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EXHIBIT 99.3
PURCHASE AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered into this
12th day of December, 1996, among QUAKER STATE CORPORATION, a Delaware
corporation ("Quaker State"), BLUE CORAL, INC., a Delaware corporation ("Blue
Coral"), XXXXXXX X. XXXXXXX (the "Executive"), XXXX XXXXXXX ("JA") and the
GST-EXEMPT TRUST FBO XXXXX XXXXXXX, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx,
Trustees (the "Trust"). Unless the context otherwise clearly requires, when
used herein the term "Company" shall mean Quaker State and all its subsidiary
entities, including, without limitation, Blue Coral. Except as otherwise
indicated, capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement and Plan of Merger dated as of June 7,
1996, as amended on October 11, 1996, among the Company, QSBC Acquisition
Corp., Blue Coral and the Blue Coral Stockholders (the "Merger Agreement").
WITNESSETH:
WHEREAS, Executive is a director and Vice Chairman of Quaker
State and is an officer and director of Blue Coral; and
WHEREAS, Executive is the beneficial owner of 2,143,647 shares of
Quaker State's Capital Stock, par value $1.00 per share ("Capital Stock"),
742,713 of which are currently held in escrow pursuant to the Escrow Agreement
dated June 28, 1996 (the "Escrow Agreement"), among Quaker State, Blue Coral,
the former stockholders of Blue Coral (the "Former Blue Coral Stockholders")
and United States Trust Company of New York, as escrow agent (the "Escrow
Agent"); and
WHEREAS, the Trust is the beneficial owner of 174,082 shares of
Capital Stock, 60,985 of which are held in escrow pursuant to the Escrow
Agreement; and
WHEREAS, Executive and Quaker State are parties to an Employment
Agreement dated as of June 28, 1996 (the "Employment Agreement"), and a Stock
Option Agreement dated as of July 25, 1996 (the "Stock Option Agreement"); and
WHEREAS, Executive and Quaker State desire to enter into an
arrangement whereby Quaker State will repurchase certain shares of Capital
Stock owned by Executive and the Trust and whereby Executive and Quaker State
will agree to terminate the Employment Agreement and the Stock Option Agreement
and to enter into a consulting agreement; and
WHEREAS, in furtherance of the foregoing, the parties have agreed
that upon completion of the transactions contemplated by this Agreement,
Executive shall resign from all positions he holds with the Company (including
his position as a director of Quaker State); and
WHEREAS, Quaker State has agreed to release from escrow a portion
of the number of shares of Capital Stock deposited by the Former Blue Coral
Stockholders as security for their indemnification obligations to Quaker State
under the Merger Agreement and to reduce the amount of the maximum liability of
the Company and the Former Blue Coral Stockholders for certain indemnifiable
claims under the Merger Agreement;
NOW, THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound,
Quaker State, Executive and the Trust agree as follows:
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1. PURCHASE OF CAPITAL STOCK AND STOCK OPTION PAYMENT. At
the Closing (as defined in Section 3 of this Agreement):
(a) Quaker State shall purchase from Executive, and Executive
shall sell to Quaker State, 1,400,934 shares of Capital Stock held of record by
Executive at a price per share of $16, for a total payment in respect thereof
of $22,414,944;
(b) Quaker State shall purchase from the Trust, and the Trust
shall sell to Quaker State, 150,000 shares of Capital Stock held beneficially
or of record by the Trust at a price per share of $16, for a total payment in
respect thereof of $2,400,000; and
(c) Quaker State shall pay to Executive the sum of $379,375 in
complete cancellation of the options to purchase 250,000 shares of Capital
Stock granted to Executive under the Stock Option Agreement.
All amounts to be paid to Executive or the Trust under this
Section 1 shall be payable on the Closing Date by electronic transfer of
immediately available funds to an account or accounts designated by Executive
and the Trust, respectively. Subject to the accuracy of the representations of
the Executive and the Trust in Section 17(c) hereof and provided that Quaker
State has not received an opinion of its independent auditors and an opinion of
counsel of the stature of Debevoise & Xxxxxxxx that Quaker State cannot under
current federal tax law report on its United States federal income tax return
the purchase and sale of Capital Stock hereunder as a sale or exchange of such
Capital Stock for federal, state and local tax purposes to which Section 302(b)
of the Internal Revenue Code of 1986, as amended (the "Code"), applies, Quaker
State agrees to treat the purchase and sale of Capital Stock hereunder as a
sale or exchange of such Capital Stock for federal, state and local tax
purposes to which Section 302(b) of the Code applies, and, accordingly, not as
a distribution within the meaning of Section 301 of the Code.
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2. RELEASE OF ESCROWED SHARES. Upon the execution of this
Agreement, Executive, as the Blue Coral Stockholders' Representative (as
defined in the Escrow Agreement), and Quaker State shall execute and deliver to
the Escrow Agent joint written instructions instructing the Escrow Agent (a) to
promptly deliver to Quaker State's transfer agent the certificate representing
the Escrowed Shares (as defined in the Escrow Agreement) held by the Escrow
Agent pursuant to the Escrow Agreement for the purpose of reissuing the shares
of Capital Stock represented by such certificate in multiple certificates
registered and denominated as follows: (i) one certificate (the "Escrow
Certificate") representing 340,136 shares of Capital Stock (representing the
quotient of $5,000,000 divided by $14.70 per share), as adjusted for any stock
split, stock reclassification, recapitalization or other similar transaction
occurring on or after the date hereof through the Closing Date, bearing the
legend (the "Legend") indicated in Section 14.4 of the Merger Agreement and
registered in the name "United States Trust Company of New York as Escrow Agent
under Escrow Agreement, dated June 28, 1996, by and among Quaker State
Corporation and the Blue Coral Stockholders (as defined therein)", and (ii)
multiple certificates (collectively, the "Released Certificates") representing
in the aggregate the balance of Escrowed Shares not represented by the Escrow
Certificate, as adjusted for any stock split, stock reclassification,
recapitalization or other similar transaction occurring on or after the date
hereof through the Closing Date, each bearing the Legend and registered in the
various names of the Former Blue Coral Stockholders (or as they may direct, it
being understood that if any Former Blue Coral Stockholder causes any
certificate to be registered in any name other than such Former Blue Coral
Stockholder, such Former Blue Coral Stockholder shall pay all transfer taxes
associated therewith or relating thereto), respectively, such Escrowed Shares
being allocated among the Former Blue Coral Stockholders in accordance with the
Ownership Certificate (as defined in the Escrow Agreement) and such Released
Certificates being in such denominations for each Former Blue Coral Stockholder
as Executive designates in such instructions, and (b) at Closing, to (x) retain
the Escrow Certificate pursuant to the terms of the Escrow Agreement, and (y)
deliver the Released Certificates to Executive, as the Blue Coral Stockholders'
Representative, or to one or more custodians designated by him. The parties
acknowledge that certain of the shares of Capital Stock being sold by the Trust
pursuant to Section 1(b) of this Agreement will be represented by a Released
Certificate.
3. CLOSING. The transactions contemplated by this Agreement
shall be consummated (the "Closing") on December 19, 1996, or on such other
date as may be mutually agreed upon by the parties (the "Closing Date"). The
Closing shall take place at 10:00 a.m., local time, on the Closing Date at the
offices of Xxxxx & Xxxxxxxxx, 0000 Xxxx 0xx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx
00000.
4. CLOSING CONDITIONS.
(a) The obligations of Quaker State to effect the Closing are
subject to the fulfillment at or prior to the Closing of the following
conditions:
(i) the representations and warranties of Executive, JA and
the Trust set forth in Section 17 hereof shall be true and
correct in all material respects at Closing and Executive, JA and
the Trust shall have delivered to Quaker State a certificate in
the form of Exhibit A hereto to that effect;
(ii) Executive and the Trust shall have delivered to Quaker
State certificates representing the shares of Capital Stock being
purchased hereunder, duly endorsed or accompanied by duly
executed stock powers;
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(iii) Executive shall have delivered to Quaker State his
resignation from all positions he holds with the Company in the
form of Exhibit B hereto;
(iv) Executive shall have executed and delivered a Consulting
Agreement (the "Consulting Agreement") in the form of Exhibit C
hereto;
(v) Executive, JA and the Trust shall have delivered to the
Company an acknowledgment in the form of Exhibit D hereto to the
effect that as of the Closing Date they have no claims for
indemnification under the Merger Agreement against the Parent
Indemnitees and that they have no knowledge of any facts or
circumstances that could give rise to such an indemnifiable
claim;
(vi) JA shall have executed and delivered to Quaker State his
resignation from all positions he holds with the Company in the
form of Exhibit E hereto;
(vii) JA shall have executed and delivered to Quaker State a
Severance Agreement (the "Severance Agreement") in the form of
Exhibit F hereto; and
(viii) the transactions contemplated by this Agreement,
including specifically Quaker State's purchase of the shares of
Capital Stock from Executive and the Trust, shall have been
approved by the Board of Directors of Quaker State in a manner
sufficient to satisfy the requirements of Rule 16b-3(b)(3) of the
Securities and Exchange Commission (the "Commission") under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
(b) The obligations of Executive, JA and the Trust to effect
the Closing are subject to the fulfillment at or prior to the Closing of the
following conditions:
(i) the representations and warranties of the Company set
forth in Section 16 hereof shall be true and correct in all
material respects at Closing and the Company shall have delivered
to Executive a certificate in the form of Exhibit G hereto to
that effect;
(ii) the Escrow Agent shall have delivered the Released
Certificates as contemplated by Section 2;
(iii) the transactions contemplated by this Agreement,
including specifically Quaker State's purchase of the shares of
Capital Stock from Executive and the Trust, shall have been
approved by the Board of Directors of Quaker State in a manner
sufficient to satisfy the requirements of Rule 16b-3(b)(3) of the
Commission under the Exchange Act, and Quaker State shall have
delivered to Executive resolutions of Quaker State's Board of
Directors reflecting such approval, certified by the Secretary of
Quaker State;
(iv) Quaker State shall have executed and delivered (or caused
to be executed and delivered by Blue Coral in the case of the
Lease Termination) the Consulting Agreement, the Severance
Agreement and the Lease Termination Agreement (as defined in
Section 6 of this Agreement);
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(v) Quaker State and Blue Coral shall have delivered to
Executive an acknowledgment in the form of Exhibit H hereto to
the effect that, except as set forth on Schedule 16(c) hereto, as
of the Closing Date they have no claims for indemnification
against the Former Blue Coral Stockholders, their respective
Affiliates and the officers, directors, employees, agents,
advisers and representatives of each such Person (the "Xxxxxxx
Indemnitees") and that the Company has no knowledge of any facts
or circumstances that could give rise to such an indemnifiable
claim;
(vi) Quaker State shall have delivered to Executive and the
Trust the purchase price for the shares against delivery of the
certificates for the shares of Capital Stock being purchased
pursuant to Section 1 of this Agreement;
(vii) Quaker State shall have paid to Executive the amount
required to be paid by Section 1(c) of this Agreement;
(viii) Quaker State and Blue Coral shall have executed and
delivered an amendment to the Merger Agreement in the form of
Exhibit I hereto (the "Merger Amendment") to provide (A) for
reduction of the amount specified in the last line of Section
11.3(b) of the Merger Agreement from $15,000,000 to $5,000,000
and (B) that if, on the third anniversary of the Closing Date (as
defined in the Merger Agreement for this purpose) the Special
Shares have not vested or if at any time prior thereto they have
become incapable of vesting, Quaker State shall promptly (but in
no event more than ten (10) business days) deliver to each Former
Blue Coral Stockholder, by electronic transfer of immediately
available funds, an amount equal to the product of i) the "Fair
Value of the Special Shares" times ii) the fraction applicable to
such Former Blue Coral Stockholder set forth on the Ownership
Schedule. For purposes of the amendment to the Merger Agreement,
the term Fair Value of the Special Shares shall mean the product
of iii) the aggregate number of Special Shares times iv) the
closing price of a share of Capital Stock as reported on the New
York Stock Exchange on such third anniversary date or on the date
the Special Shares have become incapable of vesting; and
(ix) Quaker State shall not have received an opinion of counsel
to the effect that Quaker State cannot under current federal tax
law report on its United States federal income tax return the
purchase and sale of Capital Stock hereunder as a sale or
exchange of such Capital Stock for federal, state and local tax
purposes to which Section 302(b) of the Code applies.
