Document:

Exhibit
10.3

 

EXECUTION COPY

 

 

 

ASSIGNMENT AND ASSUMPTION AGREEMENT

(MALEIC BUSINESS)

 

 

Dated as of March 18, 2004,

 

 

Between

 

 

ASHLAND INC.

 

 

And

 

 

ATB HOLDINGS INC.

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE
I

 

Maleic Assignment and Assumption

 

	
  SECTION 1.01.

  	
  Maleic Assignment and Assumption

  	
   

  
	
  SECTION 1.02.

  	
  Transferred Assets and Excluded Assets

  	
   

  
	
  SECTION 1.03.

  	
  Assumption of Certain Liabilities

  	
   

  
	
  SECTION 1.04.

  	
  Consents of Third Parties

  	
   

  
	
  SECTION 1.05.

  	
  Closing Current Assets Adjustment

  	
   

  
	
  SECTION 1.06.

  	
  Tax Matters

  	
   

  
	
  SECTION 1.07.

  	
  Neville Island Maleic Assets Provisions.

  	
   

  

 

ARTICLE II

 

The Closing

 

	
  SECTION 2.01.

  	
  Closing Date

  	
   

  
	
  SECTION 2.02.

  	
  Transactions To Be Effected at the Closing

  	
   

  

 

ARTICLE III

 

Representations and Warranties of Ashland

 

	
  SECTION 3.01.

  	
  Financial Statements

  	
   

  
	
  SECTION 3.02.

  	
  Assets Other than Real Property Interests

  	
   

  
	
  SECTION 3.03.

  	
  Real Property

  	
   

  
	
  SECTION 3.04.

  	
  Intellectual Property; Technology

  	
   

  
	
  SECTION 3.05.

  	
  Contracts

  	
   

  
	
  SECTION 3.06.

  	
  Permits

  	
   

  
	
  SECTION 3.07.

  	
  Condition of Transferred Assets

  	
   

  
	
  SECTION 3.08.

  	
  Claims

  	
   

  
	
  SECTION 3.09.

  	
  Benefit Plans

  	
   

  
	
  SECTION 3.10.

  	
  Absence of Changes or Events

  	
   

  
	
  SECTION 3.11.

  	
  Compliance with Laws

  	
   

  
	
  SECTION 3.12.

  	
  Employee and Labor Matters

  	
   

  
	
  SECTION 3.13.

  	
  Sufficiency of Transferred Assets

  	
   

  
	
  SECTION 3.14.

  	
  Inventory

  	
   

  
	
  SECTION 3.15.

  	
  Receivables

  	
   

  

 

i

 

ARTICLE IV

 

Covenants

 

	
  SECTION 4.01.

  	
  Covenants of Ashland Relating to Conduct of
  Maleic Business

  	
   

  
	
  SECTION 4.02.

  	
  Refunds and Remittances

  	
   

  
	
  SECTION 4.03.

  	
  Employee Matters.

  	
   

  
	
  SECTION 4.04.

  	
  Post-Closing Information

  	
   

  
	
  SECTION 4.05.

  	
  Records

  	
   

  
	
  SECTION 4.06.

  	
  Agreement Not To Compete

  	
   

  
	
  SECTION 4.07.

  	
  Bulk Transfer Laws

  	
   

  
	
  SECTION 4.08.

  	
  Supplies

  	
   

  
	
  SECTION 4.09.

  	
  Mail

  	
   

  
	
  SECTION 4.10.

  	
  Further Assurances

  	
   

  
	
  SECTION 4.11.

  	
  Review of Contracts

  	
   

  

 

ARTICLE V

 

Termination

 

	
  SECTION 5.01.

  	
  Termination

  	
   

  
	
  SECTION 5.02.

  	
  Effect of Termination

  	
   

  

 

ARTICLE VI

 

General Provisions

 

	
  SECTION 6.01.

  	
  Interpretation; Maleic Business Disclosure
  Letter; Certain Definitions

  	
   

  
	
  SECTION 6.02.

  	
  Counterparts

  	
   

  
	
  SECTION 6.03.

  	
  Severability

  	
   

  
	
  SECTION 6.04.

  	
  Governing Law

  	
   

  
	
  SECTION 6.05.

  	
  No Third-Party Beneficiaries

  	
   

  
	
  SECTION 6.06.

  	
  Amendment

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  Form of Deed (Maleic
  Business)

  	
   

  
	
  Exhibit B

  	
  Form of Assignment and
  Assumption (Maleic Business)

  	
   

  
	
  Exhibit C

  	
  Form of Maleic Supply
  Agreement

  	
   

  
	
  Exhibit D

  	
  Form of Transition
  Services Agreement

  	
   

  
				

 

ii

 

INDEX OF DEFINED TERMS

 

	
  Term

  	
   

  	
  Section

  
	
  Accounting Firm

  	
   

  	
  1.05(b)

  
	
  Active Maleic Business
  Employee

  	
   

  	
  4.03(a)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Ashland

  	
   

  	
  Preamble

  
	
  Ashland Insurance
  Policies

  	
   

  	
  4.01(c)

  
	
  Ashland Joint
  Contracts

  	
   

  	
  4.11

  
	
  Ashland Pension Plan

  	
   

  	
  4.03(e)

  
	
  Assigned Contracts

  	
   

  	
  1.02(a)(vi)

  
	
  Assigned Permits

  	
   

  	
  1.02(a)(v)

  
	
  Assumed Liabilities

  	
   

  	
  1.03(a)

  
	
  Assigned Technology

  	
   

  	
  1.02(a)(iv)

  
	
  Balance Sheet

  	
   

  	
  3.01

  
	
  Balance Sheet
  Principles

  	
   

  	
  1.05(d)

  
	
  Claim

  	
   

  	
  1.03(b)(iv)

  
	
  Closing Current Assets

  	
   

  	
  1.05(a)

  
	
  COBRA

  	
   

  	
  4.03(b)(ii)

  
	
  Competitive Activities

  	
   

  	
  4.06(a)

  
	
  Contracts

  	
   

  	
  1.02(a)(vi)

  
	
  Current Assets

  	
   

  	
  1.05(d)

  
	
  Employee Benefits
  Liability

  	
   

  	
  3.09(b)

  
	
  Environmental Claim

  	
   

  	
  3.11(b)

  
	
  Environmental Laws

  	
   

  	
  3.11(b)

  
	
  Environmental
  Liability

  	
   

  	
  6.01(b)

  
	
  Environmental Tests

  	
   

  	
  1.03(b)(x)

  
	
  ERISA

  	
   

  	
  3.09(a)

  
	
  Excluded Assets

  	
   

  	
  1.02(b)

  
	
  Exercise Notice

  	
   

  	
  1.07(b)

  
	
  Financial Statements

  	
   

  	
  3.01

  
	
  Hazardous Materials

  	
   

  	
  3.11(b)

  
	
  HoldCo

  	
   

  	
  Preamble

  
	
  HoldCo Maleic Welfare
  Plans

  	
   

  	
  4.03(b)(i)

  
	
  HoldCo Retiree Medical
  Plan

  	
   

  	
  4.03(f)

  
	
  HoldCo Retirement Plan

  	
   

  	
  4.03(e)

  
	
  Intellectual Property

  	
   

  	
  6.01(b)

  
	
  Inventory

  	
   

  	
  1.02(a)(ii)

  
	
  Leased Property

  	
   

  	
  3.03(a)

  
	
  Maleic Assignment and
  Assumption

  	
   

  	
  1.01

  
	
  Maleic Benefit Plans

  	
   

  	
  3.09(a)

  
	
  Maleic Business

  	
   

  	
  6.01(b)

  
	
  Maleic Business
  Disclosure Letter

  	
   

  	
  Article III

  
	
  Maleic Business
  Employee

  	
   

  	
  3.09(a)

  
	
  Maleic Business
  Material Adverse Effect

  	
   

  	
  6.01(b)

  
	
  Maleic Pension Plans

  	
   

  	
  3.09(a)

  
	
  Maleic Supply
  Agreement

  	
   

  	
  2.02(c)

  

 

i

 

	
  Term

  	
   

  	
  Section

  
	
  Master Agreement

  	
   

  	
  Recitals

  
	
  Neville Island Maleic
  Assets

  	
   

  	
  1.07(a)

  
	
  Neville Island Maleic
  Facility

  	
   

  	
  1.07(a)

  
	
  Notice of Disagreement

  	
   

  	
  1.05(b)

  
	
  Option Notice

  	
   

  	
  1.07(a)

  
	
  Option Period

  	
   

  	
  1.07(a)

  
	
  Owned Property

  	
   

  	
  3.03(a)

  
	
  Permits

  	
   

  	
  3.06

  
	
  Permitted Liens

  	
   

  	
  6.01(b)

  
	
  Plant

  	
   

  	
  1.03(b)(x)

  
	
  Premises

  	
   

  	
  1.02(a)(i)

  
	
  Proposed Sale Notice

  	
   

  	
  1.07(b)

  
	
  Receivables

  	
   

  	
  1.02(a)(x)

  
	
  Records

  	
   

  	
  1.02(a)(ix)

  
	
  Release

  	
   

  	
  3.11(b)

  
	
  Retained Liabilities

  	
   

  	
  1.03(b)

  
	
  Rev. Proc. 96-60

  	
   

  	
  4.03(i)

  
	
  Statement

  	
   

  	
  1.05(a)

  
	
  Target Current Assets

  	
   

  	
  1.05(c)

  
	
  Technology

  	
   

  	
  1.02(a)(iv)

  
	
  Transferred Assets

  	
   

  	
  1.02(a)

  
	
  Transferred Maleic
  Business Employee

  	
   

  	
  4.03(a)

  
	
  Transition Services
  Agreement

  	
   

  	
  2.02(d)

  
	
  WARN Act

  	
   

  	
  4.03(g)

  

 

ii

 

EXECUTION COPY

 

ASSIGNMENT AND ASSUMPTION AGREEMENT (MALEIC BUSINESS) (this “Agreement”)
dated as of March 18, 2004, between Ashland Inc., a Kentucky corporation (“Ashland”),
and ATB Holdings Inc., a Delaware corporation and a wholly owned subsidiary of
Ashland (“HoldCo”).

 

WHEREAS, simultaneously with the execution
and delivery of this Agreement, the parties hereto and certain other parties
are entering into a Master Agreement (the “Master Agreement”; terms used
but not otherwise defined herein have the meanings assigned to them in the
Master Agreement); and

 

WHEREAS, in accordance with the terms and
conditions of the Master Agreement, Ashland wishes to transfer to HoldCo, and
HoldCo wishes to acquire and assume, certain assets and liabilities of the
Maleic Business (as defined in Section 6.01(b)) pursuant to the terms and
conditions of this Agreement.

 

NOW, THEREFORE, the parties hereto agree as
follows:

 

ARTICLE I

 

Maleic Assignment and Assumption

 

SECTION 1.01.  
Maleic Assignment and Assumption.   On the terms and subject to the conditions of this Agreement and
the Master Agreement, at the Closing, Ashland shall contribute, assign,
transfer, convey and deliver to HoldCo, and HoldCo shall acquire from Ashland,
all the right, title and interest as of the Closing of Ashland in, to and under
the Transferred Assets (as defined in Section 1.02(a)), and HoldCo shall assume
the Assumed Liabilities (as defined in Section 1.03(a)).  The contribution, assignment, transfer,
conveyance and delivery of the Transferred Assets and the assumption of the
Assumed Liabilities and the other Transactions contemplated by this Agreement
are referred to in this Agreement as the “Maleic Assignment and Assumption”.

 

SECTION 1.02.  
Transferred Assets and Excluded Assets.   The term “Transferred Assets” means all of Ashland’s
right, title and interest in, to and under the

 

 

following assets, other than
the Excluded Assets (as defined in Section 1.02(b)):

 

(i)  
(A)   all real property,
leaseholds and other interests (including interests in surface rights and
mineral interests) in the real property listed in Section 3.03 of the Maleic
Business Disclosure Letter (as defined in Article III), in each case together
with Ashland’s right, title and interest in all buildings, structures,
improvements, paved parking lots and fixtures thereon, and caverns thereunder,
and all other appurtenances thereto (collectively, the “Premises”), and
all bridges leading to or from the Premises (and all easements relating
thereto) and (B) Ashland’s right, title and interest, if any, in, to and under
all railroad sidings on the Premises and all pipelines, cabling, wiring and
other conduit leading to or from the Premises (and all easements, licenses and
permits (to the extent transferable) relating thereto);

 

(ii)  
(A)   all raw materials,
work-in-process, finished goods, supplies, parts, spare parts and other
inventories of Ashland that on the Closing Date are located on the Premises and
(B) all other raw materials, work-in-process, finished goods, supplies, parts,
spare parts and other inventories of Ashland (including in transit, on consignment
or in the possession of any third party) on the Closing Date, in the case of
this clause (B) that are used, held for use or intended to be used exclusively
in the operation or conduct of the Maleic Business (collectively, the “Inventory”),
including any Inventory to be sold to Ashland or any of its affiliates after
the Closing pursuant to the Maleic Supply Agreement (as defined in Section
2.02(c)) or otherwise;

 

(iii)  
(A)   all other tangible personal
property and interests therein, including all machinery, equipment, tools,
appliances, telephones, telecommunications equipment, copy machines, fax
machines, computers, implements, furniture, furnishings and vehicles, of
Ashland that on the Closing Date are located on the Premises and (B) all other tangible
personal property and interests therein, including all machinery, equipment,
tools, appliances, telephones, telecommunications equipment,

 

2

 

copy machines, fax machines, computers,
implements, furniture, furnishings and vehicles, of Ashland (including in
transit, on consignment or in the possession of any third party) on the Closing
Date, in the case of this clause (B) that are used, held for use or intended to
be used exclusively in the operation or conduct of the Maleic Business, in each
case under clause (A) or (B) together with any rights or claims of Ashland
arising out of the breach of any express or implied warranty by the
manufacturers or sellers of such assets;

 

(iv)  
all trade secrets, confidential information, inventions, know-how,
formulae, proprietary processes, proprietary procedures, research records,
records of inventions, test information, market surveys and marketing know-how
(collectively, “Technology”) of Ashland, in each case that are used,
held for use or intended to be used exclusively in the operation or conduct of
the Maleic Business (the “Assigned Technology”);

 

(v)  
to the extent that such Permits (as defined in Section 3.06) are
transferable, all Permits of Ashland that are used, held for use or intended to
be used exclusively in the operation or conduct of the Maleic Business (the “Assigned
Permits”);

 

(vi)  
(A)   all contracts, leases,
subleases, licenses, indentures, agreements, commitments and all other legally
binding arrangements (“Contracts”), whether oral or written, to which
Ashland is a party or by which Ashland is bound as of the date of this
Agreement that are (1) listed in Sections 3.03 or 3.05 of the Maleic Business
Disclosure Letter or (2) of the type specified in any of clauses (i) through
(xi) of Section 3.05 but, as a result of the application of any applicable
thresholds set forth therein, are not required to be listed in Section 3.05 of
the Maleic Business Disclosure Letter, (B) all other written Contracts
(including purchase orders and sales orders) to which Ashland is a party or by
which Ashland is bound, in the case of this clause (B) that are entered into
after the date of this Agreement, but not in violation or breach of any
provision of this Agreement, and that exclusively relate to, or that arise
exclusively out of, the operation or conduct of the Maleic Business in the
ordinary course of business

 

3

 

and (C) all Contracts to which Ashland is a
party or by which Ashland is bound, in the case of this clause (C) that are
entered into after the date of this Agreement and that are to be treated as
Assigned Contracts pursuant to Section 4.11 (the “Assigned Contracts”);

 

(vii)  
all rights of Ashland in and to products sold or leased (including
products returned after the Closing and rights of rescission, replevin and
reclamation) to the extent arising in the operation or conduct of the Maleic
Business;

 

(viii)  
all credits, prepaid expenses, deferred charges, advance payments,
security deposits and prepaid items of Ashland, in each case to the extent
used, held for use or intended to be used in, or to the extent arising out of,
the operation or conduct of the Maleic Business;

 

(ix)  
all books of account, ledgers, general, financial, accounting and
personnel records, files, invoices, customers’ and suppliers’ lists, other
distribution lists, billing records, sales and promotional literature, manuals,
customer and supplier correspondence, sales records, credit data and other
information relating to present or past customers, cost and pricing
information, equipment maintenance data, purchasing records and information,
business plans, payroll and personnel records, purchase orders, sales forms,
artwork, photography, log books, environmental, health and safety audit
procedures, schedules, reports, protocols and findings pertaining to the Maleic
Business or the Transferred Assets (including records of spills or other
releases or discharges into the atmosphere, records of environmental, safety or
health reports to or from Governmental Entities regarding the Maleic Business
or the Transferred Assets (including notices of violation), and correspondence,
notices and orders of an environmental, safety or health nature regarding the
Maleic Business or the Transferred Assets) and other similar property, rights
and information of Ashland, in each case that are used, held for use or
intended to be used exclusively in, or that arise exclusively out of, the
operation or conduct of the Maleic Business (the “Records”);

 

4

 

(x)  
all accounts receivable of Ashland as of the close of business on the
Closing Date to the extent arising out of the operation or conduct of the
Maleic Business (the “Receivables”);

 

(xi)  
all goodwill and going concern value of Ashland generated exclusively
by, or associated exclusively with, the Maleic Business;

 

(xii)  
all rights, claims and credits of Ashland to the extent relating to any
other Transferred Asset or any Assumed Liability (other than any such items
arising under insurance policies), including any such items arising under any
guarantee, warranty, indemnity or similar right in favor of Ashland in respect
of any other Transferred Asset or any Assumed Liability; and

 

(xiii)  
all other or additional privileges, rights, interests, properties and
assets of Ashland of every kind and description and wherever located, in each
case that are used, held for use or intended to be used exclusively in, or that
arise exclusively out of, the operation or conduct of the Maleic Business.

