Amended And Restated Limited Liability Company Agreement

Exhibit 10.17

EXECUTION COPY


AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

of


MARATHON ASHLAND PETROLEUM LLC

Dated as of December 31, 1998


TABLE OF CONTENTS

Page
ARTICLE I Certain Definitions; Applicable GAAP

SECTION 1.01. Definitions 2

SECTION 1.02. Applicable GAAP 21 ARTICLE II General Provisions

SECTION 2.01. Formation; Effectiveness 21

SECTION 2.02. Name 22

SECTION 2.03. Term 22

SECTION 2.04. Registered Agent and Office 22

SECTION 2.05. Purpose 23

SECTION 2.06. Powers 23 ARTICLE III Members

SECTION 3.01. Members; Percentage Interests 25

SECTION 3.02. Adjustments in Percentage Interests 25 ARTICLE IV Capital Contributions; Assumption of Assumed Liabilities

SECTION 4.01. Contributions 26

SECTION 4.02. Additional Contributions 28

SECTION 4.03. Negative Balances; Withdrawal of Capital; Interest 29 ARTICLE V Distributions

SECTION 5.01. Distributions 29

SECTION 5.02. Certain General Limitations 32

SECTION 5.03. Distributions in Kind 32


SECTION 5.04. Distributions in the Event of an Exercise of the Marathon Call Right, Ashland Put Right or the Special Termination Rights 32 ARTICLE VI Allocations and Other Tax Matters

SECTION 6.01. Maintenance of Capital Accounts 33

SECTION 6.02. Allocations 33

SECTION 6.03. Tax Allocations 35

SECTION 6.04. Tax Elections 35

SECTION 6.05. Fiscal Year 35

SECTION 6.06. Tax Returns 36

SECTION 6.07. Tax Matters Partner 37

SECTION 6.08. Duties of Tax Matters Partner 37

SECTION 6.09. Survival of Provisions 39

SECTION 6.10. Section 754 Election 39

SECTION 6.11. Qualified Income Offset, Minimum Gain Chargeback 39

SECTION 6.12. Tax Treatment of Designated Sublease Agreements 39

SECTION 6.13. Tax Treatment of Reimbursed Liability Payments 40

SECTION 6.14. Tax Treatment of Disproportionate Payments 40

SECTION 6.15. Allocation of Income, Gains, Losses and Other Items from LOOP LLC and LOCAP, Inc. 40

SECTION 6.16. Allocation of Income, Gain, Loss, Deduction and Credits Attributable to Stock-Based Compensation 41 ARTICLE VII Books and Records

SECTION 7.01. Books and Records; Examination 41

SECTION 7.02. Financial Statements and Reports 42

SECTION 7.03. Notice of Affiliate Transactions; Annual List 44


ii ARTICLE VIII Management of the Company

SECTION 8.01. Managing Members 45

SECTION 8.02. Board of Managers 45

SECTION 8.03. Responsibility of the Board of Managers 46

SECTION 8.04. Meetings 46

SECTION 8.05. Compensation 48

SECTION 8.06. Quorum 48

SECTION 8.07. Voting 49

SECTION 8.08. Matters Constituting Super Majority Decisions 50

SECTION 8.09. Annual Capital Budget 55

SECTION 8.10. Business Plan 56

SECTION 8.11. Requirements as to Affiliate Transactions 57

SECTION 8.12. Review of Certain Affiliate Transactions Related to Crude Oil Purchases and Shared Services 59

SECTION 8.13. Adjustable Amounts 61

SECTION 8.14. Company Leverage Policy 62

SECTION 8.15. Company' s Investment Guidelines 62

SECTION 8.16. Requirements as to Operating Leases 62

SECTION 8.17. Limitations on Actions Relating to the Calculation of Distributable Cash 63

SECTION 8.18. Reliance by Third Parties 63

SECTION 8.19. Integration of Retail Operations 63 ARTICLE IX Officers

SECTION 9.01. Election, Appointment and Term of Office 65

SECTION 9.02. Resignation, Removal and Vacancies 66

SECTION 9.03. Duties and Functions of Executive Officers 67 ARTICLE X Transfers of Membership Interests

