Asset Purchase And Sale Agreement

U.S. Petroleum Corp

April 26, 1990


Quaker State Corporation 255 Elm Street Oil City, PA 16301


Attention: Mr. William C. Helsley


Petrowax PA Inc. ("Buyer") and Quaker State Corporation ("Seller") have entered into the Asset Purchase and Sale Agreement ("Agreement") as of the 30th day of March, 1990. Buyer and Seller further agree as follows:


As of the Closing Date, Seller shall sell to Buyer all finished paraffin
and microcrystalline wax and unfiltered microcrystalline wax inventories at
the Facilities, other than the microcrystalline wax designated by Seller
as having been sold to an overseas account (the "Overseas Micro"), at a
price which is equal to eighty percent (80%) of the price realized by Buyer
pursuant to its sale of such inventories.


Buyer shall pay Seller amounts owing hereunder within fifteen (15) days of
Buyer's receipt of payment for the sale of such inventories, but in any
event Buyer shall have sold and paid for all paraffin inventories purchased
hereunder within 90 days of the Closing Date, and all microcrystalline
inventories purchased hereunder within 180 days of the Closing Date.


On or before the Closing Date Seller shall notify Buyer if an overseas sale
can be made for 5000 barrels of microcrystalline wax. Buyer shall purchase
and arrange sale and shipment of the Overseas Micro at Seller's direction
and shall pay to Seller within fifteen (15) days of receipt of payment the
realized price for the Overseas Micro less $0.01 per pound.


The capitalized terms have the meaning defined in the Agreement.


If you agree with the foregoing please sign and return one copy of this letter, which will constitute our agreement with respect to the subject matter of this letter.


Very truly yours,


PETROWAX PA INC.


By: /s/ Gene R. Blendermann
----------------------------
Gene R. Blendermann
President


CONFIRMED AND AGREED as of the date written above:


QUAKER STATE CORPORATION


By: /s/ W.C. Helsley
---------------------------- Title: Vice President
-------------------------


EXECUTION COPY


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ASSET PURCHASE AND SALE AGREEMENT


----------------------------------------------


dated as of

March 30, 1990

between

PETROWAX PA INC.,

the Buyer,

and

QUAKER STATE CORPORATION,

the Seller


TABLE OF CONTENTS
Page
----


ARTICLE ONE

DEFINITIONS


SECTION 1.1 Compliance Costs . . . . . . . . . . . . . . . . . 1
1.2 Compliance Work. . . . . . . . . . . . . . . . . . 1
1.3 Disposal . . . . . . . . . . . . . . . . . . . . . 2
1.4 Environmental Laws . . . . . . . . . . . . . . . . 2
1.5 Facilities . . . . . . . . . . . . . . . . . . . . 2
1.6 Financial Responsibility . . . . . . . . . . . . . 2
1.7 Hazardous Materials. . . . . . . . . . . . . . . . 2
1.8 Hazardous Wastes . . . . . . . . . . . . . . . . . 3
1.9 Maintenance Costs. . . . . . . . . . . . . . . . . 3
1.10 Maintenance Work . . . . . . . . . . . . . . . . . 3
1.11 Regulatory Authorities . . . . . . . . . . . . . . 3
1.12 Remedial Costs . . . . . . . . . . . . . . . . . . 3
1.13 Remedial Work. . . . . . . . . . . . . . . . . . . 3


ARTICLE TWO


PURCHASE OF FACILITIES BY THE BUYER


SECTION 2.1 Purchase of Facilities . . . . . . . . . . . . . . 4


ARTICLE THREE


ASSETS ACQUIRED AND LIABILITIES ASSUMED
SECTION 3.1 Assets . . . . . . . . . . . . . . . . . . . . . . 4
3.2 The Coleville Station ............ . . . . . . . . 6
3.3 Excluded Assets; Other Liabilities . . . . . . . . 9
3.4 Assumption of Certain Liabilities
and Obligations. . . . . . . . . . . . . . . . . . 10


ARTICLE FOUR

PAYMENT OF PURCHASE PRICE


SECTION 4.1 Purchase Price . . . . . . . . . . . . . . . . . . 10
4.2 Method of Payment. . . . . . . . . . . . . . . . . 10
4.3 Payment in Respect of Certain Inventories . . . . 11