 

(b)  
The term “Excluded Assets” means:

 

(i)  
all assets identified in Section 1.02(b) of the Maleic Business
Disclosure Letter;

 

(ii)  
all cash and cash equivalents of Ashland;

 

(iii)  
all rights, claims and credits of Ashland to the extent relating to any
other Excluded Asset or any Retained Liability (as defined in Section 1.03(b)),
including any such items arising under insurance policies and any guarantee,
warranty, indemnity or similar right in favor of Ashland in respect of any
other Excluded Asset or any Retained Liability;

 

(iv)  
all collective bargaining agreements and other Contracts with any labor
union that cover one or more Active Maleic Business Employees (as defined in
Section 4.03(a)) and all Contracts relating to compensation, bonus or severance
to which any Active Maleic Business Employee or any person hired to become a
Maleic Business Employee (as defined in Section 3.09(a)) is a party;

 

5

 

(v)  
all the assets of the Maleic Pension Plans (as defined in Section
3.09(a)) and all the assets of Ashland and its affiliates under any other
Maleic Benefit Plan (as defined in Section 3.09(a));

 

(vi)  
all rights of Ashland under the Transaction Agreements and the Ancillary
Agreements;

 

(vii)  
all assets relating to corporate-level services of the type currently
provided to the Maleic Business by Ashland or any of its affiliates;

 

(viii) 
any shares of capital stock of any affiliate of Ashland;

 

(ix)  
the name and mark “Ashland” (in any style or design), and any name or
mark derived from or including the foregoing;

 

(x)  
all records of Ashland prepared in connection with the Transactions; and

 

(xi)  
all financial and tax records relating to the Maleic Business to the
extent they form part of Ashland’s general ledger.

 

SECTION 1.03.  
Assumption of Certain Liabilities.  (a) Upon the terms and subject to the conditions of this
Agreement, HoldCo shall assume, effective as of the Closing, and from and after
the Closing, HoldCo shall pay, perform and discharge when due, and indemnify
Ashland and its affiliates and each of their respective Representatives
against, and defend and hold them harmless from, all of the following liabilities,
obligations and commitments of any nature, whether known or unknown, express or
implied, primary or secondary, direct or indirect, liquidated, absolute,
accrued, contingent or otherwise and whether due or to become due, of Ashland
(collectively, the “Assumed Liabilities”), other than any Retained
Liabilities:

 

(i)  
all liabilities, obligations and commitments of Ashland under the
Assigned Contracts to the extent such liabilities, obligations and commitments
relate to the period from and after the Closing;

 

(ii)  
all liabilities, obligations and commitments of Ashland under any maleic
anhydride product exchange agreements that are reflected in the Statement (as

 

6

 

defined in Section 1.05(a)) in accordance
with Section 1.05;

 

(iii)  
all liabilities, obligations and commitments of Ashland to the extent
expressly assumed by HoldCo in accordance with Section 4.03;

 

(iv)  
all Environmental Liabilities (as defined in Section 6.01(b)) of Ashland
to the extent they arise out of both (A) the operation of any of the
Transferred Assets or the operation or conduct of the Maleic Business and (B)
either (x) events occurring or circumstances or conditions arising from and
after the Closing, or (y) events occurring or circumstances or conditions
arising prior to the Closing, but only, in the case of this clause (B)(y), to
the extent set forth in the table below (provided, however, that
to the extent the same Environmental Liability is described in both clauses (x)
and (y) of this Section 1.03(a)(iv)(B), such Environmental Liability will be
apportioned between HoldCo and Ashland in proportion to the extent to which the
activities of each party contributed to the cause of the Environmental
Liability, taking into account all pertinent factors, including the length of
ownership by HoldCo and Ashland of the relevant property during the time of the
event or occurrence, or the development of the circumstance or condition,
giving rise to the Environmental Liability and the use made of such property by
the parties hereto):

 

	
  If written notice (in
  reasonable detail) of such Environmental Liability is first received by
  Ashland during the twelve-month period ending on the following anniversary of
  the Closing Date (provided, however, that with respect to any
  Environmental Liability arising from any matter referred to in Section
  3.11(b) of the Maleic Business Disclosure Letter, Ashland shall be deemed to
  have received written notice

  	
   

  	
  Percentage of
  Environmental Liability described in clause (B)(y) above that will be an
  Assumed Liability:

  

 

7

 

	
  (in reasonable detail)
  of such Environmental Liability prior to the first anniversary of the Closing
  Date):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  First through Fifth

  	
   

  	
  0%

  
	
   

  	
   

  	
   

  
	
  Sixth

  	
   

  	
  20%

  
	
   

  	
   

  	
   

  
	
  Seventh

  	
   

  	
  40%

  
	
   

  	
   

  	
   

  
	
  Eighth

  	
   

  	
  60%

  
	
   

  	
   

  	
   

  
	
  Ninth 

  	
   

  	
  80% 

  
	
   

  	
   

  	
   

  
	
  If such notice is not
  received by Ashland on or prior to the ninth anniversary of the Closing Date

  	
   

  	
  100%

  

 

; and

 

(v)  
all other liabilities, obligations and commitments of Ashland to the
extent such liabilities, obligations and commitments relate to or arise out of
the operation of any of the Transferred Assets or the operation or conduct of
the Maleic Business, in each case from and after the Closing.

 

(b)  
Notwithstanding Section 1.03(a), or any other provision of this
Agreement, HoldCo shall not assume, and Ashland shall pay, perform and
discharge when due, and indemnify HoldCo and its affiliates and each of their
respective Representatives against, and defend and hold them harmless from, any
liability, obligation or commitment of Ashland or the Maleic Business of any
nature, whether known or unknown, express or implied, primary or secondary,
direct or indirect, liquidated, absolute, accrued, contingent or otherwise, and
whether due or to become due, except the Assumed Liabilities (collectively, the
“Retained Liabilities”).  Without
limiting the generality of the foregoing, the Retained Liabilities include:

 

(i)  
any liability, obligation or commitment of Ashland to the extent arising
out of the operation or

 

8

 

conduct by Ashland or any of its affiliates
of any business other than the Maleic Business;

 

(ii)  
all accounts payable of Ashland to the extent arising out of the
operation or conduct of the Maleic Business prior to the Closing;

 

(iii)  
any liability, obligation or commitment of Ashland (A) to the extent
arising out of any actual or alleged breach by Ashland of, or nonperformance by
Ashland under, any Contract (including any Assigned Contract) prior to the
Closing or (B) under any Assigned Contract to the extent such liability,
obligation or commitment relates to the period prior to the Closing;

 

(iv)  
any liability, obligation or commitment of Ashland arising out of any
warranty claim, suit, action, proceeding, investigation, governmental action or
other cause of action or claim associated with or relating to the Maleic
Business or the Transferred Assets (a “Claim”) to the extent arising out
of actions, omissions or conditions occurring or existing on or prior to the
Closing Date;

 

(v)  
any liability, obligation or commitment of Ashland to the extent such
liability, obligation or commitment relates to, or arises out of, any Excluded
Asset, or arises out of the ownership or operation by Ashland of any of the
Excluded Assets;

 

(vi)  
except as otherwise expressly provided in Section 4.03, any liability,
obligation or commitment of Ashland arising under any Maleic Benefit Plan;

 

(vii)  
any liability, obligation or commitment of Ashland to any of its
divisions, subsidiaries or affiliates;

 

(viii) 
any liability, obligation or commitment of Ashland or any of its
affiliates under any of the Transaction Agreements or any of the Ancillary
Agreements;

 

(ix)  
the amount, if any, equal to the aggregate book value (as of the Closing
Date) of all Receivables that are not collected after the Closing Date and
remain outstanding for a period of more than 60 days

 

9

 

after their respective due dates (as
reflected in the books and records of the Maleic Business) notwithstanding that
HoldCo has made reasonable efforts to collect such Receivables, which amount
shall be promptly paid by Ashland to HoldCo and, until paid, shall be deemed
for all purposes of this Agreement to be a Retained Liability; provided,
however, in the event any one or more of the Receivables become Retained
Liabilities under this clause (ix), promptly following Ashland’s payment to
HoldCo with respect to such Receivables under this clause (ix), HoldCo shall
assign all of its rights, title and interests in, to and under such Receivables
and, to the extent HoldCo thereafter receives any payments from the relevant
customers on account of such Receivables, HoldCo shall promptly forward such
payments to Ashland; and

 

(x)  
any Environmental Liability arising out of events occurring or
circumstances or conditions arising prior to the Closing except for
Environmental Liabilities that are Assumed Liabilities pursuant to Section 1.03(a)(iv);
provided, however, an Environmental Liability that otherwise
would be considered a Retained Liability under this Section 1.03(b)(x) shall be
an Assumed Liability and shall not be a Retained Liability if the event,
circumstance or condition that gave rise to such Environmental Liability (A) is
the result of a change in use after the Closing Date of (x) any portion of the
Premises consisting of the parcels of real property on which the maleic
anhydride plant located in Neal, West Virginia (the “Plant”) is located
(which parcels are identified as such in Section 3.03 of the Maleic Business
Disclosure Letter) to a use substantially unrelated to the use of such Premises
as of the Closing Date or (y) any other portion of the Premises to a use other
than an industrial use or (B) was discovered as a result of a Phase II or other
intrusive sampling, testing or investigation conducted after the Closing Date
(collectively, “Environmental Tests”) except for Environmental Tests
undertaken (x) to respond to, investigate, or otherwise remediate environmental
conditions or contamination that are on the Closing Date in violation of the
standards imposed by applicable Environmental Laws (as defined in Section
3.11(b)), (y) as required by Environmental

 

10

 

Laws or in response to an inquiry, request,
claim or demand by a Governmental Entity or as a reasonable response to any
claim or demand by any other person that is not an affiliate of HoldCo or (z)
in connection with a condition first discovered as a result of construction
activities commencing after the Closing Date at, on or beneath the Premises, so
long as such construction activities are undertaken in connection with (1) with
respect to any portion of the Premises consisting of the parcels of real
property on which the Plant is located, a use substantially related to the use
of such Premises as of the Closing Date or (2) with respect to any other
portion of the Premises, an industrial use of such Premises.

 

(c)  
HoldCo shall acquire the Transferred Assets free and clear of all
liabilities, obligations and commitments of Ashland, other than the Assumed
Liabilities, and free and clear of all Liens, other than Permitted Liens (as
defined in Section 6.01(b)) and other than any Lien pursuant to the HoldCo
Borrowing arrangements or arising from actions or inactions of any of the
Marathon Parties or their affiliates (and not of any of the Ashland Parties or
their affiliates).

 

SECTION 1.04.  
Consents of Third Parties. 
(a)   Notwithstanding anything to
the contrary in this Agreement, this Agreement shall not constitute an
agreement to assign any asset or any claim or right or any benefit arising
under or resulting from such asset, or to assume any liability, obligation or
commitment, if an attempted assignment or assumption thereof, without the
Consent of a third party, would constitute a breach or other contravention of
the rights of such third party, would be ineffective with respect to any party
to an agreement concerning such asset, liability, obligation or commitment, or
would in any way adversely affect the rights of Ashland or, upon transfer,
HoldCo with respect to such asset, liability, obligation or commitment. If any
transfer or assignment by Ashland, or any assumption by HoldCo, of any interest
in, or liability, obligation or commitment under, any asset requires the
Consent of a third party, then such transfer or assignment or assumption shall
be made subject to such Consent being obtained.  Except as set forth in Section 1.04(b), Ashland shall not have
any liability or obligation under this Agreement arising out of or relating to
the failure to obtain any such Consent that may be

 

11

 

required in connection
with the Transactions contemplated by this Agreement or because of any
circumstances resulting therefrom, in each case so long as Ashland shall have
complied with its obligation under Section 9.11 of the Master Agreement to use
its reasonable best efforts to obtain such Consents.  Subject to Section 1.04(b), no representation, warranty or
covenant of Ashland herein shall be breached or deemed breached, and no
condition shall be deemed not satisfied, as a result of (i) the failure to obtain
any such Consent, (ii) any circumstances resulting therefrom or (iii) any Claim
or investigation commenced or threatened by or on behalf of any person arising
out of or relating to the failure to obtain any such Consent or any
circumstances resulting therefrom, in each case so long as Ashland shall have
complied with its obligation under Section 9.11 of the Master Agreement to use
its reasonable best efforts to obtain such Consents.

 

(b)  
If any such Consent is not obtained prior to the Closing, the Closing
shall nonetheless take place on the terms set forth herein and, thereafter,
Ashland and HoldCo shall cooperate (at their own expense) in any lawful and
reasonable arrangement proposed by HoldCo under which HoldCo shall obtain the
economic claims, rights and benefits under the asset, claim or right with
respect to which the Consent has not been obtained in accordance with this
Agreement.  Such reasonable arrangement
may include (i) the subcontracting, sublicensing or subleasing to HoldCo of any
and all rights of Ashland against the other party to such third-party agreement
arising out of a breach or cancellation thereof by the other party and (ii) the
enforcement by Ashland of such rights. 
With respect to the Assigned Contracts listed in Section 1.04(b) of the
Maleic Business Disclosure Letter, if the provision of such economic claims,
rights and benefits to HoldCo shall violate the rights of such other party,
Ashland shall otherwise compensate HoldCo for the reasonable value, if any, of
such economic claims, rights and benefits, so long as HoldCo shall have
complied with its obligations under the first sentence of this Section 1.04(b).