SECTION 10.01. Restrictions on Transfers 67

SECTION 10.02. Conditions for Admission 71

SECTION 10.03. Allocations and Distributions 71

SECTION 10.04. Right of First Refusal 72

SECTION 10.05. Restriction on Resignation or Withdrawal 73


iii ARTICLE XI Liability, Exculpation and Indemnification

SECTION 11.01. Liability 73

SECTION 11.02. Exculpation 73

SECTION 11.03. Indemnification 74 ARTICLE XII Fiduciary Duties

SECTION 12.01. Duties and Liabilities of Covered Persons 75

SECTION 12.02. Fiduciary Duties of Members of the Company and Members of the Board of Managers 75 ARTICLE XIII Dispute Resolution Procedures

SECTION 13.01. General 76

SECTION 13.02. Dispute Notice and Response 76

SECTION 13.03. Negotiation Between Senior Managers 77

SECTION 13.04. Negotiation Between Chief Executive Officer and President 77

SECTION 13.05. Right to Equitable Relief Preserved 78 ARTICLE XIV Rights and Remedies with Respect to Monetary Disputes

SECTION 14.01. Ability of Company to Borrow to Fund Disputed Monetary Amounts 78

SECTION 14.02. Interim Payment of Disputed Monetary Amount 80

SECTION 14.03. Liquidated Damages 80

SECTION 14.04. Right of Set-Off 82

SECTION 14.05. Security Interest 82


iv ARTICLE XV Dissolution and Termination

SECTION 15.01. Dissolution 83

SECTION 15.02. Winding Up of Company 84

SECTION 15.03. Distribution of Property 84

SECTION 15.04. Time Limitation 85

SECTION 15.05. Termination of Company 85 ARTICLE XVI Miscellaneous

SECTION 16.01. Notices 85

SECTION 16.02. Merger and Entire Agreement 86

SECTION 16.03. Assignment 86

SECTION 16.04. Parties in Interest 87

SECTION 16.05. Counterparts 87

SECTION 16.06. Amendment; Waiver 87

SECTION 16.07. Severability 87

SECTION 16.08. GOVERNING LAW 87

SECTION 16.09. Enforcement 88

SECTION 16.10. Creditors 88

SECTION 16.11. No Bill for Accounting 88

SECTION 16.12. Waiver of Partition 88

SECTION 16.13. Table of Contents, Headings and Titles 89

SECTION 16.14. Use of Certain Terms; Rules of Construction 89

SECTION 16.15. Holidays 89

SECTION 16.16. Third Parties 89

SECTION 16.17. Liability for Affiliates 89


Appendix A Certain Definitions

Appendix B Procedures for Dispute Resolution

Exhibit A Speedway SuperAmerica LLC Retail Integration Protocol

Schedule 1.01 Financed Properties

Schedule 4.01(c) Subleased Property

Schedule 4.02(a)-1 Marathon Capital Expenditures

Schedule 4.02(a)-2 Ashland Capital Expenditures

Schedule 8.01(k)(i)(A) Closing Date Affiliate Transactions

Schedule 8.14 Company Leverage Policy

Schedule 8.15 Company Investment Guidelines

Schedule A Calculations re: Normal Annual Capital Budget Amount

Schedule B-1 Adjustments to Historical EBITDA (Marathon)

Schedule B-2 Adjustments to Historical EBITDA (Ashland)

Schedule C Initial Executive Officers


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AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT dated as of December 31, 1998, of MARATHON ASHLAND PETROLEUM LLC (the " Company" ), by and between Marathon Oil Company, an Ohio corporation (" Marathon" ), and Ashland Inc., a Kentucky corporation (" Ashland" ), as Members.