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5. EMPLOYMENT DURING TRANSITION PERIOD; TERMINATION OF
EMPLOYMENT; CERTAIN EMPLOYEES.
(a) Executive and Quaker State agree that Executive's employment
with the Company shall terminate in all respects as of the Closing Date as
provided below. Through and including the Closing Date, Executive shall
continue to be employed by the Company and shall continue to receive the
salary, benefits and perquisites he currently receives, except that if the
transactions contemplated by this Agreement are closed as provided herein,
Executive shall not be entitled to any bonus compensation. As provided in the
Consulting Agreement, during such period and until February 1, 1997, Executive
shall be entitled to retain, at no cost to Executive, his current office and
secretarial support at the corporate headquarters of Blue Coral in Cleveland,
Ohio. From the date hereof until the Closing Date, Executive shall perform
such functions and shall render such assistance to the Chief Executive Officer
of Quaker State as the Board of Directors or the Chief Executive Officer of
Quaker State may reasonably request. Quaker State and Executive entered into
an Employment Agreement dated June 28, 1996 (the "Employment Agreement"). Upon
the Closing, the Employment Agreement and all rights and obligations of the
parties thereunder shall terminate and be of no further force or effect, except
that (i) Executive shall remain bound by Paragraphs 5(a), 5(b) and 5(d) of the
Employment Agreement, and (ii) Quaker State will (A) distribute to Executive
(or as Executive may direct) any vested retirement benefits from any Company
plan in which Executive participates, (B) distribute to Executive (or as
Executive may direct) base salary earned by the Executive under the Employment
Agreement as of the Closing Date to the extent not theretofore paid, (C) make
available to Executive the benefits continuation rights to which he is entitled
under the Consolidated Omnibus Budget Reconciliation Act of 1985, and (D) pay
expense reimbursements accrued by Executive under Paragraph 4(c) of the
Employment Agreement as of the Closing Date to the extent not theretofore paid.
Subject to the preceding provisions of this Section 5(a), until the
consummation of the transactions contemplated by this Agreement, Executive and
Quaker State will remain bound by the terms of the Employment Agreement.
(b) Upon execution of this Agreement, Executive shall be
entitled to solicit for employment Xxxxxxx X. Xxxx and Xxxxxx Xxxxxxxxxxx (the
"Employees") and JA, and the Employees and JA shall be entitled to accept such
employment without interference from the Company. Notwithstanding the
preceding sentence, (i) the Company shall not terminate and shall not permit
Blue Coral to terminate the employment of the Employees prior to the earlier to
occur of (A) the Closing or (B) December 31, 1996, but in no event will the
Company be obligated to employ the Employees beyond the earlier to occur of (C)
the Closing or (D) December 31, 1996, and (ii) neither the Company nor Blue
Coral will alter the duties or conditions of employment of the Employees in any
material respect from those existing as of the date hereof. Until consummation
of the transactions contemplated by this Agreement, JA and Blue Coral will
remain bound by the terms of the Employment Agreement dated as of June 28,
1996, between JA and Blue Coral (the "JA Employment Agreement").
Notwithstanding any provision of this Section 5(b) to the contrary, the Company
may terminate the Employees for "Cause." For purposes of the preceding
sentence, "Cause" shall have the meaning ascribed thereto in the JA Employment
Agreement.
6. AGREEMENT RELATING TO VALLEY BELT ROAD PROPERTY. On the
Closing Date, Quaker State shall cause Blue Coral to execute and deliver to
JWA, Ltd. a document, in the form of Exhibit J attached hereto (the "Lease
Termination Agreement"), evidencing the termination of the Lease Agreement,
dated June 28, 1996, between Blue Coral and JWA, Ltd. (the "Lease") and the
termination of the Assignment of Agreement of Purchase and Sale,
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dated June 28, 1996, between JWA, Ltd. and Blue Coral (the "Assignment").
Effective as of the Closing, Quaker State, for and on behalf of itself and the
Company, agrees to indemnify and hold JWA, Ltd. (and its representatives,
members, managers, officers, employees and agents) harmless from and against
any and all claims, demands, losses, liabilities, damages and expenses
(including reasonable attorneys' fees) arising out of or in connection with (a)
the failure of the Company to perform in any respect any of its obligations
under this Section 6 (including, without limitation, performing its obligations
under the Purchase Agreement, dated as of March 18, 1996, between The Valley
Belt Limited Partnership and Blue Coral (the "Purchase Agreement")) or (b) the
ownership or lease of the property described in the Purchase Agreement by the
Company from and after the Closing Date. Quaker State agrees that the Company
shall not have any claim against the Former Blue Coral Stockholders under
Article XI of the Merger Agreement or otherwise based on non-disclosure of the
Purchase Agreement in Schedule 4.10 or in any other Schedule to the Merger
Agreement.
7. INDEMNIFICATION.
(a) For the entire period from the Closing Date until at least
six years thereafter (i) Quaker State will provide Executive and JA with rights
to indemnification and exculpation from liability that are set forth in its
certificate of incorporation and by-laws as of the date of this Agreement, and
(ii) Executive, in his capacity as a director and officer of the Company, and
JA, in his capacity as an officer of Blue Coral, shall be covered by directors'
and officers' liability insurance to the same extent as Quaker State's
directors and officers are covered on the date hereof.
(b) Quaker State, for and on behalf of itself and the Company,
hereby agrees to indemnify and hold Executive, JA and the Trust (and the
trustees and all successor trustees of the Trust) harmless from and against any
and all claims, demands, losses, liabilities, damages and expenses (including
reasonable attorneys' fees) arising out of or in connection with any claim made
by a third party unaffiliated with the Executive, JA or the Trust (whether any
such claim is made in the name of such third party or on behalf of the Company)
with respect to the purchase of Capital Stock contemplated by Sections 1(a) and
(b) of this Agreement or the payment to Executive referred to in Section 1(c)
of this Agreement.
8. PROFESSIONAL FEES; WAIVER OF CONFLICTS. Each party shall
be responsible for the payment of his or its respective legal fees and costs
(and related disbursements) incurred in connection with the negotiation and
execution of this Agreement. In connection with the negotiation and
preparation of this Agreement and in any dispute arising under this Agreement
or relating to the transactions contemplated hereby or arising under the Merger
Agreement, Executive, JA, the Trust and the other Former Blue Coral
Stockholders shall be entitled to engage Xxxxx & Xxxxxxxxx to represent them,
Quaker State, for and on behalf of itself and the Company, fully waiving any
and all conflicts of interest or potential conflicts of interest arising from
any such representation.
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9. RELEASE BY EXECUTIVE, THE TRUST AND JA. Effective as of
the Closing, Executive, in his capacity as officer and director of the Company
and as a stockholder of Quaker State, the Trust, in its capacity as a
stockholder of the Company, and JA, in his capacity as an officer of Blue Coral
and as a stockholder of Quaker State hereby release, dismiss and forever
discharge the Parent Indemnitees from and against any and all Losses which
Executive, JA or the Trust now has or may have had with respect to any actions
taken by the Company or any of its respective officers, directors or employees
after June 28, 1996, through the Closing Date. Each of Executive, JA and the
Trust further covenants and agrees that such party will not initiate,
participate in or affirmatively encourage any other person to initiate, or
participate in any suit or action before any federal, state or local judicial
or administrative forum against any Parent Indemnitee with respect to any
matter covered by the foregoing release. The release and covenant set forth in
this Section 9 shall not apply to the obligations of the Company arising under
this Agreement or any of the agreements referred to in Section 4 hereof.