 

SECTION 1.05.  
Closing Current Assets Adjustment.  (a)   Within 60 days after
the Closing Date, Ashland shall prepare and deliver to HoldCo a statement (the “Statement”),
setting forth Current Assets (as defined in Section 1.05(d)) as of the close of
business on the Closing Date (“Closing Current Assets”).  A physical inventory

 

12

 

shall be conducted
jointly by Ashland and Marathon on or prior to the Closing Date, in accordance
with Section 1.05(a) of the Maleic Business Disclosure Letter, for the purpose
of preparing the Statement.

 

(b)  
During the 30-day period following HoldCo’s receipt of the Statement,
HoldCo and its Representatives shall be permitted to review the working papers
relating to the Statement.  The
Statement shall become final and binding upon the parties on the 15th day
following delivery thereof, unless HoldCo gives written notice of its disagreement
with the Statement (a “Notice of Disagreement”) to Ashland prior to such
date.  Any Notice of Disagreement shall
(i) specify in reasonable detail the nature of any disagreement so asserted and
(ii) only include disagreements based on mathematical errors or based on
Closing Current Assets not being calculated in accordance with this Section
1.05.  If a Notice of Disagreement is
received by Ashland in a timely manner, then the Statement (as revised in
accordance with this sentence) shall become final and binding upon Ashland and
HoldCo on the earlier of (A) the date Ashland and HoldCo resolve in writing any
differences they have with respect to the matters specified in the Notice of
Disagreement or (B) the date any disputed matters are finally resolved in
writing by the Accounting Firm (as defined below).  During the 30-day period following the delivery of a Notice of
Disagreement, Ashland and HoldCo shall seek in good faith to resolve in writing
any differences that they may have with respect to the matters specified in the
Notice of Disagreement.  At the end of
such 30-day period, Ashland and HoldCo shall submit to an independent
accounting firm (the “Accounting Firm”) for arbitration any and all
matters that remain in dispute and were properly included in the Notice of
Disagreement, in the form of a written brief. 
The Accounting Firm shall be KPMG LLP or, if such firm is unable or
unwilling to act, such other nationally recognized independent public
accounting firm as shall be agreed upon by the parties hereto in writing.  Ashland and HoldCo shall instruct the
Accounting Firm to render a decision resolving the matters submitted to the
Accounting Firm within 30 days following submission.  Judgment may be entered upon the determination of the Accounting
Firm in any court having jurisdiction over the party against which such
determination is to be enforced.  The
cost of any arbitration (including the fees and expenses of the Accounting Firm
and reasonable attorney fees and expenses

 

13

 

of the parties) pursuant to this Section 1.05
shall be borne by HoldCo and Ashland in inverse proportion as they may prevail
on matters resolved by the Accounting Firm, which proportionate allocations
shall also be determined by the Accounting Firm at the time the determination
of the Accounting Firm is rendered on the merits of the matters submitted.  The fees and disbursements of Ashland’s
Representatives incurred in connection with their preparation of the Statement
and their review of any Notice of Disagreement shall be borne by Ashland, and
the fees and disbursements of HoldCo’s Representatives incurred in connection
with its review of the Statement shall be borne by HoldCo.

 

(c)  
If Closing Current Assets is less than the line item comprising Current
Assets on the Balance Sheet (as defined in Section 3.01) (“Target Current
Assets”), Ashland shall, and if Closing Current Assets is more than Target
Current Assets, HoldCo shall, within 10 business days after the Statement becomes
final and binding on the parties, make payment by wire transfer in immediately
available funds of the amount of such difference, together with interest
thereon at a rate equal to the rate of interest from time to time announced
publicly by Citibank, N.A., as its prime rate, calculated on the basis of the
actual number of days elapsed divided by 365, from the Closing Date to the date
of payment.

 

(d)  
The term “Current Assets” means the current assets of the Maleic
Business, calculated in the same way, using the same methods, as the line item
comprising current assets on the Balance Sheet, other than any current assets
relating to any Tax (as defined in the Tax Matters Agreement); provided,
however, that any liabilities, obligations or commitments of Ashland
under any maleic anhydride product exchange agreements in effect as of the
Closing Date shall be deducted, on a dollar for dollar basis, from current
assets for purposes of determining Closing Current Assets under this Section
1.05.  The foregoing principles are
referred to in this Agreement as the “Balance Sheet Principles”.  The parties acknowledge that the adjustment
contemplated by this Section 1.05 is intended solely to show the change in
Current Assets from the date of the Balance Sheet to the Closing Date, and that
such change can only be measured if the calculation is done in the same way,
using the same methods, for both dates. 
The scope of the disputes to be resolved by the Accounting

 

14

 

Firm shall be limited to whether Closing
Current Assets was calculated in accordance with the Balance Sheet Principles,
and whether there were mathematical errors in the Statement, and the Accounting
Firm is not to make any other determination, including any determination as to
whether GAAP was followed for the Balance Sheet or the Statement.  Any items on or omissions from the Balance
Sheet that are based upon errors of fact or mathematical errors or that are not
in accordance with GAAP shall be retained for purposes of calculating Closing
Current Assets.

 

(e)  
Following the Closing, HoldCo shall not modify the accounting books and
records of the Maleic Business on which the Statement is to be based that would
in any way affect the Balance Sheet or the Statement.  Without limiting the generality of the foregoing, no changes
shall be made in any reserve or other account existing as of the date of the
Balance Sheet that would in any way affect the Balance Sheet or the Statement
except, in the case of the Statement, as a result of events occurring after the
date of the Balance Sheet and, in such event, only in a manner consistent with
past practices of the Maleic Business. 
HoldCo shall cooperate in the preparation of the Statement.  HoldCo acknowledges that Ashland shall have
the primary responsibility and authority for preparing the Statement.  During the period of time from and after the
Closing Date through the resolution of any adjustment with respect to Closing
Current Assets contemplated by this Section 1.05, HoldCo shall afford to
Ashland and its Representatives reasonable access during normal business hours
to all the properties, books, contracts, personnel and records of the Maleic
Business relevant to the preparation of the Statement and the adjustment contemplated
by this Section 1.05.

 

SECTION 1.06.  
Tax Matters.  
Notwithstanding anything to the contrary in this Agreement, the rights,
responsibilities and obligations of the parties with respect to any Taxes or
Tax Items (in each case as defined in the Tax Matters Agreement) related to or
arising from the ownership or operation of the Maleic Business shall be
determined pursuant to the Tax Matters Agreement.

 

SECTION 1.07.  
Neville Island Maleic Assets Provisions.

 

(a)  
During the Option Period (as defined below), HoldCo shall be entitled to
elect to purchase from Ashland

 

15

 

all of Ashland’s right,
title and interest in, to and under the assets of the maleic anhydride portion
of the plant (the “Neville Island Maleic Facility”) located at Neville
Island, Pennsylvania and the assets that are used, held for use or intended to
be used exclusively in the maintenance or operation of the Neville Island
Maleic Facility (collectively, the “Neville Island Maleic Assets”) by
providing written notice to Ashland of such election (the “Option Notice”).  For the avoidance of doubt, the Neville
Island Maleic Assets shall not include any of the assets that are used, held
for use or intended to be used in the unsaturated polyester resin portion of
the plant located at Neville Island, Pennsylvania.  If HoldCo exercises its right to purchase hereunder, (i) the
purchase price for the Neville Island Maleic Assets shall be equal to the fair
market value of the Neville Island Maleic Assets, determined, as of the date on
which HoldCo delivers the Option Notice to Ashland, by Morgan Joseph & Co.
Inc. (or such other independent investment banking or appraisal firm as may be
agreed upon by Ashland and HoldCo after the Closing Date), using the same
valuation methodology used by Morgan Joseph & Co. Inc. for purposes of
establishing the value of the Maleic Business in connection with the
Transactions being effected on the Closing Date under the Master Agreement,
(ii) Ashland and HoldCo shall use their reasonable best efforts to cause the
closing of the purchase and sale of the Neville Island Maleic Assets to occur
within 60 days of the date on which HoldCo delivers the Option Notice to
Ashland and (iii) the other terms of the purchase and sale transaction shall be
negotiated in good faith between Ashland and HoldCo, provided that such terms
and conditions shall be substantially consistent with the terms and conditions
applicable to the Transactions effected pursuant to this Agreement.  Ashland shall provide HoldCo at least two
months’ prior written notice of the commencement of permanent demolition or
disassembly of the Neville Island Maleic Facility.  “Option Period” means the period beginning on the Closing
Date and terminating and expiring upon the earliest to occur of (i) 60 days
after the date of a prior written notice to HoldCo by Ashland of the
commencement of permanent demolition or disassembly of the Neville Island
Maleic Facility (provided that commencement of such permanent demolition or
disassembly of the Neville Island Maleic Facility occurs promptly thereafter),
(ii) the sale of the Neville Island Maleic Assets to HoldCo or a third party
(provided that, in the case of a sale to a third party, Ashland shall have

 

16

 

complied with Section
1.07(b))or (iii) the fifth anniversary of the Closing Date.

 

(b)  
Ashland shall be free to negotiate with any third party to sell,
transfer or otherwise dispose of all or any portion of the Neville Island
Maleic Assets.  Not fewer than 30 days
nor more than 90 days prior to any proposed sale, transfer or other disposition
of all or substantially all of the Neville Island Maleic Assets to a third
party prior to the expiration of the Option Period, Ashland shall provide
HoldCo a written notice (the “Proposed Sale Notice”), which shall (i)
set forth the name of the proposed purchaser and the principal terms and
conditions of the proposed transaction, including the consideration proposed to
be received by Ashland in such transaction and the proposed date for the
closing of such transaction, and (ii) offer to sell the Neville Island Maleic
Assets to HoldCo on the same terms and conditions described in the Proposed
Sale Notice (provided, however, that if any part of the
consideration to be received by Ashland described in the Proposed Sale Notice
is in a form other than cash, HoldCo shall be entitled to pay cash in an amount
equal to the fair market value of such consideration, as determined by an
independent investment banking or appraisal firm agreed upon by HoldCo and
Ashland).  If HoldCo desires to purchase
the Neville Island Maleic Assets on such terms and conditions, it shall provide
written notice of its election to do so (the “Exercise Notice”) to Ashland
on or before the 30th day after the date HoldCo receives the Proposed Sale
Notice, and thereafter Ashland and HoldCo shall use their reasonable best
efforts to cause the closing of HoldCo’s purchase on such terms and conditions
to occur on the proposed date for the closing of the transaction set forth in
the Proposed Sale Notice.  In the event
HoldCo does not give Ashland the Exercise Notice or an Option Notice on or
prior to the 30th day after the date HoldCo receives the Proposed Sale Notice,
then, during the immediately following 60-day period, Ashland may sell all or
substantially all of the Neville Island Maleic Assets to the proposed purchaser
named in the Proposed Sale Notice on terms and conditions which are not
materially less favorable, taken as a whole, to such proposed purchaser than
the terms and conditions set forth in the Proposed Sale Notice.  In the event that Ashland shall not have
consummated the sale of all or substantially all of the Neville Island Maleic
Assets to such proposed purchaser

 

17

 

within such 60-day period, any subsequent
proposed sale of all or substantially all of the Neville Island Maleic Assets
shall once again be subject to the terms of this Section 1.07(b).

 

(c)  
Notwithstanding anything to the contrary in this Agreement, HoldCo
agrees that the provisions of this Section 1.07 shall be subject in all
respects (i) to the provisions of any Contract relating to the Neville Island
Maleic Assets entered into prior to the date of this Agreement, including each
of the Asset Purchase Agreement, the Services Agreement, the Irrevocable
Easement Agreement and the Confidentiality Agreement (as such Contracts may be
amended, modified or supplemented from time to time) in each case dated as of
April 28, 1995, between Aristech Chemical Corporation and Ashland, (ii) to the
rights, responsibilities and obligations of the parties to each such agreement
and their respective successors and assigns and (iii) to the receipt of all
Consents that must be obtained by virtue of the consummation of the sale,
transfer or other disposition of any of the Neville Island Maleic Assets.  HoldCo acknowledges that the Consent of
Sunoco, Inc. shall be required in order to consummate the sale, transfer or other
disposition of any of the Neville Island Maleic Assets by Ashland to
HoldCo.  Ashland makes no
representations or warranties of any kind, express or implied, relating to the
receipt of such Consent.  Ashland and
HoldCo shall each use their reasonable best efforts to obtain such Consent; provided,
however, that they shall not be required to make any payment to any
person in order to obtain such Consent. 
Ashland shall not have any liability or obligation whatsoever arising
out of or relating to any failure to obtain such Consent, so long as Ashland
shall have used its reasonable best efforts to obtain such Consent.

 

ARTICLE II

 

The Closing

 

SECTION 2.01.  
Closing Date.   The
closing of the Maleic Assignment and Assumption will occur at the Closing, subject
only to the satisfaction or waiver of the conditions to Closing in accordance
with the terms of the Master Agreement.

 

18

 

SECTION 2.02.  
Transactions To Be Effected at the Closing.   At the Closing, in accordance with Section
1.01(a) of the Master Agreement:

 

(a)  
Ashland shall deliver to HoldCo an executed deed (in recordable form) in
the form attached hereto as Exhibit A;

 

(b)  
Ashland and HoldCo shall enter into an assignment and assumption document,
in the form attached hereto as Exhibit B, providing for the assignment of the
Transferred Assets and the assumption of the Assumed Liabilities;

 

(c)  
The parties thereto shall enter into a supply agreement in the form
attached hereto as Exhibit C (the “Maleic Supply Agreement”); and

 

(d)  
The parties thereto shall enter into a transition services agreement in
the form attached hereto as Exhibit D (the “Transition Services Agreement”).

 

ARTICLE III

 

Representations and Warranties of Ashland

 

Ashland hereby represents and warrants to
HoldCo that, as of the date of this Agreement and as of the Closing Date as if
made on the Closing Date (except to the extent any such representations and
warranties expressly relate to an earlier date, in which case as of such
earlier date), except as set forth in the letter referencing this Agreement,
dated as of the date of this Agreement, from Ashland to HoldCo (the “Maleic
Business Disclosure Letter”):

 

SECTION 3.01.  
Financial Statements.  
Section 3.01 of the Maleic Business Disclosure Letter sets forth the
unaudited combined statement of tangible assets to be sold as of September 30,
2003  (the “Balance Sheet”), the
unaudited combined statement of tangible assets to be sold as of December 31,
2003, the unaudited combined statement of income before taxes for the year
ended September 30, 2003 and the unaudited combined statement of income before
taxes for the three months ended December 31, 2003, together with the notes to
such financial statements, in each case of the Maleic Business (such financial
statements

 

19

 

and the notes thereto,
the “Financial Statements”).  The
Financial Statements present fairly, in all material respects, the tangible
assets to be sold (in each case with Ashland’s aggregate liabilities,
obligations and commitments under maleic anhydride product exchange agreements
outstanding as of the applicable balance sheet date being reflected as an
offset to Ashland’s aggregate accounts receivable relating to maleic anhydride
product exchange agreements outstanding as of the applicable balance sheet
date) and income before taxes of the Maleic Business as of the dates and for
the periods indicated, in conformity with GAAP (subject, in the case of the
interim financial statements as of and for the period ended December 31, 2003,
to normal, recurring year-end adjustments).

 

SECTION 3.02.  
Assets Other than Real Property Interests.   Ashland has, or as of the Closing Date will
have, and at the Closing Ashland will transfer (subject to the consummation of
the Closing on the Closing Date in accordance with the terms of Article I of
the Master Agreement) to HoldCo, good and valid title to all Transferred Assets
in each case free and clear of all Liens (other than any Lien pursuant to the
HoldCo Borrowing arrangements or arising from actions or inactions of any of
the Marathon Parties or their affiliates (and not of any of the Ashland Parties
or their affiliates)), except Permitted Liens. 
This Section 3.02 does not relate to real property or interests in real
property, such items being the subject of Section 3.03.