Preliminary Statement

WHEREAS, on June 11, 1997, Marathon and Emro Marketing Company (" Emro Marketing" ) formed the Company (formerly known as " Emro Supply, LLC" ) by filing a Certificate of Formation of the Company with the Secretary of State of the State of Delaware and executed the Limited Liability Company Agreement of the Company pursuant to which Marathon received a 60% interest in the Company and Emro Marketing received a 40% interest in the Company;

WHEREAS, on July 18, 1997, Emro Marketing assigned its interest in the Company to Marathon and Fuelgas Company, Inc., a wholly owned subsidiary of Marathon (" Fuelgas" ), with Marathon receiving an additional 39% interest in the Company and Fuelgas receiving a 1% interest in the Company, which interest will be transferred to Marathon immediately following the Closing (for purposes of this Agreement and the other Transaction Documents, all references to Marathon' s interest in the Company shall be deemed to include the 1% interest owned by Fuelgas);


WHEREAS, on July 18, 1997, Marathon and Fuelgas executed the First Amended and Restated Limited Liability Company Agreement of the Company and filed an Amended and Restated Certificate of Formation of the Company with the Secretary of State of the State of Delaware;

WHEREAS, on October 29, 1997, Marathon and Fuelgas filed a Second Amended and Restated Certificate of Formation of the Company with the Secretary of State of the State of Delaware to change the name of the Company to Marathon Ashland Petroleum LLC;


WHEREAS, on December 8, 1997, Marathon and Fuelgas executed the Second Amended and Restated Limited Liability Company Agreement of the Company which became effective on December 10, 1997;

WHEREAS the parties hereto desire that the Company (a) be a premier petroleum supply, refining, marketing and transportation business, (b) create a highly efficient, cost-effective and competitive petroleum supply, refining,


marketing and transportation system, (c) deliver to the Members the highest possible economic value added, (d) be customer-focused and market-driven in its business strategy, (e) be a respected and responsible member of the communities in which the Company will operate, with a high regard for environmental responsibility and employee safety, and (f) seek to maximize Distributable Cash to the Members consistent with the foregoing, including capital spending levels which over time are expected to be generally equivalent to the level of non-cash charges; and


WHEREAS the Members entered into this Agreement on January 1, 1998 to set forth the rights and responsibilities of each of them with respect to the governance, financing and operation of the Company;


WHEREAS, the Members have executed Amendment No. 1 to this Agreement as of August 21, 1998, and have executed Amendment No. 2 to this Agreement as of September 1, 1998; and


WHEREAS, the Members wish to make certain additional amendments to this Agreement, and to restate this Agreement incorporating such additional amendments as well as the amendments contained in Amendment No. 1 and Amendment No. 2.

NOW, THEREFORE, the parties hereto hereby agree as follows:

ARTICLE I


Certain Definitions; Applicable GAAP

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, when used herein the following terms have the following meanings:


" Accounting Determination" has the meaning set forth in Section 1.02.

" Acquisition Expenditures" means, in connection with any acquisition by the Company and its subsidiaries, without duplication (i) the purchase price paid or to be paid for the net assets or capital stock or other equity interests in connection with such acquisition, (ii) any Indebtedness assumed by the Company and its subsidiaries in connection with any such acquisition, (iii) any contingent


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liabilities assumed or incurred by the Company and its subsidiaries in connection with any such acquisition to the extent that such contingent liabilities are required to be reflected on the balance sheet of the Company and its subsidiaries in accordance with Financial Accounting Standard Number 5 (or any successor or superseding provision of Applicable GAAP), and (iv) all other costs and expenses incurred or to be incurred by the Company or any of its subsidiaries in connection with any such acquisition to the extent that such costs and expenses would be capitalized if such acquisition were consummated.

" Adjustable Amount" has the meaning set forth in Section 8.13.


" Additional Monetary Amount" has the meaning set forth in Section 14.03(c).


" Additional Required Cash Amount" has the meaning set forth in Section 14.01(a).


