person (the amount of Indebtedness being represented by any involuntary liquidation preference plus accrued and unpaid dividends); (c) any liability of others described in the preceding clause (a) that such Person has guaranteed; and (d) (without duplication) any amendment, supplement, modification, deferral, renewal, extension or refunding of BII\32161_1 04/07/95 10:16am Schedule III ------------ - 4 - any liability of the types referred to in clauses (a), (b) and (c) above. For purposes of determining any particular amount of Indebtedness under this definition, Guarantees of (or obligations with respect to letters of credit supporting) Indebtedness otherwise included in the determination of such amount shall not also be included. "Redeemable Stock" shall mean any class or series of ---------------- capital stock of any Person that by its terms or otherwise is required to be redeemed prior to the final maturity of the Notes (as defined in the YPF Credit Agreement), or is redeemable at the option of the holder thereof at any time prior to the final maturity of the Loans (as defined in the YPF Credit Agreement). "Schedule YPF Material Adverse Effect" shall mean the ------------------------------------ occurrence of any event or condition with respect to YPF which has a material adverse effect on (a) the financial condition, results of operations or the shareholders' equity of YPF and its Subsidiaries taken as a whole, (b) the ability of YPF to perform its payment and other material obligations under any of the Basic Documents to which it is or is intended to be a party, (c) the validity or enforceability of the obligations of YPF under any of the Basic Documents to which it is or is intended to be a party, or (d) the ability of the Lenders and the Agent to enforce their rights and remedies against YPF under any of the Basic Documents to which it is or is intended to be a party. "Significant Subsidiary" shall mean a Subsidiary of YPF ---------------------- which is material to the condition, financial or otherwise, or to the earnings, operations, business affairs or business prospects of YPF and its Subsidiaries taken as a whole. "Subsidiary" shall mean, with respect to any Person, ---------- any corporation or other business entity of which such Person owns or controls (either directly or through another or other Subsidiaries) more than 50% of the issued share capital or other ownership interest, in each case having ordinary voting power to elect directors, managers or trustees of such corporation or other business entity (whether or not capital stock or other ownership interest of any other class or classes shall or might have voting power upon the occurrence of any contingency). BII\32161_1 04/07/95 10:16am Schedule III ------------ SCHEDULE IV Litigation ---------- [See Section 8.02] BII\32161_1 04/07/95 10:16am Schedule IV ----------- EX-99.B 3 Exhibit B February 24, 1995 YPF Sociedad Anonima Avenida Pte R. Saenz Pena 777 1364 Buenos Aires, Argentina Ladies and Gentlemen: You ("Sponsor") have advised The Chase Manhattan Bank ------- (National Association) ("Chase" and, together with its ----- affiliates, the "Chase Entities") that you propose to acquire the -------------- company which we have code-named Cowboy (the "Target") in a ------ transaction pursuant to which a newly-formed indirect subsidiary of Sponsor (the "Company") will make a cash tender offer (the ------- "Tender Offer") for all of the issued and outstanding shares of ------------ common stock of Target (the "Target Shares"). All of the capital ------------- stock of the Company will be owned by a newly-formed corporation ("Holdings") and all of the capital stock of Holdings will be -------- owned by Sponsor. We understand that the Tender Offer is to be conditioned upon, among other things, there being validly tendered prior to the expiration of the Tender Offer, and not withdrawn, Target Shares representing not less than 50.1% (on a fully diluted basis) of the outstanding Target Shares and the Target's outstanding $4.00 Cumulative Convertible Preferred shares (the "Voting Preferred Shares"), but in an amount not less ----------------------- than the number of Target Shares and Voting Preferred Shares required to permit the Merger referred to below to occur promptly. - 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 4 Exhibit C ================================================================= 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.D 5 Exhibit D GUARANTEE AGREEMENT THIS GUARANTEE AGREEMENT, dated February 28, 1995, of YPF Sociedad Anonima, a corporation (sociedad anonima) organized and existing under the laws of the Republic of Argentina, with principal executive offices located at Avenida Pte. R. Saenz Pena 777, 1364 Buenos Aires, Argentina (hereinafter called the "Guarantor"), in favor of The Prudential Insurance Company of America (hereinafter called "Prudential") and Prudential's successors and assigns who are the registered owners of shares of $9.75 Cumulative Convertible Preferred Stock (hereinafter called the "Shares") of Maxus Energy Corporation, a corporation organized and existing under the laws of the State of Delaware (hereinafter called the "Company") acquired in compliance