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PUT/CALL, REGISTRATION RIGHTS
AND
STANDSTILL AGREEMENT
Dated as of January 1, 1998
among
MARATHON OIL COMPANY,
USX CORPORATION,
ASHLAND INC.
and
MARATHON ASHLAND PETROLEUM LLC
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Contents, p. 1
TABLE OF CONTENTS
Page
ARTICLE I
Certain Definitions; Adjustable Amounts;Representations and Warranties
SECTION 1.01. Definitions........................................2
SECTION 1.02. Adjustable Amounts................................17
SECTION 1.03. Representations and Warranties....................18
ARTICLE II
Special Termination Right
SECTION 2.01. Special Termination Right.........................20
SECTION 2.02. Special Termination Price.........................20
SECTION 2.03. Method of Exercise................................21
ARTICLE III
Marathon Call Right
SECTION 3.01. Marathon Call Right...............................21
SECTION 3.02. Marathon Call Price...............................21
SECTION 3.03. Method of Exercise................................22
SECTION 3.04. Limitation on Marathon's Ability To Exercise
its Marathon Call Right..........................22
ARTICLE IV
Ashland Put Right
SECTION 4.01. Ashland Put Right.................................22
SECTION 4.02. Ashland Put Price.................................23
SECTION 4.03. Method of Exercise................................26
SECTION 4.04. Ashland Put Price Election Notice.................26
SECTION 4.05. Limitation on Ashland's Ability To Exercise
its Ashland Put Right............................27
Contents, p. 2
ARTICLE V
Termination of Certain Distributions; Revocable Proxies
SECTION 5.01. Termination of Certain Distributions..............27
SECTION 5.02. Revocable Proxies.................................30
ARTICLE VI
Determination of the Appraised Value of the Company
SECTION 6.01. Determination of Appraised Value of the
Company..........................................31
ARTICLE VII
Determination of the Fair Market Value of Securities
SECTION 7.01. General...........................................35
SECTION 7.02. Determination of Fair Market Value of
Marathon Debt Securities.........................35
SECTION 7.03. Determination of Fair Market Value of
Actively Traded Marathon Equity Securities.......35
SECTION 7.04. Determination of Fair Market Value of Non-
Actively Traded Marathon Equity Securities.......39
ARTICLE VIII
Certain Matters Relating to Securities
SECTION 8.01. Certain Requirements with Respect to
Marathon Debt Securities.........................42
SECTION 8.02. Procedures with Respect to the Issuance of
Securities.......................................42
SECTION 8.03. Holding Period....................................45
SECTION 8.04. Manner of Sale of Marathon Equity
Securities.......................................45
ARTICLE IX
Closing; Conditions to Closing; Consequences of Delay
SECTION 9.01. Closing...........................................46
SECTION 9.02. Conditions to Closing.............................49
SECTION 9.03. Consequences of a Delayed Closing of the
Marathon Call Right or the Ashland Put Right
Where Ashland Is at Fault........................54
Contents, p. 3
SECTION 9.04. Consequences of a Delayed Closing of the
Marathon Call Right or the Ashland Put Right
Where Marathon or USX Is at Fault................55
SECTION 9.05. Consequences of a Delayed Closing of the
Marathon Call Right or the Ashland Put Right
Where No Party Is at Fault.......................57
SECTION 9.06. Consequences of Delayed Second or Third
Scheduled Installment Payment....................58
SECTION 9.07. Consequences of a Delayed Closing of the
Special Termination Right Where Terminating
Member Is at Fault...............................58
SECTION 9.08. Consequences of a Delayed Closing of the
Special Termination Right Where Non-
Terminating Member Is at Fault...................60
SECTION 9.09. Consequences of Delayed Closing of Special
Termination Right Where No Party Is at
Fault............................................62
ARTICLE X
Registration Rights
SECTION 10.01. Registration upon Request........................63
SECTION 10.02. Covenants of the Issuer..........................67
SECTION 10.03. Fees and Expenses................................72
SECTION 10.04. Indemnification and Contribution.................73
SECTION 10.05. Underwriting Agreement; Purchase
Agreement.......................................77
SECTION 10.06. Undertaking To File Reports......................78
ARTICLE XI
Covenants
SECTION 11.01. Cooperation; Commercially Reasonable Best
Efforts.........................................78
SECTION 11.02. Antitrust Notification; FTC or DOJ
Investigation...................................78
SECTION 11.03. Governmental Filings re: Ashland LOOP/LOCAP
Interest........................................80
SECTION 11.04. Designated Sublease Agreements...................81
Contents, p. 4
ARTICLE XII
Standstill Agreement
SECTION 12.01. Restrictions of Certain Actions by Marathon
and USX.........................................83
SECTION 12.02. Restrictions of Certain Actions by
Ashland.........................................86
ARTICLE XIII
Indemnification
SECTION 13.01. Indemnification re: Ashland Representatives'
Revocable Proxies and the Ashland LOOP/LOCAP
Revocable Proxy.................................88
SECTION 13.02. Indemnification re: Marathon Representatives
Revocable Proxies...............................89
SECTION 13.03. Indemnification re: Transfer of Economic
Interests in the Ashland LOOP/LOCAP Interest
to Marathon, the Company or a Person
Designated by Marathon..........................89
SECTION 13.04. Procedures Relating to Indemnification Under
This Article XIII...............................90
ARTICLE XIV
Company Competitive Businesses; Detrimental Activities; Limitations on the
Company Entering into Valvoline's Business
SECTION 14.01. Competitive Businesses...........................90
SECTION 14.02. Detrimental Activities...........................94
SECTION 14.03. Limitations on the Company Entering into the
Valvoline Business..............................96
SECTION 14.04. Purchase Price of Competitive Business
Assets.........................................103
Contents, p. 5
ARTICLE XV
Survival; Assignment
SECTION 15.01. Survival and Assignment re: Marathon and
USX...........................................106
SECTION 15.02. Survival and Assignment re: Ashland...........107
SECTION 15.03. Survival and Assignment re: the
Company.......................................109
SECTION 15.04. Assignment and Assumption Agreements...........109
SECTION 15.05. Consequences of Unpermitted Assignments........110
ARTICLE XVI
Dispute Resolution Procedures
SECTION 16.01. General........................................110
SECTION 16.02. Dispute Notice and Response....................110
SECTION 16.03. Negotiation Between Chief Executive
Officers......................................110
SECTION 16.04. Right to Equitable Relief Preserved............111
ARTICLE XVII
Miscellaneous
SECTION 17.01. Notices........................................111
SECTION 17.02. Merger and Entire Agreement....................113
SECTION 17.03. Parties in Interest............................113
SECTION 17.04. Counterparts...................................113
SECTION 17.05. Amendment; Waiver..............................113
SECTION 17.06. Severability...................................113
SECTION 17.07. GOVERNING LAW..................................114
SECTION 17.08. Enforcement....................................114
SECTION 17.09. Table of Contents, Headings and Titles.........115
SECTION 17.10. Use of Certain Terms; Rules of Construction....115
SECTION 17.11. Holidays.......................................115
SECTION 17.12. Third Parties..................................115
SECTION 17.13. Liability for Affiliates.......................115
SECTION 17.14. Schedules......................................116
Contents, p. 6
APPENDIX A Certain Definitions
SCHEDULE 1.03(c) Conflicts
SCHEDULE 1.03(d) Consents
SCHEDULE 14.01(a) Competitive Businesses
PUT/CALL, REGISTRATION RIGHTS AND STANDSTILL
AGREEMENT dated as of January 1, 1998 by
and among MARATHON OIL COMPANY, an Ohio
corporation ("Marathon"), USX CORPORATION, a
Delaware corporation ("USX"), ASHLAND INC., a
Kentucky corporation ("Ashland"), and MARATHON
ASHLAND PETROLEUM LLC, a Delaware limited
liability company (the "Company").
Preliminary Statement
WHEREAS Marathon and Ashland have previously entered into
a Master Formation Agreement dated as of December 12, 1997, relating to the
formation of the Company, which will own and operate certain of Marathon's
and Ashland's respective petroleum supply, refining, marketing, and
transportation businesses;
WHEREAS Marathon and Ashland have previously entered into
an Asset Transfer and Contribution Agreement dated as of December 12, 1997,
pursuant to which, among other things, Marathon and Ashland will transfer
their respective Businesses (as defined below) to the Company;
WHEREAS Marathon, USX and Ashland have previously entered
into a Parent Agreement dated as of December 12, 1997;
WHEREAS Marathon and Ashland have entered into an LLC
Agreement dated as of the date hereof in order to establish the rights and
responsibilities of each of them with respect to the governance, financing
and operation of the Company;
WHEREAS Marathon and Ashland have agreed that under
certain circumstances, Ashland will sell to Marathon and Marathon will
purchase from Ashland all of Ashland's Membership Interests and the Ashland
LOOP/LOCAP Interest (each as defined below), upon the terms and subject to
the conditions set forth herein;
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WHEREAS Marathon and Ashland have agreed that if Marathon
or Ashland elects to terminate the Term of the Company pursuant to Section
2.03 of the LLC Agreement, then the non-terminating Member shall have the
right to purchase from the terminating Member all of the terminating
Member's Membership Interests, upon the terms and subject to the conditions
set forth herein;
WHEREAS Marathon and USX have agreed that Marathon and
USX will grant Ashland certain registration rights with respect to any
Securities (as defined below) that Marathon or USX issues to Ashland
pursuant to this Agreement in connection with the purchase by Marathon of
Ashland's Membership Interests and the Ashland LOOP/LOCAP Interest, upon
the terms and subject to the conditions set forth herein;
WHEREAS Marathon and USX have agreed to certain
restrictions with respect to actions relating to Ashland Voting Securities
(as defined below), upon the terms and subject to the conditions set forth
herein;
WHEREAS Ashland has agreed to certain restrictions with
respect to actions relating to USX Voting Securities (as defined below),
upon the terms and subject to the conditions set forth herein; and
WHEREAS Marathon, USX and Ashland have agreed to certain
restrictions with respect to certain of their business activities, upon the
terms and subject to the conditions set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as
follows:
ARTICLE I
Certain Definitions; Adjustable Amounts;
Representations and Warranties
SECTION 1.01. Definitions. Defined terms used in this
Agreement shall have the meanings ascribed to them by definition in this
Agreement or in Appendix A. In addition,
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when used herein the following terms have the following meanings:
"Actively Traded Marathon Equity Securities" means
Marathon Equity Securities for which there is an active trading market on
the National Market System of the NASDAQ or on a National Securities
Exchange during the period commencing 30 days prior to the Closing Date or
applicable Installment Payment Date and ending on the Closing Date or such
Installment Payment Date.
"Adjustable Amount" has the meaning set forth in Section 1.02.
"Adjustable Amounts Notice" has the meaning set forth in
Section 1.02.
"Adjustment Year" has the meaning set forth in Section 1.02.
"Agreement" means this Put/Call, Registration Rights, and
Standstill Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time.
"Appraised Value Determination Date" has the meaning set
forth in Section 6.01(c).
"Appraised Value of the Company" has the meaning set
forth in Section 6.01(c).
"Ashland Designated Sublease Agreements" means the
Ashland Sublease Agreements attached as Exhibits L-1, L-2, L-3 and L-4 to
the Asset Transfer and Contribution Agreement.
"Ashland Exercise Period Distributions" has the meaning
set forth in Section 5.01(a)(i).
"Ashland LOOP/LOCAP Interest" means (i) the 4.0% interest
in LOOP LLC owned by Ashland on the date hereof pursuant to the limited
liability company agreement of LOOP LLC dated as of October 18, 1996, among
Ashland, Marathon Pipe Line Company, Murphy Oil Corporation, Shell Oil
Company and Texaco Inc. and (ii) the 86.20 shares of common stock of LOCAP,
Inc. owned by Ashland, which shares on the date hereof represent an 8.6%
interest in LOCAP, Inc.; provided
4
that in the event there is a reclassification of the LOOP, LLC membership
interests or the common stock of LOCAP, Inc. into one or more different
types or classes of securities, the "Ashland LOOP/LOCAP Interest" shall
instead include such different types or classes of securities.
"Ashland LOOP/LOCAP Irrevocable Proxy" has the meaning
set forth in Section 9.02(e).
"Ashland LOOP/LOCAP Revocable Proxy" has the meaning set
forth in Section 5.02(c).
"Ashland Material Adverse Effect" means, for purposes of
Section 1.03, either (i) a material adverse effect on the ability of
Ashland to perform its obligations under this Agreement or (ii) an effect
on the business, operations, assets, liabilities, results of operations,
cash flows, condition (financial or otherwise) or prospects of Ashland's
Business which results in a Loss of two million dollars ($2,000,000) or
more, or, if such Loss is not susceptible to being measured in monetary
terms, is otherwise materially adverse to Ashland's Business; provided that
any such effect relating to or resulting from any change in the price of
petroleum or petroleum byproducts, general economic conditions or local,
regional, national or international industry conditions (including changes
in financial or market conditions) shall be deemed not to constitute an
Ashland Material Adverse Effect.
"Ashland Membership Interests" means the initial
Membership Interests of Ashland on the date hereof, together with any
additional Membership Interests that Ashland may hereafter acquire.
"Ashland Put Exercise Date" has the meaning set forth in
Section 4.03.
"Ashland Put Exercise Notice" has the meaning set forth
in Section 4.03.
"Ashland Put Price" has the meaning set forth in Section
4.01.
"Ashland Put Price Election Date" has the meaning set
forth in Section 4.04(b).
5
"Ashland Put Price Election Notice" has the meaning set
forth in Section 4.04(a).
"Ashland Put Right" has the meaning set forth in Section
4.01.
"Ashland Representatives Revocable Proxies" has the
meaning set forth in Section 5.02(a).
"Ashland Special Termination Right" means the Special
Termination Right granted to Ashland pursuant to Section 2.01.
"Ashland Voting Securities" means the securities of
Ashland (i) having the power under ordinary circumstances to elect at least
a majority of the board of directors of Ashland (whether or not any senior
class of stock has voting power by reason of any contingency) or (ii)
convertible into or exchangeable for securities of Ashland having the power
under ordinary circumstances to elect at least a majority of the board of
directors of Ashland (whether or not any senior class of stock has voting
power by reason of any contingency).
"Average Annual Level" means for any twelve-month period
ending on December 31 of any calendar year, the average of the level of the
Price Index ascertained by adding the twelve monthly levels of the Price
Index during such twelve-month period and dividing the total by twelve.
"Base Level" has the meaning set forth in the LLC Agreement.
"Base Rate" means a rate of interest closely
approximating that of comparable term senior debt securities or debt
obligations priced to trade at par issued by USX or issued by Marathon and
fully guaranteed by USX, or issued by a firm of comparable credit standing.
"Blackout Period" has the meaning set forth in Section
10.01(b).
"Bulge Bracket Investment Banking Firm" means an
investment banking firm that is listed as one of the top 10 investment
banking firms for all domestic equity issues in terms of the aggregate
dollar amount of such issues (with full credit given to the lead manager)
as reported in the
6
latest issue of Investment Dealers' Digest or a publication (or otherwise)
of similar national repute which provides rankings of investment banking
firms by size of domestic issues.
"Bulk Motor Oil Business" has the meaning set forth in
Section 14.03(h).
"Cash" means United States dollars or immediately
available funds in United States dollars.
"Closing" has the meaning set forth in Section 9.01(a).
"Closing Date" has the meaning set forth in Section 9.01(a).
"Commission" means the Securities and Exchange Commission
or any successor agency having jurisdiction under the Securities Act.
"Company Competitive Business" has the meaning set forth
in Section 14.01(a).
"Company Competitive Business Assets" has the meaning set
forth in Section 14.01(d).
"Company Competitive Third Party" has the meaning set
forth in Section 14.01(d).
"Company Material Adverse Effect" means, for purposes of
Section 1.03, an effect on the business, operations, assets, liabilities,
results of operations, cash flows, condition (financial or otherwise) or
prospects of the Company's Business which results in a Loss of two million
dollars ($2,000,000) or more, or, if such Loss is not susceptible to being
measured in monetary terms, is otherwise materially adverse to the
Company's Business; provided that any such effect relating to or resulting
from any change in the price of petroleum or petroleum byproducts, general
economic conditions or local, regional, national or international industry
conditions (including changes in financial or market conditions) shall be
deemed not to constitute a Company Material Adverse Effect.
"Competitive Business Purchase Price" has the meaning set
forth in Section 14.04.
7
"Confidential Information" has the meaning set
forth in Section 14.02(b).
"Confidentiality Agreement" has the meaning set forth in
Section 14.02(b).
"Delayed Closing Date" has the meaning set forth in
Section 9.03(b).
"Delayed Closing Date Interest Period" has the meaning
set forth in Section 9.03(b).
"Delayed Installment Payment Date" has the meaning set
forth in Section 9.06.
"Delayed Installment Payment Date Interest Period" has
the meaning set forth in Section 9.06.
"Demand Registration" has the meaning set forth in
Section 10.01(a).
"Designated Sublease Agreements" means the Ashland
Designated Sublease Agreements and the
Marathon Designated Sublease Agreements.
"Disclosing Party" has the meaning set forth in Section
14.02(b).
"Dispute" has the meaning set forth in Section 16.01.
"Dispute Notice" has the meaning set forth in Section 16.02.
"Distributable Cash" has the meaning set forth in the LLC
Agreement.
"Escrow Account" has the meaning set forth in Section
5.01(a)(ii)(B).
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exercise Date" means the Special Termination Exercise
Date, the Marathon Call Exercise Date or the Ashland Put Exercise Date, as
applicable.
8
"Exercise Period Distributions" means Ashland Exercise
Period Distributions or Marathon Exercise Period Distributions, as
applicable.
"Fair Market Value" has the meaning set forth in Section
7.01.
"14.01(d) Presentation Meeting" has the meaning set forth
in Section 14.01(d).
"14.01(d) Scheduled Closing Date" has the meaning set
forth in Section 14.01(d).
"14.03(d) Offer Notice" has the meaning set forth in
Section 14.03(d).
"14.03(d) Purchase Election Notice" has the meaning set
forth on Section 14.03(d).
"14.03(d) Scheduled Closing Date" has the meaning set
forth in Section 14.03(d).
"14.03(f) Offer Notice" has the meaning set forth in
Section 14.03(f)(i).
"14.03(f) Purchase Election Notice" has the meaning set
forth in Section 14.03(f)(i).
"14.04 Appraisal Process Commencement Date" has the
meaning set forth in Section 14.04.
"14.04 Appraisal Report" has the meaning set forth in
Section 14.04.
"14.04 Initial Opinion Values" has the meaning set forth
in Section 14.04.
"14.04 Subsequent Appraisal Process Commencement Date"
has the meaning set forth in Section 14.04.
"14.04 Third Opinion Value" has the meaning set forth in
Section 14.04.
"Fully Distributed Sale" has the meaning set forth in
Section 8.04.
9
"Holding Period" has the meaning set forth in Section 8.03.
"Installment Payment" has the meaning set forth in
Section 4.02(b).
"Installment Payment Date" means a Scheduled Installment
Payment Date or a Delayed Installment Payment Date, as applicable.
"Investment Grade Rating" means a rating of BBB- or
higher by S&P or Baa3 or higher by Moody's or the equivalent of such rating
by S&P and Moody's.
"Issuer" has the meaning set forth in Section 10.01(a).
"Issuer Material Adverse Effect" means either (i) a
material adverse effect on the ability of the Issuer to perform its
obligations under this Agreement or (ii) a material adverse effect on the
business, operations, assets, liabilities, results of operations, cash
flows, condition (financial or otherwise) or prospects of the Issuer and
its subsidiaries, taken as a whole; provided, however, that any such effect
relating to or resulting from any change in the price of petroleum or
petroleum byproducts, general economic conditions or local, regional,
national or international industry conditions (including changes in
financial or market conditions) or any change in applicable tax laws or
regulations shall be deemed not to constitute an Issuer Material Adverse
Effect.
"LIBOR Rate" means, for any one-month period or portion
thereof, the per annum rate (rounded to the nearest 1/10,000 of 1%) for
U.S. dollar deposits for such one-month period which appears on Bloomberg
Page DG522a Equity GPGX as of 11:00 a.m. London time on the second London
business day preceding the first day of such one-month period. "Bloomberg
Page DG522a Equity GPGX" means the display page designated "DG522a Equity
GPGX" on the Bloomberg, L.P. quotation service (or replacement page or
successor service for displaying comparable rates).
"Losses" has the meaning set forth in Section 10.04.
10
"Long Term Debt" means Indebtedness with a maturity of
one year or longer.
"Maralube Express Business" has the meaning set forth in
Section 14.03(d)(i).
"Marathon Call Exercise Date" has the meaning set forth
in Section 3.03.
"Marathon Call Exercise Notice" has the meaning set forth
in Section 3.03.
"Marathon Call Price" has the meaning set forth in
Section 3.01.
"Marathon Call Right" has the meaning set forth in
Section 3.01.
"Marathon Debt Securities" has the meaning set forth in
Section 8.01.
"Marathon Designated Sublease Agreements" means the
Marathon Sublease Agreements attached as Exhibits E-1, E-2 and E-3 to the
Asset Transfer and Contribution Agreement.
"Marathon Equity Securities" means any of (i) the class
of common stock of USX designated as USX-Marathon Group Common Stock, par
value $1.00 per share, (ii) the class of common equity securities of
Marathon or, if USX has transferred all of the assets and liabilities of
the Marathon Group to a Marathon Group Subsidiary (as such term is defined
in the Certificate of Incorporation of USX) pursuant to Section 2(a) of
Division I of Article Fourth of the Certificate of Incorporation of USX and
the Board of Directors of USX has declared that all of the outstanding
shares of USX-Marathon Group Common Stock be exchanged for shares of common
stock of the Marathon Group Subsidiary, the Marathon Group Subsidiary;
provided, that so long as Marathon shall be a subsidiary of USX, such
common equity securities shall constitute Marathon Equity Securities only
if such class accounts for USX's primary ownership interest in Marathon, or
(iii) the common equity securities of USX (but only if a single class of
common equity securities of USX exists), in each case (1) registered
pursuant to Section 12 of the Exchange Act and (2) issued to Ashland
pursuant to Section 4.02(c); provided that in the event there is a
11
reclassification of any of the foregoing classes of common stock into one
or more different types or classes of securities, "Marathon Equity
Securities" shall instead include such different types or classes of
securities.
"Marathon Exercise Period Distributions" has the meanings
set forth in Section 5.01(b)(i).
"Marathon Material Adverse Effect" means, for purposes of
Section 1.03, either (i) a material adverse effect on the ability of
Marathon to perform its obligations under this Agreement or (ii) an effect
on the business, operations, assets, liabilities, results of operations,
cash flows, condition (financial or otherwise) or prospects of Marathon's
Business which results in a Loss of two million dollars ($2,000,000) or
more, or, if such Loss is not susceptible to being measured in monetary
terms, is otherwise materially adverse to Marathon's Business; provided
that any such effect relating to or resulting from any change in the price
of petroleum or petroleum byproducts, general economic conditions or local,
regional, national or international industry conditions (including changes
in financial or market conditions) shall be deemed not to constitute a
Marathon Material Adverse Effect.
"Marathon Membership Interests" means the initial
Membership Interests of Marathon on the date hereof, together with any
additional Membership Interests that Marathon may hereafter acquire.
"Marathon Representatives Revocable Proxies" has the
meaning set forth in Section 5.02(b).
"Marathon Special Termination Right" means the Special
Termination Right granted to Marathon pursuant to Section 2.01.
"Market Value of the Company" has the meaning set forth
in Section 6.01(c).
"Maximum Offering Size" has the meaning set forth in
Section 10.01(e).
"Mid-Level Employee" has the meaning set forth in Section
14.02(a)(ii).
12
"Minimum Lube Oil Purchase Amount" has the meaning set
forth in Section 14.03(h).
"Moody's" means Moody's Investors Service Inc. and any
successor thereto.
"National Securities Exchange" means a securities
exchange registered as a national securities exchange under Section 6 of
the Exchange Act.
"9.04(b) Post-Scheduled Closing Date Distribution Amount"
has the meaning set forth in Section 9.04(b).
"9.08(b) Post-Scheduled Closing Date Distribution Amount"
has the meaning set forth in Section 9.08(b).
"Non-Terminating Member" has the meaning set forth in
Section 2.01(a).
"Offering Memorandum" means any offering memorandum
prepared in connection with a sale of Securities effected in accordance
with Section 4(2) or Rule 144A under the Securities Act, including all
amendments and supplements to such offering memorandum, all exhibits
thereto and all materials incorporated by reference in such offering
memorandum.
"Other Holders" has the meaning set forth in Section
10.01(e).
"Packaged Motor Oil Business" has the meaning set forth
in Section 14.03(h).
"Percentage Interest" has the meaning set forth in the
LLC Agreement.
"Permitted Investments" means any of the following: (i)
any investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or
any agency thereof; (ii) investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 180 days of the date
of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America having capital,
surplus and undivided profits
13
aggregating in excess of $250,000,000 (or the foreign currency equivalent
thereof) and whose Long Term debt is rated "A" (or higher) by Moody's or
S&P; (iii) repurchase agreements having terms of not more than 30 days that
are (A) collateralized by underlying securities of the types described in
clause (i) above having a fair market value at the time the Company enters
into such repurchase agreements of at least 102% of the principal amount of
such repurchase agreements and (B) entered into with a bank meeting the
qualifications described in clause (ii) above; (iv) investments in
commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of any of the
parties hereto) organized and in existence under the laws of the United
States of America, any state thereof or any foreign country recognized by
the United States of America with a rating at the time as of which any
investment therein is made of both "P-1" (or higher) according to Moody's
and "A-1" (or higher) according to S&P; and (v) investments in securities
with maturities of six months or less from the date of acquisition issued
or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or "A" by Moody's.
"Price Index" has the meaning set forth in the LLC Agreement.
"Private Label Packaged Motor Oil Business" has the
meaning set forth in Section 14.03(h).
"Qualifying Public Offering" has the meaning set forth in
Section 8.04.
"Quick Lube Business" has the meaning set forth in
Section 14.03(h).
"Registration Statement" means any registration statement
under the Securities Act which permits the public offering of Securities,
including the prospectus included therein, all amendments and supplements
to such registration statement or prospectus, including post-effective
amendments, all exhibits thereto and all materials incorporated by
reference in such registration statement.
"Representatives" has the meaning set forth in Section
14.02(b).
14
"Response" has the meaning set forth in Section 16.02.
"Required Disclosure" has the meaning set forth in
Section 7.03(a).
"Required Disclosure Date" has the meaning set forth in
Section 7.03(a).
"Scheduled Closing Date" has the meaning set forth in
Section 9.01(a).
"Scheduled Installment Payment Date" has the meaning set
forth in Section 4.02(b).
"Securities" means Marathon Debt Securities and/or
Marathon Equity Securities.
"Securities Act" means the Securities Act of 1933.
"Securities Document" has the meaning set forth in
Section 8.02.
"Senior Employee" has the meaning set forth in Section
14.02(a)(ii).
"S&P" means Standard & Poor's Corporation and any
successor thereto.
"7.03(b) Appraisal Process Commencement Date" has the
meaning set forth in Section 7.03(b).
"7.03(b) Appraisal Report" has the meaning set forth in
Section 7.03(b).
"7.03(b) Discount Amount" has the meaning set forth in
Section 7.03(b).
"7.03(b) Initial Opinion Values" has the meaning set
forth in Section 7.03(b).
"7.03(b) Subsequent Appraisal Process Commencement Date"
has the meaning set forth in Section 7.03(b).
"7.03(b) Third Opinion Value" has the meaning set forth
in Section 7.03(b).
15
"7.04 Appraisal Process Commencement Date" has the
meaning set forth in Section 7.04(b).
"7.04 Appraisal Report" has the meaning set forth in
Section 7.04(b).
"7.04 Discount Amount" has the meaning set forth in
Section 7.04(b).
"7.04 Initial Opinion Values" has the meaning set forth
in Section 7.04(b).
"7.04 Subsequent Appraisal Process Commencement Date" has
the meaning set forth in Section 7.04(b).
"7.04 Third Opinion Value" has the meaning set forth in
Section 7.04(b).