 

SECTION 3.03.  
Real Property.   (a)   Section 3.03 of the Maleic Business
Disclosure Letter sets forth a complete list of all real property and interests
in real property owned in fee by Ashland and any of the other Ashland Parties
and used, held for use or intended to be used exclusively in the operation or
conduct of the Maleic Business, other than any such property or interest
constituting an Excluded Asset (individually, an “Owned Property”).  Section 3.03 of the Maleic Business
Disclosure Letter sets forth a complete list of all real property and interests
in real property leased by Ashland and used, held for use or intended to be
used exclusively in the operation or conduct of the Maleic Business, other than
any such property or interest constituting an Excluded Asset (individually, a “Leased
Property”).

 

20

 

(b)  
Ashland has, or as of the Closing Date will have, and at the Closing
Ashland will transfer (subject to the consummation of the Closing on the
Closing Date in accordance with the terms of Article I of the Master Agreement)
to HoldCo, good and marketable fee title to all Owned Property and good and valid
title to the leasehold estates in all Leased Property, in each case free and
clear of all Liens (other than any Lien pursuant to the HoldCo Borrowing
arrangements or arising from actions or inactions of any of the Marathon
Parties or their affiliates (and not of any of the Ashland Parties or their
affiliates)), except Permitted Liens.

 

SECTION 3.04.  
Intellectual Property; Technology.  (a)   The conduct of the
Maleic Business as presently conducted does not violate, conflict with or
infringe the Intellectual Property (as defined in Section 6.01(b)) of any other
person, except for such violations, conflicts or infringements that have not
had and would not reasonably be expected to have a Maleic Business Material
Adverse Effect (as defined in Section 6.01(b)).  During the past 12 months Ashland has not received any written
communication alleging that Ashland has in the conduct of the Maleic Business
violated any rights relating to Intellectual Property of any other person.  Except for the Assigned Technology, there is
no material Technology or Intellectual Property of Ashland that is used, held
for use or intended to be used in the operation or conduct of the Maleic
Business.

 

(b)  
Except as would not reasonably be expected to have a Maleic Business
Material Adverse Effect, (i) all confidential Assigned Technology has been
maintained in confidence in accordance with protection procedures customarily
used by Ashland to protect rights of like importance; (ii) Ashland has not
granted any license of any kind relating to any Assigned Technology, except
non-exclusive licenses to end-users in the ordinary course of business; (iii)
no Claim against or involving Ashland regarding the ownership, validity,
enforceability, effectiveness or use of any Assigned Technology is pending or,
to the knowledge of Ashland, threatened; and (iv) no Consent of any person will
be required for the use of the Assigned Technology by HoldCo in connection with
the operation or conduct of the Maleic Business immediately following the Closing
as presently conducted by Ashland.

 

SECTION 3.05.  
Contracts.   (a)   Except for Contracts that will not be
binding on the Transferred

 

21

 

Assets or the Maleic Business after the
Closing, Ashland is not a party to or bound by any Contract that is used, held
for use or intended to be used exclusively in, or that arises exclusively out
of, the operation or conduct of the Maleic Business (other than (x) the
Transaction Agreements and the Ancillary Agreements and (y) Assigned Contracts
entered into after the date of this Agreement in the ordinary course of
business and not otherwise in violation of this Agreement) that is:

 

(i)  
a covenant not to compete that limits the conduct of the Maleic Business
as presently conducted;

 

(ii)  
a Contract with (A) Ashland or any affiliate of Ashland or (B) any
officer, director or employee of Ashland or any of its affiliates, in each case
other than Contracts that will be terminated as of the Closing;

 

(iii)  
a lease, sublease or similar Contract with any person under which
Ashland is a lessor or sublessor of, or makes available for use to any person,
all or any portion of the Premises;

 

(iv)  
a lease, sublease or similar Contract with any person under which (A)
Ashland is lessee of, or holds or uses, any machinery, equipment, vehicle or
other tangible personal property owned by any person or (B) Ashland is a lessor
or sublessor of, or makes available for use by any person, any tangible
personal property owned or leased by Ashland, in any such case that has an
aggregate future liability or receivable, as the case may be, in excess of
$100,000 and is not terminable by Ashland by notice of not more than 30 days
without payment or penalty of any kind;

 

(v)  
(A)   a continuing Contract for
the future purchase of materials, supplies or equipment (other than purchase
orders for inventory in the ordinary course of business consistent with past
practice), (B) a management, service, consulting or other similar Contract or
(C) an advertising agreement or arrangement, in any such case that has an
aggregate future liability to any person in excess of $100,000 and is not
terminable by Ashland by notice of not more than 30 days without payment or
penalty of any kind;

 

22

 

(vi)  
a Contract (including a sales order) involving the obligation of Ashland
to deliver products or services for payment of more than $100,000 or extending
for a term more than 90 days from the date of this Agreement (unless terminable
without payment or penalty of any kind upon no more than 30 days’ notice);

 

(vii)  
(A)   a Contract under which
Ashland has borrowed any money from, or issued any note, bond, debenture or
other evidence of indebtedness to, any person or (B) any other note, bond,
debenture, letter of credit, financial assurance requirement or other evidence
of indebtedness issued to any person;

 

(viii)  
a Contract (including any so-called take-or-pay or keepwell agreement)
under which (A) any person has directly or indirectly guaranteed indebtedness,
liabilities or obligations of Ashland or (B) Ashland has directly or indirectly
guaranteed indebtedness, liabilities or obligations of any other person (in
each case other than endorsements for the purpose of collection in the ordinary
course of business);

 

(ix)  
a Contract under which Ashland has, directly or indirectly, made any
advance, loan, extension of credit or capital contribution to, or other
investment in, any person (other than extensions of trade credit in the
ordinary course of the Maleic Business), in any such case that, individually,
is in excess of $100,000;

 

(x)  
a Contract granting a Lien (other than Permitted Liens) upon the
Premises; or

 

(xi)  
any other Contract that has an aggregate future liability to any person
(other than Ashland) in excess of $100,000 and is not terminable by Ashland by
notice of not more than 30 days without payment or penalty of any kind (other
than purchase orders and sales orders).

 

As of the date of this
Agreement, neither the Transferred Assets nor the Maleic Business is bound by
or subject to any Contract of any of the types referred to in clauses (i)
through (xi) of this Section 3.05(a), applying the thresholds set forth
therein, that will be binding on any

 

23

 

of the Transferred
Assets or the Maleic Business after the Closing Date.

 

(b)  
All Contracts listed in the Maleic Business Disclosure Letter are valid,
binding and in full force and effect and are enforceable by Ashland in
accordance with their terms subject, as to enforcement, to applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
creditors’ rights generally and to equitable principles of general
applicability, except for such failures to be valid, binding, in full force and
effect or enforceable that have not had and would not reasonably be expected to
have a Maleic Business Material Adverse Effect.  Ashland has performed all obligations required to be performed by
it to date under the Assigned Contracts, and it is not in breach or default
thereunder and, to the knowledge of Ashland, no other party to any Assigned
Contract is in breach or default thereunder, in each case except for such
noncompliance, breaches and defaults that have not had and would not reasonably
be expected to have a Maleic Business Material Adverse Effect.  Ashland has not received any notice of the
intention of any party to terminate any Assigned Contract listed in any section
of the Maleic Business Disclosure Letter.

 

(c)  
Section 3.05(c) of the Maleic Business Disclosure Letter sets forth each
Assigned Contract with respect to which the Consent of the other party or
parties thereto must be obtained by virtue of the execution and delivery of
this Agreement or the consummation of the Maleic Assignment and Assumption to
avoid the invalidity of the transfer of such Contract, the termination thereof,
a breach, violation or default thereunder or any other change or modification
to the terms thereof, other than any such invalidity, termination, breach,
violation, default, change or modification that would not reasonably be
expected to have a Maleic Business Material Adverse Effect.

 

SECTION 3.06.  
Permits.   Section 3.06 of
the Maleic Business Disclosure Letter sets forth all certificates, licenses,
permits, authorizations, Consents and approvals issued or granted to Ashland
by, and all exemptions of, or registrations or filings with, Governmental
Entities (“Permits”), that are used, held for use or intended to be used
exclusively in the operation or conduct of the Maleic Business, except for
those Permits the absence of which would not reasonably be expected to have a
Maleic Business Material Adverse Effect. 
All such

 

24

 

Permits are transferable
by Ashland to HoldCo.  All Assigned
Permits are validly held by Ashland, and Ashland has complied with the terms
and conditions thereof, except for any such invalidity or non-compliance that
would not reasonably be expected to have a Maleic Business Material Adverse
Effect.  Ashland has not received
written notice of any Claims relating to the revocation or modification of any
Assigned Permits except for any such Claims that would not reasonably be
expected to have a Maleic Business Material Adverse Effect.  None of the Assigned Permits is subject to
suspension, modification, revocation or nonrenewal as a result of the execution
and delivery of this Agreement or the consummation of the Maleic Assignment and
Assumption, except for any such suspensions, modifications, revocations or
nonrenewals that would not reasonably be expected to have a Maleic Business
Material Adverse Effect.  This Section
3.06 does not relate to environmental matters, such items being the subject of
Section 3.11(b).

 

SECTION 3.07.  
Condition of Transferred Assets.   The Transferred Assets are in good operating condition and
repair (ordinary wear and tear excepted) and are suitable for their current
uses, except where the failure of the Transferred Assets to be in good
operating condition or repair or to be suitable for such uses would not
reasonably be expected to have a Maleic Business Material Adverse Effect.

 

SECTION 3.08.  
Claims.   Section 3.08 of
the Maleic Business Disclosure Letter sets forth a list of each Claim pending
or, to the knowledge of Ashland, threatened against, or as to which a notice
has been received as of the date of this Agreement by, Ashland (and, as to
complaints, which have been served on Ashland) and that involves an amount in
controversy of more than $100,000.  This
Section 3.08 does not relate to environmental matters, such items being the
subject of Section 3.11(b), or to employee or labor matters, such items being
the subject of Section 3.12.

 

SECTION 3.09.  
Benefit Plans.   Section
3.09 of the Maleic Business Disclosure Letter contains a list of all “employee
pension benefit plans” (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”)), maintained or
contributed to by Ashland for the benefit of any officers or employees of the
Maleic Business (“Maleic Pension Plans”) and all 

 

25

 

“employee welfare
benefit plans” (as defined in Section 3(1) of ERISA), bonus, stock option,
stock purchase, deferred compensation plans or arrangements and other employee
fringe benefit plans maintained, or contributed to, by Ashland or any of its
affiliates for the benefit of one or more current or former employees of the
Maleic Business (other than any former employee of the Maleic Business who
became employed by MAP or any of its subsidiaries following termination of
employment with Ashland or any of its affiliates) (each, a “Maleic Business
Employee”) (all the foregoing, including Maleic Pension Plans, being herein
called “Maleic Benefit Plans”). 
Ashland has provided to Marathon true, complete and correct copies of
(i) each Maleic Benefit Plan (or, in the case of any unwritten Maleic Benefit
Plans, fair and accurate summary descriptions thereof), (ii) the two most
recent annual reports on Form 5500 filed with the Internal Revenue Service with
respect to each Maleic Benefit Plan (if any such report was required), (iii)
the most recent summary plan description for each Maleic Benefit Plan for which
such a summary plan description is required and (iv) each trust agreement,
group annuity contract or other funding and financing arrangement relating to
any Maleic Benefit Plan.

 

(b)  
There does not exist as of the date of this Agreement, nor do any circumstances
exist as of the date of this Agreement that would reasonably be expected to
result in, any Employee Benefits Liability (as defined below), whether under
any Maleic Benefit Plan or otherwise, that would reasonably be expected to
become a liability of HoldCo or any of its affiliates at or after the
Closing.  “Employee Benefits
Liability” means any liability of Ashland or any entity required to be
treated as a single employer under Section 414(b), (c), (m) or (o) of the Code
with Ashland prior to the Closing under (i) Sections 302, 405, 409 or Title IV
of ERISA, (ii) Section 412, 4971 or 4975 of the Code or (iii) Sections 601 et.
seq. and 701 et seq. of ERISA and Section 4980B and Sections 9801 et seq. of
the Code.

 

SECTION 3.10.  
Absence of Changes or Events.  
From the date of the Balance Sheet to the date of this Agreement, there
has not been any event, change, effect or development (i) that, individually or
in the aggregate, has had or would reasonably be expected to have a Maleic
Business Material Adverse Effect or (ii) that would have

 

26

 

been prohibited by
Section 4.01 if the terms of such section had been in effect as of and after
the date of the Balance Sheet.

 

SECTION 3.11.  
Compliance with Laws.  
(a)   The Maleic Business is in
compliance with all applicable Laws, including those relating to occupational
health and safety, except for instances of noncompliance that would not
reasonably be expected to have a Maleic Business Material Adverse Effect.  To the knowledge of Ashland, Ashland has not
received any written communication from a Governmental Entity that alleges that
the Maleic Business is not in compliance in any material respect with any applicable
Law that has not been finally resolved with such Governmental Entity.  This Section 3.11(a) does not relate to
matters with respect to Taxes, which are the subject of the Tax Matters
Agreement, or to environmental matters, which are the subject of Section
3.11(b).

 

(b)  
Except for such matters that would not reasonably be expected to have a
Maleic Business Material Adverse Effect, (i) to the knowledge of Ashland,
Ashland has not received any written communication from a Governmental Entity
that alleges that the Maleic Business is in violation of any Environmental Law
that has not been finally resolved with such Governmental Entity, (ii) Ashland
holds all Permits required to conduct the Maleic Business under any applicable
Environmental Law, and is and at all times has been in compliance with all
Environmental Laws and the terms and conditions of such Permits, (iii) there
are no Environmental Claims (as defined below) pending, or to the knowledge of
Ashland, threatened against Ashland and (iv) there have been no Releases (as
defined below) of any Hazardous Material (as defined below) at or originating
from the Premises, and no Hazardous Materials have been handled, generated,
stored, transported or disposed of by the Maleic Business, in each case that
would reasonably be expected to form the basis of an Environmental Claim
against Ashland.  The term “Environmental
Claim” means any and all administrative, regulatory or judicial actions,
suits, orders, demands, directives, claims, liens, investigations, proceedings
or written notices of noncompliance or violation by or from any person alleging
liability of whatever kind or nature arising out of, based on or resulting from
(x) the presence or Release of, or exposure to, any Hazardous Materials; or (y)
the failure to comply with any Environmental Law.  The

 

27

 

term “Environmental Laws” means all
applicable federal, state, local and foreign laws, rules, regulations, orders,
decrees, judgments, legally binding agreements or environmental Permits issued,
promulgated or entered into by or with any Governmental Entity, relating to the
protection of the environment, the protection of the public welfare from actual
or potential exposure, or the effects from exposure, to any actual or potential
release, discharge, disposal or emission (whether past or present) of any
Hazardous Materials or the manufacture, processing, distribution, use,
treatment, labeling, storage, disposal, transport or handling of any Hazardous
Materials.  The term “Hazardous
Materials” means all explosive or regulated radioactive materials or
substances, hazardous or toxic substances, wastes or chemicals, petroleum
(including crude oil or any fraction thereof) or petroleum distillates,
asbestos or asbestos containing materials, and any other material, chemical
substance or waste that in relevant form or concentration is prohibited,
limited or regulated (or the cleanup of which can be required) pursuant to any
Environmental Law and all substances that require special handling, storage or
disposal procedures or whose handling, storage or disposal procedures is in any
way regulated, in any case under any applicable Law for the protection of the
health, safety and environment.  The
term “Release” means any spill, emission, leaking, dumping, injection,
deposit, disposal, discharge, dispersal, leaching, emanation or migration of
any Hazardous Materials into or through the environment (including ambient air,
surface water, ground water, soils, land surface, subsurface strata or
workplace).

