10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2004

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number 1-5153

Marathon Oil Corporation

(Exact name of registrant as specified in its charter)

Delaware	25-0996816
(State of Incorporation)	(I.R.S. Employer Identification No.)

5555 San Felipe Road, Houston, TX 77056-2723

(Address of principal executive offices)

Tel. No. (713) 629-6600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No ¨

There were 346,062,009 shares of Marathon Oil Corporation common stock outstanding as of July 23, 2004.

MARATHON OIL CORPORATION

Form 10-Q

Quarter Ended June 30, 2004

	INDEX	PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Statement of Income	3
	Consolidated Balance Sheet	4
	Consolidated Statement of Cash Flows	5
	Selected Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	33
	Supplemental Statistics	34
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 2.	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	37
Item 4.	Submission of Matters to a Vote of Security Holders	38
Item 6.	Exhibits and Reports on Form 8-K	39

2

Part I - Financial Information

MARATHON OIL CORPORATION

Consolidated Statement of Income (Unaudited)

	Second Quarter Ended June 30						Six Months Ended June 30
(Dollars in millions, except per share)	2004			2003			2004			2003
Revenues and other income:
Sales and other operating revenues (including consumer excise taxes)	$	12,248		$	9,415		$	22,685		$	19,216
Sales to related parties		266			229			481			460
Income (loss) from equity method investments		43			(67	)		70			(19	)
Net gains on disposal of assets		6			120			8			122
Gain (loss) on ownership change in Marathon Ashland Petroleum LLC		1			(4	)		1			—
Other income		28			13			40			26
Total revenues and other income		12,592			9,706			23,285			19,805
Costs and expenses:
Cost of revenues (excludes items shown below)		9,866			7,394			18,361			15,271
Purchases from related parties		56			49			84			81
Consumer excise taxes		1,138			1,091			2,190			2,107
Depreciation, depletion and amortization		308			297			610			589
Selling, general and administrative expenses		289			244			519			451
Other taxes		79			78			162			158
Exploration expenses		27			27			52			75
Total costs and expenses		11,763			9,180			21,978			18,732
Income from operations		829			526			1,307			1,073
Net interest and other financing costs		51			52			89			118
Minority interest in income of Marathon Ashland Petroleum LLC		220			105			237			135
Minority interest in loss of Equatorial Guinea LNG Holdings Limited		(4	)		—			(4	)		—
Income from continuing operations before income taxes		562			369			985			820
Provision for income taxes		214			134			379			300
Income from continuing operations		348			235			606			520
Discontinued operations		4			13			4			31
Income before cumulative effect of changes in accounting principles		352			248			610			551
Cumulative effect of a change in accounting principles		—			—			—			4
Net income	$	352		$	248		$	610		$	555

Income Per Share (Unaudited)

	Second Quarter Ended June 30				Six Months Ended June 30
	2004		2003		2004		2003
Basic:
Income from continuing operations	$	1.01	$	.76	$	1.85	$	1.68
Net income	$	1.02	$	.80	$	1.86	$	1.79
Diluted:
Income from continuing operations	$	1.01	$	.76	$	1.84	$	1.68
Net income	$	1.02	$	.80	$	1.85	$	1.79

The accompanying notes are an integral part of these consolidated financial statements.

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MARATHON OIL CORPORATION

Consolidated Balance Sheet (Unaudited)

(Dollars in millions)	June 30 2004			December 31 2003
Assets
Current assets:
Cash and cash equivalents	$	2,214		$	1,396
Receivables, less allowance for doubtful accounts of $6 and $5		2,817			2,389
Receivables from United States Steel		25			20
Receivables from related parties		231			121
Inventories		2,146			1,955
Other current assets		182			163
Total current assets		7,615			6,044
Investments and long-term receivables, less allowance for doubtful accounts of $10 and $10		1,530			1,323
Receivables from United States Steel		587			593
Property, plant and equipment, less accumulated depreciation, depletion and amortization of $11,868 and $11,363		11,061			10,830
Prepaid pensions		166			181
Goodwill		252			252
Intangibles		112			118
Other noncurrent assets		153			141
Total assets	$	21,476		$	19,482
Liabilities
Current liabilities:
Accounts payable	$	3,684		$	3,352
Payable to United States Steel		4			4
Payable to related parties		23			17
Payroll and benefits payable		221			230
Accrued taxes		303			247
Accrued interest		95			85
Long-term debt due within one year		22			272
Total current liabilities		4,352			4,207
Long-term debt		4,050			4,085
Deferred income taxes		1,504			1,489
Employee benefits obligations		1,023			984
Asset retirement obligations		419			390
Payable to United States Steel		8			8
Deferred credits and other liabilities		239			233
Total liabilities		11,595			11,396
Minority interest in Marathon Ashland Petroleum LLC		2,254			2,011
Minority interest in Equatorial Guinea LNG Holdings Limited		85			—
Commitments and contingencies		—			—
Stockholders’ Equity
Common stock:
Common Stock issued – 346,665,978 shares at June 30, 2004 and 312,165,978 at December 31, 2003 (par value $1 per share, authorized 550,000,000 shares)		347			312
Common stock held in treasury 699,141 shares at June 30, 2004 and 1,744,370 shares at December 31, 2003		(19	)		(46	)
Additional paid-in capital		4,017			3,033
Retained earnings		3,343			2,897
Accumulated other comprehensive loss		(133	)		(112	)
Unearned compensation		(13	)		(9	)
Total stockholders’ equity		7,542			6,075
Total liabilities and stockholders’ equity	$	21,476		$	19,482

The accompanying notes are an integral part of these consolidated financial statements.

4

MARATHON OIL CORPORATION

Consolidated Statement of Cash Flow (Unaudited)

	Six Months Ended June 30
(Dollars in millions)	2004			2003
Increase (decrease) in cash and cash equivalents
Operating activities:
Net income	$	610		$	555
Adjustments to reconcile to net cash provided from operating activities:
Cumulative effect of changes in accounting principles		—			(4	)
Income from discontinued operations		(4	)		(31	)
Deferred income taxes		(4	)		(38	)
Minority interest in income of subsidiaries		233			135
Depreciation, depletion and amortization		610			589
Pension and other postretirement benefits - net		49			82
Exploratory dry well costs		13			40
Net gains on disposal of assets		(8	)		(122	)
Impairment of investments		—			107
Changes in:
Current receivables		(442	)		(438	)
Inventories		(191	)		(147	)
Current accounts payable and accrued expenses		340			200
All other - net		24			72
Net cash provided from continuing operations		1,230			1,000
Net cash provided from discontinued operations		—			78
Net cash provided from operating activities		1,230			1,078
Investing activities:
Capital expenditures		(817	)		(826	)
Acquisitions		—			(220	)
Disposal of assets		21			315
Restricted cash - withdrawals		4			61
- deposits		(5	)		(93	)
Investments - contributions		(2	)		(28	)
- loans and advances		(106	)		(34	)
- returns and repayments		—			42
Advances on construction projects		(102	)		—
All other - net		(6	)		(16	)
Investing activities of discontinued operations		—			(22	)
Net cash used in investing activities		(1,013	)		(821	)
Financing activities:
Commercial paper and revolving credit arrangements - net		—			(53	)
Debt issuance costs		(5	)		—
Other debt repayments		(255	)		(35	)
Net proceeds from sale of common stock		1,004			—
Treasury common stock - proceeds from issuances		24			1
Dividends paid		(164	)		(143	)
Distributions to minority shareholder of Marathon Ashland Petroleum LLC		—			(26	)
Net cash provided from (used in) financing activities		604			(256	)
Effect of exchange rate changes on cash:
Continuing operations		(3	)		7
Discontinued operations		–			5
Net increase in cash and cash equivalents		818			13
Cash and cash equivalents at beginning of period		1,396			488
Cash and cash equivalents at end of period	$	2,214		$	501
Interest and other financial costs paid (net of amount capitalized)	$	(102	)	$	(129	)
Income taxes paid		(328	)		(292	)

The accompanying notes are an integral part of these consolidated financial statements.

5

MARATHON OIL CORPORATION

Notes to Consolidated Financial Statements – (Unaudited)

1. Basis of Presentation

These consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair presentation of the results for the periods reported. All such adjustments are of a normal recurring nature unless disclosed otherwise. These financial statements, including selected notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. Certain reclassifications of prior year data have been made to conform to 2004 classifications. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the 2003 Annual Report on Form 10-K of Marathon Oil Corporation (“Marathon”).

2. Information about United States Steel

The Separation – On December 31, 2001, in a tax-free distribution to holders of Marathon’s USX—U. S. Steel Group class of common stock (“Steel Stock”), Marathon exchanged the common stock of its wholly owned subsidiary United States Steel Corporation (“United States Steel”) for all outstanding shares of Steel Stock on a one-for-one basis (the “Separation”).

Amounts Receivable from or Payable to United States Steel Arising from the Separation – Marathon remains primarily obligated for certain financings for which United States Steel has assumed responsibility for repayment under the terms of the Separation. When United States Steel makes payments on the principal of these financings, both the receivable and the obligation will be reduced.

Amounts receivable or payable to United States Steel were included in the balance sheet as follows:

(In millions)	June 30 2004		December 31 2003
Receivables:
Current:
Receivables related to debt and other obligations for which United States Steel has assumed responsibility for repayment	$	25	$	20
Noncurrent:
Receivables related to debt and other obligations for which United States Steel has assumed responsibility for repayment	$	587	$	593
Payables:
Current:
Income tax settlement and related interest payable	$	4	$	4
Noncurrent:
Reimbursements payable under nonqualified employee benefit plans	$	8	$	8

Marathon remains primarily obligated for $60 million of operating lease obligations assumed by United States Steel, of which $45 million has been assumed by other third parties that had purchased plants and operations divested by United States Steel.

6

3. Business Combinations

On May 12, 2003, Marathon acquired Khanty Mansiysk Oil Corporation (“KMOC”) for $285 million, including the assumption of $31 million in debt. KMOC is currently evaluating or developing nine oil fields in the Khanty-Mansiysk region of western Siberia in the Russian Federation. Results of operations for 2003 include the results of KMOC from May 12, 2003. The allocation of purchase price is final. There was no goodwill associated with the purchase.

The following table summarizes the allocation of the purchase price to the assets acquired and liabilities assumed at the date of acquisition:

(In millions)
Cash	$	2
Receivables		10
Inventories		3
Investments and long-term receivables		19
Property, plant and equipment		325
Other assets		5
Total assets acquired	$	364
Current liabilities	$	20
Long-term debt		31
Asset retirement obligations		12
Deferred income taxes		45
Other liabilities		2
Total liabilities assumed	$	110
Net assets acquired	$	254

The following unaudited pro forma data for Marathon includes the results of operations of the above acquisition giving effect to the acquisition as if it had been consummated at the beginning of the six months ended June 30, 2003. The pro forma data is based on historical information and does not necessarily reflect the actual results that would have occurred nor is it necessarily indicative of future results of operations.