"6.01 Appraisal Process Commencement Date" has the
meaning set forth in Section 6.01(b).
"6.01 Appraisal Report" has the meaning set forth in
Section 6.01(b).
"6.01 Initial Opinion Values" has the meaning set forth
in Section 6.01(b).
"6.01 Subsequent Appraisal Process Commencement Date" has
the meaning set forth in Section 6.01(b).
"6.01 Third Opinion Value" has the meaning set forth in
Section 6.01(b).
"Special Termination Exercise Date" has the meaning set
forth in Section 2.03.
"Special Termination Exercise Notice" has the meaning set
forth in Section 2.03.
"Special Termination Price" has the meaning set forth in
Section 2.01(a).
"Special Termination Right" has the meaning set forth in
Section 2.01(a).
"Tax Liability" has the meaning set forth in the LLC
Agreement.
16
"Tax Liability Distributions" means the cash
distributions to which a Member is entitled pursuant to Section 5.01(a) of
the LLC Agreement.
"Terminating Member" has the meaning set forth in Section
2.01(a).
"Terminating Member's Membership Interests" means, if
Ashland is the Terminating Member, the Ashland Membership Interests and, if
Marathon is the Terminating Member, the Marathon Membership Interests.
"Terminating Member's Percentage Interest" means, if
Ashland is the Terminating Member, the Ashland Percentage Interest and, if
Marathon is the Terminating Member, the Marathon Percentage Interest.
"Termination Notice" has the meaning set forth in Section
2.01(a).
"Trading Day" means any day on which the New York Stock
Exchange is open for business.
"Underwritten Public Offering" means an underwritten
public offering of Securities pursuant to an effective Registration
Statement under the Securities Act.
"USX Material Adverse Effect" means, for purposes of
Section 1.03, a material adverse effect on the ability of USX to perform
its obligations under this Agreement.
"USX Voting Securities" means the securities of USX (i)
having the power under ordinary circumstances to elect at least a majority
of the board of directors of USX (whether or not any senior class of stock
has voting power by reason of any contingency) or (ii) convertible into or
exchangeable for securities of USX having the power under ordinary
circumstances to elect at least a majority of the board of directors of USX
(whether or not any senior class of stock has voting power by reason of any
contingency); provided, that each class of common equity securities of USX,
and any securities of USX convertible into or exchangeable for any such
class, shall constitute USX Voting Securities regardless of whether such
class has the power under ordinary circumstances to elect at least a
majority of the board of directors of USX.
17
"Valvoline" has the meaning set forth in Section 14.03(h).
"Valvoline Business" has the meaning set forth in Section
14.03(h).
"Valvoline Competitive Business Assets" has the meaning
set forth in Section 14.03(d).
"Valvoline Competitive Third Party" has the meaning set
forth in Section 14.03(d).
"Weighted Average Price" has the meaning set forth in
Section 7.03(a).
SECTION 1.02. Adjustable Amounts. Within 30 days
following the date on which the United States Department of Labor Bureau of
Labor Statistics for all Urban Areas publishes the Price Index for (a) the
month of December, 2002 and (b) thereafter, the month of December in each
five year anniversary of the year 2002 (the year 2002 and each such five
year anniversary being an "Adjustment Year"), the Company shall determine
whether the Average Annual Level for the applicable Adjustment Year exceeds
the Base Level. If the Company determines that the Average Annual Level for
such Adjustment Year exceeds the Base Level, then the Company shall
increase or decrease each of the following amounts (each, an "Adjustable
Amount") to an amount calculated by multiplying the relevant Adjustable
Amount by a fraction whose numerator is the Average Annual Level for such
Adjustment Year and whose denominator is the Base Level: (i) the two
million dollars ($2,000,000) amount set forth in the definition of "Ashland
Material Adverse Effect"; (ii) the two million dollars ($2,000,000) amount
set forth in the definition of "Company Material Adverse Effect"; (iii) the
two million dollars ($2,000,000) amount set forth in the definition of
"Marathon Material Adverse Effect"; (iv) the $250 million amount set forth
in clause (ii) of the definition of "Permitted Investments" in Section
1.01; and (v) the $100 million and $25 million amounts set forth in Section
10.01(a); provided that in no event shall any Adjustable Amount be
decreased below the initial amount thereof set forth herein. Within five
Business Days after making such determinations, the Company shall
distribute to each Member a notice (an "Adjustable Amounts Notice") setting
forth: (A) the amount by which the Average Annual Level for such Adjustment
Year exceeded the
18
Base Level and (B) the calculations of any adjustments made to the
Adjustable Amounts pursuant to this Section 1.02. Any adjustment made to
the Adjustable Amounts pursuant to this Section 1.02 shall be effective as
of the date on which the Company delivers to the Members the related
Adjustable Amounts Notice.
SECTION 1.03. Representations and Warranties. Each of
Marathon and USX represents and warrants to Ashland, and Ashland represents
and warrants to each of Marathon and USX, in each case as of the date
hereof and will be required to represent and warrant as of any Closing
Date, as follows:
(a) Due Organization, Good Standing and Power. It is a
corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation with the
power and authority to own, lease and operate its assets and to
conduct the business now being or to be conducted by it. It is
duly authorized, qualified or licensed to do business as a foreign
corporation or other organization in good standing in each of the
jurisdictions in which its right, title or interest in or to any
of the assets held by it or the business conducted by it requires
such authorization, qualification or licensing, except where the
failure to be so authorized, qualified, licensed or in good
standing would not have and would not reasonably be expected to
have, individually or in the aggregate, a Marathon Material
Adverse Effect, a USX Material Adverse Effect or an Ashland
Material Adverse Effect, as the case may be. It has all requisite
power and authority to enter into this Agreement and to perform
its obligations hereunder.
(b) Authorization and Validity of Agreements. The
execution and delivery by it of this Agreement and the
consummation by it of the transactions contemplated hereby have
been duly authorized and approved by all necessary corporate or
other action on its part. This Agreement has been duly executed
and delivered by it. This Agreement is its legal, valid and
binding obligation, enforceable against it in accordance with its
terms.
(c) Lack of Conflicts. Except as set forth on Schedule
1.03(c) to the Marathon, USX or Ashland Put/Call, Registration
Rights and Standstill Disclosure
19
Letter, as applicable, neither the execution and delivery by it of
this Agreement nor the consummation by it of the transactions
contemplated hereby does or will (i) conflict with, or result in
the breach of any provision of, its charter or by-laws or similar
governing or organizational documents or any of its subsidiaries,
(ii) violate any Applicable Law or any permit, order, award,
injunction, decree or judgment of any Governmental Authority
applicable to or binding upon it or any of its subsidiaries or to
which any of their respective properties or assets is subject,
(iii) violate, conflict with or result in the breach or
termination of, or otherwise give any other person the right to
terminate, or constitute a default, an event of default or an
event which with notice, lapse of time or both, would constitute a
default or an event of default under the terms of, any mortgage,
indenture, deed of trust or lease or other agreement or instrument
to which it or any of its subsidiaries is a party or by which any
of their respective properties or assets is subject, except, in
the case of clauses (ii) or (iii), for such violations, conflicts,
breaches, terminations and defaults which would not have and would
not reasonably be expected to have, individually, a Company
Material Adverse Effect.
(d) No Consents. Except as set forth on Schedule 1.03(d)
to the Marathon, USX or Ashland Put/Call, Registration Rights and
Standstill Disclosure Letter, as applicable, no Governmental
Approval or other consent is required by it for the execution and
delivery by it of this Agreement or for the consummation of the
transactions contemplated hereby except (a) for such Governmental
Approvals or other consents as have been obtained or are
contemplated hereby to be obtained after Closing or (b) where the
failure to obtain such Governmental Approvals or other consents
would not have and would not reasonably be expected to have,
individually, a Company Material Adverse Effect.
20
ARTICLE II
Special Termination Right
SECTION 2.01. Special Termination Right. (a) If Ashland
or Marathon (the "Terminating Member") notifies the Board of Managers of
the Company and the other Member (the "Non-Terminating Member") in writing
pursuant to Section 2.03 of the LLC Agreement that it wants to terminate
the term of the Company at the end of the Initial Term or any succeeding
10-year period (any such notice being a "Termination Notice"), then,
subject to Section 2.01(b), the Non-Terminating Member shall have the
right, exercisable at any time during the 180-day period following its
receipt from the Terminating Member of a Termination Notice, to purchase
from the Terminating Member on the Scheduled Closing Date (the "Special
Termination Right"), and the Terminating Member shall thereupon be required
to sell to the Non-Terminating Member on the Scheduled Closing Date, all of
its Membership Interests and, in the circumstance where Ashland is the
Terminating Member, the Ashland LOOP/LOCAP Interest, for an aggregate
amount equal to the purchase price (the "Special Termination Price") set
forth in Section 2.02(a), plus interest on the Special Termination Price at
a rate per annum equal to the Base Rate, with daily accrual of interest,
for the period commencing on the Special Termination Exercise Date and
ending on the Scheduled Closing Date. The Special Termination Right shall
automatically terminate at the close of business on the 180th day following
the Non-Terminating Member's receipt of a Termination Notice, unless
previously exercised by the Non-Terminating Member in accordance with the
provisions of Section 2.03.
(b) Notwithstanding anything to the contrary contained in
Section 2.01(a), if Marathon and Ashland each deliver a Terminating Notice
to the Board of Managers of the Company and the other Member, then neither
Marathon nor Ashland shall have a Special Termination Right.
SECTION 2.02. Special Termination Price. (a) Amount. The
Special Termination Price shall be an amount equal to the product of (i)
100% of the Appraised Value of the Company multiplied by (ii) the
Terminating Member's Percentage Interest.
21
(b) Timing of Payment. The Non-Terminating Member shall
pay the entire Special Termination Price, together with accrued interest
calculated as set forth in Section 2.01, on the Scheduled Closing Date.
(c) Form of Consideration. The Non-Terminating Member
shall pay the Special Termination Price, and all accrued interest, in Cash.
SECTION 2.03. Method of Exercise. The Non-Terminating
Member shall exercise its Special Termination Right by delivering to the
Terminating Member a notice of such exercise (the "Special Termination
Exercise Notice"). The date of the Terminating Member's receipt of the
Special Termination Exercise Notice shall be deemed to be the date of the
Non-Terminating Member's exercise of its Special Termination Right (the
"Special Termination Exercise Date") and, except as expressly provided in
Sections 9.08(a) and 9.09, the Non-Terminating Member's exercise of its
Special Termination Right shall thereafter be irrevocable.
ARTICLE III
Marathon Call Right
SECTION 3.01. Marathon Call Right. Subject to Section
3.04, at any time on and after December 31, 2004, Marathon shall have the
right to purchase from Ashland on the Scheduled Closing Date (the "Marathon
Call Right"), and Ashland shall thereupon be required to sell to Marathon
on the Scheduled Closing Date, all of Ashland's Membership Interests and
the Ashland LOOP/LOCAP Interest, for an aggregate amount equal to the
purchase price (the "Marathon Call Price") set forth in Section 3.02(a),
plus interest on the Marathon Call Price at a rate per annum equal to the
Base Rate, with daily accrual of interest, for the period commencing on the
Marathon Call Exercise Date and ending on the Scheduled Closing Date.
SECTION 3.02. Marathon Call Price. (a) Amount. The
Marathon Call Price shall be an amount equal to the product of (i) 115% of
the Appraised Value of the Company multiplied by (ii) Ashland's Percentage
Interest.
22
(b) Timing of Payment. Marathon shall pay the entire
Marathon Call Price, together with accrued interest calculated as set forth
in Section 3.01, on the Scheduled Closing Date.
(c) Form of Consideration. Marathon shall pay the
Marathon Call Price, and all accrued interest, in Cash.
SECTION 3.03. Method of Exercise. Marathon shall exercise
its Marathon Call Right by delivering to Ashland a notice of such exercise
(the "Marathon Call Exercise Notice"). The date of Ashland's receipt of the
Marathon Call Exercise Notice shall be deemed to be the date of Marathon's
exercise of its Marathon Call Right (the "Marathon Call Exercise Date")
and, except as expressly provided in Sections 9.03(a), 9.04(a) and 9.05,
Marathon's exercise of its Marathon Call Right shall thereafter be
irrevocable.
SECTION 3.04. Limitation on Marathon's Ability To
Exercise its Marathon Call Right. If prior to the Marathon Call Exercise
Date, Ashland elects to Transfer its Membership Interests to a third party
pursuant to Section 10.01(c) of the LLC Agreement, and in connection
therewith delivers to Marathon the requisite Offer Notice pursuant to
Section 10.04 of the LLC Agreement, Marathon shall not be permitted to
exercise its Marathon Call Right for a period commencing on the date of
Marathon's receipt of such Offer Notice and ending on the earliest of (i)
120 days (or 270 days if a second request has been made under HSR)
following such receipt, (ii) the closing of such Transfer, and (iii) the
date such proposed Transfer by Ashland shall have been finally abandoned.
After such period, Marathon shall be entitled to exercise its Marathon Call
Right.
ARTICLE IV
Ashland Put Right
SECTION 4.01. Ashland Put Right. Subject to Section 4.05,
at any time after December 31, 2004, Ashland shall have the right to sell
to Marathon on the Scheduled Closing Date (the "Ashland Put Right"), and
Marathon shall thereupon be required to purchase from Ashland on the
Scheduled Closing Date, all of Ashland's Membership Interests and the
Ashland LOOP/LOCAP Interest, for an
23
aggregate amount equal to the purchase price (the "Ashland Put Price") set
forth in Section 4.02, plus interest on the Ashland Put Price (or, in the
event that Marathon elects to pay the Ashland Put Price in installments,
any unpaid portion of the Ashland Put Price) at a rate per annum equal to
the Base Rate, with daily accrual of interest, for the period commencing on
the Ashland Put Exercise Date and ending on the Scheduled Closing Date (or,
in the event that Marathon elects to pay the Ashland Put Price in
installments, on the applicable Scheduled Installment Payment Date).
SECTION 4.02. Ashland Put Price. (a) Amount. The Ashland
Put Price shall be an amount equal to the sum of (i) for that portion of
the Ashland Put Price to be paid to Ashland in Cash or in Marathon Debt
Securities, an amount equal to the product of (x) 85% of the Appraised
Value of the Company multiplied by (y) Ashland's Percentage Interest
multiplied by (z) the percentage of the Ashland Put Price to be paid to
Ashland in Cash and/or in Marathon Debt Securities, plus (ii) for that
portion of the Ashland Put Price to be paid to Ashland in Marathon Equity
Securities, an amount equal to the product of (x) 90% of the Appraised
Value of the Company multiplied by (y) Ashland's Percentage Interest
multiplied by (z) the percentage of the Ashland Put Price to be paid to
Ashland in Marathon Equity Securities.
(b) Timing of Payment. Subject to Section 4.02(d),
Marathon shall have the right to elect, by specifying in the Ashland Put
Price Election Notice, to (i) pay the entire Ashland Put Price on the
Scheduled Closing Date or (ii) pay the Ashland Put Price in three equal
installments (each an "Installment Payment"), in either case, together with
accrued interest calculated as set forth in Section 4.01. If Marathon
elects to pay the Ashland Put Price in installments, Marathon shall pay
Ashland (x) the first Installment Payment on the Scheduled Closing Date;
(y) the second Installment Payment on the first anniversary of the
Scheduled Closing Date; and (z) the third Installment Payment on the second
anniversary of the Scheduled Closing Date (each such date being a
"Scheduled Installment Payment Date"), in each case, together with accrued
interest calculated as set forth in Section 4.01.
(c) Form of Consideration. Subject to Section 4.02(d),
Marathon shall have the right to elect, by specifying in an Ashland Put
Price Election Notice, to pay
24
the Ashland Put Price (i) entirely in Cash or (ii) in a combination of Cash
and Securities; provided that at least 50% of the Ashland Put Price (and at
least 50% of each Installment Payment if Marathon elects to pay in
installments) shall consist of Cash; provided further, that the sum of (x)
the Fair Market Value of any Securities issued to Ashland on the Closing
Date (or on any Installment Payment Date) plus (y) the amount of Cash paid
to Ashland on the Closing Date (or on such Installment Payment Date) in
respect of the Ashland Put Price, in each case exclusive of any interest
paid thereon, shall equal the Ashland Put Price (or the applicable
Installment Payment); and provided further, that in no event shall Marathon
or USX issue to Ashland an amount of Marathon Equity Securities that would
cause Ashland to own, directly or indirectly, at the Closing or on any
Scheduled Installment Payment Date in the aggregate 10% or more of the
number of shares of such class of Marathon Equity Securities that are
outstanding on the Closing Date and are publicly held (it being understood
and agreed that for purposes of this Section 4.02(c), any shares of such
class of Marathon Equity Securities that are either held by Marathon or any
of its Affiliates or subject to restrictions on transfer shall not be
considered publicly held). Marathon shall pay all accrued interest in Cash.
(d) Consequences of Failure to Make Certain Elections.
Notwithstanding anything to the contrary in this Agreement:
(i) if Marathon fails to deliver to Ashland an Ashland
Put Price Election Notice within the requisite time period set
forth in Section 4.04(a) or if Marathon delivers to Ashland an
Ashland Put Price Election Notice that states that the entire
Ashland Put Price will be paid at Closing but does not state
whether any portion of the Ashland Put Price will be paid in
Securities, Marathon shall thereafter be required to pay Ashland
the entire Ashland Put Price in Cash on the Closing Date;
(ii) if Marathon delivers to Ashland an Ashland Put Price
Election Notice pursuant to Section 4.04(a) that does not indicate
whether it is electing to pay the Ashland Put Price in
installments, Marathon shall thereafter be required to pay Ashland
the entire Ashland Put Price on the Closing Date;
25
(iii) if Marathon delivers to Ashland an Ashland Put
Price Election Notice pursuant to Section 4.04(a) that does not
indicate the form of consideration regarding the Ashland Put Price
(or, if such Ashland Put Price Election Notice states that
Marathon has elected to pay the Ashland Put Price in installments,
the first Installment Payment), Marathon shall thereafter be
required to pay Ashland the entire Ashland Put Price (or first
Installment Payment) in Cash on the Closing Date;
(iv) if Marathon has elected in its Ashland Put Price
Election Notice delivered pursuant to Section 4.04(b) to pay the
Ashland Put Price in installments and thereafter if Marathon fails
to deliver to Ashland an Ashland Put Price Election Notice within
the requisite time period set forth in Section 4.04(b) for any
Scheduled Installment Payment Date, Marathon shall thereafter be
required to pay Ashland the entire Installment Payment in Cash on
the applicable Installment Payment Date;
(v) if Marathon elects in any Ashland Put Price Election
Notice to issue (or to have USX issue) to Ashland Actively Traded
Marathon Equity Securities on the Closing Date (or applicable
Installment Payment Date) and at any time prior to the Closing
Date (or such Installment Payment Date), such Securities cease for
whatever reason to be Actively Traded Marathon Equity Securities,
Marathon shall thereafter be required to pay Ashland the entire
Ashland Put Price (or the applicable Installment Payment) in Cash
on the Closing Date (or applicable Installment Payment Date); and
(vi) if Marathon elects in any Ashland Put Price Election
Notice to issue (or to have USX issue) to Ashland Actively Traded
Marathon Equity Securities on the Closing Date (or applicable
Installment Payment Date) and Marathon fails to give the related
Required Disclosure on the applicable Required Disclosure Date,
Marathon shall thereafter be required to pay to Ashland the entire
Ashland Put Price (or the applicable Installment Payment) in Cash
on the Closing Date (or on such Installment Payment Date).
26
SECTION 4.03. Method of Exercise. Ashland may exercise
its Ashland Put Right by delivering to Marathon a notice of such exercise
(the "Ashland Put Exercise Notice"). The date of Marathon's receipt of the
Ashland Put Exercise Notice shall be deemed to be the date of Ashland's
exercise of its Ashland Put Right (the "Ashland Put Exercise Date") and,
except as expressly provided in Sections 9.03(a), 9.04(a) and 9.05,
Ashland's exercise of its Ashland Put Right shall thereafter be
irrevocable.
SECTION 4.04. Ashland Put Price Election Notice. (a)
Notice re: Closing. Within five Business Days after the Appraised Value
Determination Date, Marathon shall notify Ashland (a "Ashland Put Price
Election Notice") as to (i) whether it elects to pay the Ashland Put Price
(A) entirely at Closing or (B) in three equal installments and (ii) whether
Marathon elects to pay part of the Ashland Put Price or first Installment
Payment, as applicable, at Closing in Securities, and, if so, (A) the name
of the issuer of such Securities, (B) the type of such Securities, (C) the
portion of the Ashland Put Price or first Installment Payment, as
applicable, which will be comprised of such Securities, (D) whether it
elects to impose a Holding Period with respect to any of such Securities
and (E) the length of any such Holding Period.
(b) Notices re: Second and Third Scheduled Installment
Payment Dates. Within 45 days prior to each of the second and third
Scheduled Installment Payment Dates, if applicable, Marathon shall deliver
to Ashland an Ashland Put Price Election Notice as to whether Marathon
elects to pay part of the applicable Installment Payment in Securities,
and, if so, (i) the name of the issuer of such Securities, (ii) the type of
Securities, (iii) the portion of the applicable Installment Payment which
will be comprised of such Securities, (iv) whether it elects to impose a
Holding Period with respect to any of such Securities and (v) the length of
any such Holding Period. The date of Ashland's receipt of any Ashland Put
Price Election Notice is referred to herein as the "Ashland Put Price
Election Date" with respect to such Ashland Put Price Election Notice.
(c) Additional Information With Respect to Securities. If
Marathon elects to pay any part of the Ashland Put Price in Securities,
then in addition to the information provided to Ashland in the Ashland Put
Price Election Notice pursuant to Section 4.04(a) or 4.04(b),
27
Marathon shall provide Ashland and its advisors with any other information
concerning such Securities that Ashland or its advisors may reasonably
request.
(d) Irrevocability of Elections. Marathon's elections as
set forth in an Ashland Put Price Election Notice shall be irrevocable upon
Ashland's receipt of such Ashland Put Price Election Notice; provided that
at any time prior to the date that is ten Business Days prior to the
Closing Date (or applicable Installment Payment Date) Marathon shall have
the right to change a previous election to pay part of the Ashland Put
Price (or applicable Installment Payment) in Securities to an election to
pay a greater portion of or the entire Ashland Put Price (or applicable
Installment Payment) in Cash, or to change a previous election to pay the
Ashland Put Price in installments to an election to pay the entire or
remaining Ashland Put Price on the Closing Date (or applicable Installment
Payment Date).
SECTION 4.05. Limitation on Ashland's Ability To Exercise
its Ashland Put Right. If prior to the Ashland Put Exercise Date, Marathon
elects to Transfer all of its Membership Interests to a third party
pursuant to Section 10.01(c) of the LLC Agreement, and in connection
therewith delivers to Ashland the requisite Offer Notice pursuant to
Section 10.04 of the LLC Agreement, Ashland shall not be permitted to
exercise its Ashland Put Right for a period commencing on the date of
Ashland's receipt of such Offer Notice and ending on the earlier of (i) 120
days (270 days if a second request has been made under HSR) following such
receipt, (ii) the closing of such Transfer, and (iii) the date such
proposed Transfer by Marathon shall have been finally abandoned. After such
period, Ashland shall be entitled to exercise its Ashland Put Right.
ARTICLE V
Termination of Certain Distributions; Revocable Proxies
SECTION 5.01. Termination of Certain Distributions. (a)
Distributions to Ashland. (i) Subject to Sections 9.04(a), 9.05, 9.08(a)
and 9.09, in the event that Marathon exercises its Marathon Call Right or
its Special Termination Right, or in the event that Ashland exercises its
Ashland Put Right, then on the relevant
28
Exercise Date, Ashland shall cause each of its Representatives to authorize
Marathon's Representatives to cause the Company to withhold from Ashland
all distributions of Distributable Cash and all Tax Liability Distributions
that Ashland would otherwise be entitled to receive pursuant to Article V
of the LLC Agreement during the period from the relevant Exercise Date to
the Closing Date, other than (i) all distributions of Distributable Cash
and Tax Liability Distributions that are attributable to any Fiscal Quarter
that ends on or prior to the close of business on the relevant Exercise
Date, (ii) a pro rata portion of all distributions of Distributable Cash
and Tax Liability Distributions that are attributable to the portion of a
Fiscal Quarter that begins prior to the relevant Exercise Date and that
ends after such Exercise Date and (iii) all Tax Liability Distributions
that are attributable to the period from the relevant Exercise Date to the
Closing Date to the extent that Ashland has any Tax Liability during such
period ("Ashland Exercise Period Distributions").
(ii) Any Ashland Exercise Period Distributions withheld
from Ashland pursuant to Section 5.01(a)(i) shall be distributed by the
Company as follows:
(A) if at the time such distribution is so withheld,
either (1) USX's Long Term Debt has an Investment Grade Rating and
USX has agreed in writing to guarantee (which guarantee shall be a
guarantee of payment) Marathon's obligations to pay to Ashland in
the circumstances set forth in Sections 9.04(a) and 9.05 (pursuant
to a guarantee agreement in form and substance reasonably
satisfactory to Ashland and its counsel) or (2) Marathon's Long
Term Debt has an Investment Grade Rating, then the Company shall
pay such Ashland Exercise Period Distributions directly to
Marathon; and
(B) if at the time such distribution is so withheld, (1)
Marathon's Long Term Debt does not have an Investment Grade Rating
and (2) either (x) USX's Long Term Debt does not have an
Investment Grade Rating or (y) USX's Long Term Debt has an
Investment Grade Rating but USX has not agreed in writing to
guarantee Marathon's payment obligations described in clause (2)
of subparagraph (A) above, then Marathon's Representatives shall
cause the Company to, and the Company shall, deposit all Ashland
Exercise Period
29
Distributions into an escrow account to be established by the
Company (the "Escrow Account") and to release such deposits from
the Escrow Account only in accordance with this Agreement. All
amounts in the Escrow Account shall be invested only in Permitted
Investments.
(b) Distributions to Marathon. (i) Subject to Sections
9.08(a) and 9.09, in the event that Ashland exercises its Special
Termination Right in accordance with the terms hereof, then on the Special
Termination Exercise Date, Marathon shall cause each of its Representatives
to authorize Ashland's Representatives to cause the Company to withhold
from Marathon all distributions of Distributable Cash and all Tax Liability
Distributions that Marathon would otherwise be entitled to receive pursuant
to Article V of the LLC Agreement during the period from the Special
Termination Exercise Date to the Closing Date, other than (A) all
distributions of Distributable Cash and Tax Liability Distributions that
are attributable to any Fiscal Quarter that ends on or prior to the close
of business on the Special Termination Exercise Date, (B) a pro rata
portion of all distributions of Distributable Cash and Tax Liability
Distributions that are attributable to the portion of a Fiscal Quarter that
begins prior to the Special Termination Exercise Date and that ends after
the Special Termination Exercise Date and (C) all Tax Liability
Distributions that are attributable to the period from the Special
Termination Exercise Date to the Closing Date to the extent that Marathon
has any Tax Liability during such period ("Marathon Exercise Period
Distributions").
(ii) Any Marathon Exercise Period Distributions withheld
from Ashland pursuant to Section 5.01(a) shall be distributed by the
Company as follows:
(A) if at the time such distribution is so withheld,
Ashland's Long Term Debt has an Investment Grade Rating, then the
Company shall pay such Marathon Exercise Period Distributions
directly to Ashland; and
(B) if at the time such distribution is so withheld,
Ashland's Long Term Debt does not have an Investment Grade Rating,
then Ashland's Representatives shall cause the Company to, and the
Company shall, deposit all Marathon Exercise Period Distributions
into an Escrow Account and to release such deposits from the
30
Escrow Account only in accordance with this Agreement. All amounts
in the Escrow Account shall be invested only in Permitted
Investments.