10. RELEASE BY THE COMPANY. Effective as of the Closing,
Quaker State, for and on behalf of itself, the Company and the Parent
Indemnitees, hereby releases, dismisses and forever discharges the Xxxxxxx
Indemnitees from any and all Losses with respect to any actions taken by any of
the Xxxxxxx Indemnitees on or after June 28, 1996 as an officer, director or
employee of the Company through the Closing Date. Quaker State, for and on
behalf of the Company and the Parent Indemnitees, further covenants and agrees
that it will not initiate, or affirmatively encourage any other person to
initiate, any suit or action before any federal, state or local judicial or
administrative forum against any Xxxxxxx Indemnitee with respect to any matter
covered by the foregoing release. This release shall not, however, apply to
the obligations of Executive, the Trust or JA arising under this Agreement or
any of the agreements referred to in Section 4 hereof.
11. NON-DISCLOSURE; STATEMENTS TO THIRD PARTIES.
(a) Except as otherwise agreed to by all the parties hereto or
as may be required to carry out the terms of this Agreement and except to the
extent that this Agreement or the terms hereof must be disclosed pursuant to an
order of a judicial or governmental authority or a self-regulatory body or
pursuant to a law or regulation of any governmental authority having
jurisdiction (including, but not limited to, the disclosure and filing
requirements of the Commission, the New York Stock Exchange or the Pacific
Stock Exchange) (any of the foregoing, a "Disclosure Requirement"), the parties
will keep this Agreement and transactions contemplated hereby confidential and
no party hereto, or any of its employees, representatives or agents, will make
any public announcements or communicate with any employees of the Company
regarding the subject matter of this Agreement until Quaker State's Board of
Directors has approved and authorized the transactions contemplated hereby and
a certified copy of the authorizing resolution has been delivered to Executive.
Thereafter, unless required pursuant to a Disclosure Requirement, Quaker State
and Executive will agree on and cooperate in making all public announcements
and all communications with employees, and unless required pursuant to a
Disclosure Requirement, no party will make any public announcement or
communicate with employees unless the other party has agreed to the substance
of such announcement or communication. Executive shall have the authority for
and on behalf of the Trust and JA to agree on and consent to all public
announcements and employee communications under this Section 11(a).
(b) None of Executive, the Trust, JA or the Company or any of
the Trust's trustees or the Company's officers, directors or employees (or
officers, directors or employees
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of its subsidiaries) shall, directly or indirectly, make or cause to be made
any statements to any third parties criticizing or disparaging the other or
commenting on the character or business reputation of the other or relating to
the subject matter of this Agreement or relating to the products, services,
business operations, directors, officers or employees of the Company, but this
provision shall not limit the ability or responsibility of either party to
respond to the best of its knowledge to a Disclosure Requirement or any
administrative or regulatory inquiries or to testify to the best of its
knowledge in legal proceedings.
12. NOTICES. All notices, requests, demands, letters, waivers
and other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a)
delivered personally, (b) mailed, certified or registered mail with postage
prepaid, (c) sent by next-day or overnight mail or delivery, or (d) sent by
fax, as follows:
To Executive:
00 Xxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Fax: 000-000-0000
To the Trust:
Xxxxxxx X. Xxxx, Trustee
00000 Xxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxx 00000
In each instance with a copy to:
Xxxxx & Xxxxxxxxx
0000 Xxxx Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Fax: 000-000-0000
To Quaker State:
Quaker State Corporation
000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Secretary
Fax: 000-000-0000
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With a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Fax: 000-000-0000
or to such other person or address as any party shall specify by notice in
writing to the party or parties entitled to notice. All such notices,
requests, demands, letters, waivers and other communications shall be deemed to
have been received (i) if by personal delivery on the day of delivery, (ii) if
by certified or registered mail, on the fifth business day after the mailing
thereof, (iii) if by next-day or overnight mail or delivery, on the next day
following the day on which it was sent or (iv) if by fax, on the next day
following the day on which such fax was sent, provided that a copy is also sent
by certified or registered mail or next-day or overnight mail or delivery.
13. GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement (and every other issue arising hereunder)
shall be governed by the laws of the State of Delaware, without giving effect
to the principles of conflicts of laws of such state.
14. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by each party hereto. No waiver by any party
hereto at any time of any breach by any other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
15. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon and inure to the
benefit of Quaker State and Blue Coral and any successor of or to Quaker State
or Blue Coral (whether by merger or otherwise) but shall not otherwise be
assignable or delegable by Quaker State or Blue Coral except for an assignment
and delegation to the purchaser of all or substantially all of the assets of
Quaker State or Blue Coral or the purchaser of all of the Blue Coral Capital
Stock owned by Quaker State.
(b) This Agreement shall inure to the benefit of and be
enforceable by JA's and Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees and/or legatees and
by the Trust's trustees (including successor trustees), beneficiaries or
successors but shall not otherwise be assignable or delegable by any of the
foregoing parties.
(c) This Agreement is personal in nature and none of the parties
hereto shall, without the consent of the other parties, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 15.
16. REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The
Company hereby represents and warrants to Executive and the Trust that:
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(a) Quaker State has the necessary corporate power and
authority to enter into this Agreement; the execution hereof and the purchase
from Executive and the Trust of shares of Capital Stock contemplated hereby
have been duly authorized by the Board of Directors of Quaker State; and this
Agreement constitutes the valid and binding agreement of Quaker State;
(b) the execution and delivery of this Agreement by Quaker
State does not, and the performance of its obligations hereunder will not, (i)
constitute a breach or violation of, or a default under, any applicable law,
rule or regulation or any applicable judgment, decree, order, governmental
permit or any license, agreement, indenture, instrument or understanding of
Quaker State or to which Quaker State is subject, or (ii) constitute a breach
or a violation of, or a default under, the articles of incorporation or bylaws
of Quaker State; and the performance by Quaker State of its obligations
hereunder will not require any consent or approval under any such law, rule,
regulation, judgment, decree, order, governmental permit or license or the
consent or approval of any other party to any such agreement, indenture,
instrument or understanding and will not result in any liability on the part of
Executive or the Trust for so-called "short-swing profits" under Section 16(b)
of the Exchange Act or the rules and regulations of the Commission thereunder;
and
(c) as of the date hereof, neither Quaker State nor Blue Coral
has any claims for indemnification under the Merger Agreement against the
Xxxxxxx Indemnitees and, except as set forth on Schedule 16(c) hereto, neither
has knowledge of any facts or circumstances that could give rise to such an
indemnifiable claim.
17. REPRESENTATIONS AND WARRANTIES BY EXECUTIVE, JA AND THE
TRUST. Executive, JA and the Trust hereby represent and warrant to Quaker
State that:
(a) each has the necessary power and authority to enter into
this Agreement; and this Agreement constitutes the valid and binding agreement
of each of Executive, JA and the Trust;
(b) the execution and delivery of this Agreement by Executive,
JA and the Trust does not, and the performance of their respective obligations
hereunder will not, (i) constitute a breach or violation of, or a default
under, any applicable law, rule or regulation or any applicable judgment,
decree, order, governmental permit or any license, agreement, indenture,
instrument or understanding of Executive, JA or the Trust or to which any of
them is subject, or (ii) constitute a breach or a violation of, or a default
under, the trust documents of the Trust; and the performance by each of them of
their respective obligations hereunder will not require any consent or approval
under any such law, rule, regulation, judgment, decree, order, governmental
permit or license or the consent or approval of any other party to any such
agreement, indenture, instrument or understanding;
(c) Under Section 318 of the Code, Executive constructively owns
2,581,008 shares of Capital Stock and the Trust constructively owns 2,317,729
shares of Capital Stock. The shares of Capital Stock being sold to Quaker
State by Executive under Section 1(a) hereof and the shares of Capital Stock
being sold to Quaker State by the Trust under Section 1(b) hereof are owned by
Executive and the Trust, respectively, free and clear of any liens or claims of
any third party; and
(d) as of the date hereof, neither Executive, JA nor the Trust
has any claims for indemnification under the Merger Agreement against the
Parent Indemnitees and none of
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such parties has knowledge of any facts or circumstances that could give rise
to such an indemnifiable claim.
18. ENTIRE AGREEMENT. This Agreement, together with the
Consulting Agreement, the XX Xxxxxxxxx Agreement, the Lease Termination
Agreement and the Merger Amendment, constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes all
prior verbal or written negotiations, agreements, covenants, communications,
understandings, commitments, representations or warranties, whether oral or
written, by any party hereto or any of its representatives pertaining to such
subject matter; provided, however, that except as expressly provided herein,
the Merger Agreement, the Escrow Agreement, the Standstill Agreement dated June
28, 1996, between Quaker State and Executive, and the Registration Rights
Agreement dated June 28, 1996, among Quaker State and the Former Blue Coral
Stockholders shall remain in full force and effect in accordance with their
respective terms.
19. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same Agreement.
20. CAPTIONS AND SECTION HEADINGS. Captions and Section
headings used herein are for convenience and are not part of this Agreement and
shall not be used in construing it.
21. FURTHER ASSURANCES. Each party hereto shall execute such
additional documents and do such additional things as may reasonably be
requested by the other party to effectuate the purposes and provisions of this
Agreement.
22. CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring either party by virtue of the authorship of
any of the provisions of this Agreement.
23. TERMINATION. Unless extended in a written agreement
signed by each of the parties hereto, this Agreement shall terminate and no
party shall have any further liability hereunder if the Closing has not
occurred on or before December 23, 1996.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
QUAKER STATE CORPORATION
By:___________________________
Name:______________________
Title:_____________________
BLUE CORAL, INC.