(In millions)
Revenue and other income	$	19,828
Income from continuing operations		513
Net income		548
Per share amounts applicable to Common Stock:
– Income from continuing operations – basic and diluted		1.65
– Net income – basic and diluted		1.77

4. Discontinued Operations

On October 1, 2003, Marathon sold its exploration and production operations in western Canada for $612 million. This divestiture decision was made as part of Marathon’s strategic plan to rationalize noncore oil and gas properties. The results of these operations have been reported separately as discontinued operations in Marathon’s Consolidated Statement of Income. The sale resulted in a gain of $278 million, including a tax benefit of $8 million, which has been reported in discontinued operations in the fourth quarter of 2003. Revenues applicable to the discontinued operations totaled $61 million and $131 million for the second quarter of 2003 and the six months ended June 30, 2003, respectively. Pretax income from discontinued operations totaled $23 million and $50 million for the second quarter of 2003 and the six months ended June 30, 2003, respectively. In the second quarter of 2004, the final working capital adjustment was determined, which resulted in an additional gain of $4 million and is reported in discontinued operations.

5. Common Stock Issuance

On March 31, 2004, Marathon issued 34,500,000 shares of its common stock at the offering price of $30 per share and recorded net proceeds of $1.004 billion.

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6. Computation of Income Per Share

Basic net income per share is based on the weighted average number of common shares outstanding. Diluted net income per share assumes exercise of stock options, provided the effect is not antidilutive.

	Second Quarter Ended June 30
	2004				2003
(Dollars in millions, except per share data)	Basic		Diluted		Basic		Diluted
Income from continuing operations	$	348	$	348	$	235	$	235
Income from discontinued operations		4		4		13		13
Net income	$	352	$	352	$	248	$	248
Shares of common stock outstanding (thousands):
Average number of common shares outstanding		344,631		344,631		310,037		310,037
Effect of dilutive securities – stock options		—		1,491		—		79
Average common shares including dilutive effect		344,631		346,122		310,037		310,116
Per share:
Income from continuing operations	$	1.01	$	1.01	$	.76	$	.76
Income from discontinued operations	$	.01	$	.01	$	.04	$	.04
Net income	$	1.02	$	1.02	$	.80	$	.80
	Six Months Ended June 30
	2004				2003
(Dollars in millions, except per share data)	Basic		Diluted		Basic		Diluted
Income from continuing operations	$	606	$	606	$	520	$	520
Income from discontinued operations		4		4		31		31
Cumulative effect of changes in accounting principles		—		—		4		4
Net income	$	610	$	610	$	555	$	555
Shares of common stock outstanding (thousands):
Average number of common shares outstanding		327,602		327,602		309,975		309,975
Effect of dilutive securities – stock options		—		1,631		—		64
Average common shares including dilutive effect		327,602		329,233		309,975		310,039
Per share:
Income from continuing operations	$	1.85	$	1.84	$	1.68	$	1.68
Income from discontinued operations	$	.01	$	.01	$	.10	$	.10
Cumulative effect of changes in accounting principles	$	—	$	—	$	.01	$	.01
Net income	$	1.86	$	1.85	$	1.79	$	1.79

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7. Stock-Based Compensation Plans

The following net income and per share data illustrates the effect on net income and net income per share if the fair value method had been applied to all outstanding and unvested awards in each period:

	Second Quarter Ended June 30						Six Months Ended June 30
(In millions, except per share data)	2004			2003			2004			2003
Net income
As reported	$	352		$	248		$	610		$	555
Add: Stock-based compensation expense included in reported net income, net of related tax effects		19			3			24			5
Deduct: Total stock-based compensation expense determined under fair value method for all awards, net of related tax effects		(12	)		(3	)		(16	)		(5	)
Pro forma net income	$	359		$	248		$	618		$	555
Basic net income per share
As reported	$	1.02		$	.80		$	1.86		$	1.79
Pro forma	$	1.04		$	.80		$	1.89		$	1.79
Diluted net income per share
As reported	$	1.02		$	.80		$	1.85		$	1.79
Pro forma	$	1.04		$	.80		$	1.88		$	1.79

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8. Segment Information

Marathon’s operations consist of three operating segments: 1) Exploration and Production (“E&P”) - explores for and produces crude oil and natural gas on a worldwide basis; 2) Refining, Marketing and Transportation (“RM&T”) - refines, markets and transports crude oil and petroleum products, primarily in the Midwest, upper Great Plains and southeastern United States through its 62 percent owned consolidated subsidiary, Marathon Ashland Petroleum LLC (“MAP”); and 3) Integrated Gas (“IG”) – markets and transports its own and third-party natural gas and products manufactured from natural gas, such as liquefied natural gas and methanol, primarily in the United States, Europe, and West Africa.

Effective January 1, 2004, Marathon realigned its segment reporting to reflect a new business segment, Integrated Gas. This segment includes Marathon’s liquefied natural gas (“LNG”) operations in Alaska and Equatorial Guinea, methanol operations in Equatorial Guinea, and certain other natural gas marketing and transportation activities, along with expenses related to the continued development of an integrated gas business. These activities were previously reported in the Other Energy Related Businesses (“OERB”) segment, which has been eliminated. Crude oil marketing and transportation activities and costs associated with a gas-to-liquids (“GTL”) demonstration plant, previously reported in OERB, are now reported in the E&P segment. Refined product transportation activities not included in MAP, also previously reported in OERB, are now reported in the RM&T segment. The 2003 information has been restated to reflect the new segment structure.

The following represents information by operating segment:

(In millions)	E&P		RM&T		IG			Total Segments
Second Quarter 2004
Revenues:
Customer	$	1,054	$	10,849	$	345		$	12,248
Intersegment(a)		97		43		32			172
Related parties		4		262		—			266
Total revenues	$	1,155	$	11,154	$	377		$	12,686
Segment income (loss)	$	343	$	577	$	(8	)	$	912
Income from equity method investments		4		21		18			43
Depreciation, depletion and amortization(b)		195		104		2			301
Capital expenditures(c)		180		138		151			469
Second Quarter 2003
Revenues:
Customer	$	1,060	$	7,752	$	603		$	9,415
Intersegment (a)		107		29		34			170
Related parties		6		223		—			229
Total revenues	$	1,173	$	8,004	$	637		$	9,814
Segment income	$	312	$	258	$	27		$	597
Income from equity method investments(d)		16		28		13			57
Depreciation, depletion and amortization(b)		196		93		2			291
Capital expenditures(c)		297		157		14			468

^(a) Management believes intersegment transactions were conducted under terms comparable to those with unrelated parties.

^(b) Differences between segment totals and Marathon totals represent amounts included in administrative expenses.

^(c) Differences between segment totals and Marathon totals represent amounts related to corporate administrative activities.

^(d) Excludes a $124 million loss on the dissolution of MKM Partners L.P., which was not allocated to segments.

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(In millions)	E&P		RM&T		IG		Total Segments
Six Months 2004
Revenues:
Customer	$	2,230	$	19,684	$	771	$	22,685
Intersegment(a)		162		57		72		291
Related parties		7		474		—		481
Total revenues	$	2,399	$	20,215	$	843	$	23,457
Segment income	$	821	$	626	$	7	$	1,454
Income from equity method investments		9		31		30		70
Depreciation, depletion and amortization(b)		390		202		4		596
Capital expenditures(c)		352		273		186		811
Six Months 2003
Revenues:
Customer	$	2,347	$	15,732	$	1,137	$	19,216
Intersegment(a)		264		76		64		404
Related parties		9		451		—		460
Total revenues	$	2,620	$	16,259	$	1,201	$	20,080
Segment income	$	827	$	328	$	29	$	1,184
Income from equity method investments(d)		38		41		26		105
Depreciation, depletion and amortization(b)		392		181		3		576
Capital expenditures(c)		514		288		22		824

^(a) Management believes intersegment transactions were conducted under terms comparable to those with unrelated parties.

^(b) Differences between segment totals and Marathon totals represent amounts included in administrative expenses.

^(c) Differences between segment totals and Marathon totals represent amounts related to corporate administrative activities.

^(d) Excludes a $124 million loss on the dissolution of MKM Partners L.P., which was not allocated to segments.

The following reconciles segment income to income from operations as reported in Marathon’s consolidated statement of income:

(In millions)	Second Quarter Ended June 30
	2004			2003
Segment income	$	912		$	597
Items not allocated to segments:
Administrative expenses		(84	)		(49	)
Gain on disposal of assets(a)		—			106
Loss on dissolution of MKM Partners L.P.		—			(124	)
Gain (loss) on ownership change in MAP		1			(4	)
Total income from operations	$	829		$	526
	Six Months Ended June 30
(In millions)	2004			2003
Segment income	$	1,454		$	1,184
Items not allocated to segments:
Administrative expenses		(148	)		(93	)
Gain on disposal of assets(a)		—			106
Loss on dissolution of MKM Partners L.P.		—			(124	)
Gain (loss) on ownership change in MAP		1			—
Total income from operations	$	1,307		$	1,073

^(a) Represents gains on sale of Marathon’s interest in CLAM Petroleum B.V., Speedway SuperAmerica LLC (“SSA”) stores in Florida, South Carolina, North Carolina and Georgia and certain fields in the Big Horn Basin of Wyoming.

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9. Pensions and Other Postretirement Benefits

The following summarizes the components of net periodic benefit costs:

	Second Quarter Ended June 30
	Pension Benefits						Other Benefits
(In millions)	2004			2003			2004			2003
Service cost		26			25			5			5
Interest cost		27			25			12			13
Expected return on plan assets		(23	)		(22	)		—			—
Amortization – net transition gain		(1	)		(1	)		—			—
– prior service costs (credits)		1			1			(4	)		(2	)
– actuarial loss		13			10			4			4
Multi-employer plans		1			1			1			1
Settlement and curtailment losses		3			4			—			—
Net periodic benefit cost(a)	$	47		$	43		$	18		$	21

^(a) Includes MAP’s net periodic pension cost of $29 million and $30 million and other benefits cost of $10 million and $9 million for the second quarter of 2004 and 2003. Includes international net periodic pension cost of $5 million and $5 million for the second quarter of 2004 and 2003.

	Six Months Ended June 30
	Pension Benefits						Other Benefits
(In millions)	2004			2003			2004			2003
Service cost	$	52		$	46		$	10		$	10
Interest cost		54			49			24			25
Expected return on plan assets		(46	)		(45	)		—			—
Amortization – net transition gain		(2	)		(2	)		—			—
– prior service costs (credits)		2			2			(8	)		(4	)
– actuarial loss		26			17			8			6
Multi-employer plans		1			1			1			1
Settlement and curtailment losses		10			4			—			—
Net periodic benefit cost(b)	$	97		$	72		$	35		$	38

^(b) Includes MAP’s net periodic pension cost of $59 million and $52 million and other benefits cost of $19 million and $17 million for the first six months of 2004 and 2003. Includes international net periodic pension cost of $11 million and $9 million for the first six months of 2004 and 2003.