 

SECTION 3.12.  
Employee and Labor Matters.  
Except as would not reasonably be expected to have a Maleic Business
Material Adverse Effect (i) there is not any, and during the past three years
there has not been any, labor strike, dispute, work stoppage or lockout pending
against the Maleic Business; (ii) to the knowledge of Ashland, no union
organizational campaign is in progress with respect to the Maleic Business
Employees and no question concerning representation of such employees exists;
(iii) Ashland is not engaged in any unfair labor practice in connection with
the conduct of the Maleic Business; (iv) there are not any unfair labor
practice charges or complaints against Ashland pending before the National
Labor Relations Board in connection with the conduct of the Maleic Business;
(v) there are not any pending union grievances against

 

28

 

Ashland in connection
with the conduct of the Maleic Business as to which there is a reasonable
possibility of adverse determination; (vi) there are not any pending charges in
connection with the conduct of the Maleic Business against Ashland or any
Maleic Business Employee before the Equal Employment Opportunity Commission or
any state or local agency responsible for the prevention of unlawful employment
practices; and (vii) Ashland has not received written notice during the past
three years of the intent of any Governmental Entity responsible for the
enforcement of labor or employment laws to conduct an investigation of the Maleic
Business.

 

SECTION 3.13.  
Sufficiency of Transferred Assets.   Except for the exclusion of the Excluded Assets and assuming
that (i) HoldCo has the ability to provide to the Maleic Business all
corporate-level services of the type that are currently provided to the Maleic
Business by Ashland or any of its affiliates and (ii) the services to be
provided by Ashland to HoldCo pursuant to the Transition Services Agreement
will be provided as contemplated therein, the Transferred Assets are sufficient
for the operation and conduct of the Maleic Business immediately following the
Closing in substantially the same manner as currently operated and conducted,
other than any insufficiency that would not reasonably be expected to have a
Maleic Business Material Adverse Effect.

 

SECTION 3.14.  
Inventory.   Except as
would not reasonably be expected to have a Maleic Business Material Adverse
Effect, the Inventory is generally of a quality usable or salable in the
ordinary course of the Maleic Business.

 

SECTION 3.15.   Receivables.  
Except as would not reasonably be expected to have a Maleic Business
Material Adverse Effect, the Receivables have been collected, or are valid and
enforceable claims arising in the ordinary course of business and are, in the
good faith belief of Ashland’s management, collectible, in the aggregate
respective amounts so reflected on the Balance Sheet, net of the applicable
reserves (if any) reflected on the Balance Sheet.  Section 3.15 of the Maleic Business Disclosure Letter sets forth,
as of the date of this Agreement, all accounts receivable of Ashland arising
out of the operation or conduct of the Maleic Business which presently remain
unpaid and are owed by a debtor in any case under the

 

29

 

Bankruptcy Code or any
other Law relating to bankruptcy or insolvency.

 

ARTICLE IV

 

Covenants

 

SECTION 4.01.  
Covenants of Ashland Relating to Conduct of Maleic Business.   Except for matters set forth in Section
4.01 of the Maleic Business Disclosure Letter or otherwise contemplated by the
Transaction Agreements, from the date of this Agreement to the Closing, Ashland
shall conduct the Maleic Business in the usual, regular and ordinary course in
substantially the same manner as previously conducted, including completion of
the maintenance “turnaround” of the Plant currently scheduled for June 2004
and, to the extent not included in such turnaround, the item referred to in
Section 3.10 of the Maleic Business Disclosure Letter and items 1, 2, 3, 4 (except
to the extent that work with respect to such item is projected to be conducted
during Ashland’s 2005 fiscal year), 5, 6 and 7 in the capital expenditure
budget set forth in Section 4.01(a)(v) of the Maleic Business Disclosure
Letter.  Without limiting the generality
of the foregoing, Ashland shall use its reasonable best efforts to (i) preserve
the material business relationships of the Maleic Business with customers,
suppliers, distributors and others with whom Ashland deals in connection with
the conduct of the Maleic Business in the ordinary course of business and
retain its present employees who are involved in the operation of the Maleic
Business, (ii) maintain the Transferred Assets, including those held under
leases, in as good operating condition and repair (ordinary wear and tear
excepted) as at present, and maintain all Permits set forth in Section 3.06 of
the Maleic Business Disclosure Letter, (iii) perform in all material respects
its obligations under Assigned Contracts and (iv) comply in all material
respects with all applicable Laws relating to the Maleic Business or any of the
Transferred Assets.  In addition, except
as set forth in Section 4.01 of the Maleic Business Disclosure Letter or
otherwise contemplated by the Transaction Agreements, Ashland shall not do any
of the following in connection with the Maleic Business without the prior
written consent of Marathon (which consent shall not be unreasonably withheld
or delayed):

 

(i)  
adopt, establish or amend in any material respect any Maleic Benefit
Plan (or any plan that

 

30

 

would be a Maleic Benefit Plan if adopted or
established) in a manner affecting any Maleic Business Employee, except as
required by applicable Law or as would relate to a substantial number of other
similarly situated employees of Ashland and its subsidiaries;

 

(ii)  
grant to any Maleic Business Employee any increase in compensation or
benefits, except in the ordinary course of business and consistent with past
practice or as may be required under existing Contracts set forth in Section
3.05 of the Maleic Business Disclosure Letter and except for any increases for
which Ashland shall be solely obligated and which will not result in any
incremental compensation that will be payable by HoldCo after the Closing Date
pursuant to Section 4.03(a);

 

(iii)  
subject any Transferred Asset to any Lien of any nature whatsoever that
would have been required to be set forth in Sections 3.02 or 3.03 of the Maleic
Business Disclosure Letter if existing on the date of this Agreement;

 

(iv)  
waive any claims or rights of substantial value to the extent relating
to any Transferred Asset;

 

(v)  
make or incur any capital expenditures (of a non-emergency nature) that
relate to the Maleic Business and that are not reflected in the capital
expenditure budget set forth in Section 4.01(a)(v) of the Maleic Business
Disclosure Letter and that, individually, are in excess of $100,000 or that, in
the aggregate, are in excess of $500,000, except for any such capital
expenditures for which Ashland shall be solely obligated, provided, however,
that if Ashland makes or incurs a capital expenditure that relates exclusively
to the Maleic Business and is not reflected in the capital expenditure budget
set forth in Section 4.01(a)(v) of the Maleic Business Disclosure Letter, and
if Marathon agrees in writing to cause HoldCo to reimburse Ashland for such
capital expenditure, then HoldCo shall, promptly after the Closing, reimburse
Ashland for such capital expenditure;

 

(vi)  
sell, lease, license or otherwise dispose of any Transferred Assets,
except (A) inventory, supplies

 

31

 

and obsolete or excess equipment sold or
disposed of in the ordinary course of business and (B) leases entered into in
the ordinary course of business with aggregate annual lease payments not in
excess of $50,000;

 

(vii)  
enter into or amend any employee collective bargaining agreement or
other Contract with any labor union;

 

(viii)  
commit an intentional material breach of or waive any material rights
under any material Assigned Contract or any material Permit, or amend or
terminate any material Assigned Contract or any material Permit if the result
of any such amendment or termination would be materially adverse to HoldCo; or

 

(ix)  
authorize, or commit or agree to take, any of the foregoing actions.

 

(b)   Advice
of Changes.  Ashland shall promptly
advise Marathon in writing of any change or event that has had or would
reasonably be expected to have a Maleic Business Material Adverse Effect.

 

(c)   Insurance.  Ashland shall use its reasonable best
efforts to keep, or to cause to be kept, all insurance policies currently
maintained with respect to the Transferred Assets (the “Ashland Insurance
Policies”), or suitable replacements thereof, in full force and effect
without interruption through the close of business on the Closing Date; it
being understood that any and all Ashland Insurance Policies are owned and
maintained by Ashland and its affiliates (and do not exclusively relate to the
Maleic Business).  HoldCo will not have
any rights under the Ashland Insurance Policies from and after the Closing
Date.

 

(d)   Survey.  During the 90-day period following the date
of this Agreement, Ashland shall afford to HoldCo, Marathon and their
respective Representatives reasonable access during normal business hours to
the Premises for the purpose of conducting an ALTA land title survey (at
Marathon’s expense) of the Premises and all appurtenant easements.  Following the completion of that survey, a
proper legal description of the Premises shall be prepared and shall be
attached to the deed referred to in Section 2.02(a).

 

32

 

SECTION 4.02.  
Refunds and Remittances.  
After the Closing, if Ashland or any of its affiliates receive any
refund or other amount which is a Transferred Asset or is otherwise properly
due and owing to HoldCo or any of its affiliates in accordance with the terms
of this Agreement, Ashland promptly shall remit, or shall cause to be remitted,
such amount to HoldCo.  After the
Closing, if HoldCo or any of its affiliates receive any refund or other amount
which is an Excluded Asset or is otherwise properly due and owing to Ashland or
any of its affiliates in accordance with the terms of this Agreement, HoldCo
promptly shall remit, or shall cause to be remitted, such amount to
Ashland.  After the Closing, if HoldCo
or any of its affiliates receive any refund or other amount which is related to
claims (including workers’ compensation), litigation, insurance or other
matters for which Ashland or any of its affiliates is responsible hereunder,
and which amount is not a Transferred Asset, or is otherwise properly due and
owing to Ashland or any of its affiliates in accordance with the terms of this
Agreement, HoldCo promptly shall remit, or cause to be remitted, such amount to
Ashland.  After the Closing, if Ashland
or any of its affiliates receive any refund or other amount which is related to
claims (including workers’ compensation), litigation, insurance or other
matters for which HoldCo or any of its affiliates is responsible hereunder, and
which amount is not an Excluded Asset, or is otherwise properly due and owing
to HoldCo or any of its affiliates in accordance with the terms of this
Agreement, Ashland promptly shall remit, or cause to be remitted, such amount
to HoldCo.

 

SECTION 4.03.  
Employee Matters.

 

(a)   Continuation
of Employment.   Effective as of the
Closing, subject to Section 4.03(d), HoldCo or one or more of its affiliates
shall offer employment (which shall include HoldCo’s compliance with its
covenants set forth in this Section 4.03) to all Maleic Business Employees who
on the Closing Date are actively at work (each, an “Active Maleic Business
Employee”).  For purposes of this
Agreement, any Maleic Business Employee who is not actively at work on the
Closing Date due solely to a leave of absence (including due to vacation,
holiday, sick leave, maternity or paternity leave, military leave, jury duty,
bereavement leave, injury or short-term disability), other than long-term
disability, in compliance with applicable

 

33

 

policies of Ashland or
its affiliates shall be deemed an Active Maleic Business Employee.  Each Maleic Business Employee who accepts
such an offer of employment is referred to herein as a “Transferred Maleic
Business Employee”.  Immediately
following the Closing, HoldCo shall, or shall cause one or more of its affiliates
to, provide each Transferred Maleic Business Employee (i) with overall
compensation that is at least equivalent to such Transferred Maleic Business
Employee’s overall compensation in effect immediately prior to the Closing and
(ii) subject to the provisions of this Section 4.03, with appropriate employee
benefits as determined by HoldCo or such affiliate.

 

(b)   Certain
Welfare Benefits Matters.   (i)   Immediately following the Closing, HoldCo
or one or more of its affiliates shall allow Transferred Maleic Business
Employees to participate in benefit plans that provide for group welfare
benefits including, for the avoidance of doubt, vacation and severance benefits
(the “HoldCo Maleic Welfare Plans”). 
HoldCo shall grant to the Transferred Maleic Business Employees credit
for service prior to the Closing with Ashland and its affiliates for all
purposes under the HoldCo Maleic Welfare Plans (other than the HoldCo Retiree
Medical Plan (as defined in Section 4.03(f))). 
HoldCo or its applicable affiliate shall (A) waive all limitations as to
preexisting conditions, exclusions and waiting periods and actively-at-work
requirements with respect to participation and coverage requirements applicable
to the Transferred Maleic Business Employees and their dependents under the
HoldCo Maleic Welfare Plans to the extent satisfied or waived under the
applicable corresponding Maleic Benefit Plan immediately prior to the Closing
and (B) provide each Transferred Maleic Business Employee and his or her
eligible dependents with either pro-rated deductibles and co-payments for the
balance of the year or credit for any co-payments and deductibles paid prior to
the Closing in the calendar year in which the Closing Date occurs (or, if
later, in the calendar year in which Transferred Maleic Business Employees and
their dependents commence participation in the applicable HoldCo Maleic Welfare
Plan) for purposes of satisfying any applicable deductible or out-of-pocket
requirements under any HoldCo Maleic Welfare Plans in which the Transferred
Maleic Business Employees participate. 
If credit for deductibles and co-payments is provided, Ashland

 

34

 

shall provide or cause
to be provided adequate data to implement that credit as HoldCo may reasonably
request.

 

(ii)  
Ashland shall be responsible in accordance with its applicable welfare
plans (and the applicable welfare plans of its affiliates) in effect prior to
the Closing for all reimbursement claims (such as medical and dental claims)
for expenses incurred, and for all non-reimbursement claims (such as life
insurance claims) incurred, under such plans prior to the Closing by
Transferred Maleic Business Employees and their dependents, except that HoldCo
shall be responsible for such claims to the extent such claims are reflected on
the Statement or to the extent insured under an insurance policy of which
HoldCo or its affiliates becomes the beneficiary and for which Ashland or its
affiliates have paid the premium. 
HoldCo shall be responsible in accordance with the applicable welfare
plans of HoldCo and its affiliates for all reimbursement claims (such as
medical and dental claims) for expenses incurred, and for all non-reimbursement
claims (such as life insurance claims) incurred, from and after the Closing by
Transferred Maleic Business Employees and their dependents.  For purposes of this Section 4.03(b)(ii), a
claim shall be deemed to have been incurred on (A) the date of death or
dismemberment in the case of claims under life insurance and accidental death
and dismemberment policies or (B) the date on which the charge or expense
giving rise to such claim is incurred (without regard to the date of inception
of the related illness or injury or the date of submission of a claim related thereto)
in the case of all other claims; provided, however, that in the
event of a hospital stay that commences prior to the close of business on the
Closing Date and ends after the close of business on the Closing Date, the cost
thereof shall be apportioned between HoldCo and Ashland with Ashland
responsible for that portion of the cost incurred prior to the close of
business on the Closing Date and HoldCo responsible for the balance of such
cost.  Effective as of the Closing,
HoldCo shall assume all liabilities, obligations and commitments of Ashland and
its affiliates to Transferred Maleic Business Employees and their eligible
dependents in respect of health insurance under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), the

 

35

 

Health Insurance Portability and
Accountability Act of 1996 and applicable state Law; provided, however,
that Ashland and its affiliates shall remain obligated to provide any
applicable COBRA notices in respect of events occurring on or prior to the
Closing Date.

 

(c)   Accrued
Vacation.   For purposes of
determining the number of vacation days to which each Transferred Maleic
Business Employee shall be entitled following the Closing, HoldCo shall assume
and honor all vacation days accrued or earned but not yet taken by such
Transferred Maleic Business Employee as of the Closing.  To the extent that a Transferred Maleic
Business Employee is entitled under any applicable Law or any policy of Ashland
or its affiliates to be paid for any vacation days accrued or earned but not
yet taken by such Transferred Maleic Business Employee as of the Closing,
HoldCo shall discharge the liability for such vacation days.

