Limited Liability Company Agreement

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.....................................................22 SECTION 2.02. Name.........................................................................22 SECTION 2.03. Term.........................................................................22 SECTION 2.04. Registered Agent and Office..................................................23 SECTION 2.05. Purpose......................................................................23 SECTION 2.06. Powers.......................................................................24


ARTICLE III


Members


SECTION 3.01. Members; Percentage Interests................................................25 SECTION 3.02. Adjustments in Percentage Interests......................................... 26


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...........33


ARTICLE VI


Allocations and Other Tax Matters SECTION 6.01. Maintenance of Capital Accounts..............................................33 SECTION 6.02. Allocations..................................................................34 SECTION 6.03. Tax Allocations..............................................................35 SECTION 6.04. Tax Elections................................................................35 SECTION 6.05. Fiscal Year..................................................................36 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................................................................41 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...............................................42 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....................................................... 56 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 . ...................................... 63 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................................................72 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..................................................76


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...............79 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............................................................83


-iv-


ARTICLE XV


Dissolution and Termination


SECTION 15.01. Dissolution..................................................................84 SECTION 15.02. Winding Up of Company........................................................84 SECTION 15.03. Distribution of Property.....................................................85 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.................................................................. 87 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............................................................... 88 SECTION 16.09. Enforcement................................................................. 88 SECTION 16.10. Creditors................................................................... 89 SECTION 16.11. No Bill for Accounting...................................................... 89 SECTION 16.12. Waiver of Partition......................................................... 89 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


-v-


Schedule B-1 Adjustments to Historical EBITDA (Marathon) Schedule B-2 Adjustments to Historical EBITDA (Ashland) Schedule C Initial Executive Officers


-vi-


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 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, 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 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


(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:


...