SECTION 5.02. Revocable Proxies. (a) Ashland
Representatives Revocable Proxies. Subject to Sections 9.04(a), 9.05,
9.08(a) and 9.09, in the event that Marathon exercises its Marathon Call
Right or its Special Termination Right, or in the event that Ashland
exercises its Ashland Put Right, then on the relevant Exercise Date,
Ashland shall cause each of its Representatives to grant to Marathon's
Representatives a proxy (the "Ashland Representatives Revocable Proxies")
which shall authorize Marathon's Representatives to cast each Ashland
Representative's vote at a Board of Managers' meeting (but not by written
consent in lieu of a meeting in accordance with Section 8.04(h) of the LLC
Agreement unless Marathon shall have given Ashland prior written notice of
the specific action to be taken by such written consent) in favor of or
against any of the Super Majority Decisions described in Sections 8.08 of
the LLC Agreement, as Marathon's Representatives shall, in their sole
discretion, determine, other than any vote with respect to a Super Majority
Decision described in Sections 8.08(c) (admission of a new Member; issuance
of additional Membership Interests), 8.08(d) (additional capital
contributions), 8.08(i) (change in Company's independent auditors), 8.08(j)
(amendments to LLC Agreement or other Transaction Documents to which
Company or its subsidiaries is a party), 8.08(l) (bankruptcy), 8.08(m)
(modification of provisions re: distributions of Distributable Cash) or
8.08(q) (delegation to a Member of power to unilaterally bind the Company),
with respect to which Ashland's Representatives shall retain all of their
rights and authority to vote; provided that Marathon shall not, and shall
cause each of its Representatives not to, take any action through the
exercise of the Ashland Representatives Revocable Proxies to cause the
Company's status as a partnership for Federal income tax purposes to
terminate prior to the Closing Date.
(b) Marathon Representative Revocable Proxy. Subject to
Sections 9.08(a) and 9.09, in the event that Ashland exercises its Special
Termination Right, then on the Special Exercise Date, Marathon shall cause
each of its Representatives to grant to Ashland's Representatives a proxy
(the "Marathon Representatives Revocable Proxies") which shall authorize
Ashland's Representatives to cast each
31
Marathon Representative's vote at a Board of Managers' meeting (but not by
written consent in lieu of a meeting in accordance with Section 8.04(h) of
the LLC Agreement unless Ashland shall have given Marathon prior written
notice of the specific action to be taken by such written consent) in favor
of or against any of the Super Majority Decisions described in Sections
8.08 of the LLC Agreement, as Ashland's Representatives shall, in their
sole discretion, determine, other than any vote with respect to a Super
Majority Decision described in Section 8.08(c), 8.08(d), 8.08(i), 8.08(j),
8.08(l), 8.08(m) or 8.08(q) (except as expressly provided in Section 5.01),
with respect to which Marathon's Representatives shall retain all of their
rights and authority to vote; provided that Ashland shall not, and shall
cause each of its Representatives not to, take any action through the
exercise of the Marathon Representatives Revocable Proxies to cause the
Company's status as a partnership for Federal income tax purposes to
terminate prior to the Closing Date.
(c) Ashland LOOP/LOCAP Revocable Proxy. Subject to
Sections 9.04(a), 9.05, 9.08(a) and 9.09, in the event that Marathon
exercises its Marathon Call Right or its Special Termination Right, or in
the event that Ashland exercises its Ashland Put Right, then on the
relevant Exercise Date, Ashland shall grant to Marathon, or such other
person as Marathon shall designate, a proxy (the "Ashland LOOP/LOCAP
Revocable Proxy") which shall authorize Marathon and its Representatives
(or such other person) to exercise on Ashland's behalf, all of Ashland's
voting rights with respect to the Ashland LOOP/LOCAP Interest.
ARTICLE VI
Determination of the Appraised Value of the Company
SECTION 6.01. Determination of Appraised Value of the
Company. (a) Negotiation Period. If Marathon exercises its Special
Termination Right or its Marathon Call Right or if Ashland exercises its
Special Termination Right or its Ashland Put Right, then for a period of 60
days following the relevant Exercise Date, Marathon and Ashland shall
negotiate in good faith to seek to reach agreement as to the Market Value
of the Company. If Marathon and Ashland reach such an agreement, then the
Market Value of the Company shall be deemed to be the amount so agreed upon
by Marathon and Ashland.
32
(b) Appraisal Process. In the event Marathon and Ashland
are unable to reach an agreement as to the Market Value of the Company
within the 60-day period referred to in Section 6.01(a), then within five
Business Days after the expiration of such 60-day period (such fifth
Business Day being referred to herein as the "6.01 Appraisal Process
Commencement Date"), Marathon and Ashland each shall select a nationally
recognized investment banking firm to (i) prepare a report which (A) sets
forth such investment banking firm's determination of the Market Value of
the Company (which shall be a single amount as opposed to a range) and (B)
includes work papers which indicate the basis for and calculation of the
Market Value of the Company (a "6.01 Appraisal Report") and (ii) deliver to
Marathon or Ashland, as the case may be, an oral and written opinion
addressed to such party as to the Market Value of the Company. The fees and
expenses of each investment banking firm shall be paid by the party
selecting such investment banking firm. Each of Marathon and Ashland shall
instruct its respective investment banking firm to (i) not consult with the
other investment banking firm with respect to its view as to the Market
Value of the Company prior to the time that both investment banking firms
have delivered their respective opinions to Marathon or Ashland, as
applicable, (ii) determine the Market Value of the Company in accordance
with Section 6.01(c), (iii) deliver their respective 6.01 Appraisal
Reports, together with their oral and written opinions as to the Market
Value of the Company (the "6.01 Initial Opinion Values"), within 60 days
after the 6.01 Appraisal Process Commencement Date, and (iv) deliver a copy
of its written opinion and its 6.01 Appraisal Report to the Company, the
other party and the other party's investment banking firm at the time it
delivers its oral and written opinion to Marathon or Ashland, as
applicable.
If the 6.01 Initial Opinion Values differ and the lesser
6.01 Initial Opinion Value equals or exceeds 90% of the greater 6.01
Initial Opinion Value, the Market Value of the Company shall be deemed to
be an amount equal to (i) the sum of the 6.01 Initial Opinion Values
divided by (ii) two.
33
If the 6.01 Initial Opinion Values differ and the lesser
6.01 Initial Opinion Value is less than 90% of the greater 6.01 Initial
Opinion Value, then:
(i) within two Business Days after both investment
banking firms have delivered their respective opinions to Marathon
or Ashland, as applicable, each investment banking firm shall, at
a single meeting at which Marathon, Ashland, the Company and the
other investment banking firm are present, make a presentation
with respect to its 6.01 Initial Opinion Value. At such
presentation, Marathon, Ashland, the Company and the other
investment banking firm shall be entitled to ask questions as to
the basis for and the calculation of such investment banking
firm's 6.01 Initial Opinion Value; and
(ii) Marathon and Ashland shall, within five Business
Days after the date Marathon and Ashland receive the 6.01 Initial
Opinion Values (such fifth Business Day being referred to herein
as the "6.01 Subsequent Appraisal Process Commencement Date"),
jointly select a third nationally recognized investment banking
firm to (A) prepare a 6.01 Appraisal Report and (B) deliver an
oral and written opinion addressed to Marathon and Ashland as to
the Market Value of the Company. The fees and expenses of such
third investment banking firm shall be paid 50% by Marathon and
50% by Ashland. Such third investment banking firm shall not be
provided with the 6.01 Initial Opinion Values and shall not
consult with the initial investment banking firms with respect
thereto. During such five-Business Day period, Marathon and
Ashland shall negotiate in good faith to independently reach an
agreement as to the Market Value of the Company. If Marathon and
Ashland reach such an agreement, then the Market Value of the
Company shall be deemed to be the amount so agreed upon by
Marathon and Ashland. If Marathon and Ashland are unable to reach
such an agreement, then Marathon and Ashland shall instruct such
third investment banking firm to (A) determine the Market Value of
the Company in accordance with Section 6.01(c) and (B) deliver its
6.01 Appraisal Report, together with its oral and written opinion
(the "6.01 Third Opinion Value"), within 60 days after the 6.01
Subsequent Appraisal Process Commencement Date. The Market Value
of the Company in such circumstance shall
34
be deemed to be an amount equal to (A) the sum of (x) the 6.01
Third Opinion Value plus (y) whichever of the two 6.01 Initial
Opinion Values is closer to the 6.01 Third Opinion Value (or, if
the 6.01 Third Opinion Value is exactly halfway between the two
6.01 Initial Opinion Values, the 6.01 Third Opinion Value),
divided by (B) two.
(c) Definition of Market Value of the Company. For
purposes of this Agreement, the Market Value of the Company (the "Market
Value of the Company") means the fair market value of the combined common
equity of the Company as of the relevant Exercise Date, (including, in the
circumstance where Marathon has exercised its Marathon Call Right or its
Special Termination Right or Ashland has exercised its Ashland Put Right,
the Ashland LOOP/LOCAP Interest) assuming the consummation of a transaction
designed to achieve the highest value of such combined common equity. In
determining the Market Value of the Company, (i) consideration should be
given as to (A) all possible transaction participants (other than Marathon
or Ashland or their respective Affiliates) and categories of possible
transactions; (B) a range of analytical methodologies, potentially
including, but not limited to, the following: comparable trading analysis,
comparable transaction analysis, discounted cash flow analysis, leveraged
buyout analysis and break-up analysis; and (C) the value to the Company of
all indemnification obligations of Marathon, USX and Ashland in favor of
the Company pursuant to any Transaction Document (including, without
limitation, Article IX of the Asset Transfer and Contribution Agreement),
to the extent such indemnification obligations remain in effect after the
Closing and (ii) no separate incremental value will be attributed to the
Ashland LOOP/LOCAP Interest. In determining the Market Value of the
Company, no consideration should be given to the values that are initially
assigned to assets of the Company for purchase accounting or tax accounting
purposes. The Market Value of the Company as determined pursuant to this
Section 6.01 is referred to herein as the "Appraised Value of the Company",
and the date on which the Market Value of the Company is so determined is
referred to herein as the "Appraised Value Determination Date".
35
ARTICLE VII
Determination of the Fair Market Value of Securities
SECTION 7.01. General. The fair market value of any
Securities to be issued to Ashland on the Closing Date and on any
subsequent Installment Payment Date, shall be determined pursuant to the
following procedures (the fair market value of such Securities as so
determined being the "Fair Market Value" of such Securities).
SECTION 7.02. Determination of Fair Market Value of
Marathon Debt Securities. The Fair Market Value of any Marathon Debt
Securities shall be deemed to be an amount equal to the aggregate stated
principal amount of such Marathon Debt Securities.
SECTION 7.03. Determination of Fair Market Value of
Actively Traded Marathon Equity Securities. (a) Fair Market Value Where
There is No Holding Period. The Fair Market Value of any Actively Traded
Marathon Equity Securities to be issued to Ashland on the Closing Date or
applicable Installment Payment Date for which Marathon has not elected a
Holding Period shall be deemed to be an amount equal to the product of (i)
the aggregate number of such Actively Traded Marathon Equity Securities to
be issued to Ashland multiplied by (ii) the Weighted Average Price (as
defined below) of such Actively Traded Marathon Equity Securities on the
National Market System of the NASDAQ or the relevant National Securities
Exchange, as reported by The Wall Street Journal or, if not reported
thereby, as reported by any other authoritative source, for the ten full
Trading Days immediately preceding the Business Day immediately preceding
the Closing Date or applicable Installment Payment Date; provided that at
least five Trading Days prior to the commencement of such ten full Trading
Day period (the "Required Disclosure Date"), Marathon shall have made
appropriate public disclosure (including by issuing a press release and
filing a copy of such press release with the Commission) of (A) the
existence of the Transaction, (B) the Ashland Put Price and (C) the
information required to be included in the Ashland Put Price Election
Notice (each such public disclosure being a "Required Disclosure").
Marathon shall provide Ashland with a copy of each Required Disclosure
prior to Marathon making such disclosure public. Any such Required
Disclosure shall be in form and substance reasonably satisfactory to
Ashland
36
and its counsel. For purposes of this Section 7.03(a), the "Weighted
Average Price" means the quotient of (1) the product of (x) the number of
shares in each trade in such Actively Traded Marathon Equity Securities
that occurred during such ten full Trading Day period multiplied by (y) the
price at which each such trade occurred, divided by (2) the total number of
shares traded in such Actively Traded Marathon Equity Securities that
occurred during such ten full Trading Day period. In the event of (i) any
split, combination or reclassification of the class of Actively Traded
Marathon Equity Securities to be issued to Ashland on the Closing Date or
applicable Installment Payment Date, (ii) any issuance or the authorization
of any issuance of any other securities in exchange or in substitution for
the shares of such class of Actively Traded Marathon Equity Securities or
(iii) any issuance or declaration of cash or stock dividends or other
distributions with respect to such class of Actively Traded Marathon Equity
Securities, in each case at any time during the ten full Trading Day period
referred to above, Marathon and Ashland shall make such adjustment to the
Fair Market Value of such Actively Traded Equity Securities determined
pursuant to this Section 7.03(a) as Marathon and Ashland shall mutually
agree so as to preserve the economic benefits to Ashland expected on the
date of this Agreement as a result of the issuance to it of such Actively
Traded Marathon Equity Securities as part of the Ashland Put Price.
(b) Fair Market Value Where There is a Holding Period. In
the event that Marathon elects pursuant to Section 4.04(a) or 4.04(b) to
impose a Holding Period on any Actively Traded Marathon Equity Securities,
the Fair Market Value of such Actively Traded Marathon Equity Securities
shall be deemed to be an amount equal to (i) the Fair Market Value of such
Actively Traded Marathon Equity Securities as determined pursuant to
Section 7.03(a), minus (ii) a discount factor that takes into account such
limitation on Ashland's ability to freely trade such Actively Traded
Marathon Equity Securities (a "7.03(b) Discount Amount"). The 7.03(b)
Discount Amount with respect to the Fair Market Value of such Actively
Traded Marathon Equity Securities shall be determined pursuant to the
following procedures:
(i) Negotiation Period. For a period of 15 days following
the applicable Ashland Put Price Election Date, Marathon and
Ashland will negotiate in good faith to seek to reach an agreement
as to the 7.03(b) Discount Amount. If Marathon and Ashland reach
such an agreement, then the 7.03(b)
37
Discount Amount shall be deemed to be the amount so agreed upon by
Marathon and Ashland.
(ii) Appraisal Process. In the event Marathon and Ashland
are unable to reach an agreement as to the 7.03(b) Discount Amount
within the 15-day period referred to in clause (i) above, then
within five Business Days after the expiration of such 15-day
period (such fifth Business Day being referred to herein as the
"7.03(b) Appraisal Process Commencement Date"), Marathon and
Ashland each shall select a nationally recognized investment
banking firm to (A) prepare a report which (1) sets forth such
investment banking firm's determination of the 7.03(b) Discount
Amount (which shall be a single amount as opposed to a range) and
(2) includes work papers which indicate the basis for and the
calculation of the 7.03(b) Discount Amount (a "7.03(b) Appraisal
Report") and (B) deliver to Marathon or Ashland, as the case may
be, an oral and written opinion addressed to such party as to the
7.03(b) Discount Amount. The fees and expenses of each investment
banking firm shall be paid by the party selecting such investment
banking firm. Each of Marathon and Ashland shall instruct its
respective investment banking firm to (i) not consult with the
other investment banking firm with respect to its view as to the
7.03(b) Discount Amount prior to the time that both investment
banking firms have delivered their respective opinions to Marathon
and Ashland, as applicable, (ii) deliver their respective 7.03(b)
Appraisal Reports, together with their oral and written opinions
as to the 7.03(b) Discount Amount (the "7.03(b) Initial Opinion
Values"), within 15 days after the 7.03(b) Appraisal Process
Commencement Date, and (iii) deliver a copy of its written opinion
and its 7.03(b) Appraisal Report to the Company, the other party
and the other party's investment banking firm at the time it
delivers its oral and written opinion to Marathon or Ashland, as
applicable.
If the 7.03(b) Initial Opinion Values differ and
the lesser 7.03(b) Initial Opinion Value equals or exceeds 90% of
the greater 7.03(b) Initial Opinion Value, the 7.03(b) Discount
Amount shall be deemed to
38
be an amount equal to (1) the sum of the 7.03(b) Initial Opinion
Values divided by (2) two.
If the 7.03(b) Initial Opinion Values differ and
the lesser 7.03(b) Initial Opinion Value is less than 90% of the
greater 7.03(b) Initial Opinion Value, then:
(i) within two Business Days after both investment
banking firms have delivered their respective opinions to Marathon
or Ashland, as applicable, each investment banking firm shall, at
a single meeting at which Marathon, Ashland, the Company and the
other investment banking firm are present, make a presentation
with respect to its 7.03(b) Initial Opinion Value. At such
presentation, Marathon, Ashland, the Company and the other
investment banking firm shall be entitled to ask questions as to
the basis for and the calculation of such investment banking
firm's 7.03(b) Initial Opinion Value; and
(ii) Marathon and Ashland shall, within five Business
Days after the date Marathon and Ashland receive the 7.03(b)
Initial Opinion Values (such fifth Business Day being referred to
herein as the "7.03(b) Subsequent Appraisal Process Commencement
Date"), jointly select a third nationally recognized investment
banking firm to (i) prepare a 7.03(b) Appraisal Report and (ii)
deliver an oral and written opinion addressed to Marathon and
Ashland as to the 7.03(b) Discount Amount. The fees and expenses
of such third investment banking firm shall be paid 50% by
Marathon and 50% by Ashland. Such third investment banking firm
shall not be provided with the 7.03(b) Initial Opinion Values and
shall not consult with the initial investment banking firms with
respect thereto. During such five-Business Day period, Marathon
and Ashland shall negotiate in good faith to independently reach
an agreement as to the 7.03(b) Discount Amount. If Marathon and
Ashland reach such an agreement, then the 7.03(b) Discount Amount
shall be deemed to be the amount so agreed upon by Marathon and
Ashland. If Marathon and Ashland are unable to reach such an
agreement, then Marathon and Ashland shall instruct such third
investment banking firm to deliver its 7.03(b) Appraisal Report,
together with its oral and written opinion as to the 7.03(b)
Discount Amount (the "7.03(b) Third Opinion Value"),
39
within 15 days after the 7.03(b) Subsequent Appraisal Process
Commencement Date. The 7.03(b) Discount Amount in such
circumstance shall be deemed to be an amount equal to (1) the sum
of (x) the 7.03(b) Third Opinion Value plus (y) whichever of the
two 7.03(b) Initial Opinion Values is closer to the 7.03(b) Third
Opinion Value (or, if the 7.03(b) Third Opinion Value is exactly
halfway between the two 7.03(b) Initial Opinion Values, the
7.03(b) Third Opinion Value), divided by (2) two.
SECTION 7.04. Determination of Fair Market Value of
Non-Actively Traded Marathon Equity Securities. (a) Negotiation Period. If
Marathon proposes to issue (or to have issued) to Ashland Marathon Equity
Securities that are not Actively Traded Marathon Equity Securities, then
for a period of 15 days following the applicable Ashland Put Price Election
Date, Marathon and Ashland will negotiate in good faith to seek to reach an
agreement as to the Fair Market Value of such Marathon Equity Securities,
taking into account, if there is a Holding Period, a discount factor that
takes into account such limitation on Ashland's ability to freely trade
such Marathon Equity Securities (a "7.04 Discount Amount"). If Marathon and
Ashland reach such an agreement, then the Fair Market Value of such
Marathon Equity Securities shall be deemed to be the amount so agreed upon
by Marathon and Ashland.
(b) Appraisal Process. In the event Marathon and Ashland
are unable to reach an agreement as to such Fair Market Value of Marathon
Equity Securities and such 7.04 Discount Amount, if any, within the 15-day
period referred to in clause (a) above, then within five Business Days
after the expiration of such 15-day period (such fifth Business Day being
referred to herein as the "7.04 Appraisal Process Commencement Date"),
Marathon and Ashland each shall select a nationally recognized investment
banking firm to (i) prepare a report which (1) sets forth such investment
banking firm's determination of the Fair Market Value of such Marathon
Equity Securities (which shall be a single amount as opposed to a range),
taking into account, if there is a Holding Period, a 7.04 Discount Amount,
which is determined by such investment banking firm, and (2) includes work
papers which separately indicate the basis for and the calculation of the
Fair Market Value of such Marathon Equity Securities and, if there is a
Holding Period, the basis for and the calculation of the 7.04 Discount
Amount (a "7.04
40
Appraisal Report") and (ii) deliver to Marathon or Ashland, as the case may
be, an oral and written opinion addressed to such party as to the Fair
Market Value of such Marathon Equity Securities (which opinion shall take
into account a 7.04 Discount Amount if there is a Holding Period with
respect to such Marathon Equity Securities). The fees and expenses of each
investment banking firm shall be paid by the party selecting such
investment banking firm. Each of Marathon and Ashland shall instruct its
respective investment banking firm to (i) not consult with the other
investment banking firm with respect to its view as to the Fair Market
Value of such Marathon Equity Securities and the 7.04 Discount Amount prior
to the time that both investment banking firms have delivered their
respective opinions to Marathon and Ashland, as applicable, (ii) deliver
their respective 7.04 Appraisal Reports, together with their oral and
written opinions as to the Fair Market Value of such Marathon Equity
Securities (the "7.04 Initial Opinion Values"), within 15 days after the
7.04 Appraisal Process Commencement Date, and (iii) deliver a copy of its
written opinion and its 7.04 Appraisal Report to the Company, the other
party and the other party's investment banking firm at the time it delivers
its oral and written opinion to Marathon or Ashland, as applicable.
If the 7.04 Initial Opinion Values differ and the lesser
7.04 Initial Opinion Value equals or exceeds 90% of the greater 7.04
Initial Opinion Value, the Fair Market Value of such Marathon Equity
Securities shall be deemed to be an amount equal to (1) the sum of the 7.04
Initial Opinion Values divided by (2) two.
If the 7.04 Initial Opinion Values differ and the lesser
7.04 Initial Opinion Value is less than 90% of the greater 7.04 Initial
Opinion Value, then:
(i) within two Business Days after both investment
banking firms have delivered their respective opinions to Marathon
or Ashland, as applicable, each investment banking firm shall, at
a single meeting at which Marathon, Ashland, the Company and the
other investment banking firm are present, make a presentation
with respect to its 7.04 Initial Opinion Value. At such
presentation, Marathon, Ashland, the Company and the other
investment banking firm shall be entitled to ask questions as to
the basis for and the calculation of
41
such investment banking firm's 7.04 Initial Opinion Value; and
(ii) Marathon and Ashland shall, within five Business
Days after the date Marathon and Ashland receive the 7.04 Initial
Opinion Values (such fifth Business Day being referred to herein
as the "7.04 Subsequent Appraisal Process Commencement Date"),
jointly select a third nationally recognized investment banking
firm to (i) prepare a 7.04 Appraisal Report and (ii) deliver an
oral and written opinion addressed to Marathon and Ashland as to
the Fair Market Value of such Marathon Equity Securities (which
opinion shall take into account a 7.04 Discount Amount if there is
a Holding Period with respect to such Marathon Equity Securities).
The fees and expenses of such third investment banking firm shall
be paid 50% by Marathon and 50% by Ashland. Such third investment
banking firm shall not be provided with the 7.04 Initial Opinion
Values and shall not consult with the initial investment banking
firms with respect thereto. During such five-Business Day period,
Marathon and Ashland shall negotiate in good faith to
independently reach an agreement as to the Fair Market Value of
such Marathon Equity Securities. If Marathon and Ashland reach
such an agreement, then the Fair Market Value of such Marathon
Equity Securities shall be deemed to be the amount so agreed upon
by Marathon and Ashland. If Marathon and Ashland are unable to
reach such an agreement, then Marathon and Ashland shall instruct
such third investment banking firm to deliver its 7.04 Appraisal
Report, together with its oral and written opinion as to the Fair
Market Value of such Marathon Equity Securities (the "7.04 Third
Opinion Value"), within 15 days after the 7.04 Subsequent
Appraisal Process Commencement Date. The Fair Market Value of such
Marathon Equity Securities in such circumstance shall be deemed to
be an amount equal to (i) the sum of (x) the 7.04 Third Opinion
Value plus (y) whichever of the two 7.04 Initial Opinion Values is
closer to the 7.04 Third Opinion Value (or, if the 7.04 Third
Opinion Value is exactly halfway between the two 7.04 Initial
Opinion Values, the 7.04 Third Opinion Value), divided by (ii)
two.
42
ARTICLE VIII
Certain Matters Relating to Securities
SECTION 8.01. Certain Requirements with Respect to
Marathon Debt Securities. All debt securities issued to Ashland pursuant to
Section 4.02(c) shall (i) be unsecured senior public fixed income debt
securities of (a) USX or (b) Marathon and fully guaranteed as to
performance by USX; (ii) have maturities of 5 to 7 years; (iii) have yields
which are comparable to those of 5 to 7 year public debt instruments issued
by companies whose Long Term Debt at the time of the issuance of such debt
securities to Ashland is rated by S&P and Moody's at least equal to the
respective ratings by S&P and Moody's of USX's Long Term Debt; (iv) be
priced to trade at par initially; and (v) have covenants substantially the
same as those included in other outstanding senior publicly traded debt
instruments of USX, including a negative pledge providing for pari passu
security rights and usual and customary successorship provisions concerning
changes in USX's ownership (all such debt securities are referred to herein
as "Marathon Debt Securities").
SECTION 8.02. Procedures with Respect to the Issuance of
Securities. All Securities to be issued hereunder shall be accompanied on
the Closing Date or applicable Installment Payment Date by (i) a
certificate from an authorized officer of the Issuer and (ii) an opinion
from such Issuer's counsel, in each case as to such matters as Ashland may
reasonably request, including, but not limited to the matters substantially
as follows (which shall be made as of the Closing Date or applicable
Installment Payment Date):
(i) the Issuer is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
of its incorporation with the power and authority to own, lease
and operate its assets and to conduct the business now being or to
be conducted by it. The Issuer is duly authorized, qualified or
licensed to do business as a foreign corporation or other
organization in good standing in each of the jurisdictions in
which its right, title or interest in or to any of the assets held
by it or the business conducted by it requires such authorization,
qualification or licensing, except where the failure to
43
be so authorized, qualified, licensed or in good standing would
not, individually or in the aggregate, result in an Issuer
Material Adverse Effect;
(ii) the Issuer's authorized capitalization is as set
forth in its Exchange Act filings (or, in the circumstance where
Ashland has made a Demand Registration, as set forth in the
Registration Statement or Offering Memorandum, as applicable, with
respect to such Securities). All of the outstanding equity
securities of the Issuer are duly and validly authorized and
issued, are fully paid and nonassessable and were not issued in
violation of or subject to any preemptive rights or other
contractual rights to purchase securities;
(iii) if such Securities are Marathon Equity Securities,
such Securities are duly authorized, validly issued and
outstanding, are fully paid and nonassessable, and were not issued
in violation of or subject to any preemptive rights or other
contractual rights to purchase securities;
(iv) if such Securities are Marathon Debt Securities,
such Securities have been duly authorized and validly issued by
the Issuer and constitute legal, valid and binding obligations of
the Issuer enforceable against the Issuer in accordance with their
terms, except as such enforcement is subject to the effect of any
applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally and general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(v) such Securities conform in all material respects to
the description thereof contained in the Issuer's Exchange Act
filings (or, in the circumstance where Ashland has made a Demand
Registration, to the description thereof contained in the
Registration Statement or Offering Memorandum, as applicable, with
respect to such Securities) and the certificates evidencing such
Securities will be, upon issuance, in due and proper form;
(vi) if such Securities are Marathon Equity Securities,
such Securities have been authorized
44
conditionally for listing on each national securities exchange on
which the other securities of the Issuer of the same class are
listed at the time of the Closing Date or Installment Payment
Date, subject to issuance and certain other conditions that are
not material;
(vii) if such Securities are Marathon Debt Securities,
the execution and delivery by the Issuer of each agreement
pursuant to which such Securities have been issued or which relate
to such Securities (each, a "Securities Document") and the
consummation by it of the transactions contemplated thereby have
been duly authorized and approved by all necessary corporate or
other action on the part of the Issuer. Each Securities Document
has been duly executed and delivered by the Issuer and constitutes
its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforcement is subject
to the effect of any applicable bankruptcy, insolvency,
reorganization or other law relating to or affecting creditors'
rights generally and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in
equity or at law);
(viii) neither the execution and delivery by the Issuer
of the Securities Documents (in the case of Marathon Debt
Securities), nor the issuance of the Securities pursuant to this
Agreement and/or such Securities Documents will (a) conflict with,
or results in the breach of any provision of, the charter or
by-laws or similar governing or organizational documents of the
Issuer or any of its subsidiaries, (b) violate any Applicable Law
or any permit, order, award, injunction, decree or judgment of any
Governmental Authority applicable to or binding upon the Issuer or
any of its subsidiaries or to which any of their respective
properties is subject or (c) violate, conflict with or result in
the breach or termination of, or otherwise give any other person
the right to terminate, or constitute a default, event of default
or an event which with notice, lapse of time or both, would
constitute a default or event of default under the terms of, any
mortgage, indenture, deed of trust or lease or other agreement or
instrument to which the Issuer or any of its subsidiaries is a
party or by which any of their respective properties or
45
assets is subject, except, in the case of clauses (b) and (c) for
such violations, conflicts, breaches, terminations and defaults
which would not, individually or in the aggregate, result in an
Issuer Material Adverse Effect; and
(ix) except as set forth on a schedule to such
certificate or opinion, no Governmental Approval or other consent
is required by the Issuer for the execution and delivery by it of
the Securities Documents (in the case of Marathon Debt Securities)
or the issuance of the Securities pursuant to this Agreement
and/or such Securities Documents, except (a) for such Governmental
Approvals or other consents as have been obtained or (b) where the
failure to obtain such Governmental Approvals or other consents
would not, individually or in the aggregate, result in an Issuer
Material Adverse Effect.