By:___________________________
Name:______________________
Title:_____________________
______________________________
Xxxxxxx X. Xxxxxxx
______________________________
Xxxx Xxxxxxx
______________________________
Xxxxxx X. Xxxxxx, as Trustee
of the GST-Exempt Trust FBO
Xxxxx Xxxxxxx
______________________________
Xxxxxxx X. Xxxx, as Trustee of
the GST-Exempt Trust FBO Xxxxx
Xxxxxxx
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SCHEDULE 16(c)
Quaker State Corporation has received notices in a proceeding
captioned State of California v. Southland Oil, Inc., No. 92-6344WJR in the
U.S. District Court for the Central District of California. XxXxx Chemical
Company is defendant in this proceeding, apparently as a potentially
responsible party with respect to a waste disposal site. Quaker State
Corporation has no information indicating the amount of potential liability of
XxXxx Chemical Company in this matter.
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EXHIBIT A
CERTIFICATE
The undersigned each hereby certify pursuant to Section 4(a)(i)
of the Purchase Agreement, dated as of December ___, 1996, among QUAKER STATE
CORPORATION, a Delaware corporation, XXXXXXX X. XXXXXXX, XXXX XXXXXXX and the
GST- EXEMPT TRUST FBO XXXXX XXXXXXX, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx,
Trustees (the "Purchase Agreement"), that the representations and warranties of
the undersigned set forth in Section 17 of the Purchase Agreement are true and
correct in all material respects as of the date hereof.
______________________________
Xxxxxxx X. Xxxxxxx
______________________________
Xxxx Xxxxxxx
______________________________
Xxxxxx X. Xxxxxx, as Trustee
of the GST-Exempt Trust FBO
Xxxxx Xxxxxxx
______________________________
Xxxxxxx X. Xxxx, as Trustee of
the GST-Exempt Trust FBO Xxxxx
Xxxxxxx
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EXHIBIT B
December __, 1996
Quaker State Corporation
000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Re: XXXXXXX X. XXXXXXX RESIGNATION
Gentlemen:
Effective immediately, I hereby resign as a director of Quaker
State Corporation, Blue Coral, Inc. and any direct or indirect subsidiary
entities of Quaker State Corporation and from all positions I hold as an
officer of Quaker State Corporation, Blue Coral, Inc. and any direct or
indirect subsidiary entities of Quaker State Corporation.
Very truly yours,
Xxxxxxx X. Xxxxxxx
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EXHIBIT C
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Consulting Agreement") is made
and entered into as of the _____ day of December, 1996, by and between Quaker
State Corporation, a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx (the "Consultant").
WITNESSETH:
WHEREAS, the Consultant has certain skills and abilities in
connection with the production, marketing, sale and distribution of automotive
appearance products which may be useful to the Company and its affiliates from
time to time; and
WHEREAS, in reliance upon that skill, knowledge and experience
the Company wishes to retain the Consultant to provide services in relation to
such matters and the Consultant has agreed to provide such services on the
terms set forth in this Consulting Agreement;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company retains the services
of the Consultant and the Consultant agrees to provide such services upon the
following terms and conditions:
24. TERM AND DUTIES.
(a) Subject to the termination provisions of Section 5 hereof,
the term of this Consulting Agreement shall commence on the date hereof and end
on June 28, 2001.
(b) During the term of this Consulting Agreement, the
Consultant is retained on a "when needed" basis to provide such advisory and
consulting services as are specifically requested by the Chief Executive
Officer (the "CEO") of the Company and that are set out in paragraph (c) below;
provided, however, that it is understood that the Consultant shall not be
required to render such services on a full-time basis and shall not be required
to devote his full business time, effort, skill or attention to the affairs of
the Company; and, provided, further, that in no event will the Consultant be
required to devote more than twenty (20) working days per year during the term
of this Consulting Agreement to the Company. The Consultant shall be solely
responsible for determining, in his reasonable discretion, when services are to
be provided hereunder.
(c) The advisory and consulting services to be provided by the
Consultant shall be limited to assisting the Company upon the CEO's specific
request in the retention and promotion of customer and supplier relations.
This assistance may include, but may not be limited to, attending on behalf of
the Company and upon the CEO's specific request a maximum of three (3)
automotive appearance trade shows per year, two (2) of which shall be
nationally recognized trade shows in the United States and one (1) of which
shall be the internationally recognized trade show in Frankfurt, Germany. In
the event the Consultant attends any trade show at the request of the CEO,
Consultant agrees that he shall conduct business exclusively on behalf of the
Company at such trade show.
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(d) The Company acknowledges that the Consultant's residence
and principal place of business is based in the City of Cleveland, Ohio, and
agrees that the Consultant shall not be required to move his residence or
principal place of business in order to fulfill his obligations hereunder.
25. COMPENSATION. For all services he may render to the
Company and its affiliates during the term of this Consulting Agreement, the
Consultant shall receive an annual fee (the "Consulting Fee") of One Hundred
Thousand Dollars ($100,000) per annum (prorated for partial years), payable in
equal monthly installments in arrears. The Consultant shall advise the Company
where to deposit such payment.
26. SELF-EMPLOYED STATUS. The Consultant shall have the
status of a self-employed person and shall not be entitled to any pension,
bonus or other fringe benefits from the Company, and it is agreed that the
Consultant shall be responsible for payment of all income, self-employment or
other tax liabilities in respect of the Consulting Fee.
27. OFFICE; REIMBURSEMENT OF EXPENSES.
(a) The Company shall permit the Consultant to maintain, at no
cost to the Consultant, his current office and secretarial support at the
corporate headquarters of the Company's Blue Coral subsidiary until February 1,
1997. From and after February 1, 1997 until the earlier of (i) termination of
this Agreement or (ii) the date on which the Consultant sells any of the
742,713 shares of the Company's Capital Stock, par value $1.00 per share, that
the Consultant owns on the date hereof, the Company shall reimburse the
Consultant on a monthly basis, up to a maximum of $25,000 per annum, for all
costs and expenses incurred by the Consultant in maintaining a business office.
The Consultant shall provide the Company with such evidence of actual payment
of such office expenses as the Company may reasonably require and the Company
shall make payment to the Consultant no later than the tenth business day after
having received such evidence.
(b) The Company shall, during the term hereof, reimburse the
Consultant for travel and other expenses reasonably and necessarily incurred by
the Consultant in the provision of services hereunder by the Consultant;
provided, however, that the Consultant shall furnish the Company with such
evidence of payment of such expenses as the Company may reasonably require.
The Company agrees that if the Company requests the Consultant to attend any
trade shows as contemplated by Section 1(c) above, the Consultant shall be
entitled to reimbursement for the cost of first-class air travel and for the
cost of first-class accommodations while attending such trade show; provided,
however, that the Company will only reimburse the Consultant for expenses
incurred on the actual dates of the trade show at which the CEO has requested
the Consultant to be present and for expenses incurred on the days immediately
preceding and immediately succeeding the actual dates of such trade show.
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28. TERMINATION.
(a) The engagement of the Consultant hereunder and the term
hereof shall terminate in the event of the Consultant's death or permanent
disability during the term hereof. The Consultant shall be deemed to be
permanently disabled upon the earlier of (i) the end of a
twelve-consecutive-month period during which, by reason of physical or mental
injury or disease, the Consultant has been unable to perform substantially the
Consultant's duties under this Consulting Agreement, and (ii) the date that a
reputable physician selected by the Company, to whom the Consultant has no
reasonable objection, determines in writing that the Consultant will, by reason
of physical or mental injury or disease, be unable to perform substantially all
of the Consultant's duties under this Consulting Agreement for a period of at
least twelve consecutive months. Upon any termination pursuant to this Section
5, the Company shall pay to the Consultant, or his heirs or legal
representatives in the event of his death, all Consulting Fees through the date
of termination to the extent not theretofore paid. Any such payment of accrued
Consulting Fees shall be made in a lump sum no later than thirty days after the
date of termination.
(b) In accordance with the procedures hereinafter set forth, the
Board of Directors of the Company may terminate the engagement of the
Consultant hereunder for "Cause." For purposes of this Agreement, "Cause"
shall mean any of the following that is materially and demonstrably detrimental
to the goodwill of the Company or materially and demonstrably damaging to the
relationship of the Company with its customers, suppliers or employees: (i)
except in the event of the Consultant's disability, an act of willful
misconduct or gross negligence by the Consultant in the performance of his
material duties or obligations to the Company which continues after written
notice is received by the Consultant specifying the alleged failure in
reasonable detail and the Consultant fails to cure such alleged failure within
a reasonable period of time after having received such notice, or (ii)
conviction of the Consultant of a felony involving moral turpitude, or (iii) a
material act of dishonesty or breach of trust on the part of the Consultant
resulting or intended to result directly or indirectly in personal gain or
enrichment at the expense of the Company. Except for the provisions of
Sections 6 and 7 of this Agreement, this Agreement shall terminate immediately
as of the date that the Consultant receives a "Notice of Termination," or any
later date specified in such Notice of Termination, as the case may be. Any
termination of the engagement of the Consultant for Cause shall be communicated
to the Consultant by a Notice of Termination to the Consultant in accordance
with the provisions of Section 17 of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (x) indicates
the specific termination provision in this Agreement relied upon, (y) sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Consultant's engagement and (z) if the date of
termination is to be other than the date or receipt of such notice, specifies
the termination date (which date shall in all events be within fifteen (15)
days after the giving of such notice). The Notice of Termination shall include
a copy of a resolution duly adopted by the Board of Directors of the Company at
a meeting called and held for such purpose (after reasonable notice to the
Consultant and reasonable opportunity for the Consultant, together with the
Consultant's counsel, to be heard before the Board of Directors prior to such
vote), finding that, in the reasonable and good faith opinion of the Board of
Directors, the Consultant was guilty of conduct constituting Cause. No
purported termination of the Consultant's engagement for Cause shall be
effective without a Notice of Termination. In the event this Agreement
terminates pursuant to this Section 5(b), the Company shall pay to the
Consultant in a lump sum, within thirty (30) days after the date of
termination, all Consulting Fees accrued but not paid through the date of
termination and all expense reimbursements described in Section 4(b) hereof
accrued but not paid through the date of termination.
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29. NONDISCLOSURE.