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ARTICLE FIVE

THE CLOSING


SECTION 5.1 Closing . . . . . . . . . . . . . . . . . . . . . 13
5.2 Effectiveness of Transactions . . . . . . . . . . 13
5.3 Deliveries by the Seller at Closing. . . . . . . . 13
5.4 Deliveries by the Buyer at Closing . . . . . . . . 15
5.5 Joint Deliveries by the Buyer and
the Seller at the Closing. . . . . . . . . . . . . 15


ARTICLE SIX


REPRESENTATIONS AND WARRANTIES OF THE SELLER
SECTION 6.1 Organization . . . . . . . . . . . . . . . . . . . 16
6.2 Authorization of Agreement . . . . . . . . . . . . 16
6.3 Compliance with Charter and Other
Instruments. . . . . . . . . . . . . . . . . . . . 16
6.4 Compliance with Laws . . . . . . . . . . . . . . . 17
6.5 Real Property. . . . . . . . . . . . . . . . . . . 17
6.6 Personal Property. . . . . . . . . . . . . . . . . 18
6.7 Validity of Leases and Contracts . . . . . . . . . 18
6.8 Permits and Licenses . . . . . . . . . . . . . . . 18
6.9 Litigation . . . . . . . . . . . . . . . . . . . . 19
6.10 Insurance Policies . . . . . . . . . . . . . . . . 19
6.11 Labor and Employment Matters . . . . . . . . . . . 19
6.12 No Brokers . . . . . . . . . . . . . . . . . . . . 20
6.13 Disclosure . . . . . . . . . . . . . . . . . . . . 20


ARTICLE SEVEN


REPRESENTATIONS AND WARRANTIES OF THE BUYER
SECTION 7.1 Organization . . . . . . . . . . . . . . . . . . . 20
7.2 Authorization of Agreement . . . . . . . . . . . . 20
7.3 Compliance with Charter and Other Instruments. . . 21
7.4 Consents and Approvals . . . . . . . . . . . . . . 21
7.5 Disclaimer of Additional and
Implied Warranties . . . . . . . . . . . . . . . . 21
7.6 No Brokers . . . . . . . . . . . . . . . . . . . . 22


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ARTICLE EIGHT

COVENANTS


SECTION 8.1 Conduct of Business Pending Closing. . . . . . . . 22
8.2 Access to Records. . . . . . . . . . . . . . . . . 23
8.3 Government Consents. . . . . . . . . . . . . . . . 25
8.4 Non-Government Consents. . . . . . . . . . . . . . 25
8.5 Taxes and Recording Charges. . . . . . . . . . . . 25
8.6 Non-Disclosure of
Confidential Information . . . . . . . . . . . . . 26
8.7 Further Assurances; Cooperation. . . . . . . . . . 26
8.8 Finished Goods . . . . . . . . . . . . . . . . . . 27
8.9 Terminal Arrangements. . . . . . . . . . . . . . . 27
8.10 Contacts with Customers. . . . . . . . . . . . . . 28
8.11 Satisfaction of Employee Obligations . . . . . . . 28
8.12 Distributions to Employees by the Seller . . . . . 28
8.13 Title and Survey Review. . . . . . . . . . . . . . 28


ARTICLE NINE

INDEMNIFICATION


SECTION 9.1 Survival of Representations,
Warranties and Covenants . . . . . . . . . . . . . 29
9.2 Agreement to Indemnify;
Minimum Obligation . . . . . . . . . . . . . . . . 29
9.3 Notice of Asserted Liability . . . . . . . . . . . 30
9.4 Time Limitation. . . . . . . . . . . . . . . . . . 30
9.5 Opportunity to Defend. . . . . . . . . . . . . . . 30


ARTICLE TEN


ENVIRONMENTAL MATTERS


Section 10.1 Covenants of the Seller. . . . . . . . . . . . . . 31
10.2 Covenants of the Buyer . . . . . . . . . . . . . . 33
10.3 Certain Understandings Regarding
Removal and Disposal of Hazardous
Wastes After Closing . . . . . . . . . . . . . . . 36
10.4 Indemnification for
Environmental Matters. . . . . . . . . . . . . . . 36
10.5 Sole and Exclusive Remedy. . . . . . . . . . . . . 42
10.6 Certain Understandings with
Respect to Pre-existing
Insurance Policies . . . . . . . . . . . . . . . . 43


