Share Purchase Agreement

SHARE PURCHASE AGREEMENT


BY AND AMONG


TEODOSIO CESAR BREA, JUAN MARTIN ALLENDE, FEDERICO FERRO,
RAFAEL LA PORTA DRAGO, ALBERTO JOSE LOSADA, ALEJANDRO ALLENDE,
ENRIQUE GARRIDO, ROSA MARIA STEVERLYNCK DE ELIZALDE, PEDRO JOSE DE ELIZALDE, DOLORES MARIA DE ELIZALDE, MARIA ALICIA DE ELIZALDE,
MARIA MAGDALENA DE ELIZALDE, JUAN IGNACIO DE ELIZALDE


("SELLING SHAREHOLDERS")


AND


APCO ARGENTINA INC.


("APCO")


DATED AS OF DECEMBER 5, 2002


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INDEX


Section 1. Definitions and Interpretations. 3


Section 2. Purchase of FIMAIPU Capital Stock by Apco. 5
2.1 Purchase Shares. 5
2.2 Purchase Price. 5
2.3 Closing. 6


Section 3. Representations and Warranties. 6
3.1 The Selling Shareholders Representations and Warranties. 6
3.2 Apco Representations and Warranties 8


Section 4. Conditions Precedent to Apco's Obligation to Close. 9
4.1 Selling Shareholder Closing Obligations. 9
4.2 Accuracy of Representations. 9
4.3 The Selling Shareholders' Performance. 9
4.4 No Proceedings. 9
4.5 No Claim Regarding Stock Ownership or Sale Proceeds. 9


Section 5. Conditions Precedent to the Selling Shareholders' Obligation
to Close 10
5.1 Apco's Closing Obligations. 10
5.2 Accuracy of Representations. 10
5.3 Apco's Performance. 10
5.4 No Proceedings. 10
5.5 Purchase Price. 10


Section 6. Negative Covenants of the Selling Shareholders. 11


Section 7. Acts to be Performed Following Closing. 12
7.1 Acknowledgment 12


7.2 Shareholders Meeting. 12


Section 8. Termination. 13
8.1 Termination Events. 13
8.2 Effects of Termination. 13


Section 9. Indemnification; Remedy. 13
9.1 Survival. 13
9.2 Indemnification and Payment of Loss by Selling Shareholders. 14
9.3 Selling Shareholders' Liability. 14
9.4 Indemnification and Payment of Loss by Apco. 14
9.5 Remedies not Exclusive. 14
9.6 Procedure for Indemnification. 15
9.7. Indemnification Payment. 15


Section 10. Notices. 15


Section 11. Jurisdiction; Applicable Law. 16


Section 12. Miscellaneous. 16


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SHARE PURCHASE AGREEMENT


SHARE PURCHASE AGREEMENT, dated as of December 5, 2002 ("Agreement") by and among Mr. Teodosio Cesar Brea ("Mr. Brea"), Mr. Juan Martin Allende ("Mr. J.M. Allende"), Mr. Federico Ferro ("Mr. Ferro"), Mr. Rafael La Porta Drago ("Mr. La Porta Drago"), Mr. Alberto Jose Losada ("Mr. Losada"), Mr. Alejandro Allende ("Mr. A. Allende"), Mr. Enrique Garrido ("Mr. Garrido"), Ms. Rosa Maria Sterverlynck De Elizalde ("Ms. Steverlynck De Elizalde"), Mr. Pedro Jose De Elizalde ("Mr. P.J. De Elizalde"), Ms. Dolores Maria De Elizalde ("Ms. D.M. De Elizalde"), Ms. Maria Alicia De Elizalde ("Ms. M.A. De Elizalde"), Ms. Maria Magdalena De Elizalde ("Ms. M.M. De Elizalde") and Mr. Juan Ignacio De Elizalde ("Mr. J.I. De Elizalde", all of them Argentine individual residents and, jointly, the "Selling Shareholders", and each of them individually, the "Selling Shareholder"); and APCO ARGENTINA, INC., a Cayman Islands company ("Apco", and together with the Selling Shareholders, the "Parties", and each the Selling Shareholders or Apco, individually, the "Party").


RECITALS:


WHEREAS, the Selling Shareholders are the owners of all the outstanding shares of FIMAIPU S.A. ("FIMAIPU"), a stock corporation incorporated under and in good standing pursuant to the laws of Argentina, in accordance with the equity ownership schedule attached hereto as Exhibit A.


WHEREAS, FIMAIPU is the owner of 7,895 common voting shares of Petrolera Perez Companc S.A. (the "PPC Shares" and "PPC", respectively), that represent 1,579% of the outstanding stock of PPC and 1,961% of the votes of PPC.


WHEREAS, the Selling Shareholders desire to sell the shares to Apco, and Apco desires to purchase the shares from the Selling Shareholders;


WHEREAS, Apco and the Selling Shareholders desire to enter into this Agreement;


NOW, THEREFORE, the parties hereto agree as follows:


1 DEFINITIONS AND INTERPRETATIONS.


The following terms will have the following meanings when used as capitalized in this Agreement.


"Capital Stock" means any and all shares, interests, quotas, participation or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person (other than a corporation) and any and all warrants, options or rights to acquire any of the foregoing.


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"Closing" means the consummation and completion of the purchase and sale of the Shares, the payment of the Purchase Price and all other actions or transactions to be completed and consummated by the Closing in accordance with this Agreement and/or applicable laws.


"Closing Date" is defined in Section 2.3 below.


"Consent" means any approval, consent, license, permit, registration, ratification, waiver, or other authorization (including any Governmental Authorization) issued, granted, given or otherwise made available.


"Contractual Obligation" means, as to any Person, any provision of any security issued by any such Person or any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.