(a) Except for and on behalf of the Company at the direction
of the Board of Directors of the Company, the Consultant shall keep
confidential and shall not divulge to any other person or entity who is not a
director, officer or employee of the Company, during the term of this
Consulting Agreement or thereafter, any of the business secrets or other
confidential information regarding the Company and its subsidiaries which have
not otherwise become public knowledge; provided, however, that nothing in this
Agreement shall preclude the Consultant from disclosing information (i) to
parties retained to perform services for the Company or its subsidiaries, or
(ii) as may be required by law.
(b) All papers, books and records of every kind and
description relating to the business and affairs of the Company and its
subsidiaries, whether or not prepared by the Consultant, other than personal
notes prepared by or at the direction of the Consultant, shall be the sole and
exclusive property of the Company, and the Consultant shall surrender them to
the Company at any time upon request of the CEO.
30. NONCOMPETITION. During the term of this Consulting
Agreement and for a period of three years from the date of the termination of
this Consulting Agreement, whether by expiration or for any other reason, the
Consultant shall not (i) directly or indirectly, engage in, or be employed by,
or act as a consultant to, or be a director, officer, owner or partner of or
acquire an interest in any person, firm, corporation or other entity engaged in
the continental United States in a business which is in competition with the
business conducted by the Consumer Products Division of the Company or its
subsidiaries on the date hereof (except investments of 1% or less of the
capital stock of any corporation subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended); (ii) solicit any employee of the
Company or any of its subsidiaries to leave the employment thereof or in any
way interfere with the relationship of such employee with the Company or its
subsidiaries; and (iii) other than as set forth in the Redemption Agreement (as
defined in Section 8 below) with respect to Xxxxxxx Xxxx and Xxxxxx
Xxxxxxxxxxx, induce or attempt to induce any customer, supplier, licensee or
other individual, corporation or other business organization having a business
relationship with the Company or its subsidiaries to cease doing business with
the Company or its subsidiaries or in any way interfere with the relationship
between any such customer, supplier, licensee or other person and the Company
or its subsidiaries. The Consultant recognizes that the provisions of this
Section 7 are vitally important to the continuing welfare of the Company and
its subsidiaries and that money damages would constitute a totally inadequate
remedy for any violation hereof. Accordingly, in the event of any such
violation by the Consultant, the Company and its subsidiaries, in addition to
any other remedies they may have, shall have the right to institute and
maintain a proceeding to compel specific performance thereof or to issue an
injunction restraining any action of the Consultant in violation of this
Section 7.
31. BINDING AGREEMENT AND ASSIGNMENT. The rights and
obligations of the Company under this Consulting Agreement shall inure to the
benefit of, and shall be binding upon, the Company and its successors and
assigns, and the rights and obligations of the Consultant under this Consulting
Agreement shall inure to the benefit of, and shall be binding upon, the
Consultant and his heirs, personal representatives and estate. The obligations
of the Company under this Consulting Agreement may not be assigned by the
Company without the prior written consent of the Consultant except to the
purchaser of all or substantially all of the assets of the Company. The
obligations of the Consultant under this Consulting Agreement may not be
assigned by the Consultant without the prior written consent of the Company,
with the exception that this Agreement may be assigned by the Consultant
without the prior written consent of the Company to a company or other entity;
provided that at least 51% of the issued and outstanding capital stock or other
equity interests of such company or other entity is owned by the Consultant or
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members of his immediate family, all services hereunder continue to be rendered
by the Consultant, and the Consultant remains bound by the terms and provisions
of this Consulting Agreement.
32. WAIVER AND MODIFICATIONS. The failure of either party to
enforce any provision or provisions of this Consulting Agreement shall not in
any way be construed as a waiver of any such provision or provisions as to any
future violations thereof, nor prevent that party thereafter from enforcing
each and every other provision of this Consulting Agreement. The rights
granted the parties herein are cumulative and the waiver of any single remedy
shall not constitute a waiver of such party's rights to assert all other legal
remedies available to it under the circumstances. No modification, termination
or attempted waiver of this Consulting Agreement shall be valid unless in
writing and signed by the party against whom the same is sought to be enforced.
33. GOVERNING LAW; ATTORNEYS' FEES. This Consulting Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware. In the event that it shall be necessary or desirable for the
Consultant or the Company to retain legal counsel and/or incur other costs and
expenses in connection with the enforcement of any or all of their respective
rights under this Consulting Agreement, the prevailing party shall be entitled
to recover from the other party attorneys' fees and costs and expenses incurred
in connection with the enforcement of his or its rights hereunder.
34. COUNTERPARTS. This Consulting Agreement may be executed
simultaneously in multiple counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
agreement.
35. SEVERABILITY. If any provision of this Consulting
Agreement or the application thereof to any person or circumstance shall to any
extent be held in any proceeding to be invalid or unenforceable, the remainder
of this Consulting Agreement, or the application of such provision to persons
or circumstances other than those to which it was held to be invalid or
unenforceable, shall not be affected thereby, and shall be valid and be
enforceable to the fullest extent permitted by law.
36. CONSTRUCTION. The Company and the Consultant have
participated jointly in the negotiation and drafting of this Consulting
Agreement. In the event an ambiguity or question of intent or interpretation
arises, this Consulting Agreement shall be construed as if drafted jointly by
the parties and no presumption or burden of proof shall arise favoring or
disfavoring either party by virtue of the authorship of any of the provisions
of this Consulting Agreement.
37. CONFIDENTIAL INFORMATION. The parties acknowledge that
the transactions described herein are of a confidential nature and shall not be
disclosed except as required by applicable law, by a Disclosure Requirement (as
defined in the Purchase Agreement dated as of December ___, 1996, among the
Company, Blue Coral, Inc., Xxxxxxx X. Xxxxxxx, the GST-Exempt Trust FBO Xxxxx
Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx, Trustees and Xxxx Xxxxxxx (the
"Purchase Agreement")) or in a legal or administrative proceeding in which the
disclosing party is seeking to enforce his or its rights hereunder.
38. CAPTIONS. The section headings of this Consulting
Agreement are inserted for convenience only and shall not constitute a part of
this Consulting Agreement in construing or interpreting any provision hereof.
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39. ENTIRE AGREEMENT. This Consulting Agreement, together
with the Purchase Agreement (and the Employment Agreement described in Section
5(a) of the Purchase Agreement), embodies the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof,
and supersedes all prior and contemporaneous agreements and understandings,
oral or written, relative to the subject matter hereof.
40. NOTICES. All notices, requests, demands, letters, waivers
and other communications required or permitted to be given under this
Consulting Agreement shall be in writing and shall be deemed to have been duly
given if (a) delivered personally, (b) mailed certified or registered mail with
postage prepaid, (c) sent by next-day or overnight mail or delivery, or (d)
sent by fax, as follows:
To the Consultant:
00 Xxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
Fax: 000-000-0000
With a copy to:
Xxxxx & Xxxxxxxxx
0000 Xxxx Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Fax: 000-000-0000
To the Company:
Quaker State Corporation
000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Secretary
Fax: 000-000-0000
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With a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Fax: 000-000-0000
or to such other person or address as any party shall specify by notice in
writing to the party or parties entitled to notice. All such notices,
requests, demands, letters, waivers and other communications shall be deemed to
have been received (i) if by personal delivery on the day of delivery, (ii) if
by certified or registered mail, on the fifth business day after the mailing
thereof, (iii) if by next-day or overnight mail or delivery, on the next day
following the day on which it was sent or (iv) if by fax, on the next day
following the day on which such fax was sent, provided that a copy is also sent
by certified or registered mail or next-day or overnight mail or delivery.
41. WAIVER OF CONFLICTS. In connection with the negotiation
and preparation of this Consulting Agreement and in any dispute arising under
this Consulting Agreement or relating to the transactions contemplated hereby,
the Consultant shall be entitled to engage Xxxxx & Xxxxxxxxx to represent him,
the Company fully waiving any and all conflicts of interest or potential
conflicts of interest arising from any such representation.
42. TRANSITION SERVICES. For a period of 60 days commencing
on the Closing Date, the Company shall continue to provide the Consultant with
use of the Company's voicemail service. The Company shall forward all mail it
receives in the name of the Consultant to such address as the Consultant shall
deliver to the Company for such purpose and shall direct all telephone
inquiries to such telephone number as the Consultant shall deliver to the
Corporation for such purpose.
IN WITNESS WHEREOF, the undersigned have executed this Consulting
Agreement as of the day and year first above written.
QUAKER STATE CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
___________________________________
XXXXXXX X. XXXXXXX
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00
XXXXXXX X
ACKNOWLEDGMENT
The undersigned each hereby acknowledge pursuant to Section
4(a)(v) of the Purchase Agreement, dated as of December ___, 1996, among QUAKER
STATE CORPORATION, a Delaware corporation, XXXXXXX X. XXXXXXX, XXXX XXXXXXX and
the GST- EXEMPT TRUST FBO XXXXX XXXXXXX, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx,
Trustees, that as of the date hereof (i) they have no claim for indemnification
under the Agreement and Plan of Merger dated as of June 7, 1996, as amended to
date, among Quaker State Corporation, QSBC Acquisition Corp., Blue Coral and
the Blue Coral Stockholders (the "Merger Agreement") against the Parent
Indemnitees (as defined in the Merger Agreement), and (ii) they have no
knowledge of any facts or circumstances that could give rise to an
indemnifiable claim under the Merger Agreement.
______________________________
Xxxxxxx X. Xxxxxxx
______________________________
Xxxx Xxxxxxx
______________________________
Xxxxxx X. Xxxxxx, as Trustee
of the GST-Exempt Trust FBO
Xxxxx Xxxxxxx
______________________________
Xxxxxxx X. Xxxx, as Trustee of
the GST-Exempt Trust FBO Xxxxx
Xxxxxxx
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EXHIBIT E
December __, 1996
Blue Coral, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Re: XXXX XXXXXXX RESIGNATION
Gentlemen:
Effective immediately, I hereby resign from all positions I hold
as an officer of Blue Coral, Inc.