If any Securities are issued by Marathon and guaranteed by USX, each of
Marathon and USX shall provide Ashland with a certificate and an opinion of
counsel in accordance with this Section 8.02.
SECTION 8.03. Holding Period. If Marathon elects (by so
notifying Ashland in the Ashland Put Price Election Notice) to impose a
Holding Period with respect to sales by Ashland of Marathon Equity
Securities issued to Ashland on the Closing Date or on an Installment
Payment Date, as applicable, then Ashland shall not be permitted to sell
such Marathon Equity Securities during such Holding Period. The term
"Holding Period", with respect to any Marathon Equity Securities, means the
period commencing on the Closing Date or applicable Installment Payment
Date and ending on such later date as Marathon shall state in the Ashland
Put Price Election Notice; provided that the length of a Holding Period
with respect to any Marathon Equity Securities shall in no event exceed 30
days.
SECTION 8.04. Manner of Sale of Marathon Equity
Securities. Ashland agrees to sell all Marathon Equity Securities (i)
pursuant to a bona fide Underwritten Public Offering managed by one or more
Bulge Bracket Investment Banking Firms selected by Ashland, or by one or
more other investment banking firms selected by Ashland and to which
Marathon or USX shall not have reasonably objected, in a manner reasonably
designed to effect a broad distribution of
46
such Marathon Equity Securities (a "Qualifying Public Offering"), (ii) to
any person, provided that after giving effect to such sale such person
beneficially owns, together with such person's Affiliates, no more than 5%
of the Marathon Equity Securities of the relevant issuer then outstanding
on a fully diluted basis (a "Fully Distributed Sale") or (iii) to a broker
or underwriter selected by Ashland who agrees to effect any subsequent
transfer by it of such Marathon Equity Securities in a Qualifying Public
Offering or a Fully Distributed Sale.
ARTICLE IX
Closing; Conditions to Closing; Consequences of Delay
SECTION 9.01. Closing. (a) Closing Date. The closing (the
"Closing") of (i) the purchase and sale of Ashland's Membership Interests
and the Ashland LOOP/LOCAP Interest pursuant to Marathon's exercise of its
Special Termination Right or Marathon Call Right or Ashland's exercise of
its Ashland Put Right or (ii) the purchase and sale of Marathon's
Membership Interests pursuant to Ashland's exercise of its Special
Termination Right, shall be held at the offices of Marathon, at 10:00 a.m.
on the later of (x) the 60th day after the Appraised Value Determination
Date (or at such other place or at such other time or such other date as
Marathon and Ashland shall mutually agree) (the "Scheduled Closing Date")
and (y) the fifth Business Day following the satisfaction or waiver of all
conditions to the obligations of Marathon and Ashland set forth in Section
9.02. The date on which the Closing actually occurs is referred to herein
as the "Closing Date".
(b) Purchase Procedures in the Event of the Exercise by
Marathon of its Special Termination Right or its Marathon Call Right. In
the event that Marathon exercises its Special Termination Right or Marathon
Call Right, at the Closing:
(i) Marathon shall deliver to Ashland, in Cash or by wire
transfer to a bank account designated in writing by Ashland,
immediately available funds in an amount equal to the sum of (x)
the Special Termination Price or Marathon Call Price, as
applicable, plus (y) the amount of interest payable pursuant to
Section 3.01, plus (z) the amount of interest, if any,
47
payable pursuant to Section 9.04(b), 9.05, 9.08(b) or 9.09;
(ii) Ashland shall Transfer to Marathon (or, if Marathon
so elects by written notice to Ashland, a Wholly Owned Subsidiary
of Marathon or USX) in accordance with Article X of the LLC
Agreement, all of Ashland's Membership Interests;
(iii) Ashland shall Transfer to Marathon or, if Marathon
so elects by written notice to Ashland, to the Company or such
other person as Marathon shall direct, the Ashland LOOP/LOCAP
Interest; and
(iv) the Company shall release to Marathon any amounts
held in the Escrow Account, including any income earned thereon.
(c) Purchase Procedures in the Event of the Exercise by
Ashland of its Ashland Put Right. In the event that Ashland exercises its
Ashland Put Right, at the Closing:
(i) Marathon shall deliver to Ashland, in Cash or by wire
transfer to a bank account designated in writing by Ashland,
immediately available funds in an amount equal to the sum of (x)
the Cash portion of the Ashland Put Price or first Installment
Payment, as applicable, plus (y) the amount of interest payable
pursuant to Section 4.01, plus (z) the amount of interest, if any,
payable pursuant to Section 9.04(b), 9.05, 9.08(b) or 9.09;
(ii) Marathon and/or USX, as applicable, shall issue the
Securities to be issued on the Closing Date, if any, which
Securities shall be accompanied by the certificate(s) and
opinion(s) referred to in Section 8.02;
(iii) Ashland shall Transfer to Marathon or, if Marathon
so elects by written notice to Ashland, a Wholly Owned Subsidiary
of Marathon or USX in accordance with Article X of the LLC
Agreement, all of Ashland's Membership Interests;
(iv) Ashland shall Transfer to Marathon or, if Marathon
so elects by written notice to Ashland, to the
48
Company or such other person as Marathon shall direct, the Ashland
LOOP/LOCAP Interest; and
(v) the Company shall release to Marathon any amounts
held in the Escrow Account, including any income earned thereon.
In addition, on each of two remaining Scheduled Installment Payment Dates,
if any, (i) Marathon shall deliver to Ashland, in Cash or by wire transfer
to a bank account (which bank account has been designated in writing by
Ashland at least two Business Days prior to the applicable Installment
Payment Date), immediately available funds in an amount equal to the sum of
(x) the Cash portion of the second and third Installment Payments,
respectively, plus (y) the amount of interest payable pursuant to Section
4.01, plus (z) the amount of interest, if any, payable pursuant to Section
9.04(b) or 9.05; and (ii) Marathon and/or USX, as applicable, shall issue
the Securities to be issued on such Installment Payment Dates, if any,
which Securities shall be accompanied by the certificate(s) and opinion(s)
referred to in Section 8.02.
(d) Purchase Procedures in the Event of the Exercise by
Ashland of its Special Termination Right. In the event that Ashland
exercises its Special Termination Right at the Closing:
(i) Ashland shall deliver to Marathon, in Cash or by wire
transfer to a bank account designated in writing by Marathon,
immediately available funds in an amount equal to the sum of (x)
the Special Termination Price plus (y) the amount of interest
payable pursuant to Section 2.01, plus (z) the amount of interest,
if any, payable pursuant to Section 9.08(b) or 9.09;
(ii) Marathon shall Transfer to Ashland (or, if Ashland
so elects by written notice to Marathon, a Wholly Owned Subsidiary
of Ashland) in accordance with Article X of the LLC Agreement, all
of Marathon's Membership Interests; and
(iii) the Company shall release to Ashland any amounts
held in the Escrow Account, including any income earned thereon.
49
SECTION 9.02. Conditions to Closing. (a) Marathon's
Obligation in the Event of an Exercise by Marathon of its Special
Termination Right or its Marathon Call Right or an Exercise by Ashland of
its Ashland Put Right. Marathon's obligation to purchase and pay for
Ashland's Membership Interests and the Ashland LOOP/LOCAP Interest pursuant
to this Agreement in the event of an exercise by Marathon of its Special
Termination Right or its Marathon Call Right or in the event of an exercise
by Ashland of its Ashland Put Right is subject in each case to the
satisfaction (or waiver by Marathon) as of the Closing of the following
conditions:
(i) As of the Closing Date, there shall be no (i)
injunction or restraining order of any nature issued by any
Governmental Authority which directs, or which has the effect of
directing, that the Closing shall not be consummated as herein
provided or (ii) investigation, action or other proceeding that
shall have been brought by any Governmental Authority and be
pending on the Closing Date, or that shall have been threatened by
any Governmental Authority, in any such case against Marathon or
Ashland in connection with the consummation of the transactions
contemplated by this Agreement which is reasonably likely to
result in an injunction or restraining order which directs, or
which has the effect of directing, that the Closing shall not be
consummated as herein provided;
(ii) the waiting period under the HSR Act, if applicable
to the purchase and sale of Ashland's Membership Interests
pursuant to this Agreement shall have expired or been terminated;
and
(iii) Ashland shall have Transferred to Marathon (or, if
Marathon shall have so elected by written notice to Ashland, a
Wholly Owned Subsidiary of Marathon or USX) all of its Membership
Interests on the Closing Date free and clear of all Liens.
It is understood and agreed that a breach by Ashland of any of its
representations or warranties in this Agreement shall not constitute a
condition to Marathon's obligation to purchase and pay for Ashland's
Membership Interests and the Ashland LOOP/LOCAP Interest pursuant to this
Agreement in the circumstances set forth above; provided that Marathon
shall not be deemed to have waived any right to make a Claim
50
against Ashland with respect to any Loss that Marathon suffers as a result
of any such breach.
(b) Ashland's Obligation in the Event of an Exercise by
Marathon of its Special Termination Right or its Marathon Call Right or an
Exercise by Ashland of its Ashland Put Right. Ashland's obligation to sell
its Membership Interests and the Ashland LOOP/LOCAP Interest to Marathon
pursuant to this Agreement in the event of an exercise by Marathon of its
Special Termination Right or its Marathon Call Right or in the event of an
exercise by Ashland of its Ashland Put Right is subject in each case to the
satisfaction (or waiver by Ashland) as of the Closing of the following
conditions:
(i) As of the Closing Date, there shall be no (i)
injunction or restraining order of any nature issued by any
Governmental Authority which directs, or which has the effect of
directing, that the Closing shall not be consummated as herein
provided or (ii) investigation, action or other proceeding that
shall have been brought by any Governmental Authority and be
pending on the Closing Date, or threatened by any Governmental
Authority, in any such case against Marathon or Ashland in
connection with the consummation of the transactions contemplated
by this Agreement which is reasonably likely to result in an
injunction or restraining order which directs, or which has the
effect of directing, that the Closing shall not be consummated as
herein provided;
(ii) the waiting period under HSR Act, if applicable to
the purchase and sale of Ashland's Membership Interests pursuant
to this Agreement shall have expired or been terminated;
(iii) Marathon shall have delivered to Ashland, in Cash
or by wire transfer to a bank account designated in writing by
Ashland, immediately available funds in an amount equal to (x) the
Special Termination Price or Marathon Call Price, as applicable,
or the Cash portion of the Ashland Put Price or applicable
Installment Payment, plus (y) the amount of interest payable
pursuant to Section 3.01 or 4.01, as applicable, plus (z) the
amount of interest, if any, payable pursuant to Section 9.04(b) or
9.05; and
51
(iv) Marathon or USX, as applicable, shall have issued
the Securities to be issued on the Closing Date, if any,
accompanied by the certificate(s) and opinion(s) referred to in
Section 8.02.
It is understood and agreed that a breach by Marathon or USX of any of its
respective representations or warranties in this Agreement shall not
constitute a condition to Ashland's obligation to sell its Membership
Interests and the Ashland LOOP/LOCAP Interest to Marathon pursuant to this
Agreement in the circumstances set forth above; provided that Ashland shall
not be deemed to have waived any right to make a Claim against Marathon or
USX with respect to any Loss that Ashland suffers as a result of any such
breach.
(c) Ashland's Obligation in the Event of an Exercise by
Ashland of its Special Termination Right. Ashland's obligation to purchase
and pay for Marathon's Membership Interests pursuant to this Agreement in
the event of an exercise by Ashland of its Special Termination Right is
subject to the satisfaction (or waiver by Ashland) as of the Closing of the
following conditions:
(i) As of the Closing Date, there shall be no (i)
injunction or restraining order of any nature issued by any
Governmental Authority which directs, or which has the effect of
directing, that the Closing shall not be consummated as herein
provided or (ii) investigation, action or other proceeding that
shall have been brought by any Governmental Authority and be
pending on the Closing Date, or that shall have been threatened by
any Governmental Authority, in any such case against Marathon or
Ashland in connection with the consummation of the transactions
contemplated by this Agreement which is reasonably likely to
result in an injunction or restraining order which directs, or
which has the effect of directing, that the Closing shall not be
consummated as herein provided;
(ii) the waiting period under the HSR Act, if applicable
to the purchase and sale of Marathon's Membership Interests
pursuant to this Agreement shall have expired or been terminated;
and
(iii) Marathon shall have Transferred to Ashland (or, if
Ashland shall have so elected by written notice to Marathon, a
Wholly Owned Subsidiary of Ashland) all
52
of its Membership Interests on the Closing Date free and clear of
all Liens.
It is understood and agreed that a breach by Marathon or USX of any of its
respective representations or warranties in this Agreement shall not
constitute a condition to Ashland's obligation to purchase and pay for
Marathon's Membership Interests pursuant to this Agreement in the
circumstances set forth above; provided that Ashland shall not be deemed to
have waived any right to make a Claim against Marathon or USX with respect
to any Loss that Ashland suffers as a result of any such breach.
(d) Marathon's Obligation in the Event of an Exercise by
Ashland of its Special Termination Right. Marathon's obligation to sell its
Membership Interests to Ashland pursuant to this Agreement in the event of
an exercise by Ashland of its Special Termination Right is subject to the
satisfaction (or waiver by Marathon) as of the Closing of the following
conditions:
(i) As of the Closing Date, there shall be no (i)
injunction or restraining order of any nature issued by any
Governmental Authority which directs, or which has the effect of
directing, that the Closing shall not be consummated as herein
provided or (ii) investigation, action or other proceeding that
shall have been brought by any Governmental Authority and be
pending on the Closing Date, or threatened by any Governmental
Authority, in any such case against Marathon or Ashland in
connection with the consummation of the transactions contemplated
by this Agreement which is reasonably likely to result in an
injunction or restraining order which directs, or which has the
effect of directing, that the Closing shall not be consummated as
herein provided;
(ii) the waiting period under HSR Act, if applicable to
the purchase and sale of Marathon's Membership Interests pursuant
to this Agreement shall have expired or been terminated; and
(iii) Ashland shall have delivered to Marathon, in Cash
or by wire transfer to a bank account designated in writing by
Marathon, immediately available funds in an amount equal to (x)
the Special Termination Price plus (y) the amount of interest
payable pursuant to
53
Section 2.01 plus (z) the amount of interest, if any, payable
pursuant to Section 9.08(b) or 9.09.
It is understood and agreed that a breach by Ashland of any of its
representations or warranties in this Agreement shall not constitute a
condition to Marathon's obligation to sell its Membership Interests to
Ashland pursuant to this Agreement in the circumstances set forth above;
provided that Marathon shall not be deemed to have waived any right to make
a Claim against Ashland with respect to any Loss that Marathon suffers as a
result of any such breach.
(e) Consequences of Inability To Transfer the Ashland
LOOP/LOCAP Interest on the Closing Date. It shall not be a condition to the
Closing of the Marathon Call Right, the Ashland Put Right or the Marathon
Special Termination Right, as applicable, that Ashland shall have
Transferred the Ashland LOOP/LOCAP Interest to Marathon, the Company or
such other person as Marathon shall direct. In the event that any consents
or approvals required for such Transfer are not obtained prior to the
Closing of the Marathon Call Right, the Ashland Put Right or the Marathon
Special Termination Right, as applicable, and as a consequence Ashland is
not able to Transfer the Ashland LOOP/LOCAP Interest to Marathon, the
Company or such other person as Marathon shall direct, as applicable, on
the Closing Date, the parties hereto shall use their commercially
reasonable best efforts to achieve any lawful and reasonable (including
with respect to the costs and expenses to be borne by Ashland) arrangement
proposed by Marathon under which Marathon or the Company, as applicable,
shall obtain the economic claims, rights and benefits under the Ashland
LOOP/LOCAP Interest. Such reasonable arrangement may include (i) Ashland
subcontracting, sublicensing or subleasing to Marathon, the Company or such
other person as Marathon shall direct, as applicable, any and all of
Ashland's rights, and delegating all of Ashland's obligations, under the
Ashland LOOP/LOCAP Interest, and (ii) Ashland granting to Marathon, the
Company or such other person as Marathon shall direct, as applicable, a
proxy (the "Ashland LOOP/LOCAP Irrevocable Proxy") which shall authorize
such party to exercise on Ashland's behalf, all of Ashland's voting rights
with respect to the Ashland LOOP/LOCAP Interest. The costs and expenses
incurred in connection with any such arrangements shall be borne 62% by
Marathon and 38% by Ashland.
54
SECTION 9.03. Consequences of a Delayed Closing of the
Marathon Call Right or the Ashland Put Right Where Ashland Is at Fault. (a)
Right to Revoke Ashland Put Exercise Notice or Marathon Call Exercise
Notice. If the Closing of the Marathon Call Right or the Ashland Put Right
shall not have occurred on or prior to the date that is 180 days after the
Scheduled Closing Date, and (i) the delay is due to (x) a failure by
Ashland to timely perform in any material respect any of its covenants and
agreements contained herein or (y) the fact that any of Ashland's
representations and warranties contained herein have ceased to be true and
correct in any material respect, and (ii) neither Marathon nor USX shall
have (x) failed to timely perform in any material respect any of its
covenants and agreements contained herein or (y) breached any of its
representations and warranties contained herein in any material respect,
then Marathon shall thereafter have the right, exercisable at any time
prior to the Closing by written notice to Ashland, to revoke Ashland's
Ashland Put Exercise Notice or its Marathon Call Exercise Notice, as
applicable.
(b) Adjustment to Ashland Put Price or Marathon Call
Price. If the Closing of the Marathon Call Right or the Ashland Put Right
does not occur on the Scheduled Closing Date, and (i) the delay is due to
(x) a failure by Ashland to timely perform in any material respect any of
its covenants and agreements contained herein or (y) the fact that any of
Ashland's representations and warranties contained herein have ceased to be
true and correct in any material respect, and (ii) neither Marathon nor USX
shall have (x) failed to timely perform in any material respect any of its
covenants and agreements contained herein or (y) breached any of its
representations and warranties contained herein in any material respect,
then on such later date on which the Closing actually takes place (such
later date being the "Delayed Closing Date") Marathon shall deduct from the
Marathon Call Price or the Ashland Put Price (or the first Installment
Payment, as applicable) payable to Ashland on the Delayed Closing Date, an
amount equal to the amount of interest accrued during the period commencing
at 12:01 a.m. on the day immediately following the Scheduled Closing Date
and ending on and including the Delayed Closing Date (the "Delayed Closing
Date Interest Period") on the Marathon Call Price, or the Ashland Put Price
(or the first Installment Payment thereof, as applicable), at a rate per
55
annum equal to the 30-day LIBOR Rate multiplied by 1.5, with daily accrual
of interest.
(c) Other Consequences. In the event that Marathon
revokes Ashland's Ashland Put Exercise Notice or its Marathon Call Exercise
Notice pursuant to Section 9.03(a), each of Marathon and Ashland shall
thereafter have the right to exercise their respective Marathon Call Right
and Ashland Put Right in accordance with the terms of this Agreement. Any
such revocation shall not operate as a release of Ashland from any
liability it may have to Marathon for any breach of its obligations under
this Agreement and such revocation shall not in any way preclude Marathon
from exercising any right or power hereunder or otherwise available to it
at law or in equity as a result of any such breach.
SECTION 9.04. Consequences of a Delayed Closing of the
Marathon Call Right or the Ashland Put Right Where Marathon or USX Is at
Fault. (a) Revocation of Proxies; Payment of Distributions to Ashland;
Right To Revoke Ashland Put Exercise Notice or Marathon Call Exercise
Notice. If the Closing of the Marathon Call Right or the Ashland Put Right
does not occur on the Scheduled Closing Date, and (i) the delay is due to
(x) a failure by Marathon or USX to timely perform in any material respect
any of its respective covenants and agreements contained herein or (y) the
fact that any of Marathon's or USX's respective representations and
warranties contained herein (or in any certificate required to be delivered
to Ashland pursuant to Section 9.02(b)(iv)) have ceased to be true and
correct in any material respect, and (ii) Ashland shall not have (x) failed
to timely perform in any material respect any of its covenants and
agreements contained herein or (y) breached any of its representations and
warranties contained herein in any material respect, then (i) effective as
of 12:01 a.m. on the day immediately following the Scheduled Closing Date,
all Ashland Representatives Revocable Proxies and the Ashland LOOP/LOCAP
Revocable Proxy shall automatically be revoked; (ii) Marathon shall, and
shall cause each of its Representatives to, promptly take all such actions
as are necessary to provide that the Company shall thereupon resume making
distributions of Distributable Cash and Tax Liability Distributions
directly to Ashland pursuant to Article V of the LLC Agreement; (iii)
Marathon shall immediately pay to Ashland an amount equal to all Exercise
Period Distributions received by
56
Marathon from the Company in accordance with the provisions of Section
5.01(a)(ii), together with interest on each such Exercise Period
Distribution at a rate per annum equal to the Base Rate, with daily accrual
of interest, from (but excluding) the date such amount was otherwise
payable to Ashland (or, if earlier, the date such amount was paid to
Marathon) to (and including) the date such amount is paid to Ashland in
accordance with the provisions of this clause (iii); (iv) the Company shall
immediately release to Ashland all amounts then held in the Escrow Account,
including any income earned thereon; and (v) if the Closing shall not have
occurred on or prior to the date that is 180 days after the Scheduled
Closing Date, Ashland thereafter shall have the right, exercisable at any
time prior to the Closing by written notice to Marathon, to revoke its
Ashland Put Exercise Notice or Marathon's Marathon Call Exercise Notice, as
applicable.
(b) Adjustments to Ashland Put Price or Marathon Call
Price. In addition, if the Closing of the Marathon Call Right or the
Ashland Put Right does not occur on the Scheduled Closing Date, and (i) the
delay is due to (x) a failure by Marathon or USX to timely perform in any
material respect any of its respective covenants and agreements contained
herein or (y) the fact that any of Marathon's or USX's respective
representations and warranties contained herein have ceased to be true and
correct in any material respect, and (ii) Ashland shall not have (x) failed
to timely perform in any material respect any of its covenants and
agreements contained herein or (y) breached any of its representations and
warranties contained herein in any material respect, then Marathon shall be
entitled to deduct from the Marathon Call Price or from the Ashland Put
Price (or the first Installment Payment, as applicable) payable to Ashland
on the Delayed Closing Date, an amount (the "9.04(b) Post-Scheduled Closing
Date Distribution Amount") equal to the amount of any Ashland Exercise
Period Distributions that Ashland shall have received from the Company in
Cash during the Delayed Closing Date Interest Period and, on the Delayed
Closing Date, Marathon shall pay to Ashland in addition to the Marathon
Call Price or the Ashland Put Price (or the first Installment Payment, as
applicable) and related accrued interest payable pursuant to Section 3.01
or 4.01, as applicable, an amount in Cash equal to the amount of interest
accrued during the Delayed Closing Interest Period on an amount equal to
(1) the Marathon Call Price or the Ashland Put Price (or the first
Installment Payment thereof,
57
as applicable) minus (2) the 9.04(b) Post-Scheduled Closing Date
Distribution Amount, at a rate per annum equal to the 30-day LIBOR Rate
multiplied by 1.5, with daily accrual of interest.
(c) Other Consequences. In the event that Ashland revokes
its Ashland Put Exercise Notice or Marathon's Marathon Call Exercise Notice
pursuant to clause (v) of Section 9.03(a), each of Ashland and Marathon
shall thereafter have the right to exercise their respective Ashland Put
Right and Marathon Call Right in accordance with the terms of this
Agreement. Any such revocation shall not operate as a release of Marathon
or USX from any liability it may have to Ashland for any breach of its
obligations under this Agreement and such revocation shall not in any way
preclude Ashland from exercising any right or power hereunder or otherwise
available to it at law or in equity as a result of any such breach.
SECTION 9.05. Consequences of a Delayed Closing of the
Marathon Call Right or the Ashland Put Right Where No Party Is at Fault. If
the Closing of the Marathon Call Right or the Ashland Put Right does not
occur on the Scheduled Closing Date, and the delay is not due to a failure
by any party hereto to timely perform in any material respect any of its
respective covenants and agreements contained herein or to the fact that
any party's representations and warranties contained herein have ceased to
be true and correct in any material respect, then Marathon shall pay to
Ashland on the Delayed Closing Date, in addition to the Marathon Call Price
or the Ashland Put Price (or the first Installment Payment, as applicable)
and related accrued interest payable pursuant to Section 3.01 or 4.01, as
applicable, an amount in Cash equal to the amount of interest accrued
during the Delayed Closing Interest Period on the Marathon Call Price or
the Ashland Put Price (or the first Installment Payment, as applicable), at
a rate per annum equal to the Base Rate, with daily accrual of interest. If
the Delayed Closing Date does not occur on or prior to the date that is 180
days after the Scheduled Closing Date and the delay is not due to an action
or failure to act by any of Marathon, USX or Ashland, then (i) effective as
of 12:01 a.m. on the day immediately following the last day of such 180-day
period, all Ashland Representatives Revocable Proxies and the Ashland
LOOP/LOCAP Revocable Proxy shall automatically be revoked; (ii) Marathon
shall, and shall cause each of its
58
Representatives to, promptly take all such actions as are necessary to
provide that the Company shall resume making distributions of Distributable
Cash and Tax Liability Distributions directly to Ashland pursuant to
Article V of the LLC Agreement; (iii) Marathon shall immediately pay to
Ashland an amount equal to all Exercise Period Distributions received by
Marathon from the Company in accordance with the provisions of Section
5.01(a)(ii), together with interest on each such Exercise Period
Distribution at a rate per annum equal to the Base Rate, with daily accrual
of interest, from (but excluding) the date such amount was otherwise
payable to Ashland (or, if earlier, the date such amount was paid to
Marathon) to (and including) the date such amount is paid to Ashland in
accordance with the provisions of this clause (iii); (iv) the Company shall
immediately release to Ashland all amounts then held in the Escrow Account,
including any income earned thereon; and (v) the parties shall be restored
to their rights as though the Ashland Put Right or the Marathon Call Right
had never been exercised, without liability to any party and without any
effect on the ability of Ashland to exercise its Ashland Put Right or
Marathon to exercise its Marathon Call Right in accordance with the terms
of this Agreement in the future.