" Adjusted DD&A" means:


(i) for the twelve-month periods ended December 31, 1995 and 1996, $348 million and $346 million, respectively;

(ii) for the twelve-month period ended December 31, 1997, the total combined depreciation, depletion and amortization expense of the Marathon Business and the Ashland Business during such twelve-month period, including, without duplication, (a) any gains (deductions from depreciation, depletion and amortization) or losses (additions to depreciation, depletion and amortization) on asset retirements during such period and (b) pro forma depreciation, depletion and amortization expense related to the Financed Properties during such period (calculated in the same manner such pro forma depreciation, depletion and amortization expense was calculated in Schedule A, which considers the placed-in-service dates of the Financed Properties);

(iii) for the twelve-month period ended September 30, 1998, the sum of:


(a) the total combined depreciation, depletion and amortization expense of the Marathon Business and the Ashland Business during the period commencing on October 1, 1997, and ended on the date immediately preceding the Closing Date,


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including , without duplication, (1) any gains (deductions from depreciation, depletion and amortization) or losses (additions to depreciation, depletion and amortization) on asset retirements during such period and (2) pro forma depreciation, depletion and amortization expense related to the Financed Properties during such period (calculated in the same manner such pro forma depreciation, depletion and amortization expense was calculated in Schedule A, which considers the placed-in-service dates of the Financed Properties); and

(b) the total depreciation, depletion and amortization expense of the Company and its subsidiaries for the period commencing on the Closing Date and ended on September 30, 1998, including (1) any gains (deductions from depreciation, depletion and amortization) or losses (additions to depreciation, depletion and amortization) on asset retirements during such period, (2) depreciation, depletion and amortization expense related to the Garyville Propylene Upgrade Project during such period and (3) depreciation, depletion and amortization expense related to all Company-funded Capital Expenditures, but excluding (4) depreciation, depletion and amortization expense related to Member-Funded Capital Expenditures and (5) the increase or decrease in such depreciation, depletion and amortization expense related to the Ashland Transferred Assets (including pro forma depreciation, depletion and amortization expense related to the Financed Properties) resulting from the application of purchase accounting treatment to the transactions contemplated by the Transaction Documents (such purchase accounting treatment causing an increase or decrease in the estimated useful lives and the net book value of the Ashland Transferred Assets); and

(iv) for the twelve-month period ended September 30, 1999, and each twelve-month period ended September 30 thereafter, the total depreciation, depletion and amortization expense of the Company and its subsidiaries for such twelve-month period, including , without duplication, (a) any gains (deductions from depreciation, depletion and amortization) or losses (additions to depreciation, depletion and amortization) on asset retirements during such period, (b) depreciation, depletion and amortization expense


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related to the Garyville Propylene Upgrade Project during such period and (c) depreciation, depletion and amortization expense related to Company-funded Capital Expenditures but excluding (d) depreciation, depletion and amortization expense related to Member-Funded Capital Expenditures and (e) the increase or decrease in such depreciation, depletion and amortization expense related to the Ashland Transferred Assets (including pro forma depreciation, depletion and amortization expense related to the Financed Properties) resulting from the application of purchase accounting treatment to the transactions contemplated by the Transaction Documents (such purchase accounting treatment causing an increase or decrease in the estimated useful lives and the net book value of the Ashland Transferred Assets);


all as determined on a consolidated basis with respect to (x) in the case of any period ending prior to the Closing Date, Marathon and its subsidiaries or Ashland and its subsidiaries, as applicable, or (y) in the case of any period ending on or after the Closing Date, the Company and its subsidiaries, in each case in accordance with Applicable GAAP.

" Adjusted EBITDA" means:

(i) for the twelve-month periods ended December 31, 1995 and 1996, $657 million and $600 million, respectively;


(ii) for the twelve-month period ended December 31, 1997, the sum of:

(a) Historical EBITDA for such twelve-month period, plus


(b) $80 million, minus


(c) 38% of an amount equal to (1) the sum of the amounts calculated pursuant to clauses (a) and (b) above for such twelve-month period less (2) the Adjusted DD&A for such twelve-month period.

(iii) for the twelve-month period ended September 30, 1998, the sum of:


(a) for the period commencing on October 1, 1997, and ended on the date immediately preceding the Closing Date, the sum of:


(1) Historical EBITDA for such period, plus


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(2) $20 million, minus


(3) 38% of an amount equal to (A) the sum of the amounts calculated pursuant to clauses (1) and (2) above with respect to such period less (B) the Adjusted DD&A for such period; and

(b) for the period commencing on the Closing Date and ended on September 30, 1998, the sum of:

(1) EBITDA of the Company and its subsidiaries for such period, plus


(2) $12.4 million, minus


(3) the Tax Distribution Amounts paid or to be paid in respect of each of the three Fiscal Quarters (or portion thereof) included in such period; and