Marathon expects to contribute approximately $100 million to the MAP funded pension plan and $23 million to its foreign funded pension plans in 2004. As of June 30, 2004, $11 million of contributions have been made to the foreign plans. On April 14, 2004, MAP made a contribution of $42 million to its qualified pension plan. In addition, as of June 30, 2004, contributions made from the general assets of Marathon to cover current benefit payments related to the unfunded pension and other postretirement benefit plans were $11 million and $15 million.

During 2004, the FASB released Staff Position FAS 106-2 (“FSP 106-2”) “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003” (“the Act”). Effective July 1, 2004, Marathon will adopt FSP 106-2, as required. FSP 106-2 includes guidance on recognizing the effects of the new legislation under the various conditions surrounding the assessment of “actuarial equivalence”. Marathon has determined based on available regulatory guidance, that the postretirement plans’ prescription drug benefits are actuarially equivalent to the Medicare “Part D” benefit under the Act. Currently, measures of the net periodic benefit cost do not reflect any amount associated with the subsidy, as Marathon has not decided which of the alternatives under the Act to implement at this time.

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10. Business Transformation

During the third quarter of 2003, Marathon implemented an organizational realignment plan that included streamlining Marathon’s business processes and services, realigning reporting relationships to reduce costs across all organizations, consolidating organizations in Houston and reducing the workforce. In the second quarter of 2004, Marathon initiated two outsourcing agreements to achieve further business process improvements and cost reductions.

During the second quarter and first six months of 2004, Marathon recorded $10 million and $14 million of costs as general and administrative expenses related to the 2003 and 2004 business transformation programs. These charges included employee severance and benefit costs related to the elimination of approximately 300 regular employee positions in connection with the 2004 program, relocation costs, and a pension curtailment loss.

The following table sets forth the significant components and activity in the business transformation programs during the six months ended June 30, 2004:

	Accrued 12/31/03		Accruals through 6/30/04		Non-cash Charge		Cash Payments		Accrued 6/30/04
(In millions)
Employee severance and termination benefits	$	12	$	9	$	—	$	14	$	7
Pension plan curtailment loss		—		3		3		—		—
Relocation costs		5		2		—		6		1
Fixed asset related costs		1		—		—		—		1
Total	$	18	$	14	$	3	$	20	$	9

An additional charge of $37 million is expected to be incurred in the remainder of 2004 related to the programs, including an estimated $29 million pension plan settlement loss and an estimated $11 million other postretirement plan curtailment gain.

11. Comprehensive Income

The following sets forth Marathon’s comprehensive income for the periods shown:

	Second Quarter Ended June 30						Six Months Ended June 30
(In millions)	2004			2003			2004			2003
Net income	$	352		$	248		$	610		$	555
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments		—			(5	)		—			(5	)
Change in fair value of derivative instruments		(5	)		(14	)		(21	)		(10	)
Total comprehensive income	$	347		$	229		$	589		$	540

During the first six months of 2004 and 2003, less than $1 million and $5 million of losses, net of tax, were reclassified into net income as it was no longer probable the original forecasted transactions would occur. During the second quarter of 2003, $3 million of losses, net of tax, were reclassified.

12. Inventories

Inventories are carried at lower of cost or market. Cost of inventories of crude oil and refined products is determined primarily under the last-in, first-out (“LIFO”) method.

	June 30 2004		December 31 2003
(In millions)
Liquid hydrocarbons and natural gas	$	760	$	674
Refined products and merchandise		1,271		1,151
Supplies and sundry items		115		130
Total (at cost)	$	2,146	$	1,955

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13. Debt

During the second quarter of 2004, Marathon replaced both its $1.354 billion long-term revolving credit facility and $575 million 364-day facility with a $1.5 billion five-year revolving credit facility. Concurrent with the new Marathon five-year revolving credit facility, MAP entered into a new $500 million five-year revolving credit facility with third-party financial institutions in the second quarter of 2004. Interest on these facilities is based on defined short-term market rates. During the term of the agreements, Marathon is obligated to pay a facility fee on total commitments, which at June 30, 2004, was 0.125%. Marathon paid approximately $4 million in debt issuance costs associated with these new five-year revolving credit facilities. At June 30, 2004, there were no borrowings against these facilities. At June 30, 2004, Marathon had no commercial paper outstanding under its U.S. commercial paper program that is backed by its long-term revolving credit facility. Certain banks provide Marathon with uncommitted short-term lines of credit totaling $200 million.

MAP has a $190 million revolving credit agreement with Ashland Inc. (“Ashland”) that terminates in March 2005. Pursuant to the terms of Marathon’s agreement to acquire the 38 percent ownership interest in MAP currently held by Ashland (see Note 15), MAP effectively will be restricted from borrowing from Ashland under this facility after September 30, 2004. At June 30, 2004, there were no borrowings against this facility.

At June 30, 2004, in the event of a change in control of Marathon, debt obligations totaling $1.583 billion may be declared immediately due and payable. In such event, Marathon may also be required to either repurchase certain equipment at United States Steel’s Fairfield Works for $86 million or provide a letter of credit to secure the remaining obligation.

14. Contingencies and Commitments

Marathon is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. Certain of these matters are discussed below. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to Marathon’s consolidated financial statements. However, management believes that Marathon will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably.

Environmental matters – Marathon is subject to federal, state, local and foreign laws and regulations relating to the environment. These laws generally provide for control of pollutants released into the environment and require responsible parties to undertake remediation of contaminated sites or waste disposal sites. Penalties may be imposed for noncompliance. At June 30, 2004 and December 31, 2003, accrued liabilities for remediation totaled $112 million and $117 million, respectively. It is not presently possible to estimate the ultimate amount of all remediation costs that might be incurred or the penalties that may be imposed. Receivables for recoverable costs from certain states, under programs to assist companies in cleanup efforts related to underground storage tanks at retail marketing outlets, were $72 million at June 30, 2004, and $86 million at December 31, 2003.

Guarantees – During the second quarter of 2004, Marathon entered into certain guarantees and indemnifications in connection with the sale of a refined products terminal to Kinder Morgan Bulk Terminals, Inc. There is not a specified term on the guarantees and the maximum potential amount of future payments under the guarantees and indemnifications is estimated to be $5 million.

Contract commitments – At June 30, 2004, Marathon’s contract commitments to acquire property, plant and equipment and long-term investments totaled $1.202 billion. The $637 million increase from December 31, 2003 is primarily due to contractual commitments related to Equatorial Guinea LNG joint venture. For additional information, see note 17. Included in these contract commitments is $95 million related to the approximately $300 million in refinery upgrade and expansion projects for MAP’s 74,000 bpd Detroit, Michigan refinery. Marathon will loan MAP the funds necessary for the Detroit, Michigan refinery upgrade and expansion projects. The MAP LLC Agreement has been amended to allow the Detroit refinery cash flows to be dedicated to service this debt. The Put/Call Agreement was amended to provide that, in the event Marathon exercises its call right, the Detroit refinery will not be valued at an amount less than the working capital related to the Detroit refinery, excluding working capital additions related to the expansion and clean fuels project.

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15. Proposed Acquisition

Marathon has entered into an agreement which would result in the acquisition of the 38 percent ownership interest in MAP currently held by Ashland. In addition, Marathon would acquire a portion of Ashland’s Valvoline Instant Oil Change business and its maleic anhydride business. As a result of the transaction, MAP will become a wholly owned subsidiary of Marathon.

As part of the transaction, Ashland will receive approximately $800 million in cash and accounts receivable from MAP to redeem a portion of its interest in MAP. Marathon will assume approximately $1.9 billion of debt, which is expected to be repaid immediately following closing. Additionally, Ashland shareholders will receive $315 million in Marathon common stock. Ashland’s liabilities under certain existing environmental indemnification obligations related to MAP will be capped at $50 million.

The MAP Limited Liability Company Agreement has been amended to eliminate the requirement for MAP to make quarterly cash distributions to Marathon and Ashland between the date the principal transaction agreements were signed and the closing of the transaction. As a result, the redemption proceeds to Ashland will be increased by an amount equal to approximately 38 percent of the cash accumulated from MAP’s operations during that period. MAP’s distributable cash was $237 million as of June 30, 2004. In the event of a termination of the acquisition agreement, MAP’s obligation to make cash distributions to Marathon and Ashland would be restored. In addition, Ashland does not have the right to exercise its put right and Marathon does not have the right to exercise its call right under the Put/Call Agreement unless and until the acquisition agreement is terminated.

On June 1, 2004, the United States Federal Trade Commission granted early termination of the pre-closing waiting period mandated by the Hart-Scott-Rodino Act, thereby indicating that it had no present intent to challenge the acquisition and permitting the parties to proceed toward closing. Additionally, Marathon and Ashland submitted a request for a letter ruling to the United States Internal Revenue Service (“IRS”) on the tax-free status of the proposed acquisition. Related to the proposed acquisition, Ashland filed a preliminary proxy statement on schedule 14A with the United States Securities and Exchange Commission on June 21, 2004. The completion of the acquisition is subject to a number of conditions, including a favorable tax ruling from the IRS, Ashland shareholder approval and Ashland public debt holder consents.

16. Accounting Standards Not Yet Adopted

An issue recently removed from the EITF agenda, Issue No. 03-S “Applicability of FASB Statement No. 142, Goodwill and Other Intangible Assets, to Oil and Gas Companies,” was expected to address how oil and gas companies should classify the costs of acquiring contractual mineral interests in oil and gas properties on the balance sheet. The EITF had been considering an alternative interpretation of Statement of Financial Accounting Standard No. 142 “Goodwill and Other Intangible Assets” (“SFAS No. 142”) that mineral or drilling rights or leases, concessions or other interests representing the right to extract oil or gas should be classified as intangible assets rather than oil and gas properties.

On July 19, 2004, an exposure draft of FASB Staff Position FAS 142-b, “Application of FAS 142 to Oil- and Gas-Producing Entities” (“FSP FAS 142-b”) was issued. The exposure draft states drilling and mineral rights of oil- and gas-producing entities are excluded from SFAS No. 142. FSP FAS 142-b is expected to be effective the first reporting period beginning after the date that it is finalized.

Management believes that our current balance sheet classification for these costs is appropriate under generally accepted accounting principles and the proposed FSP FAS 142-b. If a reclassification were to be required, the estimated amount of the leasehold acquisition costs to be reclassified would be $2.1 billion and $2.3 billion at June 30, 2004 and December 31, 2003. There would be no impact on our previously filed income statements (or reported net income), statements of cash flow or statements of stockholders’ equity for prior periods. Additional disclosures related to intangible assets would also be required.

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17. Equatorial Guinea LNG Joint Venture

On June 22, 2004, Marathon and Compania Nacional de Petroleos de Guinea Ecuatorial (“GEPetrol”) announced that all of the necessary agreements had been finalized for a liquefied natural gas (LNG) project, including the formation of a jointly-owned holding company Equatorial Guinea LNG Holdings Limited (“EGHoldCo”). Marathon holds a 75 percent economic interest and GEPetrol holds a 25 percent economic interest in EGHoldCo.