SECTION 9.06. Consequences of Delayed Second or Third
Scheduled Installment Payment. If Marathon shall fail to make an
Installment Payment on the second or third Scheduled Installment Payment
Date, if applicable, then on such later date on which the applicable
Installment Payment is actually made (such later date being a "Delayed
Installment Payment Date"), Marathon shall pay to Ashland, in addition to
the applicable Installment Payment and related accrued interest payable
pursuant to Section 3.01 or 4.01, as applicable, an amount in Cash equal to
the amount of interest accrued during the period commencing on the day
immediately following the Scheduled Installment Payment Date and ending on
and including the date of the payment of the relevant Installment Payment
(the "Delayed Installment Payment Date Interest Period") on the applicable
Installment Payment, at a rate per annum equal to the 30 day LIBOR Rate
multiplied by 1.5, with daily accrual of interest.
SECTION 9.07. Consequences of a Delayed Closing of the
Special Termination Right Where Terminating Member Is at Fault. (a)
Continuation of Term of the Company; Right to Specific Performance. If the
Closing of the Special Termination Right shall not have occurred on or
prior to the
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Scheduled Closing Date, and (i) the delay is due to (x) a failure by the
Terminating Member (or, if Marathon is the Terminating Member, Marathon or
USX) to timely perform in any material respect any of its covenants and
agreements contained herein or (y) the fact that any of the Terminating
Member's (or, if Marathon is the Terminating Member, Marathon's or USX's)
representations and warranties contained herein have ceased to be true and
correct in any material respect, and (ii) the Non-Terminating Member (or,
if Marathon is the Non-Terminating Member, Marathon or USX) shall not have
(x) failed to timely perform in any material respect any of its covenants
and agreements contained herein or (y) breached any of its representations
and warranties contained herein in any material respect, then the
Non-Terminating Member shall have the right to elect, by written notice to
the Company and the Terminating Member, to either (i) terminate the Term of
the Company at the end of the Initial Term or the then-current 10-year
extension thereof, as applicable (in which case the Term of the Company
shall automatically terminate upon the expiration of the Initial Term or
the then-current 10-year extension thereof), or (ii) extend the Term of the
Company for two additional years following the expiration of the Initial
Term or the then-current 10-year extension thereof, as applicable (in which
case the Term of the Company shall automatically be extended for such
additional two-year period).
(b) Adjustment to Special Termination Price. If the
Closing of the Special Termination Right does not occur on the Scheduled
Closing Date, and (i) the delay is due to (x) a failure by the Terminating
Member (or, if Marathon is the Terminating Member, Marathon or USX) to
timely perform in any material respect any of its covenants and agreements
contained herein or (y) the fact that any of the Terminating Member's (or,
if Marathon is the Terminating Member, Marathon's or USX's) representations
and warranties contained herein have ceased to be true and correct in any
material respect, and (ii) the Non-Terminating Member (or, if Marathon is
the Terminating Member, Marathon or USX) shall not have (x) failed to
timely perform in any material respect any of its covenants and agreements
contained herein or (y) breached any of its representations and warranties
contained herein in any material respect, then on the Delayed Closing Date
the Non-Terminating Member shall deduct from the Special Termination Price
payable to the Terminating Member on the Delayed Closing Date, an amount
equal to the amount of interest accrued during the Delayed
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Closing Date Interest Period on the Special Termination Price, at a rate
per annum equal to the 30-day LIBOR Rate multiplied by 1.5, with daily
accrual of interest.
SECTION 9.08. Consequences of a Delayed Closing of the
Special Termination Right Where Non-Terminating Member Is at Fault. (a)
Revocation of Proxies; Payment of Distributions to Terminating Member;
Right to Revoke Special Termination Exercise Notice. If the Closing of the
Special Termination Right does not occur on the Scheduled Closing Date, and
(i) the delay is due to a failure by the Non-Terminating Member (or, if
Marathon is the Non-Terminating Member, Marathon or USX) to timely perform
in any material respect any of its covenants and agreements contained
herein or (y) the fact that any of the Non-Terminating Member's (or, if
Marathon is the Non-Terminating Member, Marathon's or USX's)
representations and warranties contained herein have ceased to be true and
correct in any material respect, and (ii) the Terminating Member (or, if
Marathon is the Terminating Member, Marathon or USX) shall not have (x)
failed to timely perform in any material respect any of its covenants and
agreements contained herein or (y) breached any of its representations and
warranties contained herein in any material respect, then (i) effective as
of 12:01 a.m. on the day immediately following the Scheduled Closing Date,
all Marathon Representative Revocable Proxies (in the circumstance where
Marathon is the Terminating Member) or all Ashland Representative Revocable
Proxies and the Ashland LOOP/LOCAP Revocable Proxy (in the circumstance
where Ashland is the Terminating Member) shall automatically be revoked;
(ii) the Non-Terminating Member shall, and shall cause each of its
Representatives to, promptly take all such actions as are necessary to
provide that the Company shall thereupon resume making distributions of
Distributable Cash and Tax Liability Distributions directly to the
Terminating Member pursuant to Article V of the LLC Agreement; (iii) the
Non-Terminating Member shall immediately pay to the Terminating Member an
amount equal to all Exercise Period Distributions received by the
Non-Terminating Member from the Company in accordance with the provisions
of Section 5.01(a)(ii) or Section 5.01(b)(ii), as applicable, together with
interest on each such Exercise Period Distribution at a rate per annum
equal to the Base Rate, with daily accrual of interest, from (but
excluding) the date such amount was otherwise payable to the Terminating
Member (or, if earlier, the date such amount was paid to the
Non-Terminating Member) to (and including) the
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date such amount is paid to the Terminating Member in accordance with the
provisions of this clause (iii); (iv) the Company shall immediately release
to the Terminating Member all amounts then held in the Escrow Account,
including any income earned thereon; and (v) if the Closing shall not have
occurred on or prior to the date that is 120 days before the expiration of
the Initial Term or the then-current 10-year extension thereof, each of the
Terminating Member and the Non-Terminating Member thereafter shall have the
right, exercisable at any time prior to the Closing by written notice to
the other party, to revoke the Non-Terminating Member's Special Termination
Exercise Notice, in which event the Term of the Company shall automatically
terminate upon the expiration of the Initial Term or the then-current
10-year extension thereof.
(b) Adjustments to Special Termination Price. In
addition, if the Closing of the Special Termination Right does not occur on
the Scheduled Closing Date, and (i) the delay is due to (x) a failure by
the Non-Terminating Member (or, if Marathon is the Non-Terminating Member,
Marathon or USX) to timely perform in any material respect any of its
covenants and agreements contained herein or (y) the fact that any of the
Non-Terminating Member's (or, if Marathon is the Non-Terminating Member,
Marathon's or USX's) representations and warranties contained herein have
ceased to be true and correct in any material respect, and (ii) the
Terminating Member (or, if Marathon is the Terminating Member, Marathon or
USX) shall not have (x) failed to timely perform in any material respect
any of its covenants and agreements contained herein or (y) breached any of
its representations and warranties contained herein in any material
respect, then the Non-Terminating Member shall be entitled to deduct from
the Special Termination Price payable to the Terminating Member on the
Delayed Closing Date, an amount (the "9.08(b) Post-Scheduled Closing Date
Distribution Amount") equal to the amount of any Exercise Period
Distributions that the Terminating Member shall have received from the
Company in Cash during the Delayed Closing Date Interest Period and, on the
Delayed Closing Date, the Non-Terminating Member shall pay to the
Terminating Member in addition to the Special Termination Price and related
accrued interest payable pursuant to Section 2.01, an amount in Cash equal
to the amount of interest accrued during the Delayed Closing Interest
Period on an amount equal to (1) the Special Termination Price minus (2)
the 9.08(b) Post-Scheduled Closing Date Distribution Amount, at a rate
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per annum equal to the 30-day LIBOR Rate multiplied by 1.5, with daily
accrual of interest.
(c) Other Consequences. In the event that the Terminating
Member revokes the Non-Terminating Member's Special Termination Exercise
Notice, then the Non-Terminating Member shall not thereafter have the right
to exercise its Special Termination Right. Any such revocation shall not
operate as a release of the Non-Terminating Member from any liability it
may have to the Terminating Member for any breach of its obligations under
this Agreement and such revocation shall not in any way preclude the
Terminating Member from exercising any right or power hereunder or
otherwise available to it at law or in equity as a result of any such
breach.
SECTION 9.09. Consequences of Delayed Closing of Special
Termination Right Where No Party Is at Fault. If the Closing of the Special
Termination Right does not occur on the Scheduled Closing Date, and the
delay is not due to a failure by any party hereto to timely perform in any
material respect any of its respective covenants and agreements contained
herein or to the fact that any party's representations and warranties
contained herein have ceased to be true and correct in any material
respect, then the Non-Terminating Member shall pay to the Terminating
Member on the Delayed Closing Date, in addition to the Special Termination
Price and related accrued interest payable pursuant to Section 2.01, an
amount in Cash equal to the amount of interest accrued during the Delayed
Closing Interest Period on the Special Termination Price, at a rate per
annum equal to the Base Rate, with daily accrual of interest. If the
Delayed Closing Date does not occur on or prior to the date that is 120
days before the expiration of the Initial Term or the then-current 10-year
extension thereof and the delay is not due to an action or failure to act
by the Terminating Member or the Non-Terminating Member, then (i) effective
as of 12:01 a.m. on the day immediately following such 120th day before the
expiration of the Initial Term or the then-current 10-year extension
thereof, all Marathon Representative Revocable Proxies (in the circumstance
where Marathon is the Terminating Member) or all Ashland Representative
Revocable Proxies and the Ashland LOOP/LOCAP Revocable Proxy (in the
circumstance where Ashland is the Terminating Member) shall be revoked;
(ii) the Non-Terminating Member shall, and shall cause each of its
Representatives to, promptly take all such actions
63
as are necessary to provide that the Company shall resume making
distributions of Distributable Cash and Tax Liability Distributions
directly to the Terminating Member pursuant to Article V of the LLC
Agreement; (iii) the Non-Terminating Member shall immediately pay to the
Terminating Member an amount equal to all Exercise Period Distributions
received by the Non-Terminating Member from the Company in accordance with
the provisions of Section 5.01(a)(ii) or Section 5.01(b)(ii), as
applicable, together with interest on each such Exercise Period
Distribution at a rate per annum equal to the Base Rate, with daily accrual
of interest, from (but excluding) the date such amount was otherwise
payable to the Terminating Member (or, if earlier, the date such amount was
paid to the Non-Terminating Member) to (and including) the date such amount
is paid to the Terminating Member in accordance with the provisions of this
clause (iii); (iv) the Company shall immediately release to the Terminating
Member all amounts then held in the Escrow Account, including any income
earned thereon; and (v) the Term of the Company shall automatically
terminate upon the expiration of the Initial Term or the then-current
10-year extension thereof.
ARTICLE X
Registration Rights
SECTION 10.01. Registration upon Request. (a) Ashland
shall have the right to make a written demand upon the issuer or, in the
case of any Marathon Debt Securities issued by Marathon and guaranteed by
USX, issuers of any class of Securities delivered or to be delivered to
Ashland as payment of any portion of the Ashland Put Price (both parties
hereinafter referred to collectively as the "Issuer"), on not more than six
separate occasions (subject to the provisions of this Section 10.01), to
either, at Ashland's option, (i) register under the Securities Act all or a
portion of such Securities for purposes of a public offering by Ashland of
such Securities or (ii) prepare an Offering Memorandum that covers all or a
portion of such Securities for purposes of a private placement by Ashland
of such Securities (either of such requests being referred to herein as a
"Demand Registration") that were not registered under the Securities Act at
the time of issuance thereof to Ashland on the Closing Date or Installment
Payment Date, as the case may be, and the Issuer shall use its best efforts
64
to file a Registration Statement and cause such Securities to be registered
under the Securities Act (in the case of a Demand Registration for a public
offering) or to prepare a final Offering Memorandum (in the case of a
Demand Registration for a private placement) (i) in the case of any
Securities to be delivered to Ashland on the Closing Date or any
Installment Payment Date, not later than the Scheduled Closing Date or
applicable Scheduled Installment Payment Date or (ii) in the case of any
Securities that have been delivered to Ashland on the Closing Date or any
Installment Payment Date, in each case not later than 60 days after such
written demand by Ashland; provided that each Demand Registration shall
cover Securities having an aggregate fair market value (based on the
then-current market value of such Securities or, if such market value
cannot be determined, based on the expected offering price of such
Securities) equal to (i) in the case of a public offering, $100 million or
more, unless Ashland shall hold less than $100 million of Securities, in
which event, the remaining Securities held by Ashland and (ii) in the case
of a private placement, $25 million or more, unless Ashland shall hold less
than $25 million of Securities, in which event, the remaining Securities
held by Ashland.
(b) Notwithstanding the provisions of Section 10.01(a),
the Issuer (i) shall not be obligated to prepare or file more than one
Registration Statement pursuant to this Section 10.01 during any six month
period (measured from the effective date (or, in the case of a private
placement, the closing date) of the most recently requested Demand
Registration to the date of the demand by Ashland for a subsequent Demand
Registration) and (ii) shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by it
pursuant to Section 10.01(a), and to prevent Ashland from initially
distributing any Offering Memorandum required to be prepared by the Issuer
pursuant to Section 10.01(a), in each case (x) if the Issuer is actively
pursuing an Underwritten Public Offering, for a period of up to 90 days
following the closing of any Underwritten Public Offering; provided that
the Issuer is advised by its managing underwriter or underwriters in
writing (with a copy to Ashland), that the price at which securities would
be offered in such offering would, in its or in their opinion, be
materially adversely affected by the registration or the initial
dissemination of the Offering Memorandum so requested, or (y) for a period
of up to 90 days if the
65
Issuer determines in its reasonable judgment and in good faith that the
registration and distribution of such Securities (or the private placement
thereof, in the case of a sale by Ashland of such securities pursuant to
Section 4(2) or Rule 144A of the Securities Act) would materially adversely
impair or interfere with in any material respect any contemplated material
financing, acquisition, disposition, corporate reorganization or other
similar transaction involving the Issuer or any of its subsidiaries or
Affiliates ((x) or (y) being hereinafter referred to as a "Blackout
Period"), provided, however, that the aggregate number of days included in
all Blackout Periods during any consecutive 12 months shall not exceed 180
days, and; provided further, however, that a period of at least 30 days
shall elapse between the termination of any Blackout Period and the
commencement of the immediately succeeding Blackout Period. In the event of
such postponement, Ashland shall have the right to withdraw such request
for registration or request for preparation of an Offering Memorandum by
giving written notice to the Issuer within 20 days after receipt of notice
of postponement and, in the event of such withdrawal, such request shall
not be counted for purposes of determining the number of Demand
Registrations to which Ashland is entitled pursuant to Section 10.01(a).
(c) A registration requested pursuant to this Section
10.01 shall not be deemed to have been effected unless the Registration
Statement relating thereto (i) has become effective under the Securities
Act and (ii) has remained effective for a period of at least 90 days (or
such shorter period in which all Securities included in such registration
have actually been sold thereunder); provided, however, that if after any
Registration Statement requested pursuant to this Section 10.01 becomes
effective such Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the Commission or other
Governmental Authority solely due to the actions or omissions to act of the
Issuer prior to being effective for 90 days and less than 75% of the
Securities have been sold thereunder, such Registration Statement shall be
at the sole expense of the Issuer and shall not constitute a Demand
Registration. In addition, a request for the preparation of an Offering
Memorandum pursuant to this Section 10.01 shall not be deemed to have been
effected unless the information contained in such Offering Memorandum has
remained "reasonably current" (as such term is defined in Rule 144A
66
under the Securities Act) for a period of at least 90 days (or such shorter
period in which all Securities covered by such Offering Memorandum have
actually been sold thereunder); provided, however, that if such Offering
Memorandum is interfered with by any stop order, injunction or other order
or requirement of the Commission or other Governmental Authority solely due
to the actions or omissions to act of the Issuer prior to such Offering
Memorandum being made available to Ashland for 90 days and less than 75% of
the Securities have been sold pursuant thereto, such Offering Memorandum
shall be at the sole expense of the Issuer and shall not constitute a
Demand Registration.
(d) On or after the date hereof, the Issuer shall not
grant to any other holder of its securities, whether currently outstanding
or issued in the future, any incidental or "piggy-back" registration rights
with respect to any Registration Statement filed or Offering Memorandum
prepared pursuant to a Demand Registration under this Section 10.01 and,
without the prior consent of Ashland, will not permit any holder of its
securities to participate in any offering or private placement made
pursuant to a Demand Registration under this Section 10.01.
(e) If a Demand Registration involves an Underwritten
Public Offering and the managing underwriter or underwriters shall advise
the Issuer and Ashland in writing that, in its view, the number of
securities requested to be included in such registration (including,
without limitation, Securities requested to be included by Ashland,
securities which the Issuer proposes to be included, and securities
proposed to be included by other holders of securities entitled to include
securities in such registration pursuant to incidental or "piggy-back"
registration rights other than those pursuant to this Article X (the "Other
Holders")) exceeds the largest number of shares of securities which can be
sold without having an adverse effect on such offering, including the price
at which such securities can be sold (the "Maximum Offering Size"), the
Issuer shall include in such registration, in the priority listed below, up
to the Maximum Offering Size:
(i) first, all Securities requested to be registered by
Ashland;
67
(ii) second, all securities requested to be included in
such registration by any Other Holder (allocated, if necessary,
for the offering not to exceed the Maximum Offering Size, pro rata
among such Other Holders on the basis of the relative number of
securities requested to be included in such registration); and
(iii) third, any securities proposed to be registered by
the Issuer or by any Other Holders pursuant to incidental or
"piggy-back" registration rights.
(f) Ashland may, at any time, prior to the effective date
of the Registration Statement or the initial distribution of the Offering
Memorandum relating to such request, revoke such request by providing a
written notice to the Issuer, in which case such request, as so revoked,
shall not constitute a Demand Registration.
SECTION 10.02. Covenants of the Issuer. (a) Registration
Statement Covenants. In the event that any Securities are to be registered
pursuant to Section 10.01, the Issuer covenants and agrees that it shall
(i) use its best efforts to effect the registration, (ii) cooperate in the
sale of the Securities and (iii) as expeditiously as possible:
(1) prepare and file with the Commission a Registration
Statement with respect to such Securities on Form S-3, if
permitted, or otherwise on any form for which the Issuer then
qualifies or which counsel for the Issuer shall deem appropriate,
and which form shall be available for the sale of the Securities
in accordance with the intended methods of distribution thereof,
and use its best efforts to cause such Registration Statement to
become and remain effective;
(2) prepare and file with the Commission amendments and
supplements to such Registration Statement and prospectus used in
connection therewith as may be necessary to maintain the
effectiveness of such registration and to comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such Registration Statement until the
earlier of (i) such time as all of such securities have been
disposed of in accordance with the
68
intended methods of disposition by Ashland set forth in such
Registration Statement and (ii) the expiration of 90 days after
the date such Registration Statement becomes effective; provided
that before filing a Registration Statement or prospectus, or any
amendments or supplements thereto, the Issuer shall furnish to
Ashland and its counsel, copies of all documents proposed to be
filed;
(3) furnish to Ashland such number of copies of such
Registration Statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of
copies of the prospectus and prospectus supplement, as applicable,
in conformity with the requirements of the Securities Act, and
such other documents as Ashland may reasonably request in order to
facilitate the disposition of the Securities by Ashland;
(4) use its best efforts to register or qualify such
Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as Ashland shall
reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable Ashland to
consummate the disposition in such jurisdictions of the Securities
owned by Ashland, except that the Issuer shall not for any such
purpose be required to (i) qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the
requirements of this Section 10.04(a)(4), it would not be
obligated to be so qualified, (ii) subject itself to taxation in
any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);
(5) use its best efforts to cause such Securities covered
by such Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be
necessary to enable Ashland to consummate the disposition of such
Securities;
(6) notify Ashland at any time when a prospectus relating
to a Registration Statement is required to be delivered under the
Securities Act within the appropriate period mentioned in Section
10.02(a)(2), of the happening of any event as a result of which
such Registration Statement contains an untrue statement of a
69
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and at the
request of Ashland, prepare and furnish to Ashland a reasonable
number of copies of an amended or supplemental prospectus as may
be necessary so that, as thereafter delivered to the purchasers of
such Securities, such prospectus shall not contain an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then
existing;
(7) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make
available to Ashland, as soon as reasonably practicable (but not
more than eighteen months) after the effective date of the
Registration Statement, an earnings statement which shall satisfy
the provisions of Section 11(a) of the Securities Act and the
rules and regulations promulgated thereunder;
(8) use its best efforts to cause all such Securities
that are Marathon Equity Securities to be listed on any securities
exchange on which the securities of the Issuer are then listed, if
such Securities are not already so listed and if such listing is
then permitted under the rules of such exchange, and to provide a
transfer agent and registrar for such Securities covered by such
Registration Statement no later than the effective date of such
Registration Statement;
(9) use its best efforts to obtain a "cold comfort"
letter or letters from the Issuer's independent public accountants
in customary form; and
(10) cooperate with Ashland and the managing underwriter
or underwriters, if any, to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legends)
representing the Securities to be sold under such Registration
Statement, and enable such Securities to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Ashland may request.
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(b) Offering Memorandum Covenants. In the event that any
Securities are to be sold by Ashland by means of an Offering Memorandum
prepared by the Issuer pursuant to Sections 10.01, the Issuer covenants and
agrees that it shall (i) cooperate in the sale of the Securities and (ii)
as expeditiously as possible:
(1) prepare the Offering Memorandum;
(2) prepare amendments and supplements to such Offering
Memorandum as may be necessary to keep the information in such
Offering Memorandum "reasonably current" (as such term is defined
in Rule 144A under the Securities Act) and to comply with the
provisions of the Securities Act with respect to the disposition
of all securities covered by such Offering Memorandum until the
earlier of (i) such time as all of such securities have been
disposed of in accordance with the intended methods of disposition
by Ashland set forth in such Offering Memorandum and (ii) the
expiration of 90 days after the date such Offering Memorandum (in
definitive form) is circulated to the initial purchasers; provided
that before making any amendments or supplements thereto, the
Issuer shall furnish to Ashland and its counsel, copies of all
proposed amendments or supplements;
(3) furnish to Ashland such number of copies of such
Offering Memorandum and of each amendment and supplement thereto
(in each case including all exhibits), and such other documents as
Ashland may reasonably request in order to facilitate the
disposition of the Securities by Ashland;
(4) use its best efforts to register or qualify such
Securities covered by such Offering Memorandum under such other
securities or blue sky laws of such jurisdictions as Ashland shall
reasonably request, and do any and all other acts and things which
may be reasonably necessary or advisable to enable Ashland to
consummate the disposition in such jurisdictions of the Securities
owned by Ashland, except that the Issuer shall not for any such
purpose be required to (i) qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the
requirements of this Section 10.02(b)(4), it would not be
obligated to be so qualified, (ii) subject itself to
71
taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction);
(5) use its best efforts to cause such Securities covered
by such Offering Memorandum to be registered with or approved by
such other governmental agencies or authorities as may be
necessary to enable Ashland to consummate the disposition of such
Securities;
(6) notify Ashland at any time prior to the completion of
the sale of the Securities by Ashland that are covered by the
Offering Memorandum, of the happening of any event as a result of
which such Offering Memorandum contains an untrue statement of a
material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and at the
request of Ashland, prepare and furnish to Ashland a reasonable
number of copies of an amended or supplemental Offering Memorandum
as may be necessary so that, as thereafter delivered to the
purchasers of such Securities, such Offering Memorandum shall not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the
circumstances then existing;
(7) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission;
(8) use its best efforts to cause all such Securities
that are Marathon Equity Securities to be listed on any securities
exchange on which the securities of the Issuer are then listed, if
such Securities are not already so listed and if such listing is
then permitted under the rules of such exchange, and to provide a
transfer agent and registrar for such Securities covered by such
Offering Memorandum no later than the effective date of such
Offering Memorandum;
(9) use its best efforts to obtain a "cold comfort"
letter or letters from the Issuer's independent public accountants
in customary form; and
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(10) cooperate with Ashland and the initial purchasers,
if any, to facilitate the timely preparation and delivery of
certificates representing the Securities to be sold under such
Offering Memorandum, and enable such Securities to be in such
denominations and registered in such names as the initial
purchasers, if any, or Ashland may request.
The Issuer may require Ashland to furnish the Issuer with
such information regarding Ashland and pertinent to the disclosure
requirements relating to the registration and/or the distribution of such
Securities pursuant to this Article X as the Issuer may from time to time
reasonably request in writing.
Ashland agrees that, upon receipt of any notice from the
Issuer of the happening of any event of the kind described in Section
10.02(a)(6) or 10.02(b)(6), or of the imposition by the Issuer of a
Blackout Period of the type described in clause (y) of 10.01(b)(ii),
Ashland shall forthwith discontinue such disposition of such Securities
pursuant to the Registration Statement or Offering Memorandum covering such
Securities until Ashland's receipt of the copies of the supplemented or
amended prospectus or Offering Memorandum contemplated by Section
10.02(a)(6) and 10.02(b)(6), respectively, or the expiration of such
Blackout Period, as applicable, and, if so directed by the Issuer, Ashland
shall deliver to the Issuer (at the Issuer's expense) all copies, other
than permanent file copies then in Ashland's possession, of the prospectus
or Offering Memorandum covering such Securities current at the time of
receipt of such notice. In the event the Issuer shall give any such notice,
the period mentioned in Section 10.02(a)(2) or 10.02(b)(2), as applicable,
shall be extended by the number of days during the period from the date of
the giving of such notice pursuant to Section 10.02(a)(6) or 10.02(b)(6),
as applicable, and through the date when Ashland shall have received the
copies of the supplemented or amended prospectus or Offering Memorandum
contemplated by Section 10.02(a)(6) or 10.02(b)(6), respectively, or the
expiration of such Blackout Period, as applicable.
SECTION 10.03. Fees and Expenses. In connection with any
registration pursuant to this Article X or the preparation of any Offering
Memorandum pursuant to this Article X, (i) Ashland shall pay all agent fees
and commissions and underwriting discounts and commissions
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related to the Securities being sold by Ashland and the fees and
disbursements of its counsel and accountants and (ii) the Issuer shall pay
all fees and disbursements of its counsel and accountants and the expenses,
including fees incurred in the preparation of a cold comfort letter
requested by Ashland pursuant to Section 10.02(a)(9) or 10.02(b)(9), as
applicable. All others fees and expenses in connection with any
Registration Statement or Offering Memorandum (including, without
limitation, all registration and filing fees, all printing costs, all fees
and expenses of complying with securities or blue sky laws) shall be borne
by Ashland; provided that Ashland shall not pay any expenses relating to
work that would otherwise be incurred by the Issuer including, but not
limited to, the preparation and filing of periodic reports with the
Commission.
SECTION 10.04. Indemnification and Contribution. In the
case of any offering registered pursuant to this Article X or any private
placement pursuant to an Offering Memorandum prepared by the Issuer
pursuant to this Article X, the Issuer agrees to indemnify and hold
Ashland, each underwriter or initial purchaser, if any, of the Securities
under such registration or covered by such Offering Memorandum and each
person who controls any of the foregoing within the meaning of Section 15
of the Securities Act, and any director, officer, employee, stockholder,
partner, agent or representative, of the foregoing, harmless against any
and all losses, claims, damages or liabilities (including reasonable legal
fees and other reasonable expenses incurred in the investigation and
defense thereof) (collectively "Losses") to which they or any of them may
become subject under the Securities Act or otherwise, insofar as any such
Losses shall arise out of or shall be based upon (i) any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (as amended if the Issuer shall have filed with the
Commission any amendment thereof) or Offering Memorandum (as amended if the
Issuer shall have prepared and delivered to Ashland for private
distribution any amendment to such Offering Memorandum), or the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the
prospectus relating to the sale of such Securities (as amended or
supplemented if the Issuer shall have filed with the Commission any
amendment
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thereof or supplement thereto), or the omission or alleged omission to
state therein a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that the indemnification contained in this Section
10.04 shall not apply to such Losses which shall arise out of or shall be
based upon any such untrue statement or alleged untrue statement, or any
such omission or alleged omission, which shall have been made in reliance
upon and in conformity with information furnished in writing to the Issuer
by Ashland or such underwriter or initial purchaser, as the case may be,
specifically for use in connection with the preparation of the Registration
Statement, the prospectus contained in the Registration Statement or the
Offering Memorandum, as applicable, or any such amendment thereof or
supplement therein.
