Exhibit 10.2
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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
================================================================================
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,/2/ 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").
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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;
---------------------------------
/2/ To be dated as of the Closing Date under the Master Formation Agreement.
2
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,
3
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 Xxxxxxxx X-0, X-0, X-0 xxx X-0 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, Xxxxxx 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 in
---------------------------------
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 Xxxxx'x 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 XXX.
00
"Xxxxxxxxx" 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 invest
ment 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)
37
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.
(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 Xxxxx'x at
least equal to the respective ratings by S&P and Xxxxx'x 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
59
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
60
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
61
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
62
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 as
63
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
69
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 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.
70
(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
72
(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
73
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
74
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
75
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
76
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
77
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
78
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
79
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
80
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.
81
(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
82
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
83
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
84
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 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.
86
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
87
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
88
(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
89
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
90
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.
91
(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
92
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
93
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.
94
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
95
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,
99
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
100
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.
101
(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
102
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.
---------
103
(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
104
(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
105
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) which ever 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.
106
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
107
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
108
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;
109
(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
110
of the parties hereto, in such form as the parties hereto shall reasonably
approve.
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
111
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
112
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
0000 Xxx Xxxxxx
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
To USX:
USX Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX, 00000-0000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
To Ashland:
Ashland Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
To the Company:
Marathon Ashland Petroleum LLC
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
113
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
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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
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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
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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 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,
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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/ Xxxxxx X. Xxxxxxx
__________________________
Name: Xxxxxx X. Xxxxxxx
Title: President
USX CORPORATION
by /s/ Xxxxxx X. Xxxxx
__________________________
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board
and Chief Executive
Officer
ASHLAND INC.
by /s/ Xxxx X. Xxxxxxxxx
__________________________
Name: Xxxx X. Xxxxxxxxx
Title: Chairman of the Board
and Chief Executive
Officer
MARATHON ASHLAND PETROLEUM LLC
by /s/ X. X. Xxxxx
__________________________
Name: X. X. Xxxxx
Title: President