Very truly yours,
Xxxx Xxxxxxx
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EXHIBIT F
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") is made and entered
into as of the ___ day of December, 1996, between BLUE CORAL, INC., a Delaware
corporation (the "Corporation"), and XXXX XXXXXXX ("Xxxxxxx").
WITNESSETH:
WHEREAS, pursuant to the terms of an Employment Agreement dated
as of June 28, 1996, between Xxxxxxx and the Corporation (the "Employment
Agreement"), Xxxxxxx is employed by the Corporation as Senior Vice President
and General Sales Manager of the Consumer Products Division of the Corporation;
and
WHEREAS, the Corporation and Xxxxxxx desire to terminate the
employment relationship and otherwise end amicably all current relationships
between the Corporation and Xxxxxxx; and
WHEREAS, in furtherance of the foregoing desires, Xxxxxxx desires
to resign from his position as an officer of the Corporation, effective upon
the closing (the "Effective Date") of the transactions contemplated by the
Purchase Agreement dated December ___, 1996, among Quaker State Corporation, a
Delaware corporation ("Quaker State"), the Corporation, Xxxxxxx, Xxxxxxx X.
Xxxxxxx, and the GST-Exempt Trust FBO Xxxxx Xxxxxxx, Xxxxxx X. Xxxxxx and
Xxxxxxx X. Xxxx, Trustees (the "Primary Agreement");
NOW, THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound,
the Corporation and Xxxxxxx agree as follows:
43. RESIGNATION; TERMINATION OF EMPLOYMENT AGREEMENT. On the
Effective Date and provided this Agreement has been properly executed and
delivered to Xxxxxxx by the Corporation, Xxxxxxx shall resign as an officer of
the Corporation and the Employment Agreement shall automatically terminate
without any further action or obligation on the part of any of the parties
hereto and no party will have any further right or obligation under the
Employment Agreement, provided that Xxxxxxx will remain bound by Sections 5(a),
5(b) and 5(d) of the Employment Agreement.
44. CONTINUATION OF SALARY; TERMINATION OF OPTIONS. The
Corporation hereby agrees that notwithstanding Adelman's resignation under
Section 1 of this Agreement, the Corporation will continue to pay Xxxxxxx base
salary at an annualized rate of $165,000 for a period of _____ months
(representing 24 months less the number of months (or portions of months)
between the date of the Primary Agreement and the Effective Date for which
Xxxxxxx received salary payments) commencing on the Effective Date, payable in
accordance with established payroll practices of the Corporation, less
deductions and withholdings required by law ("Continuation Payments"). On the
Effective Date, all options, whether vested or not, granted to Xxxxxxx to
purchase shares of capital stock of Quaker State or the Corporation shall be
cancelled without any obligation of Quaker State.
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45. EARNED SALARY; VESTED BENEFITS; COBRA; ACCRUED BONUS. In
connection with the termination of Adelman's employment, the Corporation will
(a) to the extent not paid as of the Effective Date, distribute to Xxxxxxx, in
a lump sum, any Earned Salary (as defined in the Employment Agreement), (b)
distribute to Xxxxxxx (or as Xxxxxxx may direct) any Vested Benefits (as
defined in the Employment Agreement) from any Corporation or Quaker State plan
in which Xxxxxxx participates, (c) make available to Xxxxxxx and his family the
benefits continuation rights to which he is entitled under the Consolidated
Omnibus Budget Reconciliation Act of 1985, and (d) to the extent not paid as of
the Effective Date, distribute to Xxxxxxx, in a lump sum, the $41,250 bonus to
which Xxxxxxx is entitled for calendar year 1996 under Section 3(c) of the
Employment Agreement and a pro-rata share of the long-term incentive
compensation awarded, if any, under the long-term incentive compensation plan
of Quaker State for the three-year period ending December 31, 1998, in
accordance with the provisions of Section 4(c) of the Employment Agreement.
46. REIMBURSEMENT OF EXPENSES. On or before the Effective
Date, Xxxxxxx shall present to the Corporation all claims for reimbursement of
business-related expenses. All such expenses properly incurred before the
Effective Date shall be reimbursed in accordance with normal Corporation
policies. Any claims relating to business-related expenses that are not
presented within this time period shall not be reimbursed.
47. WITHHOLDING OF TAXES; TAX REPORTING. The Corporation may
withhold from any amounts payable under this Agreement all such federal, state,
city and other taxes and withholdings, and may file with appropriate
governmental authorities all such information returns or other reports with
respect to the tax consequences attendant to any amounts payable under this
Agreement, as may, in its reasonable judgment, be required by law.
48. PROFESSIONAL FEES. Each party shall be responsible for
the payment of his or its respective legal fees and costs (and related
disbursements) incurred in connection with the negotiation and execution of
this Agreement; provided, however, that if either party incurs any legal fees
and related costs in enforcing his or its rights under this Agreement and such
party prevails in any such action, the other party shall reimburse the
prevailing party for the cost thereof. In connection with the negotiation and
preparation of this Agreement and in any dispute arising under this Agreement
or relating to the transactions contemplated hereby, Xxxxxxx shall be entitled
to engage Xxxxx & Xxxxxxxxx to represent him, the Corporation fully waiving any
and all conflicts of interest or potential conflicts of interest arising from
any such representation.
49. CONFIDENTIAL INFORMATION; BOOKS AND RECORDS;
NON-COMPETITION.
(a) Except for and on behalf of the Corporation at the
direction of the Board of Directors of the Corporation, Xxxxxxx shall keep
confidential and shall not divulge to any other person or entity who is not a
director, officer or employee of the Corporation, during the term of this
Agreement or thereafter, any of the business secrets or other confidential
information regarding the Corporation, its subsidiaries or its affiliates,
which has not otherwise become public knowledge, other than as a result of
Adelman's breach of this Section 11(a); provided, however, that nothing in this
Agreement shall preclude Xxxxxxx from disclosing information (i) to parties
retained to perform services for the Corporation, its subsidiaries or
affiliates, (ii) as may be required by law, court or governmental order or
governmental regulation to be disclosed, (iii) which is later disclosed to
Xxxxxxx by one not under obligations of confidentiality to the Corporation and
is in the public domain, or (iv) which the Corporation has expressly given
Xxxxxxx the right to use or disclose.
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(b) All papers, books and records, of every kind and
description and in whatever media, relating to the business or affairs of the
Corporation, its subsidiaries and affiliates, whether or not prepared by
Xxxxxxx, shall be the sole and exclusive property of the Corporation, and
Xxxxxxx shall surrender them to the Corporation at any time upon request of the
Board of Directors of the Corporation.
(c) So long as Xxxxxxx is receiving Continuation Payments
under this Agreement, Xxxxxxx shall not in the United States, by himself or in
partnership or as an equity owner or in conjunction with or as a consultant,
unpaid adviser, manager, employee or agent of any other person, business, firm,
corporation or other entity, either directly or indirectly, undertake or carry
on or be engaged or have any financial or other interest in, or in any other
manner, advise or assist any person, firm, corporation or other entity engaged
or interested in any business which is in competition with the business of the
Consumer Products Division of the Corporation as conducted on the date hereof
in any geographic location (except for investments of 1% or less in the capital
stock of any corporation subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended).
(d) Xxxxxxx agrees and warrants that the covenants contained in
this Section 11 are reasonable, that valid consideration has been and will be
received therefor and that the agreements set forth herein are the result of
arm's-length negotiations between the parties hereto. Xxxxxxx recognizes that
the provisions of this Section 11 are vitally important to the continuing
welfare of the Corporation, its subsidiaries and its affiliates and that money
damages constitute a totally inadequate remedy for any violation or threatened
violation thereof. Accordingly, in the event of any such violation or
threatened violation by Xxxxxxx, the Corporation, its subsidiaries and its
affiliates, in addition to any other remedies they may have, shall have the
right to compel specific performance thereof or to obtain an injunction,
restraining order or other equitable relief (without the requirement to post a
bond) restraining Xxxxxxx from committing any violation of any covenant or
obligation of this Section 11. It is the desire of the parties that the
provisions of this Section 11 be enforced to the fullest extent possible under
the law and public policies in each jurisdiction in which enforcement is
sought. Accordingly, without in any way limiting the general applicability of
Section 11, if any particular portion of this Section 11 shall be or become
unenforceable in any respect, such portion of this Section 11 shall be deemed
reformed to make such portion enforceable in a manner which provides the
Corporation the maximum rights permitted at law.
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50. NOTICES. All notices, requests, demands, letters, waivers
and other communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given if (a)
delivered personally, (b) mailed, certified or registered mail with postage
prepaid, (c) sent by next-day or overnight mail or delivery, or (d) sent by
fax, as follows:
To Xxxxxxx:
000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxxxxx, Xxxx
Attention: Xx. Xxxx Xxxxxxx
With a copy to:
Xxxxx & Xxxxxxxxx
0000 Xxxx Xxxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
Fax: 000-000-0000
To the Corporation:
c/o Quaker State Corporation
000 Xxxx Xxxx Xxxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Attention: Secretary
Fax: 000-000-0000
With a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Fax: 000-000-0000
or to such other person or address as any party shall specify by notice in
writing to the party or parties entitled to notice. All such notices,
requests, demands, letters, waivers and other communications shall be deemed to
have been received (i) if by personal delivery on the day of delivery, (ii) if
by certified or registered mail, on the fifth business day after the mailing
thereof, (iii) if by next-day or overnight mail or delivery, on the next day
following the day on which it was sent or (iv) if by fax, on the next day
following the day on which such fax was sent, provided that a copy is also sent
by certified or registered mail or next-day or overnight mail or delivery.
51. GOVERNING LAW. The validity, interpretation, construction
and performance of this Agreement (and every other issue arising hereunder)
shall be governed by the laws of the State of Ohio, without giving effect to
the principles of conflicts of laws of such state.