As of June 30, 2004, EGHoldCo is deemed to be a variable interest entity (“VIE”). Marathon is also the primary beneficiary of EGHoldCo. As a result, Marathon has consolidated EGHoldCo as of June 30, 2004. Marathon must reassess whether or not EGHoldCo is a VIE as facts and circumstances change. If EGHoldCo were no longer a VIE or if Marathon were no longer the primary beneficiary, Marathon would account for EGHoldCo under the equity method of accounting. While Marathon holds a 75 percent economic interest, GEPetrol has significant voting rights which effectively result in Marathon and GEPetrol sharing equally in decisions regarding EGHoldCo’s operations. Consequently, Marathon does not hold a controlling financial interest in EGHoldCo and is therefore precluded from consolidating EGHoldCo under the voting control model.

As of June 30, 2004, capital expenditures of $236 million related to the LNG project have been incurred and advances of $102 million to Bechtel, the engineering and construction contractor, have been paid. Receivables from related parties include $89 million in receivables from GEPetrol. Minority interest in EGHoldCo of $85 million represents GEPetrol’s 25 percent economic interest in the net assets of EGHoldCo. Start-up costs of approximately $18 million were recorded in the second quarter of 2004, $4 million of which are to be funded by GEPetrol.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Marathon Oil Corporation is engaged in worldwide exploration and production of crude oil and natural gas; domestic refining, marketing and transportation of crude oil and petroleum products primarily through its 62 percent owned subsidiary, Marathon Ashland Petroleum LLC; and integrated gas. Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements. The discussion of the Consolidated Statement of Income should be read in conjunction with the Supplemental Statistics provided on page 34.

Certain sections of Management’s Discussion and Analysis include forward-looking statements concerning trends or events potentially affecting Marathon. These statements typically contain words such as “anticipates”, “believes”, “estimates”, “expects”, “targets” or similar words indicating that future outcomes are uncertain. In accordance with “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, these statements are accompanied by cautionary language identifying important factors, though not necessarily all such factors, which could cause future outcomes to differ materially from those set forth in the forward-looking statements. For additional risk factors affecting the businesses of Marathon, see the information preceding Part I in Marathon’s 2003 Form 10-K and subsequent filings.

Unless specifically noted, amounts for MAP do not reflect any reduction for the 38 percent interest held by Ashland.

Overview

Segment Realignment

In January 2004, Marathon changed its business segments to better reflect its integrated gas strategy. In the first quarter of 2004, Marathon realigned segment reporting and introduced a new business segment, Integrated Gas, and its OERB segment was eliminated. This new segment includes Marathon’s LNG operations in Alaska and Equatorial Guinea, methanol operations in Equatorial Guinea, and certain other natural gas marketing and transportation activities, along with expenses related to the continued development of the integrated gas business. Crude oil marketing and transportation activities and costs associated with a GTL demonstration plant, previously reported in the OERB segment, are now reported in the E&P segment. Refined product transportation activities not included in MAP, also previously reported in the OERB segment, are now reported in our RM&T segment.

Proposed Acquisition of Minority Interest in MAP

On March 18, 2004, Marathon entered into an agreement with Ashland to acquire Ashland’s 38 percent interest in MAP. During the second quarter, the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Act for the proposed acquisition. Also, Marathon and Ashland submitted a request for a letter ruling to the IRS on the tax-free status of the proposed acquisition. For additional information see Note 15 to the Consolidated Financial Statements.

Exploration Success

During the second quarter, Marathon continued its exploration success with discoveries in Angola and Equatorial Guinea. Marathon has announced five discoveries out of six key exploratory wells drilled during the first half of 2004.

Offshore Angola, Marathon participated in the fourth oil discovery on Block 31. The Venus-1 discovery well announced in early June was drilled to a total depth of 14,784 feet and encountered three pay intervals. The Venus discovery, along with the three nearby discoveries moves the northeast portion of Block 31, in which Marathon holds a 10 percent interest, closer to a commercial development.

Offshore Equatorial Guinea, Marathon participated in a natural gas and condensate discovery on the Alba Block (Sub Area A). The Deep Luba well was drilled to a total measured depth of 15,497 feet from the Alba field production platform and encountered 270 feet of net gas/condensate pay. This discovery reinforces the additional resource potential of the Alba field, in which Marathon holds a 63 percent interest.

In the Gulf of Mexico, the Kansas #3 exploration well, in which Marathon holds a 46 percent interest, recently completed drilling and was plugged and abandoned. Marathon along with its partners is analyzing well data to determine next steps.

Advanced Integrated Gas Strategy

During the second quarter of 2004, Marathon continued to make progress on its LNG project in Equatorial Guinea. Marathon, along with the Government of Equatorial Guinea and GEPetrol, the National Oil Company of Equatorial Guinea, finalized all of the necessary agreements for the Equatorial Guinea LNG project. This marked the final investment decision for this LNG project and construction is underway.

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Marathon delivered two LNG cargos as part of the company’s Elba Island, Georgia, LNG regasification terminal agreement during the quarter. Under the terms of the agreement, Marathon can supply up to 58 billion cubic feet of natural gas (as LNG) per year, for up to 22 years, providing the company with access to U.S. LNG regasification capacity.

Achieved Strong Operational Performance at MAP

With the completion of a significant amount of refinery maintenance and the Catlettsburg repositioning project during the first quarter of this year, MAP was able to help meet market demand for transportation fuels during the second quarter resulting in the second best quarterly earnings in MAP’s six-year history. MAP set records for total refinery throughput, as well as crude oil throughput during the quarter. During the second quarter 2004, MAP refineries crude oil throughput totaled approximately 1.013 million barrels per day.

In the retail segment, Speedway SuperAmerica LLC same store merchandise sales results increased approximately 12 percent when compared to the same period last year.

Long-term Gas Contracts

Marathon has two long-term contracts for the sale of natural gas in the United Kingdom. These contracts expire in September 2009. These contracts were entered into in the early 1990s in support of Marathon’s investments in the East Brae field and the SAGE pipeline. Contract prices are linked to a basket of energy and other indices. The contract price is reset annually in October based on the previous twelve-month changes in the basket of indices. Consequently the prices under these contracts do not track forward gas prices.

These contracts are accounted for as derivative instruments under generally accepted accounting principles. Derivatives are required to be recorded in the balance sheet at fair value and changes in fair value are recognized in income. The fair value of these contracts is determined by applying the difference between the contract price and the U.K. forward gas strip price to the expected sales volumes for the next eighteen months under these contracts. Adjustments to the fair value of these contracts result in non-cash charges or credits to income from operations. The difference between the contract price and the U.K. forward gas strip price may fluctuate widely from time to time and may result in significant effects to income from operations.

During the second quarter of 2004, Marathon recorded a non-cash charge of $95 million to earnings and increased the derivative liability relating to the U.K. contracts to $110 million as of June 30, 2004. The increase is primarily due to the U.K. 18-month forward gas price curve strengthening more than 30 percent during the quarter. Since the adoption of the current accounting standard on derivatives, the fair value of these contracts has fluctuated from an asset value of $38 million to a liability value of $110 million.

SEC Inquiry Relating to Equatorial Guinea

By letter dated July 15, 2004, the United States Securities and Exchange Commission (“SEC”) notified Marathon that it was conducting an inquiry into payments made to the government of Equatorial Guinea, or to officials and persons affiliated with officials of the government of Equatorial Guinea. This inquiry follows an investigation and public hearing conducted by the United States Senate Permanent Subcommittee on Investigations, which reviewed the transactions of various foreign governments, including that of Equatorial Guinea, with Riggs Bank. The investigation and hearing also reviewed the operations of U.S. oil companies, including Marathon, in Equatorial Guinea. There was no finding in the Subcommittee’s report that Marathon violated the U.S. Foreign Corrupt Practices Act or any other applicable laws or regulations. Marathon is cooperating fully with the SEC inquiry.

Outlook

Exploration and Production

The outlook regarding Marathon’s upstream revenues and income is largely dependent upon future prices and volumes of liquid hydrocarbons and natural gas. Prices have historically been volatile and have frequently been affected by unpredictable changes in supply and demand resulting from fluctuations in worldwide economic activity and political developments in the world’s major oil and gas producing and consuming areas. Any significant decline in prices could have a material adverse effect on Marathon’s results of operations. A prolonged decline in such prices could also adversely affect the quantity of crude oil and natural gas reserves that can be economically produced and the amount of capital available for exploration and development.

Marathon estimates its 2004 production will average approximately 360,000 barrels of oil equivalent per day, excluding the effect of any acquisitions or dispositions, compared to previous estimates of approximately 365,000 boepd. This reduction is primarily a result of delays associated with the company’s liquids expansion projects in Equatorial Guinea.

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Exploration

Major exploration activities, which are currently underway or under evaluation, include:

• Angola, where Marathon is drilling the Cola well on Block 32 and plans to participate in one to two additional exploration wells offshore Angola during 2004;

• Norway, where Marathon plans to participate in one additional exploration well during 2004;

• Gulf of Mexico, where Marathon plans to participate in one exploration well during the remainder of 2004;

• Equatorial Guinea, where Marathon expects to drill one additional exploration well offshore Equatorial Guinea in 2004;

• Offshore Nova Scotia, where Marathon is drilling the Crimson well, which is expected to reach total depth late in the third quarter.

Production

In Equatorial Guinea, Marathon’s Phase 2A condensate expansion project is mechanically complete and expected to reach full capacity in the third quarter 2004. Phase 2A is expected to increase total liquids production from approximately 20,000 gross bpd to approximately 57,000 gross bpd (32,000 bpd net to Marathon). This project also has eliminated the need to flare gas, preserving the resource while reducing emissions.

The Phase 2B liquefied petroleum gas (LPG) expansion project is expected to start-up in the first half of 2005. Upon completion of Phase 2B, gross liquids production is expected to increase from approximately 57,000 bpd to approximately 79,000 bpd (44,500 bpd net to Marathon).

In Norway, Marathon and its partners continued to move forward with development plans for Alvheim, in which Marathon is operator and holds a 65 percent interest. Marathon and its Alvheim project partners submitted a plan of development and operation to the Norwegian authorities in July 2004, with approval anticipated during the fourth quarter of 2004 and first Alvheim production expected in early 2007. The Alvheim group has reached agreement to tie-in the nearby Klegg discovery, in which Marathon holds a 47 percent interest. Production from a combined Alvheim/Klegg development is expected to reach more than 50,000 net bpd during 2007. Also, the Hamsun discovery, announced earlier this year, is being examined as another possible tie-back to the Alvheim development. In February 2004, Marathon and its Alvheim project partners signed a purchase and sale agreement to acquire a multipurpose shuttle tanker. The purchase is contingent upon the approval of a plan of development and operation by the Norwegian authorities.