Notwithstanding the foregoing provisions of this Section
10.04, the Issuer shall not be liable to Ashland, any person who
participates as an underwriter in the offering or sale of such Securities,
any person who participates as an initial purchaser in the private
placement of such Securities or any other person, if any, who controls
Ashland or any underwriter or initial purchaser (within the meaning of the
Securities Act), under the indemnity agreement in this Section 10.04 for
any such Losses that arise out of Ashland's or such other person's failure
to send or give a copy of the final prospectus or final Offering Memorandum
to the person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the
sale of the Securities to such person if such statement or omission was
corrected in such final prospectus or final Offering Memorandum and the
Issuer has previously furnished copies thereof in accordance with this
Agreement.
In the case of each offering registered pursuant to this
Article X and each private placement pursuant to this Article X, Ashland
shall agree, and each underwriter or initial purchaser, if any,
participating therein shall agree, substantially in the same manner and to
the same extent as set forth in the preceding paragraph, severally to
indemnify and hold harmless the Issuer and each person who controls the
Issuer within the meaning of Section 15 of the Securities Act, and any
director, officer, employee, stockholder, partner, agent or representative
of the Issuer, with respect to any statement in or omission from such
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Registration Statement (as amended or as supplemented, if amended or
supplemented as aforesaid) or Offering Memorandum (as amended or as
supplemented, if amended or supplemented as aforesaid), as applicable, if
such statement or omission shall have been made in reliance upon and in
conformity with information furnished in writing to the Issuer by Ashland
or such underwriter or initial purchaser, as the case may be, specifically
for use in connection with the Registration Statement, the prospectus
contained in such Registration Statement or the Offering Memorandum, as
applicable, or any such amendment thereof or supplement thereto.
Each party indemnified under this Section 10.04 shall,
promptly after receipt of notice of the commencement of any claim against
any such indemnified party in respect of which indemnity may be sought
hereunder, notify the indemnifying party in writing of the commencement
thereof. The failure of any indemnified party to so notify an indemnifying
party of any action shall not relieve the indemnifying party from any
liability in respect of such action which it may have to such indemnified
party on account of the indemnity contained in this Section 10.04, unless
(and only to the extent) the indemnifying party was prejudiced by such
failure, and in no event shall such failure relieve the indemnifying party
from any other liability which it may have to such indemnified party. In
case any action in respect of which indemnification may be sought hereunder
shall be brought against any indemnified party and it shall notify an
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it may
desire, jointly with any other indemnifying party similarly notified, to
assume the defense thereof through counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under this
Section 10.04 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other than
reasonable costs of investigation (unless (i) such indemnified party
reasonably objects to such assumption on the grounds that there may be
defenses available to it which are different from or in addition to those
available to such indemnifying party, (ii) the indemnifying party and such
indemnified party shall have mutually agreed to the retention of such
counsel or (iii) in the reasonable opinion
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of such indemnified party representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and
any other party represented by such counsel in such proceeding, in which
case the indemnified party shall be reimbursed by the indemnifying party
for the reasonable expenses incurred in connection with retaining one firm
of separate legal counsel; provided that (i) in circumstances where Ashland
or an underwriter or initial purchaser is the indemnifying party, the
indemnifying party shall not be liable for more than one firm of legal
counsel for all indemnified parties and (ii) in circumstances where the
Issuer is the indemnifying party, the indemnifying party shall not be
liable for more than (A) one firm of legal counsel for Ashland, each person
who controls Ashland within the meaning of Section 15 of the Securities
Act, and any director, officer, employee, stockholder, partner, agent or
representative of Ashland, and (B) one firm of legal counsel for the
underwriters or initial purchasers, if any, indemnified under this Section
10.04, each person who controls such underwriters or initial purchasers
within the meaning of Section 15 of the Securities Act, and any director,
officer, employee, stockholder, partner, agent or representative of such
underwriters or initial purchasers). No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any claim or pending or threatened proceeding in respect of which the
indemnified party is or could have been a party and indemnity could have
been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all
liability arising out of such claim or proceeding. If an indemnifying party
shall have expressly acknowledged its indemnification obligations with
respect to a claim or pending or threatened proceeding, then the
indemnified party with respect to such claim or pending or threatened
proceeding shall not, without the prior written consent of the indemnifying
party, effect any settlement of such claim or pending or threatened
proceeding.
If the indemnification provided for in this Section 10.04
is unavailable to an indemnified party or is insufficient to hold such
indemnified party harmless from any Losses in respect of which this Section
10.04 would otherwise apply by its terms (other than by reason of
exceptions provide herein), then each applicable
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indemnifying party, in lieu of indemnifying such indemnified party, shall
have a joint and several obligation to contribute to the amount paid or
payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative benefits received by
and fault of the indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the offering or private
placement to which such contribution relates as well as any other relevant
equitable considerations. The relative benefit shall be determined by
reference to, among other things, the amount of proceeds received by each
party from the offering or private placement to which such contribution
relates. The relative fault shall be determined by reference to, among
other things, each party's relative knowledge and access to information
concerning the matter with respect to which the claim was asserted, and the
opportunity to correct and prevent any statement or omission. The amount
paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in
connection with any investigation or proceeding, to the extent such party
would have been indemnified for such expenses if the indemnification
provided for in this Section 10.04 was available to such party.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 10.04 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
SECTION 10.05. Underwriting Agreement; Purchase
Agreement. In connection with any underwritten offering or private
placement of Securities pursuant to a Demand Registration under Section
10.01, the Issuer and Ashland shall enter into an underwriting agreement
with the underwriters for such offering or a purchase agreement with the
initial purchasers for such private placement, such underwriting agreement
or purchase agreement to contain such representations and warranties by the
Issuer and Ashland and such other terms and provisions as are customarily
contained
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in underwriting agreements with respect to secondary distributions or
purchase agreements with respect to private placements, including, without
limitation, indemnities and contribution to the effect and to the extent
provided in Section 10.04 (and customary provisions with respect to
indemnities and contribution by such underwriters or initial purchasers).
SECTION 10.06. Undertaking To File Reports. For as long
as Ashland holds Securities, the Issuer shall use its best efforts to file,
on a timely basis, all annual, quarterly and other reports required to be
filed by it under Sections 13 and 15(d) of the Exchange Act and the rules
and regulations of the Commission thereunder, as amended from time to time,
or any successor statute or provisions.
ARTICLE XI
Covenants
SECTION 11.01. Cooperation; Commercially Reasonable Best
Efforts. Each of the parties hereto shall cooperate with each other in good
faith, and shall cause their respective officers, employees, agents,
auditors and representatives to cooperate with each other in good faith, to
cause the Closing to occur. In addition, each of the parties hereto shall
use its commercially reasonable best efforts to cause the Closing to occur.
SECTION 11.02. Antitrust Notification; FTC or DOJ
Investigation. (a) Each of Marathon, USX and Ashland shall as promptly as
practicable, but in no event later than 30 days following the relevant
Exercise Date, file with the FTC and the DOJ the notification and report
form, if any, required for the transactions contemplated hereby and any
supplemental information requested in connection therewith pursuant to the
HSR Act. Any such notification and report form and supplemental information
shall be in substantial compliance with the requirements of the HSR Act.
Each of Marathon, USX and Ashland shall furnish to the other such necessary
information and reasonable assistance as the other may request in
connection with its preparation of any filing or submission which is
necessary under the HSR Act. Each of Marathon, USX and Ashland shall keep
each other apprised of the status of any communications with, and any
inquiries or requests for additional information from, the FTC and the
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DOJ and shall comply promptly with any such inquiry or request.
(b) In the event that Marathon, USX and Ashland are not
required to file with the FTC and the DOJ any notification and report form
pursuant to the HSR Act, but the FTC or the DOJ nevertheless commences an
investigation with respect to the transactions contemplated hereby, each of
Marathon, USX and Ashland shall comply promptly with any inquiry or request
made by the DOJ or the FTC in connection with such investigation.
(c) In the event that Marathon, USX and Ashland file
notification and report forms with the FTC and the DOJ pursuant to Section
11.02(a) or the FTC or the DOJ commences an investigation with respect to
the transactions contemplated hereby, then, in addition to the obligations
of Marathon, USX and Ashland set forth in Section 11.02(a) and 11.02(b), as
applicable, Marathon, USX and Ashland agree as follows:
(i) In the case of Marathon's exercise of its Marathon
Call Right, each of Marathon and USX shall take all such actions
as are necessary to obtain any clearance required under the HSR
Act or from the FTC or DOJ in connection with any such
investigation, as applicable, for the purchase and sale of
Ashland's Membership Interests and the Ashland LOOP/LOCAP Interest
pursuant to this Agreement, including divesting or holding
separate any assets or commencing or defending litigation;
provided, however, that neither Marathon nor USX shall be required
to take any action proposed by the FTC or the DOJ that would or
would reasonably be expected to have a material adverse effect on
the business, operations, assets, liabilities, results of
operations, cash flows, condition (financial or otherwise) or
prospects of the Company and its subsidiaries, taken as a whole.
(ii) In the case of (A) Ashland's exercise of its Ashland
Put Right or (B) Marathon's exercise of its Special Termination
Right, each of Marathon and USX shall take all such actions as are
necessary to obtain any clearance required under the HSR Act or
from the FTC or DOJ in connection with any such investigation, as
applicable, for the purchase and sale of Ashland's Membership
Interests and the Ashland LOOP/LOCAP
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Interest pursuant to this Agreement, including divesting or
holding separate any assets or commencing or defending litigation;
provided, however, that neither Marathon nor USX shall be required
to take any action proposed by the FTC or the DOJ that would or
would reasonably be expected to have a material adverse effect on
the business, operations, assets, liabilities, results of
operations, cash flows, condition (financial or otherwise) or
prospects of (A) the Company and its subsidiaries, taken as a
whole, (B) Marathon and its subsidiaries, taken as a whole, or (C)
USX and its subsidiaries, taken as a whole.
(iii) In the case of Ashland's exercise of its Special
Termination Right, Ashland shall take all such actions as are
necessary to obtain any clearance required under the HSR Act or
from the FTC or DOJ in connection with any such investigation, as
applicable, for the purchase and sale of Marathon's Membership
Interests pursuant to this Agreement, including divesting or
holding separate any assets or commencing or defending litigation;
provided, however, that Ashland shall not be required to take any
action proposed by the FTC or the DOJ that would or would
reasonably be expected to have a material adverse effect on the
business, operations, assets, liabilities, results of operations,
cash flows, condition (financial or otherwise) or prospects of (A)
the Company and its subsidiaries, taken as a whole or (B) Ashland
and its subsidiaries, taken as a whole.
SECTION 11.03. Governmental Filings re: Ashland
LOOP/LOCAP Interest. (a) Each of the parties hereto shall as promptly as
practical, but in no event later than five Business Days following the
relevant Exercise Date, file all documentation with all relevant
Governmental Entities that is required to be filed with such Governmental
Entities in connection with the purchase and sale of the Ashland LOOP/LOCAP
Interest on the Scheduled Closing Date. Each of the parties hereto shall
keep the other apprised of the status of any communications with, and any
inquiries or requests for additional information from, such Governmental
Entities and shall comply promptly with any such inquiry or request.
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(b) In addition to the obligations of the parties hereto
set forth in Section 11.03(a), Marathon and USX agree as follows:
(i) In the case of Marathon's exercise of its Marathon
Call Right, each of Marathon and USX shall take all such actions
as are necessary to obtain any requisite approvals from such
Governmental Entities as are required in connection with the
purchase and sale of the Ashland LOOP/LOCAP Interest pursuant to
this Agreement, including commencing or defending litigation;
provided, however, that neither Marathon nor USX shall be required
to take any such action that would or would reasonably be expected
to have a material adverse effect on the business, operations,
assets, liabilities, results of operations, cash flows, condition
(financial or otherwise) or prospects of the Company and its
subsidiaries, taken as a whole.
(ii) In the case of Marathon's exercise of its Special
Termination Right or Ashland's exercise of its Ashland Put Right,
each of Marathon and USX shall take all such actions as are
necessary to obtain any requisite approvals from such Governmental
Entities as are required in connection with the purchase and sale
of the Ashland LOOP/LOCAP Interest pursuant to this Agreement,
including commencing or defending litigation; provided, however,
that neither Marathon nor USX shall be required to take any such
action that would or would reasonably be expected to have a
material adverse effect on the business, operations, assets,
liabilities, results of operations, cash flows, condition
(financial or otherwise) or prospects of (A) the Company and its
subsidiaries, taken as a whole, (B) Marathon and its subsidiaries,
taken as a whole, or (C) USX and its subsidiaries, taken as a
whole.
SECTION 11.04. Designated Sublease Agreements. (a)
Ashland Designated Sublease Agreements. In the event of (i) Marathon's
exercise of its Marathon Call Right, (ii) Ashland's exercise of its Ashland
Put Right or (iii) Marathon's exercise of its Special Termination Right,
Ashland shall use its commercially reasonable best efforts to (A) terminate
the outstanding Original Lease underlying each Ashland Designated Sublease
Agreement on or prior to Closing and (B) contribute the related Subleased
Property to the Company or one of its subsidiaries at no cost to the
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Company or such subsidiary on or prior to Closing; provided, however, that
(i) Ashland shall not be obligated to pay more than a reasonable amount as
consideration therefor to, or make more than a reasonable financial
accommodation in favor of, or commence litigation against, a third party
lessor with respect to any such underlying Original Lease in order to
obtain any consent required from such lessor and (ii) any additional cost
associated with exercising an option under the Original Lease to purchase
Subleased Property shall be deemed not to constitute an obligation to pay
more than a reasonable amount. In the event that Ashland is unable to
terminate an outstanding Original Lease in accordance with this Section
11.04(a), then (i) the Company shall be entitled to continue to sublease
the Subleased Property pursuant to the related Ashland Designated Sublease
Agreement until the term of the Original Lease expires, (ii) Ashland shall
continue to use its commercially reasonable best efforts to terminate the
Original Lease and contribute the Subleased Property to the Company as
provided above; provided, however, that (A) Ashland shall not be obligated
to pay more than a reasonable amount as consideration therefor to, or make
more than a reasonable financial accommodation in favor of, or commence
litigation against, a third party lessor with respect to any such
underlying Original Lease in order to obtain any consent required from such
lessor and (B) any additional cost associated with exercising an option
under the Original Lease to purchase Subleased Property shall be deemed not
to constitute an obligation to pay more than a reasonable amount and (iii)
if Ashland subsequently acquires fee title to the Subleased Property,
Ashland shall contribute such Subleased Property to the Company or one of
its subsidiaries at no cost to the Company or such subsidiary at such time.
(b) Marathon Designated Sublease Agreements. In the event
of Ashland's exercise of its Special Termination Right, Marathon shall use
its commercially reasonable best efforts to (A) terminate the outstanding
Original Lease underlying each Marathon Designated Sublease Agreement on or
prior to Closing and (B) contribute the related Subleased Property to the
Company or one of its subsidiaries at no cost to the Company or such
subsidiary on or prior to Closing; provided, however, that (i) Marathon
shall not be obligated to pay more than a reasonable amount as
consideration therefor to, or make more than a reasonable financial
accommodation in favor of, or commence litigation against, a third party
lessor with respect to any such
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underlying Original Lease in order to obtain any consent required from such
lessor and (ii) any additional cost associated with exercising an option
under the Original Lease to purchase Subleased Property shall be deemed not
to constitute an obligation to pay more than a reasonable amount. In the
event that Marathon is unable to terminate an outstanding Original Lease in
accordance with this Section 11.04(b), then (i) the Company shall be
entitled to continue to sublease the Subleased Property pursuant to the
related Marathon Designated Sublease Agreement until the term of the
Original Lease expires, (ii) Marathon shall continue to use its
commercially reasonable best efforts to terminate the Original Lease and
contribute the Subleased Property to the Company as provided above;
provided, however, that (A) Marathon shall not be obligated to pay more
than a reasonable amount as consideration therefor to, or make more than a
reasonable financial accommodation in favor of, or commence litigation
against, a third party lessor with respect to any such underlying Original
Lease in order to obtain any consent required from such lessor and (B) any
additional cost associated with exercising an option under the Original
Lease to purchase Subleased Property shall be deemed not to constitute an
obligation to pay more than a reasonable amount and (iii) if Marathon
subsequently acquires fee title to the Subleased Property, Marathon shall
contribute such Subleased Property to the Company or one of its
subsidiaries at no cost to the Company or such subsidiary at such time.
ARTICLE XII
Standstill Agreement
SECTION 12.01. Restrictions of Certain Actions by
Marathon and USX. Each of Marathon and USX covenants and agrees that, from
the date hereof through the six-month anniversary of the earlier to occur
of (a) the date that Ashland and its Affiliates do not own any Membership
Interests, and (b) the date that Marathon and its Affiliates do not own any
Membership Interests, it shall not, and it shall cause each of its
Affiliates (including, for the avoidance of doubt, Employee Benefit Plans
of USX, Marathon and their respective Affiliates) not to, singly or as part
of a partnership, limited partnership, syndicate or other group
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(as those terms are defined in Section 13(d)(3) of the Exchange Act),
directly or indirectly:
(i) acquire, offer to acquire, or agree to acquire, by
purchase, gift or otherwise, more than 1% of any class of any
Ashland Voting Securities, except (A) pursuant to a stock split,
stock dividend, rights offering, recapitalization,
reclassification or similar transaction, (B) in connection with
the transfer of Ashland Voting Securities to a Marathon or USX
Employee Benefit Plan as contemplated by Section 3.1(v) of the
Asset Transfer and Contribution Agreement or (C) the ownership by
any Employee Benefit Plan of USX, Marathon or any of their
respective Affiliates of any interest in any diversified index,
mutual or pension fund managed by an independent investment
advisor, which fund in turn holds, directly or indirectly, Ashland
Voting Securities; provided that not more than 5% of such fund's
assets are comprised of Ashland Voting Securities;
(ii) make, or in any way participate in any
"solicitation" of "proxies" to vote (as such terms are defined in
Rule 14a-1 under the Exchange Act), solicit any consent or
communicate with or seek to advise or influence any person or
entity with respect to the voting of any Ashland Voting Securities
or become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the Exchange Act) with
respect to Ashland;
(iii) form, join, encourage or in any way participate in
the formation of, any "person" within the meaning of Section
13(d)(3) of the Exchange Act with respect to any Ashland Voting
Securities;
(iv) deposit any Ashland Voting Securities into a voting
trust or subject any such Ashland Voting Securities to any
arrangement or agreement with respect to the voting thereof;
(v) initiate, propose or otherwise solicit shareholders
for the approval of one or more shareholder proposals with respect
to Ashland as described in Rule 14a-8 under the Exchange Act, or
induce or attempt to induce any other person to initiate any
shareholder proposal;
85
(vi) seek election to or seek to place a representative
on the Board of Directors of Ashland or seek the removal of any
member of the Board of Directors of Ashland;
(vii) except with the approval of management of Ashland,
call or seek to have called any meeting of the shareholders of Ashland;
(viii) otherwise act to seek to control, disrupt or
influence the management, business, operations, policies or affairs of
Ashland;
(ix) (A) solicit, seek to effect, negotiate with or
provide any information to any other person with respect to, (B)
make any statement or proposal, whether written or oral, to the
Board of Directors of Ashland or any director or officer of
Ashland with respect to, or (C) otherwise make any public
announcement or proposal whatsoever with respect to, any form of
business combination transaction involving Ashland (other than the
Transaction), including, without limitation, a merger, exchange
offer, or liquidation of Ashland's assets, or any restructuring,
recapitalization or similar transaction with respect to Ashland;
(x) seek to have Ashland waive, amend or modify any of
the provisions contained in this Section 12.01;
(xi) disclose or announce any intention, plan or
arrangement inconsistent with the foregoing; or
(xii) advise, assist, instigate or encourage any third
party to do any of the foregoing.
If either Marathon or USX or any of their respective
Affiliates owns or acquires any Ashland Voting Securities in violation of
this Section 12.01, such Ashland Voting Securities shall immediately be
disposed of to persons who (i) are not Marathon or USX or Affiliates
thereof and (ii) do not own, individually or as part of a "group" (within
the meaning of Section 13(d)(3) of the Exchange Act), more than 5% of the
then outstanding Ashland Voting Securities; provided that Ashland may also
pursue any other available remedy to which it may be entitled as a result
of such violation.
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SECTION 12.02. Restrictions of Certain Actions by
Ashland. Ashland covenants and agrees that, from the date hereof through
the later to occur of (a) the six-month anniversary of the earlier to occur
of (i) the date that Marathon and its Affiliates do not own any Membership
Interests and (ii) the date that Ashland and its Affiliates do not own any
Membership Interests and (b) in the event that Ashland or its Affiliates
acquires USX Voting Securities pursuant to the Closing of the Ashland Put
Right, the date on which Ashland and its Affiliates do not own more than 5%
of the then outstanding USX Voting Securities, it shall not, and it shall
cause each of its Affiliates (including, for the avoidance of doubt,
Employee Benefit Plans of Ashland and its Affiliates) not to, singly or as
part of a partnership, limited partnership, syndicate or other group (as
those terms are defined in Section 13(d)(3) of the Exchange Act), directly
or indirectly:
(i) acquire, offer to acquire, or agree to acquire, by
purchase, gift or otherwise, more than 1% of any class of USX
Voting Securities, except (A) pursuant to a stock split, stock
dividend, rights offering, recapitalization, reclassification or
similar transaction and except for any issuance of USX Voting
Securities to Ashland as payment of any portion of the Ashland Put
Price in accordance with the provisions of this Agreement or (B)
the ownership by any Employee Benefit Plan of Ashland or any of
its Affiliates of any interest in any diversified index, mutual or
pension fund managed by an independent investment advisor, which
fund in turn holds, directly or indirectly, USX Voting Securities;
provided that not more than 5% of such fund's assets are comprised
of USX Voting Securities;
(ii) make, or in any way participate in any
"solicitation" of "proxies" to vote (as such terms are defined in
Rule 14a-1 under the Exchange Act), solicit any consent or
communicate with or seek to advise or influence any person or
entity with respect to the voting of any USX Voting Securities or
become a "participant" in any "election contest" (as such terms
are defined or used in Rule 14a-11 under the Exchange Act) with
respect to USX;
(iii) form, join, encourage or in any way participate in
the formation of, any "person" within
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the meaning of Section 13(d)(3) of the Exchange Act with respect
to any USX Voting Securities;
(iv) deposit any USX Voting Securities into a voting
trust or subject any such USX Voting Securities to any arrangement
or agreement with respect to the voting thereof;
(v) initiate, propose or otherwise solicit shareholders
for the approval of one or more shareholder proposals with respect
to USX as described in Rule 14a-8 under the Exchange Act, or
induce or attempt to induce any other person to initiate any
shareholder proposal;
(vi) seek election to or seek to place a representative
on the Board of Directors of USX or seek the removal of any member
of the Board of Directors of USX or seek the removal of any member
of the Board of Directors of USX;
(vii) except with the approval of management of USX, call
or seek to have called any meeting of the shareholders of USX;
(viii) otherwise act to seek to control, disrupt or
influence the management, business, operations, policies or
affairs of USX;
(ix) (A) solicit, seek to effect, negotiate with or
provide any information to any other person with respect to, (B)
make any statement or proposal, whether written or oral, to the
Board of Directors of USX or any director or officer of USX with
respect to, or (C) otherwise make any public announcement or
proposal whatsoever with respect to, any form of business
combination transaction involving USX (other than the
Transaction), including, without limitation, a merger, exchange
offer, or liquidation of USX's assets, or any restructuring,
recapitalization or similar transaction with respect to USX;
(x) seek to have USX waive, amend or modify any of the
provisions contained in this Section 12.02;
(xi) disclose or announce any intention, plan or
arrangement inconsistent with the foregoing; or
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(xii) advise, assist, instigate or encourage any third
party to do any of the foregoing.
If Ashland or any of its Affiliates owns or acquires any
USX Voting Securities in violation of this Section 12.02, such USX Voting
Securities shall immediately be disposed of to persons who (i) are not
Ashland or Affiliates thereof and (ii) do not own, individually or as part
of a "group" (within the meaning of Section 13(d)(3) of the Exchange Act),
more than 5% of the then outstanding USX Voting Securities; provided that
USX may also pursue any other available remedy to which it may be entitled
as a result of such violation.
ARTICLE XIII
Indemnification
SECTION 13.01. Indemnification re: Ashland
Representatives' Revocable Proxies and the Ashland LOOP/LOCAP Revocable
Proxy. In the event that Ashland's Representatives grant Marathon's
Representatives the Ashland Representatives Revocable Proxies pursuant to
Section 5.02(a) and Ashland grants to Marathon or a person designated by
Marathon, as applicable, the Ashland LOOP/LOCAP Revocable Proxy pursuant to
Section 5.02(c), each of Marathon, USX and the Company agree to indemnify
and hold Ashland, its Representatives, their respective Affiliates and any
director, officer, employee, stockholder, partner, agent or representative
of Ashland or its Affiliates harmless against any and all Losses to which
they or any of them may become subject, insofar as any such Losses shall
arise out of, are based upon or relate to any obligations or liabilities of
whatever kind and nature, primary or secondary, direct or indirect,
absolute or contingent, known or unknown, whether or not accrued, which
arise on or after the relevant Exercise Date and which are attributable to
(i) in the event that the Closing occurs, (A) the Company and its
subsidiaries or LOOP, LLC or LOCAP, Inc., (B) Ashland's ownership interest
in the Company or the Ashland LOOP/LOCAP Interest, (C) actions taken by
Marathon's Representatives pursuant to the Ashland Representatives
Revocable Proxies or (D) actions taken by Marathon or the Company, as
applicable, pursuant to the Ashland LOOP/LOCAP Revocable Proxy, and (ii) in
the event that Ashland or Marathon revokes Ashland's Ashland Put Exercise
Notice or Marathon's Marathon Call
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Exercise Notice pursuant to Section 9.03(a), 9.04(a), 9.05, 9.08(a) or
9.09, or Ashland revokes Marathon's Special Termination Exercise Notice
pursuant to Section 9.08(a) or 9.09 (A) actions taken by Marathon's
Representatives pursuant to the Ashland Representatives Revocable Proxies
or (B) actions taken by Marathon or the Company, as applicable, pursuant to
the Ashland LOOP/LOCAP Revocable Proxy.
SECTION 13.02. Indemnification re: Marathon
Representatives Revocable Proxies. In the event that Marathon's
Representatives grant Ashland's Representatives the Marathon
Representatives Revocable Proxies pursuant to Section 5.02(b), each of
Ashland and the Company agree to indemnify and hold Marathon, its
Representatives, their respective Affiliates and any director, officer,
employee, stockholder, partner, agent or representative of Marathon or its
Affiliates harmless against any and all Losses to which they or any of them
may become subject, insofar as any such Losses shall arise out of, are
based upon or relate to any obligations or liabilities of whatever kind and
nature, primary or secondary, direct or indirect, absolute or contingent,
known or unknown, whether or not accrued, which arise on or after the
Special Termination Exercise Date and which are attributable to (i) in the
event that the Closing occurs, (A) the Company and its subsidiaries or (B)
actions taken by Ashland's Representatives pursuant to the Marathon
Representatives Revocable Proxies and (ii) in the event that Marathon
revokes Ashland's Special Termination Exercise Notice pursuant to Section
9.08(a) or 9.09, actions taken by Ashland's Representatives pursuant to the
Marathon Representatives Revocable Proxies.