"Debt" of any Person means any and all indebtedness, Obligations or liabilities of such Person created or arising under any and all payments, notes, bonds, debentures, loans or other similar instruments.


"Encumbrance" means any charge, claim, mortgage, servitude, marital property interest, condition, equitable interest, Lien, option, pledge, encumbrance, right of first refusal, or restriction of any kind, including any restriction on use, voting, transfer, receipt of income, or exercise of any other attribute of ownership.


"Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.


"Lien" means any lien, security interest or other charge or Encumbrance of any kind, or any other type of preferential arrangement, including without limitation, the lien or retained security title of a conditional vendor, any easement, right of way or other encumbrance on title to real property.


"Obligation" means with respect to any Person, any payment, performance or other obligations of such Person of any kind, including, without limitation, any liability on any claim arising from, without limitation, the obligation to pay principal, interest, charges, expenses, fees, attorneys' fees and disbursements, indemnities and other amounts payable by any party under this Agreement.


"Person" means an individual, partnership, corporation, limited liability company, trust, joint venture or other entity, or a government or any political subdivision or agency thereof.


"Requirement of Law" means any applicable constitution, law, statute, treaty, rule, regulation, ordinance, decree, binding case law, order, injunction, notice, approval, permit,


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license, authorization or judgment, including, without limitation, any consolidations, amendments, re-enactments, extensions or replacements of any of the foregoing.


"Selling Shareholders" is defined in the Recitals of this Agreement.


"Shares" is defined in Exhibit A of this Agreement.


"VAT" means Value Added Tax (Impuesto al Valor Agregado).


2 PURCHASE OF FIMAIPU CAPITAL STOCK BY APCO.


2.1. PURCHASED SHARES. Subject to the terms and conditions of this Agreement, Apco hereby agrees to purchase from the Selling Shareholders, and the Selling Shareholders hereby agree to sell to Apco, all of the Shares.


2.2. PURCHASE PRICE. The purchase price (the "Purchase Price") for the Shares will be, in the aggregate, US$1,853,903, payable in accordance with the following schedule and in the manner set forth in Section 5.5:


(i) US$624,209, for the shares owned by Mr. Brea;


(ii) US$567,480, for the shares owned by Mr. J.M. Allende;


(iii) US$246,013, for the shares owned by Mr. Ferro;


(iv) US$94,549, for the shares owned by Mr. La Porta Drago;


(v) US$94,549, for the shares owned by Mr. Losada;


(vi) US$75,639, for the shares owned by Mr. A. Allende;


(vii) US$56,914, for the shares owned by Mr. Garrido;


(viii) US$47,275, for the shares owned by Ms. Steverlynck de De Elizalde;


(ix) US$9,455, for the shares owned by Mr. P.J. De Elizalde;


(x) US$9,455, for the shares owned by Ms. D.M. De Elizalde;


(xi) US$9,455, for the shares owned by Ms. M.A. De Elizalde;


(xii) US$9,455, for the shares owned by Ms. M.M. De Elizalde;


(xiii) US$9,455, for the shares owned by Mr. J. I. De Elizalde.


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2.3. CLOSING. The Closing will take place at the offices of Allende & Brea, located at Maipu 1300, 10th floor, City of Buenos Aires, Argentina, on January 10, 2003 (the "Closing Date").


3 REPRESENTATIONS AND WARRANTIES.


3.1. THE SELLING SHAREHOLDERS REPRESENTATIONS AND WARRANTIES. Each of the Selling Shareholders (as applicable to it below) severally represents and warrants to Apco as of the date of this Agreement and the Closing Date that:


(a) Due Incorporation. Each Selling Shareholder has the legal capacity to enter into and close this Agreement, without any legal restrictions whatsoever, enjoying full legal capacity.


FIMAIPU is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and has the power and authority and the legal right to perform any obligation;


(b) Financial Statements. The audited annual balance sheets of FIMAIPU, particularly the annual balance sheet closed on August 31, 2002, and the special balance sheet closed on November 30, 2002, present fairly in all material respects the consolidated financial position of FIMAIPU at the date of such balance sheets and for the period covered thereby. All such financial statements have been prepared in accordance with Argentine generally accepted accounting procedures ("AGAAP").


(c) Tax Returns and Payments. FIMAIPU has filed all income tax, gross income tax and VAT returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes and assessments payable by it which have become due, except for those contested in good faith and adequately disclosed and fully provided for in the financial statements in accordance with AGAAP. FIMAIPU has at all times paid, or has provided adequate reserves (in the good faith of the Board of Directors of FIMAIPU) for the payment of all income taxes, gross income taxes and VAT applicable for all prior fiscal years and for the current fiscal year to date. There is no material action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of FIMAIPU and the Selling Shareholders, by any authority regarding any taxes relating to FIMAIPU. FIMAIPU has not entered into any agreement or waiver nor has been requested to enter into any agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of FIMAIPU, or is aware of any circumstances that would cause the taxable years or other taxable periods of FIMAIPU not to be subject to the normally applicable statue of limitations. FIMAIPU has not incurred, or will not incur, in any tax liability in connection with this Agreement.


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(d) Personnel. FIMAIPU is a holding company and is not, or has ever been, engaged in operations of any kind. FIMAIPU does not have, nor has ever had, any hired or permanent personnel or staff.


(e) Litigation. There are no actions, suits or proceedings pending or, to the best knowledge of the Selling Shareholders, threatened, that could materially affect the Shares of FIMAIPU.


(f) Indebtedness. FIMAIPU has not contracted, created, incurred or assumed any Debt.


(g) Shares. All of the Shares to be sold by each Selling Shareholder to Apco have ...