Marathon continues to negotiate the terms of reentry to Libya, which would reestablish a significant core area for Marathon. Also, Marathon is marketing Pennaco Energy, Inc. and its coalbed natural gas assets in the Powder River Basin as part of Marathon’s ongoing efforts to actively manage its global asset portfolio. Strong natural gas prices and recent sales transactions in the Rocky Mountains indicate that now is the appropriate time to solicit potential offers for these interests.

The above discussion includes forward-looking statements with respect to the timing and levels of Marathon’s worldwide liquid hydrocarbon, natural gas and condensate production, the exploration drilling program, the Phase 2B LPG expansion project, the possibility of an equipment purchase and a possible disposition of coalbed natural gas assets. Some factors that could potentially affect worldwide liquid hydrocarbon, natural gas and condensate production, and the exploration drilling program include pricing, supply and demand for petroleum products, amount of capital available for exploration and development, occurrence of acquisitions or dispositions of oil and gas properties, regulatory constraints, timing of commencing production from new wells, drilling rig availability, inability or delay in obtaining necessary government and third party approvals and permits, including Norwegian regulatory approvals for the Alvheim and Klegg plans of development, unforeseen hazards such as weather conditions, acts of war or terrorist acts and the governmental or military response and other geological, operating and economic considerations. Factors that could affect the Phase 2B LPG expansion project include unforeseen problems arising from construction, including equipment repairs, and unforeseen hazards such as weather conditions. Factors affecting the possibility of the equipment purchase include the approval of a plan of development and operation by the Norwegian authorities. Factors affecting the potential disposition of coalbed natural gas assets include the identification of buyers and the negotiation of acceptable prices and other terms, customary closing conditions and any applicable regulatory approvals. The foregoing factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements.

Refining, Marketing and Transportation

Marathon’s RM&T segment income is largely dependent upon the refining and wholesale marketing margin for refined products, the retail gross margin for gasoline and distillates, and the gross margin on retail merchandise sales. The refining and wholesale marketing margin reflects the difference between the wholesale selling prices of refined products and the cost of raw materials refined, purchased product costs, effects of commodity derivative instruments and manufacturing expenses. Refining and wholesale marketing margins have been historically volatile and vary from the impact of competition and with the level of economic activity in the various marketing areas, the regulatory and political

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climate, the seasonal pattern of certain product sales, crude oil costs, manufacturing costs, the available supply of crude oil and refined products, and logistical constraints. The retail gross margin for gasoline and distillates reflects the difference between the retail selling prices of these products and their wholesale cost, including secondary transportation. Retail gasoline and distillate margins have also been historically volatile, but tend to be countercyclical to the refining and wholesale marketing margin. Factors affecting the retail gasoline and distillate margin include competition, seasonal demand fluctuations, the available wholesale supply, the level of economic activity in the marketing areas and weather situations that impact driving conditions. The gross margin on retail merchandise sales tends to be less volatile than the retail gasoline and distillate margin. Factors affecting the gross margin on retail merchandise sales include consumer demand for merchandise items, the impact of competition and the level of economic activity in the marketing area.

MAP continues to expect its average crude oil throughput for the total year 2004 to be at or above historical levels.

MAP is conducting approximately $300 million in new capital projects for its 74,000 bpd Detroit, Michigan refinery. One of the projects, a $110 million expansion project, is expected to raise the crude oil capacity at the refinery by 35 percent to 100,000 bpd. Other projects are expected to enable the refinery to produce new clean fuels and further control regulated air emissions. Completion of the projects are scheduled for the fourth quarter of 2005. Marathon will loan MAP the funds necessary for these upgrade and expansion projects.

The proposed acquisition of Ashland’s 38 percent interest in MAP will increase Marathon’s ownership in a high performing downstream business without the common risks associated with integrating a newly acquired business. Marathon believes that its acquisition of the minority interest in MAP should provide the financial and strategic flexibility to capture and fund many growth opportunities across the value chain. Marathon is on schedule to complete the transaction by year-end, subject to the satisfaction of the remaining conditions including the receipt of a favorable tax ruling from the IRS and Ashland shareholder approval of the transaction.

The above discussion includes forward-looking statements with respect to the Detroit capital projects and the proposed acquisition of Ashland’s 38 percent interest in MAP. Some factors that could potentially cause the actual results from the Detroit construction projects to be different than expected include availability of materials and labor, unforeseen hazards such as weather conditions, and other risks customarily associated with construction projects. Some factors that could affect the proposed acquisition of Ashland’s 38 percent interest in MAP include a favorable tax ruling from the IRS, opinions of outside tax counsel, Ashland shareholder approval, Ashland public debt holder consents and updated Ashland solvency opinions. These factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements.

Integrated Gas

In the LNG project in Equatorial Guinea, Marathon and GEPetrol through EGHoldCo have made the final investment decision to develop a 3.4 million metric tonnes per year LNG plant, with start up projected for late 2007. Preparations for the construction of the first LNG train are progressing on schedule with site preparation, accommodation, equipment mobilization and ordering of major plant components. EGHoldCo has also signed a Sales and Purchase Agreement (“SPA”) with a subsidiary of BG Group plc (“BGML”) under which BGML would purchase the LNG plant’s production for a period of 17 years on an FOB Bioko Island basis with pricing linked principally to the Henry Hub index. The LNG would be targeted primarily to a receiving terminal in Lake Charles, Louisiana, where it would be regasified and delivered into the Gulf Coast natural gas pipeline grid. Marathon, through its subsidiaries, currently holds a 75 percent interest in the LNG project.

The above discussion contains forward-looking statements with respect to the estimated construction and startup dates of a LNG liquefaction plant and related facilities and the purchase of LNG by BGML. Factors that could affect the purchase of LNG by BGML and the estimated construction and startup dates of the LNG liquefaction plant and related facilities include, without limitation, unforeseen problems arising from construction, inability or delay in obtaining necessary government and third-party approvals, unanticipated changes in market demand or supply, environmental issues, availability or construction of sufficient LNG vessels, and unforeseen hazards such as weather conditions. The foregoing factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements.

Corporate Matters

Marathon has announced business transformation programs that will enable it to focus and execute on its core business strategies by providing superior long-term value growth. During the third quarter of 2003, Marathon implemented an organizational realignment plan that included streamlining Marathon’s business processes and services, realigning reporting relationships to reduce costs across all organizations, consolidating organizations in Houston and reducing the workforce. In the second quarter of 2004, Marathon initiated two outsourcing agreements to achieve further business process improvements and cost reductions.

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It is anticipated that most of the changes being implemented in these programs will be completed by the fourth quarter of 2004, and will result in total pretax charges of approximately $75 million. Of these charges, $24 million was recorded in 2003 and $14 million was recorded in the first six months of 2004. The remainder will be recognized when incurred during the last half of 2004 and includes an expected settlement loss of $29 million for the Marathon qualified pension plan and an estimated $11 million other post retirement plan curtailment gain resulting from the additional workforce reductions as a result of the outsourcing.

Projected savings from the business transformation programs are expected to benefit all business segments, as well as unallocated administrative expenses. The total upfront cash costs of outsourcing are expected to be recovered in savings in less than two years.

The above discussion includes forward-looking statements with respect to cost savings from the business transformation programs, the projected completion time for implementation of the changes and pension plan settlement expenses. Factors, but not necessarily all factors, that could adversely affect these expected results include possible delays in consolidating the U.S. production organization, future acquisitions or dispositions, technological developments, actions of government or other regulatory bodies in areas affected by these organizational changes, unforeseen hazards, regulatory impacts, and other economic or political considerations. The foregoing factors (among others) could cause actual results to differ materially from those set forth in the forward-looking statements.

Results of Operations

Revenues for the second quarter and first six months of 2004 and 2003 are summarized in the following table:

	Second Quarter Ended June 30						Six Months Ended June 30
(In millions)	2004			2003			2004			2003
E&P	$	1,155		$	1,173		$	2,399		$	2,620
RM&T		11,154			8,004			20,215			16,259
IG		377			637			843			1,201
Segment revenues		12,686			9,814			23,457			20,080
Elimination of intersegment revenues		(172	)		(170	)		(291	)		(404	)
Total revenues	$	12,514		$	9,644			23,166		$	19,676
Items included in both revenues and costs and expenses:
Consumer excise taxes on petroleum products and merchandise	$	1,138		$	1,091		$	2,190		$	2,107
Matching crude oil, gas and refined product buy/sell transactions settled in cash:
E&P		40			63			82			117
RM&T		2,353			1,686			4,348			3,337
Total buy/sell transactions	$	2,393		$	1,749		$	4,430		$	3,454

E&P segment revenues decreased by $18 million in the second quarter of 2004 from the comparable prior-year period. For the first six months of 2004, revenues decreased by $221 million from the prior-year period. These decreases were primarily due to derivative losses and lower domestic liquid hydrocarbon and worldwide natural gas volumes. These decreases were partially offset by higher liquid hydrocarbon and natural gas prices. Derivative losses totaled $126 million and $134 million in second quarter and the first six months of 2004, compared to losses of $32 million and $85 million in second quarter and first six months of 2003.

RM&T segment revenues increased by $3.150 billion in the second quarter of 2004 from the comparable prior-year period. For the first six months of 2004, revenues increased by $3.956 billion from the prior-year period. The increases primarily reflected higher refined product selling prices and volumes and increased crude oil sales volumes and prices.

Integrated Gas segment revenues decreased by $260 million in the second quarter of 2004 from the comparable prior-year period. For the first six months of 2004, revenues decreased by $358 million from the comparable prior-year period. This decrease primarily reflected lower natural gas marketing volumes and prices. Derivative gains totaled $2 million and $10 million in second quarter and the first six months of 2004, compared to gains of $19 million and $1 million in second quarter and first six months of 2003.

For additional information on segment results, see “Results of Operations by Segments” on page 23.

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Income (loss) from equity method investments increased by $110 million in the second quarter and $89 million in the first six months of 2004 from the comparable prior-year periods. The increase in the second quarter and the six months is primarily due to a $124 million loss on the dissolution of MKM Partners L.P. in the second quarter of 2003.

Net gains on disposal of assets decreased by $114 million in the second quarter and in the first six months of 2004 from the comparable prior-year periods. The decrease in the second quarter and the six months is primarily due to Marathon selling its interest in CLAM Petroleum B.V., interests in several pipeline companies, SSA stores in Florida, South Carolina, North Carolina and Georgia, and certain fields in the Big Horn Basin of Wyoming during the first six months of 2003.

Cost of revenues for the second quarter of 2004 increased by $2.472 billion from the comparable prior-year period. For the first six months of 2004, cost of revenues increased by $3.090 billion from the comparable prior-year period. The increases in the RM&T segment primarily reflected higher acquisition costs for crude oil, other refinery charge and blend stocks and refined products and higher manufacturing expenses. This was partially offset by decreases in E&P as a result of lower crude oil marketing activity and in the IG segment primarily as a result of lower natural gas marketing volumes.

Selling, general and administrative expenses for the second quarter and the first six months of 2004 increased by $45 million and $68 million from the comparable prior-year periods, primarily as a result of increased stock-based compensation expense, severance and pension plan curtailment charges related to outsourcing, and start-up costs related to the Equatorial Guinea LNG joint venture. First six months of 2004 included settlement losses on nonqualified pension plans of $7 million.