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52. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by each party hereto. No waiver by any party
hereto at any time of any breach by any other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
53. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall be binding upon and inure to the
benefit of the Corporation and any successor of or to the Corporation but shall
not otherwise be assignable or delegable by the Corporation except to the
purchaser of all or substantially all of the assets of the Corporation.
(b) This Agreement shall inure to the benefit of and be
enforceable by Adelman's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and none of the parties
hereto shall, without the consent of the other parties, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in this Section 15.
54. REPRESENTATIONS AND WARRANTIES.
(a) The Corporation hereby represents and warrants to Xxxxxxx
that:
(i) the Corporation has the necessary corporate power and
authority to enter into this Agreement; the execution hereof has been duly
authorized by the Board of Directors of the Corporation; and this Agreement
constitutes the valid and binding agreement of the Corporation; and
(ii) the execution and delivery of this Agreement by the
Corporation does not, and the performance of its obligations hereunder will
not, (A) constitute a breach or violation of, or a default under, any
applicable law, rule or regulation or any applicable judgment, decree, order,
governmental permit or any license, agreement, indenture, instrument or
understanding of the Corporation or to which the Corporation is subject, or (B)
constitute a breach or a violation of, or a default under, the certificate of
incorporation or bylaws of the Corporation; and the performance by the
Corporation of its obligations hereunder will not require any consent or
approval under any such law, rule, regulation, judgment, decree, order,
governmental permit or license or the consent or approval of any other party to
any such agreement, indenture, instrument or understanding.
(b) Xxxxxxx hereby represents and warrants to the Corporation
that:
(i) Xxxxxxx has the necessary power and authority to enter
into this Agreement; and this Agreement constitutes the valid and binding
agreement of Xxxxxxx; and
(ii) the execution and delivery of this Agreement by Xxxxxxx
does not, and the performance of his obligations hereunder will not, constitute
a breach or violation of, or a default under, any applicable law, rule or
regulation or any applicable judgment, decree, order, governmental permit or
any license, agreement, indenture, instrument or understanding of
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Xxxxxxx or to which Xxxxxxx is subject; and the performance by Xxxxxxx of his
obligations hereunder will not require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or license
or the consent or approval of any other party to any such agreement, indenture,
instrument or understanding.
55. ENTIRE AGREEMENT. This Agreement, together with the
Primary Agreement, constitutes the entire agreement among the parties hereto
with respect to the subject matter hereof and, except as set forth in the
provision to Section 1 hereof, supersedes all prior verbal or written
agreements, covenants, communications, understandings, commitments,
representations or warranties, whether oral or written, by any party hereto or
any of its representatives pertaining to such subject matter.
56. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same Agreement.
57. CAPTIONS AND SECTION HEADINGS. Captions and Section
headings used herein are for convenience and are not part of this Agreement and
shall not be used in construing it.
58. FURTHER ASSURANCES. Each party hereto shall execute such
additional documents and do such additional things as may reasonably be
requested by any other party to effectuate the purposes and provisions of this
Agreement.
59. TRANSITION SERVICES. For a period of 60 days commencing
on the Closing Date, the Corporation shall continue to provide Xxxxxxx with use
of the Corporation's voicemail service. The Corporation shall forward all mail
it receives in the name of Xxxxxxx to such address as Xxxxxxx shall deliver to
the Corporation for such purpose and shall direct all telephone inquiries to
such telephone number as Xxxxxxx shall deliver to the Corporation for such
purpose.
60. CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring either party by virtue of the authorship of
any of the provisions of this Agreement.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
BLUE CORAL, INC.
By:___________________________
Name:______________________
Title:_____________________
______________________________
Xxxx Xxxxxxx
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EXHIBIT G
CERTIFICATE
The undersigned each hereby certify pursuant to Section 4(b)(i)
of the Purchase Agreement, dated as of December ___, 1996, among QUAKER STATE
CORPORATION, a Delaware corporation, XXXXXXX X. XXXXXXX, XXXX XXXXXXX and the
GST- EXEMPT TRUST FBO XXXXX XXXXXXX, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx,
Trustees (the "Purchase Agreement"), that the representations and warranties of
the undersigned set forth in Section 16 of the Purchase Agreement are true and
correct in all material respects as of the date hereof.
QUAKER STATE CORPORATION
By:___________________________
Name:______________________
Title:_____________________
BLUE CORAL, INC.
By:___________________________
Name:______________________
Title:_____________________
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EXHIBIT H
ACKNOWLEDGMENT
The undersigned each hereby acknowledge pursuant to Section
4(b)(v) of the Purchase Agreement, dated as of December ___, 1996, among QUAKER
STATE CORPORATION, a Delaware corporation, XXXXXXX X. XXXXXXX, XXXX XXXXXXX and
the GST- EXEMPT TRUST FBO XXXXX XXXXXXX, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx,
Trustees (the "Purchase Agreement"), that as of the date hereof and except as
set forth on Schedule 1 hereto (i) they have no claim for indemnification under
the Agreement and Plan of Merger dated as of June 7, 1996, as amended to date,
among Quaker State Corporation, QSBC Acquisition Corp., Blue Coral and the Blue
Coral Stockholders (the "Merger Agreement") against the Xxxxxxx Indemnitees (as
defined in the Purchase Agreement), and (ii) they have no knowledge of any
facts or circumstances that could give rise to an indemnifiable claim under the
Merger Agreement.
QUAKER STATE CORPORATION
By:___________________________
Name:______________________
Title:_____________________
BLUE CORAL, INC.
By:___________________________
Name:______________________
Title:_____________________
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SCHEDULE 1
Quaker State Corporation has received notices in a proceeding
captioned State of California v. Southland Oil, Inc., No. 92-6344WJR in the
U.S. District Court for the Central District of California. XxXxx Chemical
Company is defendant in this proceeding, apparently as a potentially
responsible party with respect to a waste disposal site. Quaker State
Corporation has no information indicating the amount of potential liability of
XxXxx Chemical Company in this matter.
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EXHIBIT I
AMENDMENT NO. TWO
TO
AGREEMENT AND PLAN OF MERGER
THIS AMENDMENT NO. TWO TO AGREEMENT AND PLAN OF MERGER (this
"Amendment") is made and entered as of the ___ day of December, 1996, among
QUAKER STATE CORPORATION, a Delaware corporation ("Quaker State"), BLUE CORAL,
INC., a Delaware corporation ("Blue Coral"), XXXXXXX XXXXXXX ("Xxxxxxx") and
each of the other former stockholders of Blue Coral signatory hereto
(collectively, including Xxxxxxx, the "Former Blue Coral Stockholders").
Except as otherwise indicated, capitalized terms used but not defined herein
shall have the meanings given to them in the Agreement and Plan of Merger dated
as of June 7, 1996, as amended to date, among Quaker State, QSBC Acquisition
Corp., a Delaware corporation ("QSBC"), Blue Coral and the Former Blue Coral
Stockholders (the "Merger Agreement").
WITNESSETH:
WHEREAS, pursuant to the Merger Agreement, QSBC was merged with
and into Blue Coral, all Outstanding Blue Coral Shares were converted into the
Merger Consideration and Blue Coral became a wholly owned subsidiary of Quaker
State; and
WHEREAS, pursuant to the Merger Agreement, the Former Blue Coral
Stockholders were issued 2,936,328 shares of Quaker State's Capital Stock, par
value $1.00 per share ("Common Stock"), 1,020,408 of which (the "Escrowed
Shares") are currently held in escrow pursuant to the Escrow Agreement dated
June 28, 1996 (the "Escrow Agreement"), among Quaker State, Blue Coral, the
Former Blue Coral Stockholders and United States Trust Company of New York, as
escrow agent (the "Escrow Agent"); and
WHEREAS, in negotiations among Quaker State, Xxxxxxx and the GST-
Exempt Trust FBO Xxxxx Xxxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxx, Trustees
(the "Trust"), which commenced November 18, 1996 and concluded November 20,
1996, Xxxxxxx, Xxxx Xxxxxxx and the Trust agreed to sell and Quaker State
agreed, subject to the approval of Quaker State's Board of Directors, to
purchase and redeem certain of the shares of Common Stock owned by Xxxxxxx and
the Trust at a purchase price of $16 per share (the "Stock Purchase
Transaction"), and to terminate the existing employment agreements of Xxxxxxx
and Xxxx Xxxxxxx and to have Quaker State and Blue Coral enter into a
consulting agreement with Xxxxxxx and a severance agreement with Xxxx Xxxxxxx;
and
WHEREAS, Quaker State, Blue Coral, Xxxxxxx, Xxxx Xxxxxxx and the
Trust entered into a Purchase Agreement dated as of ________________, 1996 (the
"Stock Purchase Agreement"), to memorialize their agreements relating to the
Stock Purchase Transaction; and
WHEREAS, as a condition to the obligation of Xxxxxxx, Xxxx
Xxxxxxx and the Trust to effect consummation of the transactions contemplated
by the Stock Purchase Agreement, Quaker State agreed, among other things, (i)
to release 680,272 of the Escrowed Shares and to reduce the amount of the
maximum liability of itself and of the Former Blue Coral Stockholders for
Losses arising under Sections 11.1(a)(ii), 11.1(e) or 11.2(b), as the case may
be, of the Merger Agreement from $15,000,000 to $5,000,000, and (ii) to execute
and deliver an amendment to the
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Merger Agreement to reflect the foregoing and to provide for the payment to the
Former Blue Coral Stockholders of the Fair Value of the Special Shares (as
hereafter defined) if on the third anniversary of the Closing Date the Special
Shares have not vested or if any time prior thereto the Special Shares have
become incapable of vesting;
NOW, THEREFORE, in consideration of the foregoing and the
promises and agreements contained herein and other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged,
and intending to be legally bound, Quaker State, Blue Coral and the Former Blue
Coral Stockholders hereby agree as follows:
1. AMENDMENT TO SECTION 11.3(B). Section 11.3(b) of the
Merger Agreement is hereby amended by deleting in its entirety Section 11.3(b)
and inserting the following in lieu thereof:
"(b) Notwithstanding anything in Section 11.1 or 11.2 hereof to
the contrary, the aggregate amount payable by the Blue Coral
Stockholders, on the one hand, or by the Parent and the Surviving
Corporation, on the other, under Sections 11.1(a)(ii), 11.1(e) or
11.2(b) hereof, as the case may be, with respect to all Losses
arising under such Sections, shall not exceed $5,000,000."