(iv) for the twelve-month period ended September 30, 1999 and each twelve-month period ended September 30 thereafter, the sum of:


(a) EBITDA of the Company and its subsidiaries for such twelve-month period, minus


(b) the Tax Distribution Amounts paid or to be paid in respect of each of the four Fiscal Quarters included in such twelve-month period;

all as determined on a consolidated basis with respect to (x) in the case of any period ending prior to the Closing Date, Marathon and its subsidiaries or Ashland and its subsidiaries, as applicable, or (y) in the case of any period ending on or after the Closing Date, the Company and its subsidiaries, in each case in accordance with then Current GAAP (other than Ordinary Course Lease Expenses which shall be calculated in accordance with Applicable GAAP).


" Advanced Amount" has the meaning set forth in Section 14.01(b).


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" Affiliate Transaction" means any agreement or transaction between the Company or any of its subsidiaries and any Member or any Affiliate of any Member that:


(a) for purposes of Section 7.03(a)(i), will result or is reasonably anticipated will result in expenditures, contingent or actual liabilities or benefits to the Company and its subsidiaries in excess of $2 million;


(b) for purposes of Section 7.03(b), is either (i) outside the ordinary course of the Company and its subsidiaries' business and results or will result in contingent or actual liabilities or benefits to the Company and its subsidiaries in excess of $100,000 in the applicable Fiscal Year or (ii) within the ordinary course of the Company and its subsidiaries' business and results or will result in expenditures, contingent or actual liabilities or benefits to the Company and its subsidiaries (A) in excess of $2 million individually in the applicable Fiscal Year or (B) when taken together with all other agreements or transactions entered into the same Fiscal Year as such agreement or transaction which are either related to such agreement or transaction or are substantially the same type of agreement or transaction as such agreement or transaction, in excess of $2 million in the aggregate in the applicable Fiscal Year; and


(c) for purposes of Section 8.08(k)(i), is either (i) outside the ordinary course of the Company and its subsidiaries' business and will result or is reasonably anticipated will result in expenditures, contingent or actual liabilities or benefits to the Company and its subsidiaries in excess of $2 million or (ii) within the ordinary course of the Company and its subsidiaries' business and will result or is reasonably anticipated will result in expenditures, contingent or actual liabilities or benefits to the Company and its subsidiaries in excess of $25 million.

For purposes of this definition of Affiliate Transaction, any guarantee by a Member or any Affiliate of any Member of any obligations of the Company or any of its subsidiaries that is provided by such Member or such Affiliate without cost to the Company and its subsidiaries shall not be deemed to be an Affiliate Transaction. Notwithstanding the foregoing, the term " Affiliate Transaction" shall not include any distributions of cash or other property to the Members pursuant to Article V.


" Affiliate Transaction Dispute Notice" has the meaning set forth in Section 8.11(b).

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" Aggregate Tax Rate" has the meaning set forth in Section 5.01(a)(i).

" Agreed Additional Capital Contributions" has the meaning set forth in Section 4.02(c).


" Agreement" means this Limited Liability Company Agreement of the Company, as the same may be amended, restated, supplemented or otherwise modified from time to time.

" Annual Capital Budget" has the meaning set forth in Section 8.09(a).


" Applicable GAAP" has the meaning set forth in Section 1.02.

" Approved Marathon Crude Oil Purchase Program" has the meaning set forth in Section 8.12.


" Arbitratable Dispute" has the meaning set forth in Section 13.04(a).


" Arbitration Payment Due Date" has the meaning set forth in Section 14.03(a).

" Arbitration Proceeding" has the meaning set forth in Section 14.01(a).


" Arbitration Tribunal" has the meaning set forth in Appendix B.

" Arm' s-Length Transaction" has the meaning set forth in Section 8.11(a).


" Ashland Designated Sublease Agreements" shall mean the Ashland Sublease Agreements attached as Exhibits L-1, L-2, L-3 and L-4 to the Asset Transfer and Contribution Agreement.

" Ashland-Funded Capital Expenditures" has the meaning set forth in Section 4.02(a).