Net interest and other financing costs for the second quarter and the first six months of 2004 decreased by $1 million and $29 million, respectively, compared to the same periods last year. The decreases are primarily a result of increased interest income on investments, an increase in capitalized interest related to increased long-term construction projects, and the favorable effect of interest rate swaps, partially offset by a decrease in foreign currency gains.

Minority interest in income of MAP, which represents Ashland’s 38 percent ownership interest, increased $115 million and $102 million in the second quarter and the first six months of 2004 from the comparable 2003 periods, due to higher MAP income as discussed below for the RM&T segment.

Minority interest in loss of Equatorial Guinea LNG Holdings Limited, which represents GEPetrol’s 25 percent ownership interest, was $4 million in the second quarter, resulting from GEPetrol’s share of the $18 million start-up costs associated with the LNG project in Equatorial Guinea.

Provision for income taxes in the second quarter of 2004 and the first six months of 2004 increased by $80 million and $79 million from the comparable 2003 periods primarily due to $193 million and $165 million increases in income before income taxes, respectively. The effective tax rate for the first six months of 2004 was 38.5% compared to 36.6% for the comparable period in 2003. The increase in the rate is primarily related to the effects of foreign operations and an unfavorable prior year adjustment in the 2004 provision.

Net income for the second quarter and first six months increased by $104 million and $55 million in 2004 from 2003, primarily reflecting the factors discussed above.

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Results of Operations by Segments

Income from operations for the second quarter and the first six months of 2004 and 2003 is summarized in the following table:

	Second Quarter Ended June 30						Six Months Ended June 30
(In millions)	2004			2003			2004			2003
E&P
Domestic	$	285		$	244		$	591		$	605
International		58			68			230			222
E&P segment income		343			312			821			827
RM&T		577			258			626			328
IG		(8	)		27			7			29
Segment income		912			597			1,454			1,184
Items not allocated to segments:
Administrative expenses		(84	)		(49	)		(148	)		(93	)
Gain on disposal of assets		—			106			—			106
Loss on dissolution of MKM Partners L.P.		—			(124	)		—			(124	)
Gain (loss) on ownership change in MAP		1			(4	)		1			—
Total income from operations	$	829		$	526		$	1,307		$	1,073

Domestic E&P income in the second quarter of 2004 increased by $41 million from last year’s second quarter. Results in the first six months of 2004 decreased by $14 million from the same period in 2003. The increase in the second quarter was primarily due to higher liquid hydrocarbon and natural gas prices partially offset by lower liquid hydrocarbon volumes primarily resulting from the sale of the Yates field. The decrease in the six months is primarily related to lower liquid hydrocarbon and natural gas volumes partially offset by higher liquid hydrocarbon prices and lower dry well expense. Derivative losses totaled $23 million and $40 million in second quarter and the first six months of 2004, compared to losses of $21 million and $67 million in second quarter and first six months of 2003.

Marathon’s domestic average realized liquid hydrocarbons price excluding derivative activity was $31.74 and $30.71 per barrel (“bbl”) in second quarter and the first six months of 2004, compared with $25.23 and $27.59 per bbl in the comparable prior periods. Average gas prices were $5.02 and $4.86 per thousand cubic feet (“mcf”) excluding derivative activity in second quarter and the first six months of 2004, compared with $4.40 and $4.91 per mcf in the corresponding 2003 periods.

Domestic net liquid hydrocarbons production decreased to 90 thousand barrels per day (“mbpd”) in the first six months of 2004, down 23 percent from the 2003 comparable period, as a result of natural declines mainly in the Gulf of Mexico and the sale of Yates field. Net natural gas production averaged 671 million cubic feet per day (“mmcfd”) in the first six months of 2004, down 10 percent from the 2003 comparable period, as a result of natural declines in the Permian Basin and the Gulf of Mexico.

International E&P income in the second quarter of 2004 decreased by $10 million from last year’s second quarter. Results in the first six months of 2004 increased by $8 million from the same period in 2003. The decrease in the second quarter period was primarily a result of significantly higher non-cash mark-to-market derivative losses, partially offset by higher liquid hydrocarbon prices and volumes and natural gas prices. The increase in the six months is primarily due to higher liquid hydrocarbon prices and volumes and natural gas prices, partially offset by increased derivative losses. The higher liquid hydrocarbon volumes in both periods are mainly attributable to the acquisition of KMOC in the second quarter of 2003 and increased production from Phase 2A in Equatorial Guinea. Derivative losses totaled $104 million and $94 million in second quarter and the first six months of 2004, compared to losses of $11 million and $18 million in second quarter and first six months of 2003. The derivative losses in the second quarter and the first six months of 2004 included non-cash mark-to-market losses of $95 million and $81 million and in the second quarter and the first six months of 2003 included non-cash mark-to-market losses of $10 million and $12 million on long-term gas contracts in the United Kingdom. For additional information on U.K. gas contracts, see “Long-term Gas Contracts” on page 18.

Marathon’s international average realized liquid hydrocarbons price excluding derivative activity was $30.91 and $29.55 per bbl in second quarter and the first six months of 2004, compared with $23.56 and $26.73 per bbl in the comparable prior period. Average gas prices were $3.07 and $3.29 per mcf excluding derivative activity in second quarter and the first six months of 2004, compared with $2.44 and $2.68 per mcf in the corresponding 2003 periods.

International net liquid hydrocarbons production increased to 91 thousand barrels per day (“mbpd”) in the first six months of 2004, up 20 percent from the 2003 comparable period, as a result of increased production in Equatorial Guinea and the acquisition of KMOC. Net natural gas production averaged 379 mmcfd in the first six months of 2004, down 7 percent from the 2003 comparable period, primarily from lower production in the U.K. and the disposition in 2003 of Marathon’s interest in CLAM Petroleum B.V.

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RM&T segment income in the second quarter of 2004 increased by $319 million from last year’s second quarter. Results in the first six months of 2004 increased by $298 million from the same period in 2003. The increases primarily reflect a higher refining and wholesale marketing margin due initially to the market’s concerns about refiners’ ability to supply the new Tier 2 low sulfur gasolines which were required effective January 1, 2004 and, more recently, due to concerns about the adequacy of distillate supplies heading into winter. Additionally, the 3-2-1 crack spread was strong in both of MAP’s markets during the second quarter 2004. The Chicago 3-2-1 crack spread averaged over $11 per barrel during the second quarter 2004, up from about $6.60 per barrel in the same quarter last year. Blending the Chicago and U.S. Gulf Coast crack spreads on a 2/3 - 1/3 basis, the 3-2-1 crack spread increased from about $5.60 per barrel in the June 2003 quarter to about $10.50 per barrel in the June 2004 quarter or about $5 per barrel. MAP processed record volumes of crude oil and total refinery inputs in the second quarter 2004. MAP averaged 1,013,000 bpd of crude oil throughputs and an additional 142,000 barrels per day of other charge and blend stocks through the plants for an average total refinery input of 1,155,000 bpd during the second quarter 2004. MAP set nine throughput records in the refinery organization in the month of June. The total refinery throughputs were 7% higher this year compared to the same quarter last year. These improvements were partially offset by higher manufacturing costs. Crude oil prices averaged about $9 per barrel or about 30% higher in the second quarter 2004 compared to the comparable quarter last year. Due to these high raw material prices, the wholesale margins, especially on the non-gasoline and non-distillate refined products, were compressed compared to the comparable quarter last year in comparison to what the 3-2-1 crack spread metric would indicate. This is primarily due to the fact that the prices for MAP’s other refined products do not change as quickly or as frequently as spot gasoline and distillate prices. Derivative losses, which are included in the refining and wholesale marketing margin, were $83 million and $203 million in the second quarter and first six months of 2004 as compared to $14 million and $97 million in the same periods of 2003. Trading gains (losses), which were included in other income, were $10 million and $12 million in the second quarter and first six months of 2004 as compared to $(3) million and $(1) million in the same periods of 2003.

IG segment income in the second quarter of 2004 decreased by $35 million from last year’s second quarter. Results in the first six months of 2004 decreased by $22 million from the same period in 2003. The decreases were primarily the result of $18 million of start-up costs associated with the LNG project in Equatorial Guinea and lower income due to reduced gas marketing activities, including mark-to-market changes in derivatives used to support those activities. These were partially offset by increased earnings from Marathon’s equity investment in a methanol plant in Equatorial Guinea. Plant operations in 2004 have been operating at a 93 percent on-stream factor and prices have remained strong in 2004 averaging nearly $213 per ton through June 2004.

Unallocated administrative expenses in the second quarter of 2004 increased by $35 million compared to last year’s second quarter. For the first six months of 2004, unallocated administrative expenses increased by $55 million from the same period in 2003. These increases were due to a $24 million non-cash charge in the second quarter of 2004 related to equity based compensation, primarily as a result of an increase of more than $4.00 per share in Marathon’s stock price during the quarter, and up-front costs related to outsourcing activities. The first six months of 2004 also included settlement losses on nonqualified pension plans of $7 million.

Dividends to Stockholders

On July 28, 2004, the Marathon Board of Directors (the “Board”) declared dividends of 25 cents per share, payable September 10, 2004, to stockholders of record at the close of business on August 18, 2004.

Cash Flows

Net cash provided from operating activities (for continuing operations) was $1.230 billion in the first six months of 2004, compared with $1.0 billion in the first six months of 2003. The $230 million increase mainly reflects a higher refining and wholesale marketing margin and higher international liquid hydrocarbon and natural gas prices. In the second quarter of 2004, MAP made cash contributions to its pension plan of $42 million.

Capital expenditures in the first six months of 2004 totaled $817 million compared with $826 million in the same period of 2003, excluding the acquisitions of KMOC in the first six months of 2003. For information regarding capital expenditures by segment, refer to the Supplemental Statistics on page 34.

Acquisitions included cash payments of $220 million for the first six months of 2003 for the acquisition of KMOC.

Cash from disposal of assets was $21 million in the first six months of 2004, compared with $315 million in the first six months of 2003. In 2003, proceeds were primarily from the disposition of Marathon’s interest in CLAM Petroleum B.V., SSA stores, interest in several pipeline companies and certain fields in the Big Horn Basin of Wyoming. In 2004, proceeds were primarily from the disposition of certain SSA stores.

Investments in the first six months of 2004 totaled $108 million compared with $20 million in the same period of 2003. The increase is due to increased advances to an equity affiliate for Phase 2B costs in Equatorial Guinea.

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Advances on construction projects included cash payments of $102 million for the first six months of 2004 for the LNG plant in Equatorial Guinea.