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ARTICLE ELEVEN

CONDITIONS OF CLOSING


SECTION 11.1 Conditions to Obligations of Buyer . . . . . . . . 44
11.2 Conditions to Obligations of the Seller. . . . . . 45


ARTICLE TWELVE

MISCELLANEOUS


SECTION 12.1 Notices . . . . . . . . . . . . . . . . . . . . . 46
12.2 Headings. . . . . . . . . . . . . . . . . . . . . 47
12.3 Entire Agreement; Amendment . . . . . . . . . . . 47
12.4 Assignment. . . . . . . . . . . . . . . . . . . . 47
12.5 No Waiver . . . . . . . . . . . . . . . . . . . . 48
12.6 Risk of Loss. . . . . . . . . . . . . . . . . . . 48
12.7 Press Releases. . . . . . . . . . . . . . . . . . 48
12.8 Bulk Sales Law. . . . . . . . . . . . . . . . . . 49
12.9 Severability . . . . . . . . . . . . . . . . . . 49
12.10 Third Party Beneficiaries . . . . . . . . . . . . 49
12.11 Governing Law . . . . . . . . . . . . . . . . . . 49
12.12 Counterparts. . . . . . . . . . . . . . . . . . . 49


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EXHIBITS


Exhibit A Form of $10,000,000 Subordinated Note Exhibit B Form of Gas Purchase Agreement Exhibit C Form of Slack Wax and Petrolatum Purchase
Agreement Exhibit D Form of Crude Oil Purchase and Sale
Agreement Exhibit E Form of Environmental Notes Exhibit F Legal Opinion of Quaker State Corporation Exhibit G Legal Opinion of Gibson, Dunn & Crutcher


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SCHEDULES


Schedule 1.13 Remedial Work


Schedule 3.1(a)(i) McKean Plant Real Property


Schedule 3.1(a)(ii) McKean Easements, Right of Way
and Rail Crossing Agreements
Schedule 3.1(a)(iii) McKean Contracts and Lease Agreements


Schedule 3.1(a)(vi) McKean Vehicles


Schedule 3.1(a)(vii) McKean Permits, Licenses,
Certificates of Occupancy and
Registrations


Schedule 3.1(b)(i) Emlenton Wax Plant Real Property


Schedule 3.1(b)(ii) Emlenton Easements, Rights of
Way and Rail Crossing Agreements


Schedule 3.1(b)(iii) Emlenton Contracts and Lease Agreements
Schedule 3.1(b)(vi) Emlenton Vehicles
Schedule 3.1(b)(vii) Emlenton Permits, Licenses,
Certificates of Occupancy and
Registrations


Schedule 3.2(a) Coleville Station Assets


Schedule 3.3(a)(i) Product Equivalencies and Brand
Names to be Used for One Year
Schedule 3.3(a)(ii) Product Equivalencies and Brand
Names to be Used for the Term
of the Crude Oil Purchase and
Sale Agreement
Schedule 3.3(c) Customer Assets at the Facilities


Schedule 3.3(f) Computers and Data Processing Equipment


Schedule 3.3(g) Type of Products in Inventory


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Schedule 3.4 Assumed Liabilities


Schedule 4.3(d)(i) Fully Allocated February 1990
Processing Costs


Schedule 6.3 Encumbrances


Schedule 6.4 Compliance with Laws


Schedule 6.5(a) Permitted Exceptions


Schedule 6.5(b) Title Exceptions to be Removed
Prior to Closing


Schedule 6.6(a) Encumbrances and Third Party
Rights and Interests in
Personal Property


Schedule 6.6(b) Personal Property Constituting
Processing Units and Systems at
the Facilities


Schedule 6.8 Permits, Licenses, Approvals,
Consents, Franchises and
Authorizations Associated with
the Facilities


Schedule 6.9 Litigation


Schedule 6.10 Insurance Policies


Schedule 6.11 Labor and Employment Matters


Schedule 7.3 Conflicts and Consents


Schedule 8.8 Third Party Handling Charges


4755P


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ASSET PURCHASE AND SALE AGREEMENT


This Asset Purchase and Sale Agreement (the "Agreement") is made and entered into as of the 30th day of March, 1990, by and between PETROWAX PA INC., a Delaware corporation (the "Buyer"), and QUAKER STATE CORPORATION, a Delaware corporation (the "Seller").