 

(d)   Collectively
Bargained Employees.   HoldCo shall
comply with all applicable Laws relating to negotiations with unions in respect
of the Transactions contemplated by this Agreement and shall bear all expenses
of any compensation resulting from such negotiations.  HoldCo shall indemnify Ashland from, and hold it harmless
against, any liability arising out of, attributable to or resulting from
HoldCo’s nonassumption of any collective bargaining agreement that covers one
or more Transferred Maleic Business Employees; provided, however,
that such indemnification shall not include benefits and obligations accrued
and payable under Ashland’s pension plans and employment practices prior to the
Closing.

 

(e)   Pension
Benefit.   Immediately following the
Closing, HoldCo or one or more of its affiliates shall have in effect a
retirement benefit plan or plans (as applicable, the “HoldCo Retirement Plan”)
that shall provide benefits to the Transferred Maleic Business Employees who
immediately prior to the Closing are salaried or non-union hourly
employees.  HoldCo shall grant such
Transferred Maleic Business Employees credit for service prior to the Closing
with Ashland and its affiliates for purposes of determining eligibility to
participate and vesting under the HoldCo Retirement Plan to the same extent that
such service is recognized for purposes of eligibility to participate and
vesting under the Ashland Inc. and Affiliates Pension Plan (the “Ashland
Pension Plan”) as of the Closing Date.

 

36

 

(f)   Retiree
Medical Benefit.   Immediately
following the Closing, HoldCo or one or more of its affiliates shall have in
effect a retiree medical plan or plans (as applicable, the “HoldCo Retiree
Medical Plan”) that shall provide benefits to Transferred Maleic Business
Employees who immediately prior to the Closing are salaried or non-union hourly
employees that are the same as those offered by MAP to its employees, subject
to MAP’s right to amend or modify its retiree medical plan in the ordinary
course of business in accordance with the reservation of rights provisions of
such plan.  HoldCo shall grant such
Transferred Maleic Business Employees credit for service prior to the Closing
with Ashland and its affiliates for purposes of determining eligibility to
receive retiree medical subsidies and for purposes of determining level of
benefits and benefit accruals under the HoldCo Retiree Medical Plan to the same
extent that such service is recognized for purposes of eligibility to
participate and vesting under the Ashland Pension Plan as of the Closing Date.

 

(g)   WARN
Act.   HoldCo agrees to provide any
required notice under the Worker Adjustment and Retraining Notification Act, as
amended (the “WARN Act”), and any similar state Law that may be
applicable to HoldCo, and to otherwise comply with any such applicable Law with
respect to any “plant closing” or “mass layoff” (in each case as defined in the
WARN Act) or group termination or similar event affecting Maleic Business
Employees (including as a result of the consummation of the Transactions) and
occurring on or after the Closing Date. 
HoldCo shall notify Ashland after the Closing of any layoffs of any
Transferred Maleic Business Employees in the 90 day period after the Closing.

 

(h)   Administration.   Following the date of this Agreement,
Ashland and HoldCo shall reasonably cooperate in all matters reasonably
necessary to effect the transactions contemplated by this Section 4.03,
including exchanging information and data relating to workers’ compensation,
employee benefits and employee benefit plan coverages (except to the extent
prohibited by applicable Law), and in obtaining any governmental approvals
required hereunder.

 

(i)   Employment
Tax Reporting Responsibility.  
HoldCo and Ashland hereby agree to follow the alternate procedure for
employment tax withholding as provided in Section 5 of Rev. Proc. 96-60,
1996-53 I.R.B. 24 (“Rev.

 

37

 

Proc. 96-60”). 
Ashland shall provide HoldCo with all necessary and accurate payroll
records and such other information relating to the Transferred Maleic Business
Employees as HoldCo may reasonably request with respect to Transferred Maleic
Business Employees in order to comply with the provisions of Rev. Proc. 96-60
with respect to the calendar year that includes the Closing Date.  HoldCo shall perform all employment tax
reporting responsibilities for such employees from the Closing Date forward and
shall furnish a Form W-2 for such calendar year to each Transferred Maleic
Business Employee that will include all remuneration earned by such Transferred
Maleic Business Employee from Ashland or HoldCo during such calendar year.

 

(j)   Intent.   It is HoldCo’s intent that overall
compensation and benefits provided by HoldCo to the Transferred Maleic Business
Employees will have comparable value to those provided to them by Ashland
immediately prior to the Closing.  It is
HoldCo’s intent to provide competitive compensation and benefits to all
employees (including collectively bargained employees) at the Plant.

 

SECTION 4.04.  
Post-Closing Information.  
After the Closing, upon reasonable written notice, Ashland and HoldCo
shall furnish or cause to be furnished to each other and their employees and
Representatives, during normal business hours, reasonable access to the
personnel, properties, books, Contracts, commitments, records and other
information relating to the Maleic Business (and, to the extent reasonably
requested, copies of the portions relating to the Maleic Business of any such books,
Contracts, commitments, records and other information, in each case to the
extent they are available in written form and they relate to the period prior
to the Closing Date) and assistance relating to the Maleic Business (to the
extent within the control of such party), in each case for any reasonable
business purpose, including in respect of litigation, insurance matters,
financial reporting and accounting matters.

 

SECTION 4.05.  
Records.   HoldCo
recognizes that certain Records may contain incidental information relating to
subsidiaries, divisions or businesses of Ashland other than the Maleic Business
and that Ashland may retain copies thereof. 
Ashland recognizes that certain documents and information of a type
similar to the Records may be used, held for use or intended to be used
primarily in, or arise primarily out of, the operation or conduct of the Maleic

 

38

 

Business, and shall
provide copies of the relevant portions thereof to HoldCo at the Closing.

 

SECTION 4.06.  
Agreement Not To Compete.  
(a)   For a period of five years
from the Closing Date, Ashland shall not, and shall cause each of its
subsidiaries (other than Ashland-Suedchemie Kernfest GmbH and Ashland Avebene
S.A., in each case for so long as neither Ashland nor any of its subsidiaries
own, directly or indirectly and individually or collectively, more than 50% of
the equity interests of such entities) not to, directly or indirectly: (i)
engage in the business of manufacturing or marketing maleic anhydride (“Competitive
Activities”) within North America; provided, however, that
this clause (i) shall not apply to the marketing of briquette maleic anhydride
acquired from Marathon or any of its subsidiaries; (ii) solicit or recruit any
Transferred Maleic Business Employee; provided, however, that
this clause (ii) shall not apply to (A) a general advertisement or solicitation
program that is not specifically targeted at such persons or (B) any employee
whose employment by HoldCo has been terminated prior to such solicitation or
recruitment; or (iii) solicit any customer of the Maleic Business within North
America or any person who, within one year prior to the time of such
solicitation, was a customer of the Maleic Business within North America, for
the purpose of marketing maleic anhydride in competition with the Maleic
Business in North America with the knowledge of such customer relationship; provided,
however, that this clause (iii) shall not apply to the marketing of
briquette maleic anhydride acquired from Marathon or any of its
subsidiaries.  Notwithstanding the
foregoing, this Section 4.06(a) shall be deemed not breached as a result
of:  (i) the ownership by Ashland or any
of its subsidiaries of (A) less than an aggregate of 10% of any class of stock
of a person engaged, directly or indirectly, in Competitive Activities or (B)
less than 10% in value of any instrument of indebtedness of a person engaged,
directly or indirectly, in Competitive Activities; or (ii) the acquisition by
Ashland or any of its subsidiaries of any person that, prior to the acquisition
thereof, is not an affiliate of Ashland and that engages, directly or
indirectly, in Competitive Activities within North America (A) if such
Competitive Activities within North America account for less than 20% of such
person’s consolidated annual revenues for its most recently completed fiscal
year or (B) if Ashland disposes of or agrees to dispose of or discontinues such
person’s business 

 

39

 

engaged in Competitive
Activities within North America within one year after the closing of such
acquisition.

 

(b)  
Ashland hereby agrees that the geographic and business scope and the
duration of the covenants and restrictions in this Section 4.06 are fair and
reasonable.  However, if any provision
of this Agreement is held to be invalid or unenforceable by reason of the
geographic or business scope or duration thereof, the court or other tribunal
is hereby directed to construe and enforce this Section 4.06 as if the
geographic or business scope or the duration of such provision has been more
narrowly drawn as so not to be invalid or unenforceable, and such invalidity or
unenforceability shall not affect or render invalid or unenforceable any other
provision of this Agreement.

 

(c)  
Ashland acknowledges that HoldCo will have no adequate remedy at law if
Ashland violates or breaches any term of this Section 4.06.  In such event, HoldCo shall have the right
(upon compliance with any necessary prerequisites imposed by law upon the
availability of such remedies), in addition to any other rights or remedies
that it may have to obtain, in any court of competent jurisdiction, injunctive
relief to restrain any breach or threatened breach of, or otherwise to
specifically enforce the terms of, this Section 4.06, and to exercise such
remedies cumulatively or in conjunction with all other rights and remedies
provided by contract (hereunder or otherwise, including the right to indemnity
under Article XIII of the Master Agreement), at law or in equity.

 

(d)  
All the covenants in this Section 4.06 are intended by each party hereto
to, and shall, be construed as an agreement independent of any other provision
in this Agreement, and the existence of any claim or cause of action of Ashland
against HoldCo, whether predicated on this Agreement or otherwise (other than a
claim or cause of action of Ashland against HoldCo for a material breach of the
Maleic Supply Agreement that is continuing after written notice by Ashland
thereof and the expiration of a reasonable cure period in accordance with the
terms of the Maleic Supply Agreement), shall not constitute a defense to the
enforcement by HoldCo of any covenant in this Section 4.06.

 

SECTION 4.07.  
Bulk Transfer Laws.  
HoldCo hereby waives compliance by Ashland with the provisions of any
so-

 

40

 

called “bulk transfer
law” of any jurisdiction in connection with the Maleic Assignment and
Assumption.

 

SECTION 4.08.  
Supplies.   At any time
after 20 days after the Closing Date, HoldCo shall not use stationery, purchase
order forms, labels, material safety data sheets or other similar paper goods
or supplies that state or otherwise indicate thereon that the Maleic Business is
a division or unit of Ashland.

 

SECTION 4.09.  
Mail.   From and after the
Closing, Ashland and HoldCo shall cooperate with each other, and shall cause
their Representatives to cooperate with each other, to ensure that (i) HoldCo
receives copies of all mail (including mail sent by private delivery and
electronic mail correspondence) relating to the Maleic Business or the
Transferred Assets and (ii) Ashland receives all mail addressed to Ashland
delivered to the Premises (which HoldCo is hereby authorized to receive and
open) that contains information relating to, or of importance to, Ashland
(including for financial reporting, accounting or tax purposes) or to
subsidiaries, divisions or businesses of Ashland other than the Maleic
Business.

 

SECTION 4.10.   Further Assurances.  
From time to time after the Closing, as and when requested by any party
hereto, each party shall execute and deliver, or cause to be executed and
delivered, all such documents and instruments and shall take, or cause to be
taken, all such further or other actions, as such other party may reasonably
deem necessary or desirable to consummate the Transactions contemplated by this
Agreement, including, (i) in the case of Ashland, executing and delivering to
HoldCo such assignments, deeds, Consents and other instruments as HoldCo may
reasonably request as necessary or desirable for such purpose and (ii) in the
case of HoldCo, executing and delivering to Ashland such assumptions and other
instruments as Ashland may reasonably request as necessary or desirable for
such purpose.  From and after the
Closing Date, Ashland will promptly refer all bona fide written inquiries with
respect to ownership of the Transferred Assets after the Closing or the operation
or conduct of the Maleic Business after the Closing to HoldCo or its designee.

 

SECTION 4.11.  
Review of Contracts.  
Prior to the Closing Date, Ashland shall review the terms of each
material Contract that relates in part to the Maleic

 

41

 

Business and in part to
any other business of Ashland or any of its subsidiaries (collectively, “Ashland
Joint Contracts”) in order to determine whether such Contract should be
terminated and replaced on or prior to the Closing Date by a separate Contract
relating to the Maleic Business on the one hand (any such separate Contract
being an Assigned Contract, so long as (i) entering into such Contract would
not otherwise be in violation of this Agreement and (ii) such Contract does not
contain terms that, in the aggregate, are materially less advantageous to the
Maleic Business than the terms under the Contract being terminated and
replaced), and a separate Contract relating to such other business of Ashland
or any of its subsidiaries on the other hand (any such separate Contract not
being an Assigned Contract).  If
requested by HoldCo or Marathon within 90 days after Ashland notifies HoldCo
and Marathon in writing of the specific terms of the Ashland Joint Contracts,
Ashland shall continue in effect any Ashland Joint Contract not terminated and
replaced in accordance with the immediately preceding sentence, if not
prohibited by the terms of such Ashland Joint Contract, until the stated
expiration thereof (without regard to any available renewal options); provided,
however, that Ashland shall not be prohibited from terminating any such
Ashland Joint Contract (other than the Car Service Contract dated as of April
16, 1990, between Ashland and General American Transportation Corporation, the
Car Leasing Agreement dated as of January 3, 1984, between Ashland and General
Electric Railcar Leasing Services Corporation, the Car Service Agreement dated
as of April 1, 1989, between Ashland and Union Tank Car Company and the Master
Supplier Agreement dated as of January 1, 1990, between Ashland and Union Tank
Car Company) that relates to a substantial portion of the business of Ashland
and its subsidiaries.  Each of Ashland
and HoldCo shall perform its respective obligations under all such Ashland
Joint Contracts so as not to create a default thereunder, and Ashland shall
provide HoldCo with rights thereunder consistent with historical practice
between the parties with respect thereto, subject to obtaining any necessary
Consents from third parties (which Ashland and HoldCo mutually agree to use
their reasonable best efforts to obtain) and subject to HoldCo bearing the
proportionate expense attributable to such rights consistent with historical
practice between the parties with respect thereto; provided, however,
that neither Ashland nor HoldCo shall be obligated to extend credit to the
other party.

 

42

 

ARTICLE V

 

Termination

 

SECTION 5.01.  
Termination.  
Notwithstanding anything to the contrary in this Agreement, this
Agreement shall automatically terminate, without further action by any party,
and the Maleic Assignment and Assumption abandoned at any time prior to the
Closing, upon termination of the Master Agreement in accordance with the terms
thereof.

 

SECTION 5.02.  
Effect of Termination.  
In the event of termination of this Agreement in accordance with Section
5.01, this Agreement shall forthwith become void and have no effect, without
any liability or obligation on the part of any party hereto, other than (i)
Section 5.01 and this Section 5.02 and (ii) Article VI (General Provisions),
which provisions shall survive such termination, and except to the extent that
such termination results from the material breach by a party of its
representations, warranties or covenants set forth in the Transaction
Agreements.

 

ARTICLE VI

 

General Provisions

 

SECTION 6.01.  
Interpretation; Maleic Business Disclosure Letter; Certain
Definitions.   (a)   When a reference is made in this Agreement
to an Article, Section or Exhibit, such reference shall be to an Article of, a
Section of, or an Exhibit to, this Agreement unless otherwise indicated.  The table of contents and headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without
limitation”.  No item contained in any
section of the Maleic Business Disclosure Letter shall be deemed adequate to
disclose an exception to a representation or warranty made in this Agreement,
unless (i) such item is included (or expressly incorporated by reference) in a
section of the Maleic Business Disclosure Letter that is numbered to correspond
to the section number assigned to such representation or warranty in this
Agreement or (ii) it is readily apparent from a reading of such item

 

43

 

that it discloses an
exception to such representation or warranty.