Net cash provided from financing activities was $604 million in the first six months of 2004, compared with net cash used of $256 million in the first six months 2003. The increase was due to the issuance on March 31, 2004, of 34,500,000 shares of common stock resulting in net proceeds of $1.004 billion. This was partially offset by the repayment on maturity of $250 million 7.2% notes in the first six months of 2004. Additionally, the first six months of 2003 reflects distributions of $26 million to Ashland. In 2004, the MAP Limited Liability Company Agreement was amended to eliminate the requirement for MAP to make quarterly cash distributions to Marathon and Ashland between the date the principal transaction agreements were signed and the closing of the transaction. In the event of a termination of the acquisition agreement, MAP’s obligation to make cash distributions to Marathon and Ashland would be restored.

Derivative Instruments

See “Quantitative and Qualitative Disclosures About Market Risk” for discussion of derivative instruments and associated market risk.

Liquidity and Capital Resources

Marathon’s main sources of liquidity and capital resources are internally generated cash flow from operations, committed and uncommitted credit facilities, and access to both the debt and equity capital markets. Marathon’s ability to access the debt capital market is supported by its investment grade credit ratings. Because of the liquidity and capital resource alternatives available to Marathon, including internally generated cash flow, Marathon’s management believes that its short-term and long-term liquidity is adequate to fund operations, including its capital spending program, repayment of debt maturities for the years 2004, 2005, and 2006, and any amounts that may ultimately be paid in connection with contingencies.

Marathon’s senior unsecured debt is currently rated investment grade by Standard and Poor’s Corporation, Moody’s Investor Services, Inc. and Fitch Ratings with ratings of BBB+, Baa1, and BBB+, respectively. Marathon’s investment-grade credit ratings were affirmed by these agencies following the announcement of the proposed acquisition of Ashland’s 38 percent ownership interest in MAP.

Marathon has a committed $1.5 billion five-year revolving credit facility that terminates in May 2009. At June 30, 2004, there were no borrowings against this facility. At June 30, 2004, Marathon had no commercial paper outstanding under the U.S. commercial paper program that is backed by the five-year revolving credit facility. Additionally, Marathon has other uncommitted short-term lines of credit totaling $200 million, of which no amounts were drawn at June 30, 2004.

MAP has a committed $500 million five-year revolving credit facility with a third-party financial institution that terminates in May 2009. MAP also has a $190 million revolving credit agreement with Ashland that expires in March 2005. Pursuant to the terms of Marathon’s agreement to acquire the 38 percent ownership interest in MAP currently held by Ashland (see Note 15 to the Consolidated Financial Statements), MAP’s use of its credit agreement with Ashland will be restricted after September 30, 2004. As of June 30, 2004, there were no borrowings against these facilities.

The Marathon and MAP revolving credit facilities each require a representation at an initial borrowing that there has been no change in the respective borrower’s consolidated financial position or operations, considered as a whole, that would materially and adversely affect such borrower’s ability to perform its obligations under its revolving credit facility.

On March 31, 2004 Marathon completed the sale of 34,500,000 shares of common stock at the offering price of $30 per share from the $2.7 billion universal shelf registration statement filed with the Securities and Exchange Commission in 2002. Marathon recorded net proceeds of $1.004 billion related to this issuance, which contributed to cash and cash equivalents of $2.2 billion at June 30, 2004. Marathon expects to utilize a substantial portion of this cash to repay debt assumed in connection with the proposed acquisition of the remaining interest in MAP and related businesses or to retire other outstanding long-term debt, and to fund operations, including its capital and investment program. As of June 30, 2004 there was $1.7 billion aggregate amount of common stock, preferred stock and other equity securities, debt securities, trust preferred securities and/or other securities, including securities convertible into or exchangeable for other equity or debt securities available to be issued under this shelf registration statement.

Marathon’s cash-adjusted debt-to-capital ratio (total-debt-minus-cash to total-debt-plus-equity-minus-cash) was 20 percent at June 30, 2004, compared to 33 percent at year-end 2003. This includes approximately $600 million of debt that is serviced by United States Steel Corporation (“United States Steel”). Marathon continually monitors its spending levels, market conditions and related interest rates to maintain what it perceives to be reasonable debt levels.

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Marathon management’s opinion concerning liquidity and Marathon’s ability to avail itself in the future of the financing options mentioned in the above forward-looking statements are based on currently available information. To the extent that this information proves to be inaccurate, future availability of financing may be adversely affected. Factors that affect the availability of financing include the performance of Marathon (as measured by various factors including cash provided from operating activities), the state of worldwide debt and equity markets, investor perceptions and expectations of past and future performance, the global financial climate, and, in particular, with respect to borrowings, the levels of Marathon’s outstanding debt and credit ratings by rating agencies.

Contractual Cash Obligations

Subsequent to December 31, 2003, there have been no significant changes to Marathon’s obligations to make future payments under existing contracts. The portion of Marathon’s obligations to make future payments under existing contracts that have been assumed by United States Steel has not changed significantly subsequent to December 31, 2003.

Off-Balance Sheet Arrangements

Off-balance sheet arrangements comprise those arrangements that may potentially impact Marathon’s liquidity, capital resources and results of operations, even though such arrangements are not recorded as liabilities under generally accepted accounting principles. Although off-balance sheet arrangements serve a variety of Marathon’s business purposes, Marathon is not dependent on these arrangements to maintain its liquidity and capital resources; nor is management aware of any circumstances that are reasonably likely to cause the off-balance sheet arrangements to have a material adverse effect on liquidity and capital resources. There have been no significant changes to Marathon’s off-balance sheet arrangements subsequent to December 31, 2003.

Nonrecourse Indebtedness of Investees

Certain equity investees of Marathon have incurred indebtedness that Marathon does not support through guarantees or otherwise. If Marathon were obligated to share in this debt on a pro rata basis, its share would have been approximately $289 million as of June 30, 2004. Of this amount, $158 million relates to Pilot Travel Centers LLC (“PTC”). If any of these equity investees default, Marathon has no obligation to support the debt. Marathon’s partner in PTC has guaranteed $157 million of the total PTC debt.

Obligations Associated with the Separation of United States Steel

Marathon remains obligated (primarily or contingently) for certain debt and other financial arrangements for which United States Steel has assumed responsibility for repayment under the terms of the Separation. United States Steel’s obligations to Marathon are general unsecured obligations that rank equal to United States Steel’s accounts payable and other general unsecured obligations. If United States Steel fails to satisfy these obligations, Marathon would become responsible for repayment. Under the Financial Matters Agreement, United States Steel has all of the existing contractual rights under the leases assumed from Marathon, including all rights related to purchase options, prepayments or the grant or release of security interests. However, United States Steel has no right to increase amounts due under or lengthen the term of any of the assumed leases, other than extensions set forth in the terms of any of the assumed leases.

As of June 30, 2004, Marathon has obligations totaling $686 million that have been assumed by United States Steel. Of the total $686 million, obligations of $612 million and corresponding receivables from United States Steel were recorded on Marathon’s consolidated balance sheet (current portion - $25 million; long-term portion - $587 million). The remaining $74 million was related to off-balance sheet arrangements and contingent liabilities of United States Steel.

Environmental Matters

Marathon has incurred and will continue to incur substantial capital, operating and maintenance, and remediation expenditures as a result of environmental laws and regulations. To the extent these expenditures, as with all costs, are not ultimately reflected in the prices of Marathon’s products and services, operating results will be adversely affected. Marathon believes that substantially all of its competitors are subject to similar environmental laws and regulations. However, the specific impact on each competitor may vary depending on a number of factors, including the age and location of its operating facilities, marketing areas, production processes and whether or not it is engaged in the petrochemical business or the marine transportation of crude oil and refined products.

New Tier 2 gasoline and on-road diesel fuel rules require substantially reduced sulfur levels for gasoline and diesel starting in 2004 and 2006, respectively. The combined capital costs to achieve compliance with the gasoline and diesel regulations could amount to approximately $900 million over the period between 2002 and 2006. Some of these costs could be incurred as part of other refinery upgrade projects. This is a forward-looking statement. Costs incurred

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through June 30, 2004, were approximately $310 million. Some factors (among others) that could potentially affect gasoline and diesel fuel compliance costs include completion of project detailed engineering and project construction and logistical considerations.

During 2001, MAP entered into a New Source Review consent decree and settlement of alleged Clean Air Act (“CAA”) and other violations with the U.S. Environmental Protection Agency covering all of MAP’s refineries. The settlement committed MAP to specific control technologies and implementation schedules for environmental expenditures and improvements to MAP’s refineries over approximately an eight-year period. The total one-time expenditures for these environmental projects is approximately $330 million over the eight-year period, with about $200 million incurred through June 30, 2004. The impact of the settlement on ongoing operating expenses is expected to be immaterial. In addition, MAP has nearly completed certain agreed upon supplemental environmental projects as part of this settlement of an enforcement action for alleged CAA violations, at a cost of $9 million. MAP believes that this settlement will provide MAP with increased permitting and operating flexibility while achieving significant emission reductions.

In May 2004, plaintiff environmental groups Environmental Defense et al, filed suit against the U.S. Bureau of Land Management (“BLM”) in Montana Federal District Court, alleging the agency did not adequately consider air quality impacts of coal bed methane and oil and gas operations in the Powder River Basin in Montana and Wyoming when preparing its environmental impact statements. Plaintiffs request that BLM be ordered to cease issuing leases and permits for energy development, until additional analysis of predicted air impacts is conducted. Along with other companies, Marathon and Pennaco Energy, Inc. have filed petitions to intervene in the litigation.

There have been no other significant changes to Marathon’s environmental matters subsequent to December 31, 2003. Changes in accrued liabilities for remediation and receivables for recoverable costs since December 31, 2003 are described in Note 14 to the Consolidated Financial Statements on page 14.

Other Contingencies

Marathon is the subject of, or a party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to Marathon. However, management believes that Marathon will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably to Marathon. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources”.

Accounting Standards Not Yet Adopted

An issue recently removed from the EITF agenda, Issue No. 03-S “Applicability of FASB Statement No. 142, Goodwill and Other Intangible Assets, to Oil and Gas Companies,” was expected to address how oil and gas companies should classify the costs of acquiring contractual mineral interests in oil and gas properties on the balance sheet. The EITF had been considering an alternative interpretation of Statement of Financial Accounting Standard No. 142 “Goodwill and Other Intangible Assets” (“SFAS No. 142”) that mineral or drilling rights or leases, concessions or other interests representing the right to extract oil or gas should be classified as intangible assets rather than oil and gas properties.

On July 19, 2004 an exposure draft of FSP FAS 142-b, “Application of FAS 142 to Oil- and Gas-Producing Entities” (“FSP FAS 142-b”) was issued. The exposure draft states drilling and mineral rights of oil- and gas-producing entities are excluded from SFAS No. 142. FSP FAS 142-b is expected to be effective the first reporting period beginning after the date that it is finalized.

Management believes that our current balance sheet classification for these costs is appropriate under generally accepted accounting principles and the proposed FSP FAS 142-b. If a reclassification were to be required, the estimated amount of the leasehold acquisition costs to be reclassified would be $2.1 billion and $2.3 billion at June 30, 2004 and December 31, 2003. There would be no impact on our previously filed income statements (or reported net income), statements of cash flow or statements of stockholders’ equity for prior periods. Additional disclosures related to intangible assets would also be required.