2. AMENDMENT TO SECTION 7.12. Section 7.12 of the Merger
Agreement is hereby amended by deleting in its entirety the last sentence of
Section 7.12 and inserting the following in lieu thereof:
"If, on or prior to the third anniversary of the Closing Date,
such shares (or their equivalent) have not so vested or have
become incapable of so vesting, the Parent shall promptly (but in
no event more than ten (10) business days following the later of
the date that such shares have not so vested or have become
incapable of so vesting and the date on which the Parent has
received the designated account information referred to below)
deliver to each Blue Coral Stockholder, by electronic transfer of
immediately available funds to an account or accounts designated
by each Blue Coral Stockholder, an amount equal to the product of
i) the "Fair Value of the Special Shares" times ii) the fraction
applicable to such Blue Coral Stockholder set forth on the
Ownership Schedule. The term "Fair Value of the Special Shares"
means the product of the aggregate number of Special Shares times
the closing price of a share of Parent Capital Stock as reported
on the NYSE on the date that is the earlier of the third
anniversary of the Closing Date and the date the Special Shares
become incapable of vesting. The Parent shall have no obligation
to pay interest on the amount payable to the Blue Coral
Stockholders under this Section 7.12."
3. FULL FORCE AND EFFECT. Except as expressly provided in
this Amendment, the Merger Agreement shall continue in full force and effect in
accordance with the provisions thereof.
4. EFFECTIVE DATE. This Amendment shall be effective as of
the date of the closing under the Stock Purchase Agreement, and from and after
such date all references to the Merger Agreement shall be deemed to refer to
the Merger Agreement as amended by this Amendment.
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5. COUNTERPARTS. This Amendment may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same Amendment.
6. WAIVER OF CONFLICTS. In connection with the negotiation
and drafting of this Amendment and in any dispute arising under this Amendment
or arising under the Merger Agreement, the Former Blue Coral Stockholders shall
be entitled to engage Xxxxx & Xxxxxxxxx to represent them, Quaker State and
Blue Coral each fully waiving any and all conflicts of interest or potential
conflicts of interest arising from any such representation.
7. CHOICE OF LAW. The construction and performance of this
Amendment shall be governed by the laws of the State of New York without regard
to its principles of conflict of laws, except insofar as the laws of the State
of Delaware are mandatorily applicable to the Merger, and the state and federal
courts of New York shall have exclusive jurisdiction over any controversy or
claim arising out of or relating to this Amendment.
8. CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Amendment. In the event an ambiguity or
question of intent or interpretation arises, this Amendment shall be construed
as if drafted jointly by the parties and no presumption or burden of proof
shall arise favoring or disfavoring either party by virtue of the authorship of
any of the provisions of this Amendment.
IN WITNESS WHEREOF, the parties have executed and delivered this
Amendment as of the date first set forth above.
QUAKER STATE CORPORATION
By:___________________________
Name:______________________
Title:_____________________
BLUE CORAL, INC.
By:___________________________
Name:______________________
Title:_____________________
FORMER BLUE CORAL STOCKHOLDERS:
______________________________
XXXXXXX XXXXXXX
______________________________
XXXX XXXXXXXX
______________________________
XXXXXXX XXXX
______________________________
XXXX XXXXXXXX
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______________________________
XXXXXXXX XXXXXX
______________________________
XXXXXX XXXXXXX
SIGNATURE PAGE TO AMENDMENT NO.
TWO TO AGREEMENT AND PLAN OF MERGER
DATED AS OF ___________, 1996, AMONG
QUAKER STATE CORPORATION, BLUE CORAL,
INC. AND THE FORMER BLUE CORAL
STOCKHOLDERS CONTINUED:
______________________________
XXXXXX XXXXXXXX
______________________________
XXXXXX XXXXXX
______________________________
XXXX XXXXXXX
______________________________
XXXXXX XXXX
GST-EXEMPT TRUST FBO XXXXX XXXXXXX
______________________________
XXXXXX X. XXXXXX, TRUSTEE
______________________________
XXXXXXX X. XXXX, TRUSTEE
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EXHIBIT J
TERMINATION
OF
LEASE AGREEMENT
THIS TERMINATION OF LEASE AGREEMENT (this "Termination") is
effective as of the 1st day of December, 1996, among QUAKER STATE CORPORATION,
a Delaware corporation ("Quaker State"), BLUE CORAL, INC., a Delaware
corporation ("Blue Coral"), and JWA, LTD., an Ohio limited liability company
("JWA"). Except as otherwise indicated, capitalized terms used but not defined
herein shall have the meanings given to them in the Lease Agreement dated as
June 28, 1996, among Blue Coral and JWA (the "Lease Agreement").
WITNESSETH:
WHEREAS, Blue Coral and JWA are parties to the Lease Agreement;
and
WHEREAS, pursuant to the Lease Agreement, JWA agreed to lease to
Blue Coral and Blue Coral agreed to lease from JWA the Demised Premises; and
WHEREAS, Blue Coral and JWA desire to terminate the Lease
Agreement; and
WHEREAS, The Valley Belt Limited Partnership, a Delaware limited
partnership (the "Seller") and Blue Coral entered into a Purchase Agreement
dated as of March 18, 1996 (the "Purchase Agreement"), pursuant to which the
Seller agreed to sell to Blue Coral or its nominee the real property (the
"Property") described in the Purchase Agreement; and
WHEREAS, Blue Coral assigned its right, title and interest in and
to the Purchase Agreement to JWA under the Assignment of Agreement of Purchase
and Sale, dated June 28, 1996, between JWA and Blue Coral (the "Assignment");
and
WHEREAS, Blue Coral and JWA desire to terminate the Assignment
effective as of December 1, 1996; and
WHEREAS, the Purchase Agreement has been terminated pursuant to a
Mutual Termination of Purchase Agreement dated as of December 1, 1996, between
the Seller and Blue Coral;
NOW, THEREFORE, in consideration of the promises and agreements
contained herein and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, and intending to be legally bound,
Blue Coral and JWA agree as follows:
1. TERMINATION OF LEASE AGREEMENT AND ASSIGNMENT. The Lease
Agreement and the Assignment are hereby terminated without any further action
on the part of either Blue Coral or JWA and each party is hereby released from
any further liability or obligation to the other under or with respect to the
Lease Agreement or the Assignment.
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2. INDEMNIFICATION. Quaker State, for and on behalf of
itself and Blue Coral, agrees to indemnify and hold JWA, its representatives,
members, managers, officers, employees and agents harmless from and against any
and all claims, demands, losses, liabilities, damages and expenses (including
reasonable attorneys' fees) arising out of or in connection with (a) the
failure of Blue Coral to perform in any respect any of its obligations under
the Purchase Agreement or (b) the ownership or leasing of the Property by Blue
Coral or any of its subsidiaries or affiliates from and after the date hereof.
3. COUNTERPARTS. This Termination may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same Termination.
4. FURTHER ASSURANCES. Each party hereto shall execute such
additional documents and do such additional things as may reasonably be
requested by any other party to effectuate the purposes and provisions of this
Agreement.
5. GOVERNING LAW. The validity, interpretation, construction
and performance of this Termination (and every other issue arising hereunder)
shall be governed by the laws of the State of Ohio, without giving effect to
the principles of conflicts of laws of such state.
6. CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Termination. In the event an ambiguity or
question of intent or interpretation arises, this Termination shall be
construed as if drafted jointly by the parties and no presumption or burden of
proof shall arise favoring or disfavoring either party by virtue of the
authorship of any of the provisions of this Termination.
7. WAIVER OF CONFLICTS. In connection with the negotiation
and preparation of this Termination and in any dispute arising under this
Termination or relating to the transactions contemplated hereby, JWA shall be
entitled to engage Xxxxx & Xxxxxxxxx to represent it, Quaker State and Blue
Coral each fully waiving any and all conflicts of interest or potential
conflicts of interest arising from any such representation.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first set forth above.
WITNESSES: QUAKER STATE CORPORATION
_______________________ By:___________________________
Print Name_____________ Name:______________________
Title:______________
_______________________
Print Name_____________
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BLUE CORAL, INC.
_______________________ By:___________________________
Print Name_____________ Name:______________________
Title:______________
_______________________
Print Name_____________
JWA, LTD.
_______________________ By:___________________________
Print Name_____________ Name:______________________
Title:______________
_______________________
Print Name_____________
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STATE OF ________ )
) SS:
COUNTY OF ______ )
BEFORE ME, a Notary Public in and for said County and State
personally appeared ___________________________, _________________________ of
Quaker State Corporation, who acknowledged that he did sign the foregoing
instrument for and on behalf of such corporation, and the same is the free act
and deed of such corporation, and his free act and deed individually and as
such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal this _____ day of December, 1996.
____________________________
Notary Public
STATE OF ________ )
) SS:
COUNTY OF ______ )
BEFORE ME, a Notary Public in and for said County and State
personally appeared ___________________________, _________________________ of
Blue Coral, Inc., who acknowledged that he did sign the foregoing instrument
for and on behalf of such corporation, and the same is the free act and deed of
such corporation, and his free act and deed individually and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal this _____ day of December, 1996.
____________________________
Notary Public
STATE OF ________ )
) SS:
COUNTY OF ______ )
BEFORE ME, a Notary Public in and for said County and State
personally appeared ________________________, _________________________ of
JWA, Ltd., who acknowledged that he did sign the foregoing instrument for and
on behalf of such limited liability company, and the same is the free act and
deed of such limited liability company, and his free act and deed individually
and as such officer.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal this _____ day of December, 1996.
____________________________
Notary Public
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