 

(b)  
For all purposes hereof:

 

“Environmental Liability” means any
liability, obligation or commitment arising under any Environmental Law; provided,
however, that Environmental Liability specifically does not include any
liability, obligation or commitment relating to any Claim brought by any person
other than a Governmental Entity seeking damages, contribution,
indemnification, cost recovery, penalties, compensation or injunctive relief
resulting from the existence or release of, or exposure to, Hazardous
Materials, except where such Claim is brought as a citizen’s suit in which no
monetary damages are sought for the account of such person.  Anything in this Agreement to the contrary
notwithstanding, any liability, obligation or commitment under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, or any comparable state Environmental Law that arises out of, is
based on or is in connection with the disposal or Release by Ashland of
Hazardous Materials at a location other than the Premises shall be treated as a
Retained Liability and shall not be or become an Assumed Liability.

 

“Intellectual Property” means patents
(including all reissues, divisions, continuations and extensions thereof),
patent applications, trademarks, trademark registrations, trademark
applications, servicemarks, trade names, business names, brand names,
copyrights, copyright registrations and proprietary designs and design
registrations.

 

“Maleic Business” means the business of
(i) manufacturing maleic anhydride at the Plant, (ii) acquiring maleic
anhydride from parties not affiliated with Ashland and (iii) marketing,
distributing and selling the foregoing, in each case as conducted by Ashland,
directly or indirectly through certain of its subsidiaries, as of the date of
this Agreement.

 

“Maleic Business Material Adverse Effect”
means a material adverse effect (i) on the business, properties, assets,
condition (financial or otherwise), operations or results of operation of the Maleic
Business, taken as a whole, (ii) on the ability of Ashland to perform its
obligations under this Agreement and the other agreements

 

44

 

and instruments to be
executed and delivered in connection with this Agreement or (iii) on the
ability of Ashland to consummate the Maleic Assignment and Assumption.  For purposes of this Agreement, “Maleic
Business Material Adverse Effect” shall exclude any events, changes, effects
and developments to the extent relating to (A) the economy of the United States
or foreign economies in general, (B) industries in which the Maleic Business
operates and not specifically relating to the Maleic Business, (C) any
announcement by Ashland of the Transactions or of its intention to transfer the
Maleic Business or (D) the execution of the Transaction Agreements and the
Ancillary Agreements and the consummation of the Transactions.

 

“Permitted Liens” means (i) Liens for
current Taxes, assessments, governmental charges or levies not yet due, (ii)
workers’ or unemployment compensation Liens arising in the ordinary course of
business, (iii) mechanic’s, materialman’s, supplier’s, vendor’s, garnishment or
similar Liens arising in the ordinary course of business for amounts not yet
due, (iv) Liens or other charges or encumbrances as may have arisen in the
ordinary course of business, none of which individually or in the aggregate are
material to the ownership, use or operation of the Transferred Assets, (v) any
state of facts which an accurate survey would show which does not materially
detract from the value of or materially interfere with the use and operation of
the Transferred Assets, (vi) any Liens, easements, rights-of-way, restrictions,
rights, leases and other encumbrances affecting title thereto, whether or not
of record, which do not materially detract from the value of or materially
interfere with the use and operation of the Transferred Assets, (vii) legal
highways, zoning and building Laws, ordinances or regulations, (viii) any Liens
for real estate Taxes which are not yet due and payable, (ix) Liens set forth
in Section 3.02 of the Maleic Business Disclosure Letter and (x) Liens set
forth in Section 3.03 of the Maleic Business Disclosure Letter.

 

SECTION 6.02.  
Counterparts.   This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.

 

SECTION 6.03.  
Severability.   If any
term or other provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule or Law, or public

 

45

 

policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the Transactions
contemplated hereby is not affected in any manner materially adverse to any
party hereto.  Upon such determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement (in accordance with the terms of Section 6.06) so as to effect the
original intent of the parties hereto as closely as possible to the end that
the Transactions contemplated hereby are fulfilled to the greatest extent
possible.

 

SECTION 6.04.  
Governing Law.   This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York, regardless of the laws that might otherwise govern under
applicable principles of conflicts of laws thereof.

 

SECTION 6.05.  
No Third-Party Beneficiaries.  
This Agreement is not intended to confer any rights or remedies upon any
person other than the parties hereto and the Marathon Parties, whom the parties
hereto expressly agree are third-party beneficiaries entitled to enforce the
provisions of this Agreement.  Ashland
acknowledges that the rights, titles and interests provided to HoldCo pursuant to
this Agreement are a material part of the consideration for the agreements of
the Marathon Parties pursuant to the Master Agreement.  It is further understood that, subject to
Section 14.09 of the Master Agreement, the respective successors and assigns of
Ashland and HoldCo shall have all of the rights, interests and obligations of
Ashland and HoldCo, respectively, hereunder.

 

SECTION 6.06.  
Amendment.   This
Agreement may not be amended by the parties except pursuant to an instrument in
writing signed on behalf of Ashland and HoldCo with the written consent of
Marathon.

 

46

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Agreement, all as of the date first written above.

 

	
   

  	
  ASHLAND INC.,

  
	
   

  	
   

  
	
   

  	
  by 

  	
  /s/ James J. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATB HOLDINGS INC.,

  
	
   

  	
   

  
	
   

  	
  by 

  	
  /s/ James J. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
  President

  
					

 

47EXHIBIT 10.4

 

 

AMENDMENT NO. 2 dated as of
March 18, 2004 (this “Amendment”), to the Amended and Restated
Limited Liability Company Agreement dated as of December 31, 1998 (the “MAP
LLC Agreement”) of Marathon Ashland Petroleum LLC (the “Company”),
by and between Ashland Inc., a Kentucky corporation (“Ashland”) and
Marathon Oil Company, an Ohio corporation (“Marathon”), a wholly owned
subsidiary of Marathon Oil Corporation, a Delaware Corporation (“Marathon
Corporation”).

 

WHEREAS Ashland and Marathon are the only
Members of the Company and are parties to the MAP LLC Agreement, which sets
forth the rights and responsibilities of each of them with respect to the
governance, financing and operation of the Company (capitalized terms used in
this Amendment and not defined herein shall have the meanings given such terms
in the MAP LLC Agreement);

 

WHEREAS Marathon Corporation, Marathon,
Ashland, New EXM Inc., a Kentucky Corporation (“New Ashland Inc.”),
certain of their respective affiliates and the Company are parties to a Master Agreement (as defined
herein), pursuant to which the parties have agreed to effect the Transactions
described therein;

 

WHEREAS Marathon Corporation, Marathon,
Ashland, New Ashland Inc. and certain of their respective
affiliates are parties
to a Tax Matters Agreement (as defined herein), which sets forth the rights and obligations of the parties with
respect to Taxes in connection with the Transactions (as defined herein);

 

WHEREAS in connection with the MAP Partial
Redemption (as defined herein), Marathon and Ashland wish to adjust the
Percentage Interests of the Members;

 

WHEREAS the Members wish to amend the MAP LLC
Agreement to facilitate the Transactions.

 

 

NOW, THEREFORE, in consideration of the
mutual agreements herein contained and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, the parties
hereto agree as follows:

 

SECTION 1.                            Definitions

 

Effective as of the date of this Amendment, Section 1.01 of the
MAP LLC Agreement is amended by adding the following defined terms at the
appropriate alphabetical location:

 

“Closing Date” has the meaning set
forth in the Master Agreement.

 

“Closing” has the meaning set forth in
the Master Agreement.

 

“Code” means the Internal Revenue Code
of 1986, as amended from time to time.

 

“Cold Assets” has the meaning set
forth in Section 5.05(b).

 

“Collection Policies and Procedures”
means the policies and procedures set forth on Schedule 5.05 attached
hereto and pursuant to which the Company shall act as the collection agent on
behalf of New Ashland Inc. with respect to the Distributed Receivables.

 

“Distributed Receivables” has the meaning set forth in the
Master Agreement.

 

“Distribution Period” means
each of (i) the three-month periods ended March 31, June 30,
September 30 and December 31 of each Fiscal Year, and (ii) if such
Distribution Period would otherwise include the Closing Date, each of (a) the
period beginning on the day after the last day of the Fiscal Quarter
immediately preceding the Closing Date and ending at the close of business on
the Closing Date; and (b) the period beginning on the day after the Closing
Date and ending on the next to occur of March 31, June 30,
September 30 and December 31.

 

“Excess Section 751 Property” has
the meaning set forth in Section 5.05(b).

 

2

 

“Final Determination” has the meaning
set forth in the Tax Matters Agreement.

 

“Form of Receivables Assignment” means the Form of Receivables
Assignment attached as Attachment A hereto.

 

“Incidental Cash” shall mean (a)
petty cash, (b) refining, retail outlets and transportation (“RMT”) working
funds, (c) depository account balances for the RMT business (automated
clearinghouse transmissions submitted on the most recent banking day in the
applicable jurisdiction immediately preceding the Closing Date or later will be
for the account of the Company and its subsidiaries), (d) funds in transit
relating to retail outlet deposits, and (e) uncollected funds in lockboxes and
lockbox bank accounts for the RMT business (automated clearinghouse
transmissions submitted on the most recent banking day in the applicable
jurisdiction immediately preceding the Closing Date or later will be for the
account of the Company and its subsidiaries).

 

“IRS” means the U.S. Internal Revenue
Service.

 

“Master Agreement” means the Master
Agreement, dated as of March 18, 2004 among Marathon Corporation, a
Delaware Corporation (“Marathon Corporation”), Marathon, Ashland, New
EXM Inc., a Kentucky Corporation (“New Ashland Inc.”), certain
of their respective affiliates
and the Company pursuant to which the parties have agreed to effect the
Transactions.

 

“Member Loans” means any loan of cash
or other property by the Company to a Member.

 

“MAP Partial Redemption” has the meaning set forth in the Master
Agreement.

 

“MAP Partial Redemption Amount” has the meaning set forth in the
Master Agreement.

 

“MAP Partial Redemption Date” means
the date on which the MAP Partial Redemption is effected pursuant to
Section 1.01 of the Master Agreement.

 

“Outstanding Member Loan” means any
Member Loan to the extent that such Member Loan has not been repaid by the
borrower to the Company.

 

3

 

“Pass-Through Items” has the meaning
set forth in the Tax Matters Agreement.

 

“Receivables Sales Facility” means the facility for sales of
accounts receivable by the Company to a party unrelated to any Member pursuant
to the Receivables Purchase and Sale Agreement and exhibits thereto, attached
as Attachment B to this Agreement or such additional or other terms as agreed
by the parties, it being understood that Ashland (or, after the Closing, New Ashland Inc.)
shall agree to such additional or other terms proposed by Mexico or the Company
unless in its good faith judgment such terms adversely affect
the treatment of such sales as sales for tax purposes.

 

“Refund” means any refund of Taxes,
including any reduction of Taxes paid or payable by means of credits, offsets
or otherwise.

 

“Section 704(b) Book-Up” has the
meaning set forth in Section 6.19.

 

“Section 751 Property” means
Section 751 property, as such term is defined in U.S. Treasury Regulation
§ 1.751-1(e).

 

“Tax” or “Taxes” means all
forms of taxation imposed by any governmental authority, including net income,
gross income, alternative minimum, sales, use, ad valorem, gross receipts,
value added, franchise, license, transfer, withholding, payroll, employment,
excise, severance, stamp, property, custom duty, taxes or governmental charges,
together with any related interest, penalties or other additional amounts
imposed by a Tax Authority, and including all liability for or in respect of
any of the foregoing as a result of being a member of a consolidated or similar
group or a partner in an entity treated as a partnership or other pass-through
entity for Tax purposes or as a result of any tax sharing or similar
contractual agreement.

 

“Tax Authority” means any governmental
authority imposing Taxes and the agency, if any, charged with the collection of
such Taxes for such authority.

 

“Tax Matters Agreement” means the Tax
Matters Agreement, dated as of March 18, 2004, among Ashland, New Ashland
Inc., Marathon Corporation, Marathon, certain of

 

4

 

their respective
affiliates and the Company, that sets forth the rights and obligations of such
parties with respect to Taxes in connection with the Transactions.

 

“Transactions” has the meaning set
forth in the Master Agreement.

 

“Undistributed Cash” means any Short
Term Investments held by the Company immediately following the MAP Partial
Redemption.

 

SECTION 2.                            Definition
of Distributable Cash   

 

Effective as of the date of this Amendment, Section 1.01 of the
MAP LLC Agreement is amended by amending and replacing the defined term
“Distributable Cash” as follows:

 

“Distributable Cash” means, for each
Distribution Period including a Distribution Period that includes the Closing
Date, without duplication:

 

(a)  the Short-Term Investments
of the Company and its subsidiaries on the last day of such Distribution
Period, minus

 

(b)  the Ordinary Course Debt of
the Company and its subsidiaries on the last day of such Distribution Period,
minus

 

(c)  the Tax Distribution
Amount, if any, to be distributed under Section 5.01(a) in respect of such
Distribution Period, minus

 

(d)  funds held on the last day
of such Distribution Period for financing Special Projects (including the
Detroit Clean Fuels/Expansion Project) or Permitted Capital
Projects/Acquisitions, minus

 

(e)  if the notional repayment
of principal for Special Project Indebtedness or Permitted Capital
Project/Acquisition Indebtedness during such Distribution Period calculated
using a notional repayment schedule established and approved by the Board
of Managers in accordance with the Company Leverage Policy was more than the
amount of actual principal repayments for such Special Project Indebtedness or
Permitted Capital Project Acquisition

 

5

 

Indebtedness during such Distribution Period, the amount of such
excess, plus

 

(f)  if the amount of the actual
principal repayments for Special Project Indebtedness or Permitted Capital
Project/Acquisition Indebtedness during such Distribution Period was more than
the notional repayment of principal for such Special Project Indebtedness or
Permitted Capital Project/Acquisition Indebtedness during such Distribution
Period (calculated in the manner described in clause (e) above), the amount of
such excess, plus or minus

 

(g)  any adjustments or reserves
(including any adjustments for minimum cash balance requirements, including
cash reserves for accrued or withheld Taxes not yet due) in the amounts and for
the time periods established and approved by the Board of Managers pursuant to
a vote in accordance with Section 8.07(b), minus

 

(h)  the proceeds of any asset
sales, dispositions or sale leaseback arrangements, effected pursuant to
Section 9.15(b) of the Master Agreement, to the extent such asset sales,
dispositions or sale leaseback arrangements are not effected in the ordinary
course of the Company’s business and are not reflected in the Company’s
Business/Tactical Plan & Budget 2004-2006, dated December 16, 2003,
plus

 

(i)  with respect to determining
the MAP Partial Redemption Amount (as defined in the Master Agreement), all out
of pocket costs and expenses to the extent paid by the Company prior to the
Closing Date in connection with any asset sales, dispositions, or sale
leaseback arrangements described in clause (h) above, plus

 

(j)  with respect to determining
the MAP Partial Redemption Amount (as defined in the Master Agreement), all out
of pocket costs and expenses paid by the Company to arrange, maintain or
terminate any Working Capital Facilities (as defined in the Company Leverage
Policy, set forth in Schedule 8.14) (other than interest), Receivables
Sales Facilities or other arrangements to provide financing to the Company (to
the extent such costs and expenses are paid prior to

 

6

 

the Closing Date).

 

In applying
the definition of “Distributable Cash” for purposes of the definition of “MAP
Adjustment Amount” in the Master Agreement, any reduction in Distributable Cash
resulting from the MAP Partial Redemption (as defined in the Master Agreement)
or any payment pursuant to Section 9.09(b) of the Master Agreement shall
be disregarded.