with Section 3 of the 1995 Agreement hereinafter referred to (Prudential and all such successors and assigns being hereinafter sometimes collectively called the "Obligees"). RECITALS On February 1, 1987 Prudential and the Company entered into a Preferred Stock Purchase Agreement, dated February 1, 1987 (hereinafter called the "Original Stock Purchase Agreement") providing for the issuance to Prudential of 3,000,000 of the Shares. The Original Stock Purchase Agreement was subsequently amended by agreements between the Company and Prudential dated February 8, 1987 (hereinafter called the "First Amendment"), and April 12, 1990 (hereinafter called the "Existing Second Stock Purchase Agreement"), and pursuant to the Existing Second Stock Purchase Agreement (a) the Company reacquired from Prudential 500,000 of the Shares, and (b) Prudential executed and delivered a Waiver of Certain Equity Offering Rights dated as of April 12, 1990 and a Waiver of Certain Rights Relating to $9.75 Preferred Stock dated June 5, 1990 (hereinafter collectively called the "Waivers"). Prudential is currently the registered owner of all the outstanding Shares. In contemplation of certain Transactions (as said term is defined in the 1995 Agreement hereinafter referred to), including a cash tender offer by a wholly-owned subsidiary of the Guarantor for shares of Common Stock of the Company (the "Tender Offer") as a result of which the Company would become a subsidiary of the Guarantor, the Company and Prudential are entering into an agreement (the "1995 Agreement"), making provision, among other things, with respect to (a) certain consents and waivers by Prudential in connection with the Transactions, (b) certain further amendments of the Original Stock Purchase Agreement, as previously amended, (c) certain amendments of the Existing Second Stock Purchase Agreement, (d) consent to certain amendments of, or, at the request of the Company, waivers with respect to, the Certificate of Designations relating to the Shares, and (e) the termination of the Registration Rights Agreement referred to in the Original Stock Purchase Agreement. The Original Stock Purchase Agreement, as amended as aforesaid (including by the 1995 Agreement), and as the same may be further amended in accordance with the provisions thereof and be in effect from time to time is hereinafter called the "Stock 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.E 6 Exhibit E MAXUS ENERGY CORPORATION 717 North Harwood Street Dallas, Texas 75201 February 28, 1995 The Prudential Insurance Company of America Three Gateway Center 100 Mulberry Street Newark, New Jersey 07102 Gentlemen: On February 1, 1987, the undersigned, MAXUS ENERGY CORPORATION (the "Company"), a Delaware corporation, and you entered into a Preferred Stock Purchase Agreement, dated February 1, 1987 (the "Original Stock Purchase Agreement"), providing for the issuance to you of 3,000,000 shares of $9.75 Cumulative Convertible Preferred Stock of the Company (the "Shares"). The Original Stock Purchase Agreement was subsequently amended by agreements between the undersigned and you dated February 8, 1987 (the "First Amendment"), and April 12, 1990 (the "Second Stock Purchase Agreement"), and pursuant to the Second Stock Purchase Agreement (a) the Company reacquired from you 500,000 of the Shares, and (b) you executed and delivered a Waiver of Certain Equity Offering Rights dated as of April 12, 1990 and a Waiver of Certain Rights Relating to $9.75 Preferred Stock dated June 5, 1990 (collectively the "Waivers"), relating to certain provisions of the Certificate of Designations, the Registration Rights Agreement and the Company's Preferred Stock Purchase Rights Plan. The Original Stock Purchase Agreement, as amended as aforesaid, is herein called the "Stock Purchase Agreement," and except as otherwise expressly provided herein, all capitalized terms used herein and defined in the Stock Purchase Agreement or the Second Stock Purchase Agreement, as the case may be, are used herein as so defined. The undersigned has advised you that it contemplates entering into the Transactions, including a cash tender offer by a wholly-owned subsidiary of Gaucho for shares of the Common Stock of the Company (the "Tender Offer"), as a result of which the Company would become a subsidiary of Gaucho, and in connection therewith has obtained the agreement of Gaucho, effective upon the merger into the Company of such wholly-owned subsidiary of Gaucho, to guarantee the Company's obligations under the Certificate of Designations, the Stock Purchase Agreement and the Second Stock Purchase Agreement (each as heretofore and hereby amended or to be amended or certain provisions thereof heretofore and hereby waived or to be waived, as the case may be), such guarantee to be substantially in the form annexed hereto as Exhibit A (the "Gaucho Guarantee"). In consideration of the execution and delivery to you of the Gaucho Guarantee, you have agreed to consent to the Transactions and waive all provisions of applicable agreements and other instruments necessary in connection therewith, effective upon the execution and delivery of 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 -----END PRIVACY-ENHANCED MESSAGE-----