SECTION 13.03. Indemnification re: Transfer of Economic
Interests in the Ashland LOOP/LOCAP Interest to Marathon, the Company or a
Person Designated by Marathon. To the extent that Ashland is unable to
Transfer the Ashland LOOP/LOCAP Interest to Marathon, the Company or a
person designated by Marathon, as applicable, at Closing, and as a result
thereof, Ashland enters into any arrangement under which Marathon, the
Company or such other person shall obtain the economic claims, rights and
benefits under the Ashland LOOP/LOCAP interest, including a grant to
Marathon, the Company or such other person, as applicable, of the Ashland
LOOP/LOCAP Irrevocable Proxy, each of Marathon, USX and the Company agree
to indemnify and hold Ashland, its Representatives, their respective
Affiliates and any director, officer, employee, stockholder, partner, agent
or
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representative of Ashland or its Affiliates harmless against any and all
Losses to which they or any of them may become subject, insofar as any such
Losses shall arise out of, be based upon or relate to any obligations or
liabilities of whatever kind and nature, primary or secondary, direct or
indirect, absolute or contingent, known or unknown, whether or not accrued,
which arise on or after the relevant Exercise Date and which are
attributable to (i) LOOP, LLC, (ii) LOCAP, Inc., (iii) Ashland's ownership
interest in LOOP, LLC and LOCAP, Inc., (iv) any such arrangements between
Ashland and Marathon, the Company or such other person or (v) actions taken
by Marathon, the Company or such other person, as applicable, pursuant to
the Ashland LOOP/LOCAP Irrevocable Proxies.
SECTION 13.04. Procedures Relating to Indemnification
Under This Article XIII. The procedures for Indemnification under this
Article XIII shall be the procedures for indemnification set forth in
Section 9.7 of the Asset Transfer and Contribution Agreement.
ARTICLE XIV
Company Competitive Businesses;
Detrimental Activities; Limitations on the
Company Entering into Valvoline's Business
SECTION 14.01. Competitive Businesses. (a) Subject to
Sections 14.01(b), 14.01(d) and 14.03(c), and except to the extent
otherwise provided in Schedule 14.01(a), each of Marathon, USX and Ashland
hereby agrees that during the Term of the Company, it shall not, and it
shall cause its Affiliates not to, engage in any business within North
America which is substantially in competition with (i) the Company's
Business conducted on the date hereof or (ii) any new line of business of
the Company that the Board of Managers has approved in accordance with
Section 8.07(b) of the LLC Agreement (but only if and to the extent that
the Board of Managers specifically determined pursuant to Section 8.07(b)
of the LLC Agreement that such new line of business should also constitute
a Company Competitive Business) (each such business in clauses (i) and
(ii), a "Company Competitive Business"); provided, however, that nothing in
this Section 14.01 shall be deemed or interpreted to prohibit Ashland or
any of its Affiliates from engaging in the Valvoline Business.
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(b) Notwithstanding any limitation contained in Section
14.01(a), Marathon, USX and Ashland and their respective Affiliates shall
be permitted to engage in a Company Competitive Business if: (i) Marathon
or Ashland, as applicable, shall have first presented the Company, at a
meeting of the Board of Managers at which at least one of the
Representatives of the other Member was present, with the opportunity to
pursue or engage in such Company Competitive Business and (ii) one or more
of the Representatives of the other Member on the Board of Managers shall
have voted against the Company pursuing such Company Competitive Business.
(c) If Marathon, USX or Ashland or any of their
respective Affiliates is permitted pursuant to Section 14.01(b) to engage
in a Company Competitive Business and, in connection therewith, wishes to
use any of the properties, facilities or other assets of the Company or any
of its subsidiaries, Marathon or Ashland and their respective
Representatives will negotiate in good faith with the Company to reach a
reasonable agreement as to the nature and scope of any agreement between
the Company or any such subsidiary and such Member with respect to the use
of such property, facility or other assets. Any transaction relating to
such property, facility or assets shall be deemed for purposes of the LLC
Agreement to constitute an Affiliate Transaction that was entered into
outside the ordinary course of the Company's business.
(d) Notwithstanding any limitation contained in Section
14.01(a), Marathon, USX and Ashland and their respective Affiliates shall
be permitted to purchase: (i) less than an aggregate of 10% of any class of
stock of a person engaged, directly or indirectly, in one or more
Competitive Businesses (a "Company Competitive Third Party"); provided that
such stock is listed on a national securities exchange or is quoted on the
National Market System of NASDAQ; (ii) less than 10% in value of any
instrument of Indebtedness of a Company Competitive Third Party; (iii) a
Company Competitive Third Party (whether by merger or purchase of all or
substantially all of such Company Competitive Third Party's assets) which
engages, directly or indirectly, in one or more Company Competitive
Businesses which accounted for less than 20% of such Company Competitive
Third Party's consolidated revenues for the most recently completed fiscal
quarter; and (iv) a Company Competitive Third Party (whether by merger or
purchase of
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all or substantially all of such Company Competitive Third Party's assets
or otherwise) which engages, directly or indirectly, in one or more Company
Competitive Businesses which accounted for greater than 20% of such Company
Competitive Third Party's consolidated revenues for the most recently
completed fiscal quarter; provided that a purchase by Marathon, USX or
Ashland or any of their respective Affiliates of a Company Competitive
Third Party pursuant to this clause (iv) shall only be permitted if within
30 Business Days after the earlier to occur of (A) the execution of
definitive agreements with respect to such purchase or (B) the closing of
such purchase, Marathon, USX, Ashland or such Affiliate, as applicable,
shall present the Company with the opportunity to purchase the portion of
such Company Competitive Third Party's business that is in substantial
competition with the Company in North America (the "Company Competitive
Business Assets") at a purchase price determined in accordance with Section
14.04, at a special or regular meeting of the Board of Managers (such
meeting, a "14.01(d) Presentation Meeting").
(e) If the Board of Managers determines at the 14.01(d)
Presentation Meeting (by a vote of a majority of the Representatives of the
Member not purchasing such Company Competitive Third Party's business at a
special or regular meeting of the Board of Managers (which majority shall
constitute a quorum for purposes of the transaction of business)) to
purchase the Company Competitive Business Assets, the closing date with
respect to such purchase shall not be later than 60 days after the date of
the determination of the Purchase Price pursuant to Section 14.04 or, if
later, 30 days after the Company has received any antitrust clearance or
other Governmental Approval required in connection with such purchase (the
"14.01(d) Scheduled Closing Date"). If the Company breaches its obligation
to purchase the Company Competitive Business Assets on the 14.01(d)
Scheduled Closing Date after the Board of Managers shall have determined to
make such purchase as provided in the immediately preceding sentence (other
than where such breach is due to circumstances beyond the Company's
reasonable control), then Marathon, USX, Ashland or such Affiliate, as
applicable, shall be permitted to retain such Company Competitive Business
Assets and the Company shall cease to have the right to purchase such
Company Competitive Business Assets. If the Company breaches its obligation
to purchase the Company Competitive Business Assets on the 14.01(d)
Scheduled Closing Date after
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the Board of Managers shall have determined to make such purchase as
provided in the first sentence of this Section 14.01(e)and such breach is
due to circumstances beyond the Company's reasonable control, then, if the
closing of the purchase by the Company of the Company Competitive Business
Assets does not occur within 270 days after the Scheduled Closing Date,
Marathon, USX, Ashland or such Affiliate, as applicable, shall be permitted
to retain such Company Competitive Business Assets and the Company shall
cease to have the right to purchase such Company Competitive Business
Assets. If the Board of Managers determines at the 14.01(d) Presentation
Meeting not to purchase such Company Competitive Business Assets, then
Marathon, USX, Ashland or such Affiliate, as applicable, shall be permitted
to retain such Company Competitive Business Assets and the Company shall
cease to have the right to purchase such Company Competitive Business
Assets.
(f) It is the intention of each of the parties hereto
that if any of the restrictions or covenants contained in this Section
14.01 is held by a court of competent jurisdiction to cover a geographic
area or to be for a length of time that is not permitted by Applicable Law,
or is in any way construed by a court of competent jurisdiction to be too
broad or to any extent invalid, such provision shall not be construed to be
null, void and of no effect, but to the extent such provision would be
valid or enforceable under Applicable Law, a court of competent
jurisdiction shall construe and interpret or reform this Section 14.01 to
provide for a covenant having the maximum enforceable geographic area, time
period and other provisions (not greater than those contained in this
Section 14.01) as shall be valid and enforceable under such Applicable Law.
Each of the parties hereto acknowledges that any breach of the terms,
conditions or covenants set forth in this Section 14.01 shall be
competitively unfair and may cause irreparable damage to the Company
because of the special, unique, unusual, extraordinary and intellectual
character of the Company's business, and the Company's recovery of damages
at law will not be an adequate remedy. Accordingly, each of the parties
hereto agrees that for any breach of the terms, covenants or agreements of
this Section 14.01, a restraining order or an injunction or both may be
issued against such person, in addition to any other rights or remedies the
Company or the other parties hereto may have.
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SECTION 14.02. Detrimental Activities. (a) Solicitation,
Recruiting or Hiring of Employees. Each of Marathon, USX and Ashland hereby
agrees that during the Term of the Company, without the consent of each of
the Members, it shall not, and it shall cause its Affiliates not to,
solicit, recruit or hire any employee of the Company or any of its
subsidiaries (other than solicitations that are directed at the public in
general in publications available to the public in general) if:
(i) such employee is an Executive Officer or the officer
principally in charge of environmental health and safety and human
resources, unless, subject to clauses (iii) and (iv) below, such
solicitation, recruitment or hiring is consented to in advance by
Ashland (in the case of a solicitation, recruitment or hiring by
Marathon, USX or any of their respective Affiliates) or by
Marathon (in the case of a solicitation, recruitment or hiring by
Ashland or any of its Affiliates), which consent shall not be
unreasonably withheld;
(ii) such employee reports directly to (A) an Executive
Officer or the officer principally in charge of environmental
health and safety and human resources(a "Senior Employee") or (B)
a Senior Employee (a "Mid-Level Employee"), unless, subject to
clauses (iii) and (iv) below, at the time of such solicitation,
recruitment or hiring, the total number of Senior Employees and
Mid-Level Employees that have been hired by Marathon, USX, Ashland
and their respective Affiliates during the then preceding
twenty-four months is less than 10% of the total number of Senior
Employees and Mid-Level Employees employed by the Company at the
time Marathon, USX, Ashland or an Affiliate thereof wishes to
solicit, recruit or hire such Senior Employee or Mid-Level
Employee (based on the average number of Senior Employees and
Mid-Level Employees employed by the Company during such
twenty-four-month period);
(iii) the hiring of such employee, when considered
together with all other employees hired by Marathon, USX, Ashland
and their respective Affiliates during the then preceding
twenty-four months, would have or would reasonably be expected to
have, a significant
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detrimental impact on the department of the Company in which such
employee is then working; or
(iv) such employee is being solicited, recruited or hired
for a position in a Competitive Business of such person or such
person's Affiliates.
Notwithstanding the foregoing, the employees of the Company shall not be
required to accept any job offer by Marathon, USX, Ashland or any of their
respective Affiliates and a refusal to accept such a job offer shall not
negatively affect an employee's career opportunities at the Company.
(b) Disclosure of Confidential Information. Each of
Marathon, USX and Ashland (each, a "Disclosing Party") hereby agrees that
during the Term of the Company, it shall not, and it shall cause its
Affiliates not to, disclose or furnish to anyone any confidential
information relating to the Company and its subsidiaries ("Confidential
Information") except pursuant to a confidentiality agreement in form and
substance reasonably satisfactory to the other parties hereto which
expressly provides that the other parties hereto shall be a beneficiary
thereof (a "Confidentiality Agreement"). The foregoing restriction on
disclosure of Confidential Information shall not apply to (i) information
which is or becomes part of the public domain through no fault or breach of
the Disclosing Party; (ii) information which at the time of disclosure is
already in the possession of the Disclosing Party in written form and was
not received directly or indirectly from the Company or any of its
subsidiaries under a requirement of confidentiality; (iii) information
received by the Disclosing Party from a third party; provided that the
Disclosing Party, after reasonable inquiry, has no reason to believe that
the third party obtained the information directly or indirectly from the
Company or any of its subsidiaries under a requirement of confidentiality;
(iv) information required to be disclosed under subpoena or other mandatory
legal process; provided, that the Disclosing Party shall give the Company
timely notice of the service of the subpoena or other process so that the
Company may seek a protective order or other legal remedy to prevent such
disclosure; (v) information which has been subsequently and independently
acquired or developed by the Disclosing Party without violating any of its
obligations under this Section 14.02(b) or under any Confidentiality
Agreement; and (vi) information which is required or advisable to be
disclosed
96
under the Securities Act or the Exchange Act. Notwithstanding the
foregoing, a Disclosing Party shall be permitted to disclose Confidential
Information to its directors, officers, employees, auditors, agents,
advisors and representatives (such persons being collectively referred as
its "Representatives") if the Disclosing Party informs its Representatives
of the confidential nature of the Confidential Information and obtains
their agreement to be bound by this Section 14.02(b) and not to disclose
such Confidential Information to any other person. Each Disclosing Party
shall be responsible for any breach of this Section 14.02 by its
Representatives.
SECTION 14.03. Limitations on the Company Entering into
the Valvoline Business. (a) Subject to Sections 14.03(b) and 14.03(d), the
Company hereby agrees that it shall not, and it shall cause its Affiliates
(other than Marathon, Ashland and their respective subsidiaries (other than
the Company and its subsidiaries)) not to, engage in any business worldwide
which is substantially in competition with the Valvoline Business.
Notwithstanding the foregoing, the provisions of this Section 14.03(a)
shall terminate on the first date on which Ashland and its Affiliates shall
own (beneficially or otherwise) less than 20% of the Valvoline Business.
(b)(i) Notwithstanding any limitation contained in
Section 14.03(a), if in any two consecutive calendar years, (A)
Valvoline shall not have purchased from the Company and its
subsidiaries a quantity of lube oil at least equal to the Minimum
Lube Oil Purchase Amount and (B)(1) such failure to purchase was
due to the fact that the Company and Valvoline could not in good
faith agree to mutually acceptable terms and conditions for the
sale by the Company and its subsidiaries to Valvoline of at least
such quantity of lube oil and (2) such failure was not due, in
whole or in part, to the failure of the Company and its
subsidiaries to produce and offer for sale to Valvoline the
Minimum Lube Oil Purchase Amount during either such calendar year,
the failure of the Company and its subsidiaries to produce and
offer for sale to Valvoline lube oil satisfying contractual
specifications or any other failure of the Company or its
subsidiaries to satisfy in any material respect any of its then
existing material contractual obligations to Valvoline, then the
Company and its subsidiaries shall be permitted to
97
engage in a business which is substantially in competition with
Valvoline's Bulk Motor Oil Business and/or Valvoline's Packaged
Motor Oil Business (but, except as expressly permitted in Section
14.03(a), no other business that constitutes part of the Valvoline
Business); provided that, notwithstanding the foregoing, the
Company and its subsidiaries shall not be permitted to enter into
or engage in any such business if the Company and its subsidiaries
shall have substantially ceased production at the Catlettsburg,
Kentucky refinery of lube oil for sale to third parties (other
than due to a force majeure or an inability to find a willing
buyer for its lube oil) for any period of 90 consecutive days or
more prior to the time the Company and its subsidiaries shall
first enter or propose to enter into such business.
(ii) Notwithstanding any limitation contained in Section
14.03(a), if in each of the four calendar years following the
consecutive two-year period provided for in Section 14.03(b)(i),
(A) Valvoline shall not have purchased from the Company and its
subsidiaries a quantity of lube oil at least equal to the Minimum
Lube Oil Purchase Amount and (B)(1) such failure to purchase was
due to the fact that the Company and Valvoline could not in good
faith agree to mutually acceptable terms and conditions for the
sale by the Company and its subsidiaries to Valvoline of at least
such quantity of lube oil and (2) such failure was not due, in
whole or in part, to the failure of the Company and its
subsidiaries to produce and offer for sale to Valvoline the
Minimum Lube Oil Purchase Amount during any such calendar year,
the failure of the Company and its subsidiaries to produce and
offer for sale to Valvoline lube oil satisfying contractual
specifications or any other failure of the Company or its
subsidiaries to satisfy in any material respect any of its
existing material contractual obligations to Valvoline, then at
any time after the conclusion of such consecutive four-year
period, the Company and its subsidiaries shall be permitted to
engage in a business which is substantially in competition with
Valvoline's Private Label Packaged Motor Oil Business and/or
Valvoline's Quick Lube Business; provided that, notwithstanding
the foregoing, the Company and its subsidiaries shall not be
permitted to enter into or engage in any such business if the
Company and its subsidiaries shall have
98
substantially ceased production at the Catlettsburg, Kentucky
refinery of lube oil for sale to third parties (other than due to
a force majeure or an inability to find a willing buyer for its
lube oil) for any period of 90 consecutive days or more prior to
the time the Company and its subsidiaries shall first enter or
propose to enter into such business.
(iii) The provisions set forth in this Section 14.03(b)
permitting the Company and its subsidiaries to engage in a new
business in competition with the Valvoline Business if certain
conditions are satisfied shall be an exception only to the super
majority vote requirement in Section 8.08(a) of the LLC Agreement,
and shall not be an exception to any other supermajority vote
requirements of Section 8.08 of the LLC Agreement.
(c) Notwithstanding any limitation contained in Section
14.01(a), if at any time the Company or any of its subsidiaries enters
into, other than as expressly permitted in Section 14.03(d), either the
Bulk Motor Oil Business, the Packaged Motor Oil Business, the Private Label
Packaged Motor Oil Business or the Quick Lube Business, Ashland and its
subsidiaries thereafter shall be permitted to enter into a business which
is substantially in competition with the Company's lube oil production
business.
(d) Notwithstanding any limitation contained in Section
14.03(a), subject to Section 8.08 of the LLC Agreement, the Company and its
subsidiaries shall be permitted to (i) engage, directly or through its own
dealers, jobbers or jobber dealers, in the business currently conducted
under the brand name "Maralube Express" (the "Maralube Express Business");
(ii) engage, directly or through its own dealers, jobbers or jobber
dealers, in the truck stop oil change business; (iii) engage, directly or
through its own dealers, jobbers, or jobber dealers, in the oil,
lubricants, antifreeze and other, in each case automotive fluid change
business and auto and light truck maintenance service, in each case
incidental to operating their service stations or other retail units; (iv)
engage, directly or through its own dealers, jobbers, or jobber dealers, in
the sale of lubricants to farm, government, school and other similar
commercial accounts; (v) engage, directly or through its own dealers,
jobbers, or jobber dealers, in the sale of car care products and chemicals,
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antifreeze and rust preventatives in service stations or similar retail
units that are owned or operated by them, in each case incidental to
operating their service stations or other retail units; (vi) engage,
directly or through its own dealers, jobbers, or jobber dealers, in the
collection of used lubricants at service stations or similar retail units
that are owned or operated by them, in each case incidental to operating
their service stations or other retail units; (vii) enter into contractual
agreements with Valvoline or other third party packagers with respect to
the packaging by Valvoline or such other third party packagers of lube oil
products for sale (A) in service stations or similar retail units that are
owned or operated by the Company and its subsidiaries or its dealers,
jobbers or jobber dealers or to farm, government, school or other similar
commercial accounts pursuant to clause (iv) above and (B) solely under the
brandnames or trademarks of such service stations; and (viii) purchase a
Person (whether by merger or purchase of all or substantially all the
assets or otherwise) which engages, directly or indirectly, in a business
that is substantially in competition with the Valvoline Business (a
"Valvoline Competitive Third Party") provided that less than 33% of such
Valvoline Competitive Third Party's consolidated revenues for the most
recently completed fiscal quarter are derived from businesses which are
substantially in competition with Valvoline's Business; provided further
that a purchase by the Company or one of its subsidiaries of a Valvoline
Competitive Third Party shall be permitted only if within 30 Business Days
after the earlier to occur of (A) the execution of definitive agreements
with respect to such purchase or (B) the closing of such purchase, the
Company shall give notice (a "14.03(d) Offer Notice") to Ashland,
identifying the portion of such Valvoline Competitive Third Party's
business that is substantially in competition with the Valvoline Business
(the "Valvoline Competitive Business Assets") and offering to sell to
Ashland such Valvoline Competitive Business Assets at a purchase price
determined in accordance with Section 14.04.
(e) Ashland shall have 90 days from receipt of the
14.03(d) Offer Notice to elect, by notice to the Company (a "14.3(d)
Purchase Election Notice"), to purchase such Valvoline Competitive Business
Assets. If Ashland makes such election, the notice of election shall state
a closing date not later than 60 days after the date of the Section
14.03(d) Purchase Election Notice or, if later, 30 days after Ashland has
received any antitrust clearance or other
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Governmental Approval required in connection with such purchase (a
"14.03(d) Scheduled Closing Date"). If Ashland breaches its obligation to
purchase the Valvoline Competitive Business Assets on the 14.03(d)
Scheduled Closing Date after giving notice of its election to make such
purchase (other than where such breach is due to circumstances beyond
Ashland's reasonable control), then the Company shall be permitted to
retain such Valvoline Competitive Business Assets. If Ashland breaches its
obligation to purchase the Valvoline Competitive Business Assets on the
14.03(d) Scheduled Closing Date after giving notice of its election to make
such purchase and such breach is due to circumstances beyond Ashland's
reasonable control, then, if the closing of the purchase by Ashland of the
Valvoline Competitive Business Assets does not occur within 270 days after
the Scheduled Closing Date, the Company shall be permitted to retain such
Valvoline Competitive Business Assets. If Ashland elects not to purchase
such Valvoline Competitive Business Assets, then the Company shall be
permitted to retain such Valvoline Competitive Business Assets.
(f) (i) If the Company and its subsidiaries are permitted
under Section 14.03(d) to retain any Valvoline Competitive Business Assets
and, at any time thereafter, the Company or any such subsidiary shall
determine to sell such Valvoline Competitive Business Assets (or any
portion thereof), then the Company shall give notice (a "14.03(f) Valvoline
Offer Notice") to Ashland, identifying the proposed purchaser from whom it
has received a bona fide offer and setting forth the proposed sale price
(which shall be payable only in cash or purchase money obligations secured
solely by such Valvoline Competitive Business Assets (or portion thereof)
being sold) and the other material terms and conditions upon which the
Company is proposing to sell such Valvoline Competitive Business Assets to
such identified purchaser (or portion thereof). No such sale shall
encompass or be conditioned upon the sale or purchase of any property other
than such Valvoline Competitive Business Assets (or portion thereof).
Ashland shall have 90 days from receipt of the Valvoline Offer Notice to
elect, by notice to the Company (a "14.03(f) Valvoline Purchase Election
Notice"), to purchase such Valvoline Competitive Business Assets (or
portion thereof) on the terms and conditions set forth in the 14.03(f)
Valvoline Offer Notice.
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(ii) If Ashland makes such election, the notice of election
shall state a closing date not later than 60 days after the date of the
14.03(f) Valvoline Purchase Election Notice. If Ashland breaches its
obligation to purchase such Valvoline Competitive Business Assets (or
portion thereof) on the same terms and conditions as those contained in the
14.03(f) Valvoline Offer Notice after giving notice of its election to make
such purchase (other than where such breach is due to circumstances beyond
Ashland's reasonable control), then the Company may, at any time for a
period of 270 days after such default, sell such Valvoline Competitive
Business Assets (or portion thereof) to any person at any price and upon
any other terms without further compliance with the procedures set forth in
this Section 14.03(f).
(iii) If Ashland gives notice within the 90-day period
following the 14.03(f) Valvoline Offer Notice from the Company that it
elects not to purchase such Valvoline Competitive Business Assets (or
portion thereof), the Company may, within 120 days after the end of such
90-day period (or 270 days in the case where such parties have received a
second request under HSR), sell such Valvoline Competitive Business Assets
to the identified purchaser on terms and conditions no less favorable to
the Company than the terms and conditions set forth in such 14.03(f)
Valvoline Offer Notice. In the event the Company shall desire to offer such
Valvoline Competitive Business Assets (or portion thereof) for sale to such
identified purchaser or to any other person on terms and conditions less
favorable to it than those previously set forth in a 14.03(f) Valvoline
Offer Notice, the procedures set forth in this Section 14.03(f) must again
be initiated and applied with respect to the terms and conditions as
modified.
(g) It is the intention of each of the parties hereto
that if any of the restrictions or covenants contained in this Section
14.03 is held by a court of competent jurisdiction to cover a geographic
area or to be for a length of time that is not permitted by Applicable Law,
or is in any way construed by a court of competent jurisdiction to be too
broad or to any extent invalid, such provision shall not be construed to be
null, void and of no effect, but to the extent such provision would be
valid or enforceable under Applicable Law, a court of competent
jurisdiction shall construe and interpret or reform this Section 14.03 to
provide for a covenant having the maximum enforceable geographic area, time
period and other
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provisions (not greater than those contained in this Section 14.03) as
shall be valid and enforceable under such Applicable Law. Each of the
parties hereto acknowledges that any breach of the terms, conditions or
covenants set forth in this Section 14.03 shall be competitively unfair and
may cause irreparable damage because of the special, unique, unusual,
extraordinary and intellectual character of the applicable business, and
recovery of damages at law will not be an adequate remedy. Accordingly,
each of the parties hereto agrees that for any breach of the terms,
covenants or agreements of this Section 14.03, a restraining order or an
injunction or both may be issued against such person, in addition to any
other rights or remedies the aggrieved party may have.
(h) For purposes of this Agreement, the following terms
shall have the following meanings:
(i) "Bulk Motor Oil Business" means sales of blended
(finished) motor oil in tanker truck, barge and tanker railcar
quantities.
(ii) "Minimum Lube Oil Purchase Amount" means a quantity
of lube oil at least equal to 70% of the quantity of lube oil that
Valvoline purchased from the Catlettsburg, Kentucky refinery in
the 1997 calendar year.
(iii) "Packaged Motor Oil Business" means the ownership,
use and/or operation (including toll processing through a third
party's plant) of packaging facilities for the sale of packaged
motor oil under third party brandnames or trademarks.
(iv) "Private Label Packaged Motor Oil Business" means
the sale of packaged motor oil under third party and/or the
Company's brand names or trademarks.
(v) "Quick Lube Business" means the provision of services
for changing oil, lubricants, antifreeze and other automotive
fluids for passenger car and light commercial trucks and the
provision of maintenance checks and related services.
(vi) "Valvoline" means the Valvoline division of Ashland.
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(vii) "Valvoline Business" means the business currently
engaged in by Valvoline, including (A) the production and
marketing of automotive and industrial oils, automotive car care
products and chemicals, antifreeze, rust preventives, (B)
automotive services and (C) environmental recycling services
(including collection of used oil, filters and related items). For
the avoidance of doubt, the Valvoline Business includes the Bulk
Motor Oil Business, the Packaged Motor Oil Business, the Private
Label Packaged Motor Oil Business and the Quick Lube Business.
SECTION 14.04. Purchase Price of Competitive Business
Assets. In the event that (x) the Company elects to purchase any Company
Competitive Business Assets pursuant to the proviso to Section 14.01(d)(iv)
or (y) Ashland elects to purchase any Valvoline Competitive Business Assets
pursuant to the second proviso to Section 14.03(d)(viii), the purchase
price of such Company Competitive Business Assets or Valvoline Competitive
Business Assets (the "Competitive Business Purchase Price") shall be
determined pursuant to the following procedures:
(a) Negotiation Period. For a period of 15 days following
the date the Board of Managers approves such purchase, Marathon
and Ashland will negotiate in good faith to seek to reach an
agreement as to the Competitive Business Purchase Price. If
Marathon and Ashland reach such an agreement, then the Competitive
Business Purchase Price shall be deemed to be the amount so agreed
upon by Marathon and Ashland.
(b) Appraisal Process. (i) In the event Marathon and
Ashland are unable to reach an agreement as to the Competitive
Business Purchase Price within the 15 day period referred to in
clause (a) above, then within five Business Days after the
expiration of such 15-day period (such fifth Business Day being
referred to herein as the "14.04 Appraisal Process Commencement
Date"), Marathon and Ashland each shall select a nationally
recognized investment banking firm to (A) prepare a report which
(1) sets forth such investment banking firm's determination of the
Competitive Business Purchase Price (which shall be a single
amount as opposed to a range) and (2) includes work papers which
indicate the basis for the calculations of the Competitive
Business Purchase Price
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(a "14.04 Appraisal Report") and (B) deliver to Marathon or
Ashland, as the case may be, an oral and written opinion addressed
to such party as to the Competitive Business Purchase Price.
(ii) The fees and expenses of each investment banking
firm shall be paid by the party selecting such investment banking
firm.