 

SECTION 3.                            Percentage
Interest after MAP Partial Redemption

 

Effective as of the date of this Amendment, Section 3.01 of the
MAP LLC Agreement is amended and restated to be Section 3.01(a), and a new
Section 3.01(b) is added immediately thereafter as follows:

 

(b)    Immediately following the MAP Partial Redemption, the respective
Percentage Interests of Ashland and Marathon will be determined as
follows:  Ashland’s Percentage Interest
will equal the quotient, expressed as a percentage, of (x) $2.915 billion plus
the MAP Adjustment Amount (as defined in the Master Agreement) minus the MAP Partial Redemption
Amount (as defined in the Master Agreement) divided by (y) $7.671 billion plus
100% of the Distributable Cash of the Company as of the Closing Date minus the MAP Partial Redemption
Amount.  Marathon’s Percentage Interest
will equal 100% minus Ashland’s Percentage Interest.  The Percentage Interests of the Members will be appropriately
adjusted if the MAP Partial Redemption Amount is increased in accordance with
Sections 1.01 or 1.06 of the Master Agreement.

 

SECTION 4.                            Distributions

 

Effective as of the date of this Amendment, Section 5.01 of the
MAP LLC Agreement is amended and restated in its entirety as follows:

 

SECTION 5.01.  Distributions. 
(a)  No
distribution with respect to a Tax Distribution Amount shall be made under this
Section 5.01 with respect to a Distribution Period, and the Tax
Distribution Amount with respect to such Distribution Period shall be $0.00,
unless the Board of Managers, pursuant to a vote in accordance with
Section 8.07(b), determines that there shall be such a distribution.  If the Board of Managers, pursuant to a vote

 

7

 

in accordance with Section 8.07(b),
determines that there shall be a distribution under this Section 5.01 with
respect to any Distribution Period during a Taxable Year, then, within 45 days after the end such
Distribution Period, the Company shall distribute to the Members (the date of
such distribution being a “Distribution Date”) an amount in cash (the “Tax
Distribution Amount”) determined as follows:

 

(i)    The maximum Tax Liability of each Member with respect to its
allocable portion (as provided in Section 6.03) of the Company’s estimated
taxable income for such Distribution Period shall be determined, based upon the
highest aggregate marginal statutory Federal, state and local income tax rate
(determined taking into account the deductibility, to the extent allowed, of
income-based taxes paid to governmental entities) to which any Member may be
subject for the related Fiscal Year (and excluding any deferred taxes) (the “Aggregate
Tax Rate”).

 

(ii)    If the Tax Liability determined in clause (i) is positive
with respect to either Member, there shall be a cash distribution to each of
the Members, in accordance with their Percentage Interests, of an aggregate
amount such that neither Member shall have received distributions under this
clause and subsection (b) below for such portion of such Fiscal Year in an
amount less than its Tax Liability for such portion of such Fiscal Year.

 

(b)  No
distribution of Distributable Cash shall be made under this
Section 5.01(b) with respect to a Distribution Period unless the Board of
Managers, pursuant to a vote in accordance with Section 8.07(b),
determines that there shall be such a distribution.  If the Board of Managers, pursuant to a vote in accordance with
Section 8.07(b), determines that there shall be a distribution under this
Section 5.01(b) with respect to any Distribution Period, the Company shall
distribute to the Members such amount of Distributable Cash as is determined to
be distributed by such vote of the Board of Managers.  Subject to Section 5.02(b), each such distribution shall be
allocated between the Members pro rata based upon their respective
Percentage Interests.

 

(c) 
The Company shall prepare and distribute to each Member within 45 days
after the end of each

 

8

 

Distribution Period a
statement (a “Distributions Calculation Statement”) setting forth the
calculations (in reasonable detail) of (i) the Tax Distribution Amount for
each Member with respect to such Distribution Period (as if the
Board of Managers had determined that there shall be a distribution under
Section 5.01(a) for such Distribution Period, regardless of whether such a
determination was actually made),
(ii) the amount of Distributable Cash with respect to such Distribution
Period (as if the Board of Managers had determined that there shall be a
distribution under Section 5.01(b) for such Distribution Period,
regardless of whether such a distribution was actually made) and (iii) the
allocation between the members of distributions, if any, under Sections
5.01(a) and (b) for such Distribution Period.  Such Distributions
Calculations Statements shall be distributed to such Members regardless of the
amount, if any, that is actually distributed to such Members during such
Distribution Period.

 

(d) 
Notwithstanding anything to the contrary in this Agreement, any
agreement reached between the Members to distribute any amount of cash
different from the amounts which would be calculated in accordance with the
methodology set forth in Section 5.01(a) and Section 5.01(b) above
shall not alter or waive in any manner the obligations of the Company to
prepare and deliver the Distributions Calculation Statement as set forth in Section 5.01(c)
above, and after any such agreement has been reached the Company shall continue
to prepare and deliver such Distributions Calculation Statement with respect to
each Distribution Period as if no such agreement had been reached.

 

SECTION 5.                            Partial
Redemption of Ashland Membership Interest

 

Effective as of the date of this Amendment, Article V of the MAP
LLC Agreement is amended by adding the following new Section 5.05:

 

SECTION 5.05.  MAP Partial Redemption. 
(a) On the MAP Partial Redemption Date, the Company shall effect
the MAP Partial Redemption as described in Section 1.01 of the Master
Agreement by distributing to Ashland the MAP Partial Redemption Amount in
redemption of a portion of its Membership Interest in the Company and by
adjusting the Percentage Interests of the Members as set forth in
Section 3.01 of this Agreement.  It
is understood that no Tax

 

9

 

Distribution shall be made with respect to
the MAP Partial Redemption.  The MAP
Partial Redemption Amount shall be distributed in cash and by the distribution
by the Company of the Distributed Receivables, each in the amount determined in
accordance with Section 1.01 of the Master Agreement.  In connection with the MAP Partial
Redemption, on the Closing Date the Company shall, in accordance with the Form
of Receivables Assignment attached as Attachment A hereto, (i) assign, transfer, or otherwise
convey to Ashland, and Ashland shall accept from the Company, the Distributed
Receivables, together with all Related Security and all Collections thereof (as
such terms are defined in Schedule 5.05 attached hereto) and (ii) shall
distribute to Ashland cash (by wire transfer of immediately available funds to
a bank account, which will be designated by Ashland at least two
Business Days before the Closing Date).  The Company shall act as collection agent
with respect to the Distributed Receivables on behalf of New Ashland Inc. and
pay the full amount of all Collections thereof to New Ashland Inc. in
accordance with the Collection Policies and Procedures set forth in
Schedule 5.05.  A subsequent
distribution may be made with respect to any adjustments pursuant to Sections
1.06 or 9.13 of the Master Agreement.

 

(b) 
If, in accordance with the pre-filing agreement (as referenced in
Section 7.06 of the Tax Matters Agreement) or as a result of any other
Final Determination with respect to the MAP Partial Redemption, Ashland is
determined to have received Section 751 Property in excess of the amount
of Section 751 Property which, had Ashland actually received such amount,
would have resulted in no gain recognition to Ashland under Section 751(b)
of the Code (such excess amount of Section 751 Property, the “Excess
Section 751 Property”), the Members agree that Ashland shall be deemed
to have exchanged its share of Undistributed Cash for such Excess
Section 751 Property for the purpose of determining the amount of gain, if
any, recognized by Ashland under Section 751(b) of the Code; provided,
however, that if the total amount of Undistributed Cash is less than the
fair market value of the Excess Section 751 Property, then Ashland shall
be deemed to have exchanged, for an amount of Section 751 Property, its
share of property other than Section 751 Property, as designated by Ashland
and Marathon prior to the Closing Date, with a fair market value equal to its
tax basis (the “Cold Assets”); provided further, however,
that

 

10

 

the fair market value of
such Cold Assets shall equal the difference between the fair market value of
the Excess Section 751 Property and the total amount of Undistributed
Cash.  The Members agree that any deemed
exchange by Ashland of Undistributed Cash and/or Cold Assets for Excess
Section 751 Property pursuant to this Section 5.05(b) is intended to
be consistent with the principles of U.S. Treasury Regulation
§ 1.751-1(g), Example 3(c) and Example 5(d)(1).

 

SECTION 6.                            Member
Loans

 

Effective as of the date of this Amendment, Article V of the MAP
LLC Agreement is amended by adding the following new Section 5.06:

 

SECTION 5.06.  Member Loans.  No
Member Loans shall be permitted prior to January 1, 2005, unless approved
by the Board of Managers pursuant to a vote in accordance with
Section 8.07(b).  At any time during
the period beginning on January 1, 2005 and ending on the date 45 days
prior to the Closing Date, Member Loans to Ashland shall be permitted on terms
and conditions consistent with the Company’s historical practice with respect
to Member Loans, and Member Loans to Marathon shall be permitted pursuant to a
vote in accordance with Section 8.07(b). 
All Member Loans shall be repaid to the Company by Ashland or Marathon,
as applicable, no later than 30 days prior to the Closing Date.

 

SECTION 7.                            Tax
Allocations

 

(a)  Effective as of the date of
this Amendment, Section 6.02(a) of the MAP LLC Agreement is amended and
restated as follows:

 

(a) Except as provided in
Section 6.02(b), 6.02(c), 6.02(d), 6.02(e) and 6.17,  Profit or Loss for any Fiscal
Year shall be allocated between the Members in proportion to their respective
Percentage Interests.

 

(b) Effective as of the date of this Amendment, Article VI of the
MAP LLC Agreement is amended by adding the following new Sections 6.17, 6.18
and 6.19:

 

SECTION 6.17  Special Allocations. 
Notwithstanding anything to the contrary in Article VI of this
Agreement or any other provision of this Agreement,

 

11

 

Marathon shall be
allocated any Profit and Loss associated with Pass-Through Items that would be
allocable to Ashland in the absence of this Section 6.17 and that are
attributable to a payment that is (1) described in Section 12.01(d)(vii)
of the Master Agreement, which results in a special non-pro rata distribution to
Ashland, or (2) made with respect to the St. Paul Park QQQ Project or the
Plains Settlement (as both are described in Section 9.09 of the Master
Agreement).

 

SECTION 6.18.  Pre-Closing
Allocation of Company Debt.   Prior
to the Closing Date, the Company and the Members will take all steps necessary
to ensure that nonrecourse debt (within the meaning of U.S. Treasury Regulation
§ 1.752-1(a)) is allocated to the Members for purposes of Section 752
of the Code in a manner that results in each Member’s share of aggregate
Company debt after the MAP Partial Redemption being equal to such Member’s
share of aggregate Company debt immediately prior to such Redemption.  For these purposes, with respect to
nonrecourse debt (within the meaning of U.S. Treasury Regulation
§ 1.752-1(a)) if any, the Members agree to utilize, if necessary to
satisfy the preceding sentence, U.S. Treasury Regulation §§ 1.752-3(a)(3) and
1.752-3(b).

 

SECTION 6.19  Section 704(b)
Book-Up.  The Company shall
determine the value of each item (or class of items, as appropriate) of its assets as of the MAP
Partial Redemption Date, based on the report prepared by Deloitte & Touche
LLP and delivered to Ashland and Marathon in accordance with the definition of
AR Fraction in Section 1.01 of the Master Agreement and shall, immediately
prior to the MAP Partial Redemption, adjust the Capital Accounts of the Members
under Treasury Regulation §1.704-1(b)(2)(iv)(f) and (g), based upon the amount of
Profit and Loss that would be allocated to each Member under Section 6.02
of this Agreement with respect to each such item or class as if the Company
sold all of its assets for such values immediately before the MAP Partial
Redemption (the “Section 704(b) Book-Up”).  Any resulting differences between the book
and tax basis of property resulting from such Section 704(b) Book-Up shall
be accounted for under Section 6.03 using a method selected by the
Members.

 

12

 

SECTION 8.                            Items
Requiring Vote of Members Under Section 8.07(b)

 

Section 8.08 of the MAP LLC Agreement is hereby amended by adding
the following new Sections 8.08(r)-(t):

 

(r) 
the approval of a distribution under Section 5.01(a);

 

(s) 
the approval of a distribution under Section 5.01(b);

 

(t) 
making a Member Loan, except as otherwise provided in Section 5.06.

 

SECTION 9.                            Company
Leverage Policy

 

The Company Leverage Policy (set forth in Schedule 8.14) is
amended and restated in its entirety. 
Such policy is set forth in a new Schedule 8.14 attached hereto.

 

SECTION 10.                     Receivables
Sales Facility

 

Article VIII of the MAP LLC Agreement is hereby amended by adding
the following new Section 8.20:

 

SECTION 8.20.  Receivables
Sales Facility.  The Company may
enter into the Receivables Sales Facility.

 

SECTION 11.                     Transfer
of Membership Interest

 

Effective as of the date of this Amendment,  Section 10.01 of the MAP LLC Agreement is hereby amended by
adding the following new Section 10.01(h):

 

(h)                                 Transfer Pursuant to Master
Agreement.  Notwithstanding anything to the contrary in
this Agreement, Ashland’s contribution, transfer and conveyance of its
Membership Interests to HoldCo (as defined in the Master Agreement), HoldCo’s
acceptance of such contribution, transfer and conveyance and the Transactions
as contemplated by and in accordance with the Master Agreement and the other
Transaction Agreements (as defined in the Master Agreement) are expressly
permitted hereunder and shall not require approval under Section 8.07 or
otherwise.

 

SECTION 12.                     Parties in
Interest  This Amendment shall
inure to the benefit of, and be binding upon, the parties hereto and their
respective successors, legal representatives and permitted assigns.

 

13

 

SECTION 13.                     Counterparts  This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

SECTION 14.                     GOVERNING
LAW  THIS AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.  ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO
ANY CLAIM OR PROCEEDING RELATED TO OR ARISING OUT OF THIS AMENDMENT, OR ANY TRANSACTION
OR CONDUCT IN CONNECTION HEREWITH, IS WAIVED.

 

SECTION 15.                     No
Third-Party Beneficiaries  This
Amendment is not intended to confer upon any person other than the parties
hereto any rights or remedies.

 

SECTION 16.                     Interpretation  The headings contained in this Amendment are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Amendment. 
Whenever the words “include”, “includes” or “including” are used in this
Agreement, they shall be deemed to be followed by the words “without
limitation”.

 

SECTION 17.                     Severability  If any term or other provision of this
Amendment is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Amendment
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions and amendments contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Amendment so as to effect
the original intent of the parties as closely as possible to the end that the
transactions and amendments contemplated hereby are fulfilled to the extent
possible.

 

SECTION 18.                     Continuation Of MAP LLC Agreement  The MAP LLC Agreement continues in full
force and effect, except as expressly amended herein.

 

SECTION 19.                     Consequences Of Termination Of Master Agreement  In the event of a termination of the Master
Agreement pursuant to Section 11.01 of the Master

 

14

 

Agreement, the parties further agree that, as of the date the Master
Agreement is terminated: the definition of “Distributable Cash,” sections 5.01
and 8.08, and the Company Leverage Policy (set forth in Schedule 8.14)
shall be amended and restored to their language existing prior to this
Amendment; Sections 5.05, 5.06, 6.17, and 8.20 shall be repealed in their
entirety; and allocations of Profit and Loss for the period or periods between
the signing of this Amendment and the date the Master Agreement is terminated
shall be made without regard to Section 6.17 or, to the extent such
allocations have been made under Section 6.17, the effects of such
allocations shall be reversed with future allocations of Profit and Loss.

 

15

 

IN WITNESS WHEREOF, the parties hereto have
caused this Amendment to be duly executed as of the day and year first written
above.

 

	
   

  	
  MARATHON
  OIL COMPANY,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Clarence P.
  Cazalot, Jr.

  
	
   

  	
   

  	
  Name: 
  Clarence P. Cazalot, Jr.

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ASHLAND INC.,

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ James J. O’Brien

  
	
   

  	
   

  	
  Name:

  	
  James J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive

  Officer

  
					

 

16

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