W I T N E S S E T H

WHEREAS, the Seller desires to sell the Seller's manufacturing facilities known as the Emlenton Wax Plant located at Emlenton, Pennsylvania, and the McKean Plant located at Farmer's Valley, Pennsylvania, and certain related assets and the Buyer desires to purchase and accept the same.

NOW, THEREFORE, for and in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE I


DEFINITIONS


The following words and phrases, as used throughout this Agreement, shall have the respective meanings set forth below. Other terms not defined in this Article I shall have the respective meanings given to such terms elsewhere in this Agreement.

1.1 Compliance Costs: The term "Compliance Costs" shall mean any and all funds or payments expended by the Buyer or the Seller in order to conduct Compliance Work. Compliance Costs shall include any civil penalties arising from violations of the Environmental Laws.

1.2 Compliance Work: The term "Compliance Work" shall mean any work which is required by or conducted as a result of violations of the Environmental Laws. Compliance Work shall consist of bringing the Facilities into compliance with existing regulatory programs in effect on the Closing Date and permits issued thereunder the violation of which would subject the owner/operator to statutory civil penalties. Remedial Work shall not be considered Compliance Work for purposes of this


Agreement. Moreover, in no event shall replacement of or repair of the Facilities' sewer systems be considered Compliance Work.


1.3 Disposal: The term "Disposal" shall mean the discharge, deposit, injection, dumping, spilling, leaking, placing or releasing, active or passive, of any Hazardous Material into or on any air, land or water so that such Hazardous Material or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including groundwaters, and any grammatical variation thereof shall have the correlative meaning.

1.4 Environmental Laws: The term "Environmental Laws" shall mean the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. Section 9601, et seq.), the Resource Conservation and Recovery Act, as amended ("RCRA") (42 U.S.C. Section 6901, et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), the Safe Drinking Water Act, as amended (42 U.S.C. Section 300f, et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. Section 136, et seq.), the Clean Air Act, as amended (42 U.S.C. Section 7401, et seq.), all as amended or supplemented and any analogous state or local statutes and the regulations adopted pursuant thereto.


1.5 Facilities: The term "Facilities" shall mean the land being conveyed hereunder and structures, other appurtenances and improvements on the land, comprising the production plants owned and operated by the Seller in Emlenton, Pennsylvania and Farmer's Valley, Pennsylvania prior to execution of this Agreement.

1.6 Financial Responsibility: The term "Financial Responsibility" shall mean the requirement to establish one or more of the mechanisms for demonstrating the availability of funds to close and/or otherwise manage any unit or facility regulated by 25 Pa. Code 75.301 et seq. or 40 C.F.R. Parts 264 and 265 and to provide liability coverage for bodily injury and property damage to third parties arising from the use of such unit or facility.

1.7 Hazardous Materials: The term "Hazardous Materials" shall mean (1) Hazardous Substances as defined in Section 101 of CERCLA; (2) petroleum, petroleum


2


products and petroleum wastes; (3) Pollutants or Contaminants as defined in Section 101 of CERCLA, and (4) Hazardous Wastes.


1.8 Hazardous Wastes: The term "Hazardous Wastes" shall mean hazardous wastes as such term is defined in 40 C.F.R. Part 261.3, as amended.

1.9 Maintenance Costs: The term "Maintenance Costs" shall mean any and all funds or payments expended for Maintenance Work.

1.10 Maintenance Work: The term "Maintenance Work" shall mean any work performed to correct wear or to maintain the Facilities in operational condition, including, but not limited to, the replacement or repair of process equipment, structural components (e.g., plant sewer system), removal and Disposal of asbestos, and emptying and cleaning of process, treatment and storage containers, such as tanks and roll-off boxes.

1.11 Regulatory Authorities: The term "Regulatory Authorities" shall mean the United States, the U.S. Environmental Protection Agency, the Commonwealth of Pennsylvania, the Pennsylvania Department of Environmental Resources or any political subdivision with authority to enforce the Environmental Laws.