(iii) Each of Marathon and Ashland shall instruct its
respective investment banking firm to (A) not consult with the
other investment banking firm with respect to its view as to the
Competitive Business Purchase Price prior to the time that both
investment banking firms have delivered their respective opinions
to Marathon and Ashland, as applicable, (B) deliver their
respective 14.04 Appraisal Reports, together with their oral and
written opinions as to the Competitive Business Purchase Price
(the "14.04 Initial Opinion Values"), within 15 days after the
14.04 Appraisal Process Commencement Date, and (C) deliver a copy
of its written opinion and its 14.04 Appraisal Report to the
Company, the other party and the other party's investment banking
firm at the time it delivers its oral and written opinion to
Marathon or Ashland, as applicable.
(iv) If the 14.04 Initial Opinion Values differ and the
lesser 14.04 Initial Opinion Value equals or exceeds 90% of the
greater 14.04 Initial Opinion Value, the Competitive Business
Purchase Price shall be deemed to be an amount equal to (A) the
sum of the 14.04 Initial Opinion Values divided by (B) two.
(v) If the 14.04 Initial Opinion Values differ and the
lesser 14.04 Initial Opinion Value is less than 90% of the greater
14.04 Initial Opinion Value then:
(A) within two Business Days after both
investment banking firms have delivered their respective
opinions to Marathon or Ashland, as applicable, each
investment banking firm shall, at a single meeting at
which Marathon, Ashland, the Company and the other
investment banking firm are present, make a presentation
with respect to its 14.04 Initial Opinion Value. At such
presentation, Marathon, Ashland, the Company and the
other
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investment banking firm shall be entitled to ask
questions as to the basis for and the calculation of such
investment banking firm's 14.04 Initial Opinion Value;
and
(B) Marathon and Ashland shall, within five
Business Days after the date Marathon and Ashland receive
the 14.04 Initial Opinion Values (such fifth Business Day
being referred to herein as the "14.04 Subsequent
Appraisal Process Commencement Date"), jointly select a
third nationally recognized investment banking firm to
(1) prepare a 14.04 Appraisal Report and (2) deliver an
oral and written opinion addressed to Marathon and
Ashland as to the Competitive Business Purchase Price.
The fees and expenses of such third investment banking
firm shall be paid 50% by Marathon and 50% by Ashland.
Such third investment banking firm shall not be provided
with the 14.04 Initial Opinion Values and shall not
consult with the initial investment banking firms with
respect thereto. During such five-Business Day period,
Marathon and Ashland shall negotiate in good faith to
independently reach an agreement as to the Competitive
Business Purchase Price. If Marathon and Ashland reach
such an agreement, then the Competitive Business Purchase
Price shall be deemed to be the amount so agreed upon by
Marathon and Ashland. If Marathon and Ashland are unable
to reach such an agreement, then Marathon and Ashland
shall instruct such third investment banking firm to
deliver its 14.04 Appraisal Report, together with its
oral and written opinion as to the Competitive Business
Purchase Price (the "14.04 Third Opinion Value"), within
15 days after the 14.04 Subsequent Appraisal Process
Commencement Date. The Competitive Business Purchase
Price in such circumstances shall be deemed to be an
amount equal to (I) the sum of (x) the 14.04 Third
Opinion Value plus (y) whichever of the two 14.04 Initial
Opinion Values is closer to the 14.04 Third Opinion Value
(or, if the 14.04 Third Opinion Value is exactly halfway
between the two 14.04 Initial Opinion Values, the 14.04
Third Opinion Value), divided by (II) two.
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ARTICLE XV
Survival; Assignment
SECTION 15.01. Survival and Assignment re: Marathon and
USX. (a) General. Except as expressly permitted by this Section 15.01,
neither Marathon nor USX shall assign all or any part of its rights and
obligations hereunder to any person without first obtaining the written
approval of each of the other parties hereto, which approval may be granted
or withheld in such parties' sole discretion.
(b) Merger or Sale of Substantially All of Marathon's or
USX's Assets. In the event that Marathon or USX shall be a party to a
merger, consolidation or other similar business combination transaction
with a third party or sell all or substantially all its assets to a third
party, Marathon's or USX's, as the case may be, rights and obligations
hereunder shall be assignable to such third party in connection with such
transaction; provided, however, that Marathon or USX shall not be permitted
to assign its rights and obligations hereunder to such third party as
aforesaid if the purpose or intent of such merger, consolidation, similar
business combination transaction or sale is to circumvent or avoid the
application of Sections 10.01(c) and 10.04 of the LLC Agreement to the
related Transfer of Marathon's Membership Interests to such third party.
(c) Transfer of Marathon's Membership Interests Pursuant
to Section 10.01(c) of the LLC Agreement. In the event that Marathon
Transfers all of its Membership Interests to a third party pursuant to
Section 10.01(c) of the LLC Agreement, then:
(i) such third party shall at the time of such Transfer
become subject to all of Marathon's and USX's respective
obligations hereunder and shall succeed to all of Marathon's and
USX's respective rights hereunder;
(ii) such third party and its ultimate parent, if any,
shall each become subject to the same standstill obligations that
apply to Marathon and USX under Section 12.01, which standstill
provisions shall remain in effect with respect to such third party
and its ultimate parent, if any, through the six-month
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anniversary of the earlier to occur of (a) the date that Ashland
and its Affiliates do not own any Membership Interests and (b) the
date that such third party and its Affiliates do not own any
Membership Interests;
(iii) such third party and its ultimate parent, if any,
shall each become subject to the same non-compete covenants that
apply to Marathon and USX under Article XIV; and
(iv) Marathon and USX shall each be relieved of all of
its obligations hereunder other than (1) any default hereunder by
Marathon or USX or any of their respective Affiliates that
occurred prior to the time of such Transfer; (2) Marathon's and
USX's respective obligations under Section 12.01 (which are in
addition to, and not in lieu of such third party's obligations
under Section 12.01); (3) Marathon's and USX's respective
obligations under Article X with respect to any Securities that
Marathon and/or USX issued to Ashland pursuant to Section 4.02(c)
prior to such Transfer or that Marathon and/or USX intends to
issue to Ashland pursuant to Section 4.02(c) after such Transfer;
and (4) Marathon's and USX's respective obligations under Article
XIV (which shall survive for six months from the date of such
Transfer and which are in addition to, and not in lieu of such
third party's obligations under Article XIV).
(d) Assignment of Marathon's Marathon Call Right and
Special Termination Right. In the event of an assignment by Marathon of its
rights and obligations under this Agreement to a third party pursuant to
this Section 15.01, Marathon's rights and obligations related to its
Marathon Call Right and its Special Termination Right shall also be
assigned to such third party; provided, that such third party shall not be
permitted to exercise the Marathon Call Right until the third anniversary
of the date of such assignment.
SECTION 15.02. Survival and Assignment re: Ashland. (a)
General. Except as expressly permitted by this Section 15.02, Ashland shall
not assign all or any part of its rights and obligations hereunder to any
person without first obtaining the prior written approval of each
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of the other parties hereto, which approval may be granted in such parties'
sole discretion.
(b) Merger or Sale of Substantially all of Ashland's
Assets. In the event that Ashland shall be a party to a merger,
consolidation or other similar business combination transaction with a
third party or sell all or substantially all of its assets to a third
party, Ashland's rights and obligations hereunder shall be assignable to
such third party in connection with such transaction; provided, however,
that Ashland shall not be permitted to assign its rights and obligations
hereunder to such third party as aforesaid if the purpose or intent of such
merger, consolidation, similar business combination transaction or sale is
to circumvent or avoid the application of Sections 10.01(c) and 10.04 of
the LLC Agreement to the related Transfer of Ashland's Membership Interests
to such third party.
(c) Transfer of Membership Interests Pursuant to Section
10.01(c) of the LLC Agreement. In the event that Ashland Transfers all of
its Membership Interests to a third party pursuant to Section 10.01(c) of
the LLC Agreement, then:
(i) such third party shall at the time of such Transfer
become subject to all of Ashland's obligations hereunder and shall
succeed to all of Ashland's rights hereunder;
(ii) such third party and its ultimate parent, if any,
shall each become subject to the same standstill obligations that
apply to Ashland under Section 12.02, which standstill provisions
shall remain in effect with respect to such third party and its
ultimate parent, if any, through the later to occur of (i) the
six-month anniversary of the earlier to occur of (A) the date that
Marathon and its Affiliates do not own any Membership Interests
and (B) the date that such third party and its Affiliates do not
own any Membership Interests and (ii) in the event that such third
party or its Affiliates acquires USX Voting Securities pursuant to
the Closing of the Ashland Put Right, the date on which such third
party and its Affiliates do not own more than 5% of the then
outstanding USX Voting Securities;
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(iii) such third party and its ultimate parent, if any,
shall each become subject to the same non-compete covenants that
apply to Ashland under Article XIV;
(iv) Ashland shall be relieved of all of its obligations
hereunder other than (1) any default hereunder by Ashland or any
of its Affiliates that occurred prior to the time of such
Transfer; (2) Ashland's obligations under Section 12.02 (which are
in addition to, and not in lieu of such third party's obligations
under Section 12.02); and (3) Ashland's obligations under Article
XIV (which shall survive for six months from the date of such
Transfer and which are in addition to, and not in lieu of such
third party's obligations under Article XIV); and
(v) Ashland shall retain all of its rights under Article
X with respect to any Securities that are issued to Ashland
pursuant to Section 4.02(c) prior to or after the date of such
Transfer (which rights shall be in addition to and not in lieu of
the rights that the third party of Ashland's Membership Interests
is entitled to under Article X).
(d) Assignment of Ashland's Ashland Put Right and Special
Termination Right. In the event of an assignment by Ashland of its rights
and obligations under this Agreement to a third party pursuant to this
Section 15.02, Ashland's rights and obligations related to its Ashland Put
Right and its Special Termination Right shall also be assigned to such
third party; provided that such third party shall not be permitted to
exercise the Ashland Put Right until the third anniversary of the date of
such assignment.
SECTION 15.03. Survival and Assignment re: the Company.
The Company shall not be permitted to assign its rights and obligations
hereunder without the prior written consent of each of the other parties
hereto, which consent shall not be unreasonably withheld.
SECTION 15.04. Assignment and Assumption Agreements. Any
assignment of Marathon's, USX's, Ashland's or the Company's respective
rights and obligations hereunder pursuant to this Article XV shall be
pursuant to an assignment and assumption agreement by and among the third
party, such third party's ultimate parent, if any, and each of the parties
hereto, in such form as the parties hereto shall reasonably approve.
110
SECTION 15.05. Consequences of Unpermitted Assignments.
Any attempted assignment in violation of this Article XV shall be void and
without legal effect.
ARTICLE XVI
Dispute Resolution Procedures
SECTION 16.01. General. All controversies, claims or
disputes that arise out of or relate to the Agreement or the construction,
interpretation, performance, breach, termination, enforceability or
validity of the Agreement, or the commercial economic or other relationship
of the parties thereto, whether such claim is based on rights, privileges
or interests recognized by or based upon statute, contract, tort, common
law or otherwise and whether such claim existed prior to or arises on or
after the date of the Agreement (a "Dispute") shall be resolved in
accordance with the provisions of this Article XVI. Notwithstanding
anything to the contrary contained in this Article XVI, nothing in this
Article XVI shall limit the ability of the directors and officers of a
party hereto from communicating directly with the directors and officers of
any other party hereto.
SECTION 16.02. Dispute Notice and Response. A party
hereto may give another party hereto written notice (a "Dispute Notice") of
any Dispute which has not been resolved in the normal course of business.
Within fifteen Business Days after delivery of the Dispute Notice, the
receiving party shall submit to the other party a written response (the
"Response"). The Dispute Notice and the Response shall each include a
statement setting forth the position of the party giving such notice, a
summary of the arguments supporting such position and, if applicable, the
relief sought.
SECTION 16.03. Negotiation Between Chief Executive
Officers. (a) If a Dispute Notice is delivered prior to the Closing, within
10 Business Days after delivery of the Response provided for in Section
16.02, the Chief Executive Officer (in the case of Ashland and USX) and/or
the President (in the case of Marathon and the Company) of
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each party to such Dispute shall meet or communicate by telephone at a
mutually acceptable time and place, and thereafter as often as they
reasonably deem necessary, and shall negotiate in good faith to attempt to
resolve the Dispute that is the subject of such Dispute Notice. If such
Dispute has not been resolved within 20 Business Days after the delivery of
the Response as provided for in Section 16.02, then each party shall be
permitted to take such actions at law or in equity as it is otherwise
permitted to take or as may be available under Applicable Law.
(b) All negotiations between the Chief Executive
Officer(s) and/or the President(s) pursuant to this Section 16.03 shall be
treated as compromise and settlement negotiations. Nothing said or
disclosed, nor any document produced, in the course of such negotiations
which is not otherwise independently discoverable shall be offered or
received as evidence or used for impeachment or for any other purpose in
any current or future arbitration or litigation.
SECTION 16.04. Right to Equitable Relief Preserved.
Notwithstanding anything in this Agreement to the contrary, any party
hereto may at any time seek from any court of the United States located in
the State of Delaware or from any Delaware state court, any interim,
provisional or injunctive relief that may be necessary to protect the
rights or property of such party or maintain the status quo before, during
or after the pendency of the negotiation process or any other proceeding
contemplated by Section 16.03.
ARTICLE XVII
Miscellaneous
SECTION 17.01. Notices. Any notice, consent or approval
to be given under this Agreement shall be in writing and shall be deemed to
have been given if delivered: (i) personally by a reputable courier service
that requires a signature upon delivery; (ii) by mailing the same via
registered or certified first-class mail, postage prepaid, return receipt
requested; or (iii) by telecopying the same with receipt confirmation
(followed by a first-class mailing of the same) to the intended recipient.
Any such writing will be deemed to have been given: (a) as of the date of
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personal delivery via courier as described above; (b) as of the third
calendar day after depositing the same into the custody of the postal
service as evidenced by the date-stamped receipt issued upon deposit of the
same into the mails as described above; and (c) as of the date and time
electronically transmitted in the case of telecopy delivery as described
above, in each case addressed to the intended party at the address set
forth below:
To Marathon:
Marathon Oil Company
5555 San Felipe
P.O. Box 3128
Houston, TX 77056
Attn: General Counsel
Phone: (713) 296-4137
Fax: (713) 296-4171
To USX:
USX Corporation
600 Grant Street
Pittsburgh, PA, 15219-4776
Attn: General Counsel
Phone: (412) 433-1121
Fax: (412) 433-2015
To Ashland:
Ashland Inc.
1000 Ashland Drive
Russell, KY 41169
Attn: General Counsel
Phone: (606) 329-3333
Fax: (606) 329-3823
To the Company:
Marathon Ashland Petroleum LLC
539 South Main Street
Findlay, Ohio 45840
Attn: General Counsel
Phone: (419) 421-4115
Fax: (419) 422-2121
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Any party may designate different addresses or telecopy numbers by notice
to the other parties.
SECTION 17.02. Merger and Entire Agreement. This
Agreement (including the Schedules and Appendices attached hereto),
together with the other Transaction Documents (including the exhibits,
schedules and appendices thereto) and certain other agreements executed
contemporaneously with the Master Formation Agreement constitutes the
entire Agreement of the parties hereto and supersedes any prior
understandings, agreements, or representations by or among the parties
hereto, written or oral, to the extent they relate in any way to the
subject matter hereof.
SECTION 17.03. Parties in Interest. This Agreement shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors, legal representatives and permitted assigns.
SECTION 17.04. Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
SECTION 17.05. Amendment; Waiver. This Agreement may not
be amended except in a written instrument signed by each of the parties
hereto and expressly stating it is an amendment to this Agreement. Any
failure or delay on the part of any party hereto in exercising any power or
right hereunder shall not operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power preclude any other or
further exercise thereof or the exercise of any other right or power
hereunder or otherwise available at law or in equity.
SECTION 17.06. Severability. If any term, provision,
covenant, or restriction of this Agreement or the application thereof to
any Person or circumstance, at any time or to any extent, is held by a
court of competent jurisdiction or other Governmental Authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement (or the application of such
provision in other jurisdictions or to Persons or circumstances other than
those to which it was held invalid or unenforceable) shall in no way be
affected, impaired or invalidated, and to the extent permitted by
Applicable Law, any such term, provision, covenant or
114
restriction shall be restricted in applicability or reformed to the minimum
extent required for such to be enforceable. This provision shall be
interpreted and enforced to give effect to the original written intent of
the parties hereto prior to the determination of such invalidity or
unenforceability.
SECTION 17.07. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW
THEREOF. ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING
RELATED TO OR ARISING OUT OF THIS AGREEMENT, OR ANY TRANSACTION OR CONDUCT
IN CONNECTION HEREWITH, IS WAIVED.
SECTION 17.08. Enforcement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties
hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the Delaware Chancery Court; provided that
if the Delaware Chancery Court does not have jurisdiction with respect to
such matter, the parties hereto shall be entitled to enforce specifically
the terms and provisions of this Agreement in any court of the United
States located in the State of Delaware or in Delaware state court, this
being in addition to any other remedy to which they are entitled at law or
in equity. In addition, each of the parties hereto (i) consents to submit
itself to the personal jurisdiction of the Delaware Chancery Court in the
event that any dispute arises out of this Agreement or any of the
transactions contemplated by this Agreement; provided that if the Delaware
Chancery Court does not have jurisdiction with respect to any such dispute,
such party consents to submit itself to the personal jurisdiction of any
Federal court located in the State of Delaware or any Delaware state court,
(ii) agrees to appoint and maintain an agent in the State of Delaware for
service of legal process, (iii) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from
any such court, (iv) agrees that it will not plead or claim in any such
court that any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any such court has been brought in an
inconvenient forum and (v) agrees that it will not initiate
115
any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than (1) the Delaware
Chancery Court, or (2) if the Delaware Chancery Court does not have
jurisdiction with respect to such action, a Federal court sitting in the
State of Delaware or a Delaware state court.
SECTION 17.09. Table of Contents, Headings and Titles.
The table of contents and section headings of this Agreement and titles
given to Schedules and Appendices to this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
SECTION 17.10. Use of Certain Terms; Rules of
Construction. As used in this Agreement, the words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole and not to any particular paragraph, subparagraph, section,
subsection or other subdivision. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and
verbs shall include the plural and vice versa. Each party hereto agrees
that any rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be employed in the
interpretation or construction of this Agreement or any Transaction
Document.
SECTION 17.11. Holidays. Notwithstanding any deadline for
payment, performance, notice or election under this Agreement, if such
deadline falls on a date that is not a Business Day, then the deadline for
such payment, performance, notice or election will be extended to the next
succeeding Business Day.
SECTION 17.12. Third Parties. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give any person
and their respective successors, legal representatives and permitted
assigns any rights, remedies or basis for reliance upon, under or by reason
of this Agreement.
SECTION 17.13. Liability for Affiliates. Except where and
to the extent that a contrary intention otherwise appears, where any party
hereto undertakes to cause its Affiliates to take or abstain from taking
any action, such undertaking shall mean (i) in the case of an Affiliate
that is controlled by such party, that such party shall cause such
Affiliate to take or abstain from taking such
116
action and (ii) in the case of an Affiliate that controls or is under
common control with such party, that such party shall use its commercially
reasonable best efforts to cause such Affiliates to take or abstain from
taking such action; provided, however, that such party shall not be
required to violate, or cause any director of an Affiliate to violate, any
fiduciary duty to minority shareholders of such Affiliate.
SECTION 17.14. Schedules. No representation or warranty
hereunder shall be deemed to be inaccurate if the actual situation is
disclosed pursuant to another representation or warranty herein or in a
schedule to a Put/Call, Registration Rights and Standstill Agreement
Disclosure Letter or in any other Transaction Document or any exhibit,
schedule or appendix thereto, whether or not an explicit cross-reference
appears. Neither the specification of any dollar amount in any
representation, warranty or covenant contained in this Agreement nor the
inclusion of any specific item in a schedule to a Put/Call, Registration
Rights and Standstill Agreement Disclosure Letter is intended to imply that
such amount, or higher or lower amounts, or the item so included or other
items, are or are not material, and neither party shall use the fact of the
setting forth of any such amount or the inclusion of any such item in any
dispute or controversy involving the parties as to whether any obligation,
item or matter not described herein or included in a schedule to a
Put/Call,
Registration Rights and Standstill Agreement Disclosure Letter is or is not
material for purposes of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed
by the parties as of the day and year first above written.
MARATHON OIL COMPANY
by /s/ Victor G. Beghini
--------------------------
Name: Victor G. Beghini
Title: President
USX CORPORATION
by /s/ Thomas J. Usher
--------------------------
Name: Thomas J. Usher
Title: Chairman of the Board
and Chief Executive Officer
ASHLAND INC.
by /s/ Paul W. Chellgren
--------------------------
Name: Paul W. Chellgren
Title: Chairman of the Board
and Chief Executive Officer
MARATHON ASHLAND PETROLEUM LLC
by /s/ J. L. Frank
--------------------------
Name: J. L. Frank
Title: President
[85257.5]
AMENDMENT NO. 1, dated as of December 31, 1998 (this "Amendment")
to the PUT/CALL, REGISTRATION RIGHTS AND STANDSTILL AGREEMENT dated as of
January 1, 1998 (the "Agreement") among MARATHON OIL COMPANY, an Ohio
corporation, USX CORPORATION, a Delaware corporation, ASHLAND INC., a
Kentucky corporation and MARATHON ASHLAND PETROLEUM LLC, a Delaware limited
liability company (collectively, the "Parties")
WHEREAS, the Parties have heretofore entered into the Agreement
(capitalized terms used in this Amendment and not defined herein shall have
the meanings given such terms in the Agreement); and
WHEREAS, the Parties wish to amend the Agreement to reflect
certain changes to the prices set forth therein.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the Parties agree as follows:
Section 1. Amendments:
(a) Section 1.01 of the Agreement is amended to insert the
following definition after the definition of "Price Index" and prior to the
definition of "Private Label Packaged Motor Oil Business":
" 'Price Reduction' shall have the meaning set forth in
Section 2.02(b) of the Put/Call, Registration Rights and
Standstill Agreement."
(b) Section 2.02(a) of the Agreement is amended to read in its
entirety as follows:
"(a) Amount. The Special Termination Price shall be an
amount equal to (i) the product of (x) 100% of the Appraised Value
of the Company multiplied by (y) the Terminating Member's
Percentage Interest, less (ii) if the Terminating Member is
Ashland, the Price Reduction."
(c) Sections 2.02(b) and 2.02(c) as numbered in the Agreement are
numbered Sections 2.02(c) and 2.02(d) respectively and a new Section
2.02(b) of the Agreement is added to read in its entirety as follows:
"(b) Price Reduction. Price Reduction means an amount
equal to the excess of (i) $14,139,519, which is the agreed
present value at January 1, 1998, of the tax cost to Ashland
("Present Value Tax Cost') of allocating to it depreciation
deductions as shown in Chart A in Schedule 2.02(b) (1) ("Chart A
Depreciation") , as compared to allocating to Ashland depreciation
deductions as shown in Chart B in Schedule 2.02(b) (1) ("Chart B
Depreciation"), over (ii) the present value at January 1, 1998, of
the tax cost to Ashland of allocating to it Chart A Depreciation
as compared to Chart B Depreciation, taking into account Ashland's
decreased taxable gain or increased taxable loss on the sale of
all of its Membership Interest in the Company when Chart A
Depreciation as compared to Chart B Depreciation is allocated to
it ("Present Value Tax Cost on Sale").
"Chart A Depreciation represents the agreed depreciation
deductions with respect to property contributed by Ashland on the
Closing of the Asset Transfer and Contribution Agreement allocated
to it through the depreciable life of such property as set forth
in Section 6.03 of the LLC Agreement as amended and restated as of
December 31, 1998. Chart B Depreciation represents the agreed
depreciation deductions with respect to property contributed by
Ashland on the Closing of the Asset Transfer and Contribution
Agreement allocated to it through the depreciable life of such
property as set forth in Sections 6.03, 6.12 and 4.01(c) of such
agreement as in effect prior to such restatement as if it were in
effect through such depreciable life, but treating the assets
comprising the Merrill Lynch Master Lease Program as Subleased
Property listed on Schedule 4.01(c) for purposes of Sections
4.01(c) and 6.12. Chart A Depreciation and Chart B Depreciation
shall not be revised to reflect the actual amount of depreciation
deductions with respect to property contributed by Ashland on the
Closing of the Asset Transfer and Contribution Agreement allocated
to Ashland, or to take into account the sale or other disposition
by the Company of any of the property contributed by Ashland on
the Closing of the Asset Transfer and Contribution Agreement.
"Solely for purposes of determining the Present Value Tax
Cost and the Present Value Tax Cost on Sale, the following factors
and assumptions have been and will be used: (i) discount rate of
9% per annum, (ii) combined Federal/State income tax rate of 39%,
(iii) the cash flow impact of a reduction in Ashland's
income taxes for a year as the result of Chart A or Chart B
Depreciation is realized on the last day of that year and (iv) the
cash flow impact of Ashland's income tax expense or benefit
arising from a sale of all of its membership interest in the
Company is incurred or realized on the last day of the year of
sale.
"Schedule 2.02(b) (2) reflects, for purposes of
illustration, the Present Value Tax Cost on Sale if Ashland sells
all of its 38% membership interest in the Company on January 1,
2005. The Present Value Tax Cost on Sale with respect to Ashland's
sale of all of its interest in the Company at a date different
than January 1, 2005, shall be computed in the same manner as the
Present Value Tax Cost on Sale illustrated in Schedule 2.02(b)
(2).
"Consistent with the foregoing principle, if Ashland
sells all or part of its Membership Interest to Marathon in a
transaction not otherwise described in this Agreement, the price
paid by or on behalf of Marathon for such interest shall be
appropriately reduced."
(d) Attached new Schedules 2.02(b) (1) and 2.02(b) (2) are
inserted between Schedule 1.03(d) and Schedule 14.01 (a)
(e) Section 3.02(a) of the Agreement is amended to read in its
entirety as follows:
"(a) Amount. The Marathon Call Price shall be an amount
equal to (i) the product of (x) 115% of the Appraised Value of the
Company multiplied by (y) Ashland's Percentage Interest, less (ii)
the Price Reduction."
(f) Section 4.02(a) of the Agreement is amended to read in its
entirety as follows:
"(a) Amount. The Ashland Put Price shall be an amount
equal to the sum of (i) for that portion of the Ashland Put Price
to be paid to Ashland in Cash or in Marathon Debt Securities, an
amount equal to the product of (1) the excess of (x) the product
of (A) 85% of the Appraised Value of the Company multiplied by (B)
Ashland's Percentage Interest over (y) the Price Reduction,
multiplied by (2) the percentage of the Ashland Put Price to be
paid to Ashland in Cash and/or
in Marathon Debt Securities, plus (ii) for that portion of the
Ashland Put Price to be paid to Ashland in Marathon Equity
Securities the same as above but substituting 90% for 85% in
Clause (A) and substituting Marathon Equity Securities for Cash
and/or Marathon Debt Securities in clause (2) ."
Section 2. Parties in Interest. This Amendment shall inure to the
benefit of, and be binding upon, the Parties hereto and their respective
successors, legal representatives and permitted assigns.
Section 3. Counterparts. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 4. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY CLAIM OR PROCEEDING RELATED TO OR ARISING
OUT OF THIS AMENDMENT, OR ANY TRANSACTION OR CONDUCT IN CONNECTION
HEREWITH, IS WAIVED.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the day and year first above written.
MARATHON OIL COMPANY ASHLAND INC.
By: /s/ V. G. Beghini By: /s/ Paul Chellgren
------------------------------ --------------------------
Name: V. G. Beghini Name: Paul W. Chellgren
Title: President Title: Chairman of the Board and Chief
Executive Office
USX CORPORATION MARATHON ASHLAND PETROLEUM,
LLC
By: /s/ Thomas J. Usher By: /s/ J. L. Frank
------------------------------- ---------------------------
Name: Thomas J. Usher Name: J. L. Frank
Title: Chairman of the Board Title: President
and Chief Executive Officer