" Audited Financial Statements" has the meaning set forth in Section 7.02(c).


" Average Annual DD&A" means:


(a) for Fiscal Year 1998, the average of the Adjusted DD&A for the three twelve-month periods ended December 31, 1995, 1996 and 1997;


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(b) for Fiscal Year 1999, the average of the Adjusted DD&A (i) for the two twelve-month periods ended December 31, 1996 and 1997 and (ii) for the one twelve-month period ended September 30, 1998;

(c) for Fiscal Year 2000, the average of the Adjusted DD&A (i) for the twelve-month period ended December 31, 1997 and (ii) for the two twelve-month periods ending on September 30, 1998 and 1999; and


(d) for Fiscal Year 2001 and each Fiscal Year thereafter, the average of the Adjusted DD&A for the three twelve-month periods ending on September 30 in each of the three Fiscal Years immediately preceding such Fiscal Year.


" Average Adjusted EBITDA" means:


(a) for Fiscal Year 1998, the average of the Adjusted EBITDA for the three twelve-month periods ended December 31, 1995, 1996 and 1997;

(b) for Fiscal Year 1999, the average of the Adjusted EBITDA (i) for the two twelve-month periods ended December 31, 1996 and 1997 and (ii) for the one twelve-month period ended September 30, 1998;


(c) for Fiscal Year 2000, the average of the Adjusted EBITDA (i) for the twelve-month period ended December 31, 1997 and (ii) for the two twelve-month periods ending on September 30, 1998 and 1999; and

(d) for Fiscal Year 2001 and each Fiscal Year thereafter, the average of the Adjusted EBITDA for the three twelve-month periods ending on September 30 in each of the three Fiscal Years immediately preceding such Fiscal Year.


" Average Annual Level" means for any twelve-month period ending on September 30 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.


" Bareboat Charters" has the meaning set forth in Section 9.3(k) of the Asset Transfer and Contribution Agreement.


" Base Level" means 161.2.


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" Base Rate" has the meaning set forth in Section 1.01 of the Put/Call, Registration Rights and Standstill Agreement.


" Board of Managers" has the meaning set forth in Section 8.02(a).


" Bulk Motor Oil Business" has the meaning set forth in Section 14.03(h) of the Put/Call, Registration Rights and Standstill Agreement.


" Business Plan" has the meaning set forth in Section 8.10.


" Capital Account" has the meaning set forth in Section 6.01.

" Capital Expenditures" means, for any period, the aggregate of all expenditures incurred by the Company and its subsidiaries during such period that, in accordance with Applicable GAAP, are or should be included in additions to property, plant or equipment or similar items reflected in the consolidated statement of cash flows of the Company and its subsidiaries; provided , however , that Capital Expenditures shall not include (a) exchanges of such items for other items, (b) expenditures of proceeds of insurance settlements by the Company or any of its subsidiaries in respect of lost, destroyed or damaged assets, equipment or other property to the extent such expenditures are made to replace or repair such lost, destroyed or damaged assets, equipment or other property within 18 months of such loss, destruction or damage, (c) funds expended by a Member or an Affiliate of a Member to purchase any Subleased Property that is contributed to the Company or a subsidiary of the Company pursuant to Section 4.01(c)(i)(A) or (d) Member-Funded Capital Expenditures; all as determined on a consolidated basis with respect to the Company and its subsidiaries in accordance with Applicable GAAP.


" Capital Lease" means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a consolidated balance sheet of the Company and its subsidiaries in accordance with Applicable GAAP.

" Closing Date Affiliate Transactions" has the meaning set forth in Section 8.08(k)(i)(A).


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" Company Independent Auditors" has the meaning set forth in Section 7.01.

" Company Investment Guidelines" has the meaning set forth in Section 8.15.


" Company Leverage Policy" has the meaning set forth in Section 8.14.


" Competitive Business" has the meaning set forth in Section 14.01(a) of the Put/Call, Registration Rights and Standstill Agreement.

" Competitive Third Party" has the meaning set forth in Section 14.01(d) of the Put/Call, Registration Rights and Standstill Agreement.


" Contractin ...