1.12 Remedial Costs: The term "Remedial Costs" shall mean any and all funds or payments reasonably expended by the Buyer or the Seller in order to conduct Remedial Work.

1.13 Remedial Work: The term "Remedial Work" shall mean any work performed by the Buyer or the Seller pursuant to, in accordance with, and only to the extent required by any law, statute, rule, regulation, ordinance, directive or other similar provision established by applicable law, including, without limitation, Environmental Laws, in order to investigate, evaluate, treat and/or clean up any Hazardous Materials Disposed of, discharged or released at the Facilities as of the Closing Date (as hereinafter defined). For purposes of this Agreement, Remedial Work shall include, but not be limited to, response or remedial actions under CERCLA, the Pennsylvania Hazardous Sites Cleanup Act and sections 3004(u), 3008(h) and 7003 of RCRA. Remedial Work shall also include any such work, response or remedial actions required to allow the Buyer to make use of, modify, expand or add to the operations at the Facilities consistent with


3


their current use. Any actions taken as a result of the environmental site conditions identified in Schedule 1.13 hereto shall also constitute Remedial Work. In no event shall replacement of or repair of the Facilities' sewer systems be considered Remedial Work.


ARTICLE II


PURCHASE OF FACILITIES BY THE BUYER

2.1 PURCHASE OF FACILITIES. Subject to the terms and conditions herein contained, the Buyer agrees to purchase from the Seller and the Seller agrees to transfer, sell, assign and convey to the Buyer the Facilities and the property, real and personal, tangible and intangible, associated therewith as more fully specified in Section 3.1 hereof (the "Assets").


ARTICLE III


ASSETS ACQUIRED AND LIABILITIES ASSUMED

3.1 ASSETS. The Assets to be transferred hereunder shall consist of all items of property, plant, pipeline and equipment of the Seller used in connection with the operation of the Facilities as the same shall exist on the Closing Date, including without limitation:

(a) McKean Plant Assets:


i. That certain real property located in McKean County,
Pennsylvania, commonly known as the McKean Plant and more
particularly described in Schedule 3.1(a)(i), together with
all appurtenances thereto and all buildings, railroad
sidings, bridges, water wells, and other improvements
located thereon.

ii. All of the Seller's rights under all easements, rights of
way and rail crossing agreements listed on Schedule
3.1(a)(ii) hereto.

iii. All of the Seller's rights under those lease agreements and
other contracts listed on Schedule 3.1(a)(iii) hereto.


4


iv. All equipment and fixtures associated with and located at
the McKean Plant, including but not limited to all tanks
both above and below ground, pumps, piping, conveyors,
furnaces, process units, loading facilities, tools,
laboratory equipment and office furniture and equipment.

v. The inventory of materials and supplies and work in process
located at the McKean Plant as of the time of Closing (as
hereinafter defined).


vi. All of the vehicles set forth on Schedule 3.1(a)(vi)
hereto.


vii. All of the Seller's rights under those permits, licenses,
certificates of occupancy and registrations related to the
ownership and operation of the McKean Plant, including but
not limited to those listed on Schedule 3.1(a)(vii) hereto.


viii. All of the Seller's records pertaining to the sale of any
and all goods (excluding finished motor oils) manufactured
at or shipped from the McKean Plant, since January 1, 1985,
including without limitation customer lists, invoices,
names of carriers used and payment histories.


(b) Emlenton Wax Plant Assets:

i. That certain real property located in Venango County,
Pennsylvania, commonly known as the Emlenton Wax Plant and
more particularly described in Schedule 3.1(b)(i), together
with all appurtenances thereto and all buildings, railroad
sidings, bridges, water wells, and other improvements
located thereon.

ii. All of the Seller's rights under all easements, rights of
way and rail crossing agreements listed on Schedule
3.1(b)(ii) hereto.


5


iii. All of the Seller's rights under those lease agreements
and other contracts listed on Schedule 3.1(b)(iii)
hereto.

iv. All equipment and fixtures associated with and located
at the Emlenton Wax Plant, including but not limited to
all tanks both above and below ground, pumps, piping,
conveyors, furnaces, process units, loading facilities,
tools, laboratory equipment and office furniture and
equipment.

v. The inventory of materials and supplies and work in
process located at the Emlenton Wax Plant as of the
time of Closing.


vi. All of the vehicl ...