During 2004, the FASB released Staff Position FAS 106-2. Effective July 1, 2004, Marathon will adopt FSP 106-2, as required. FSP 106-2 includes guidance on recognizing the effects of the new legislation under the various conditions surrounding the assessment of “actuarial equivalence”. Marathon has determined based on available regulatory guidance, that the postretirement plans’ prescription drug benefits are actuarially equivalent to the Medicare “Part D” benefit under the Act. Currently, measures of the net periodic benefit cost do not reflect any amount associated with the subsidy, as Marathon has not decided which of the alternatives under the Act to implement at this time.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Management Opinion Concerning Derivative Instruments

Management has authorized the use of futures, forwards, swaps and options to manage exposure to market fluctuations in commodity prices, interest rates, and foreign currency exchange rates.

Marathon uses commodity-based derivatives to manage price risk related to the purchase, production or sale of crude oil, natural gas, and refined products. To a lesser extent, Marathon is exposed to the risk of price fluctuations on natural gas liquids and on petroleum feedstocks used as raw materials.

Marathon’s strategy has generally been to obtain competitive prices for its products and allow operating results to reflect market price movements dictated by supply and demand. Marathon will use a variety of derivative instruments, including option combinations, as part of the overall risk management program to manage commodity price risk within its different businesses. As market conditions change, Marathon evaluates its risk management program and could enter into strategies that assume market risk whereby cash settlement of commodity-based derivatives will be based on market prices.

Marathon’s E&P segment primarily uses commodity derivative instruments to selectively lock in realized prices on portions of its future production when deemed advantageous to do so.

Marathon’s RM&T segment primarily uses commodity derivative instruments to mitigate the price risk of certain crude oil and other feedstock purchases, to protect carrying values of excess inventories, to protect margins on fixed-price sales of refined products and to lock-in the price spread between refined products and crude oil. In addition, MAP also utilizes commodity derivative instruments, classified as trading activities, to take advantage of opportunities in the commodity markets.

Marathon’s IG segment is exposed to market risk associated with the purchase and subsequent resale of natural gas. Marathon uses commodity derivative instruments to mitigate the price risk on purchased volumes and anticipated sales volumes.

Marathon uses financial derivative instruments to manage interest rate and foreign currency exchange rate exposures. As Marathon enters into these derivatives, assessments are made as to the qualification of each transaction for hedge accounting.

Management believes that use of derivative instruments along with risk assessment procedures and internal controls does not expose Marathon to material risk. However, the use of derivative instruments could materially affect Marathon’s results of operations in particular quarterly or annual periods. Management believes that use of these instruments will not have a material adverse effect on financial position or liquidity.

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Commodity Price Risk

Sensitivity analyses of the incremental effects on income from operations (“IFO”) of hypothetical 10 percent and 25 percent changes in commodity prices for open derivative instruments as of June 30, 2004 are provided in the following table:

	Incremental Decrease in Income from Operations Assuming a Hypothetical Price Change of: (a)
(In millions)	10%		25%
Commodity Derivative Instruments(b)(c)
Crude oil(d)	$	21.8	$	52.5
Natural gas(d)		32.5		84.1
Refined products(d)		8.9		21.9

^(a) Marathon remains at risk for possible changes in the market value of derivative instruments; however, such risk should be mitigated by price changes in the underlying hedged item. Effects of these offsets are not reflected in the sensitivity analyses. Amounts reflect hypothetical 10 percent and 25 percent changes in closing commodity prices, excluding basis swaps, for each open contract position at June 30, 2004. Marathon evaluates its portfolio of commodity derivative instruments on an ongoing basis and adds or revises strategies to reflect anticipated market conditions and changes in risk profiles. Marathon is also exposed to credit risk in the event of nonperformance by counterparties. The creditworthiness of counterparties is subject to continuing review, including the use of master netting agreements to the extent practical. Changes to the portfolio after June 30, 2004, would cause future IFO effects to differ from those presented in the table.

^(b) Net open contracts for the combined E&P and IG segments varied throughout second quarter 2004, from a low of 27,208 contracts at April 30 to a high of 35,367 contracts at May 1, and averaged 31,222 for the quarter. The number of net open contracts for the RM&T segment varied throughout second quarter 2004, from a low of 429 contracts at June 28 to a high of 22,297 contracts at April 22, and averaged 9,606 for the quarter. The commodity derivative instruments used and hedging positions taken will vary and, because of these variations in the composition of the portfolio over time, the number of open contracts by itself cannot be used to predict future income effects.

^(c) The calculation of sensitivity amounts for basis swaps assumes that the physical and paper indices are perfectly correlated. Gains and losses on options are based on changes in intrinsic value only.

^(d) The direction of the price change used in calculating the sensitivity amount for each commodity reflects that which would result in the largest incremental decrease in IFO when applied to the commodity derivative instruments used to hedge that commodity.

E&P Segment

At June 30, 2004 the following commodity derivative contracts were outstanding. All contracts currently qualify for hedge accounting unless noted.

Contract Type(a)	Period	Daily Volume	% of Estimated Production(b)	Average Price
Natural Gas
Zero-cost collars	July – December 2004	30 mmcfd	3%	$7.15 -$4.25 mcf
Swaps	July – December 2004	50 mmcfd	5%	$5.02 mcf
Crude Oil
Zero-cost collars	July – December 2004	44 mbpd(c)	24%	$29.67 -$24.26 bbl

^(a) These contracts may be subject to margin calls above certain limits established by counterparties.

^(b) Volumes and percentages are based on the estimated production on an annualized basis.

^(c) On June 30, 2004, 16 mbpd no longer qualify for hedge accounting due to ineffectiveness between the hedge and the underlying commodity.

Derivative losses included in the E&P segment were $134 million and $85 million for the first six months of 2004 and 2003, respectively. Losses of $81 million and $12 million are included in segment results for the first six months of 2004 and 2003, respectively, on long-term gas contracts in the United Kingdom that are accounted for as derivative instruments and marked-to-market. For additional information on U.K. gas contracts, see “Long-term Gas Contracts” on page 18. Additionally, losses of $1 million and $7 million from discontinued cash flow hedges are included in segment results for the six months of 2004 and 2003, respectively. The discontinued cash flow hedge amounts were reclassified from accumulated other comprehensive income (loss) as it was no longer probable that the original forecasted transactions would occur.

29

RM&T Segment

Marathon’s RM&T operations primarily use commodity derivative instruments to mitigate the price risk of certain crude oil and other feedstock purchases, to protect carrying values of excess inventories, to protect margins on fixed price sales of refined products and to lock-in the price spread between refined products and crude oil (“the crack spread”). Derivative instruments are used to mitigate the price risk between the time foreign and domestic crude oil and other feedstock purchases for refinery supply are priced and when they are actually refined into salable petroleum products. In addition, natural gas options are in place to manage the price risk associated with approximately 60 percent of the anticipated natural gas purchases for refinery use through the third quarter of 2004. Commodity derivative instruments are also used to protect the value of excess refined product, crude oil and LPG inventories. Derivatives are used to lock in margins associated with future fixed price sales of refined products to non-retail customers. Commodity derivative instruments are used to protect against decreases in the future crack spreads. Derivative instruments are also used to take advantage of trading opportunities identified in the commodity markets.

Marathon does not attempt to qualify commodity derivative instruments used in its RM&T operations for hedge accounting and, therefore, recognizes all changes in the fair value of derivatives used in its RM&T operations in income, despite the fact that most of these derivatives have an underlying physical commodity transaction. Generally, derivative losses occur when market prices increase, which are offset by gains on the underlying physical commodity transactions. Conversely, derivative gains occur when market prices decrease, which are offset by losses on the underlying physical commodity transactions. Derivative gains (losses) included in RM&T segment income for the first six months of 2004 and 2003 are summarized in the following table:

	Six Months Ended June 30
Strategy (In Millions)	2004			2003
Mitigate price risk	$	(91	)	$	(74	)
Protect carrying values of excess inventories		(37	)		(36	)
Protect margin on fixed price sales		6			3
Protect crack spread values		(81	)		10
Trading activities		12			(1	)
Total net derivative losses	$	(191	)	$	(98	)

In the fourth quarter 2003 through the second quarter 2004, using derivative instruments MAP sold crack spreads forward through the third quarter 2004 at values higher than the company thought sustainable in the actual months these contracts expire. Included in the $81 million derivative loss in the first six months of 2004 noted in the above table for the “Protect crack spread values” strategy was approximately a $19 million loss due to the mark-to-market of the crack spreads that will expire in the third quarter of 2004. The table below summarizes the open protect crack spread values strategies in place at June 30, 2004.

Contract Type	Quarterly Period	Volume	Average Price(a)
Gasoline crack spreads	July – September 2004	5 mmbbls	$	7.12 bbl
Distillate crack spreads	July – September 2004	2 mmbbls	$	3.98 bbl

^(a) Crack spread strategies include both Over the Counter U.S. Gulf Coast price based and New York Mercantile Exchange (“NYMEX”) based derivative instruments. The average price is weighted by the volume of each type of derivative instrument.

IG Segment

Marathon has used derivative instruments to convert the fixed price of a long-term gas sales contract to market prices. The underlying physical contract is for a specified annual quantity of gas and matures in 2008. Similarly, Marathon will use derivative instruments to convert shorter term (typically less than a year) fixed price contracts to market prices in its ongoing purchase for resale activity; and to hedge purchased gas injected into storage for subsequent resale. Derivative gains included in IG segment income were $10 million and $1 million for the first six months of 2004 and 2003, respectively. IG’s trading activity losses of $7 million in the first six months of 2003 are included in the aforementioned amounts.

30

Other Commodity Related Risks

Marathon is subject to basis risk, caused by factors that affect the relationship between commodity futures prices reflected in commodity derivative instruments and the cash market price of the underlying commodity. Natural gas transaction prices are frequently based on industry reference prices that may vary from prices experienced in local markets. For example, NYMEX contracts for natural gas are priced at Louisiana’s Henry Hub, while the underlying quantities of natural gas may be produced and sold in the western United States at prices that do not move in strict correlation with NYMEX prices. To the extent that commodity price changes in one region are not reflected in other regions, commodity derivative instruments may no longer provide the expected hedge, resulting in increased exposure to basis risk. These regional price differences could yield favorable or unfavorable results. OTC transactions are being used to manage exposure to a portion of basis risk.

Marathon is subject to liquidity risk, caused by timing delays in liquidating contract positions due to a potential inability to identify a counterparty willing to accept an offsetting position. Due to the large number of active participants, liquidity risk exposure is relatively low for exchange-traded transactions.

Interest Rate Risk

Marathon is subject to the effects of interest rate fluctuations affecting the fair value of certain financial instruments. A sensitivity analysis of the projected incremental effect of a hypothetical 10 percent decrease in interest rates as of June 30, 2004 is provided in the following table:

Financial Instruments (a) (In millions)	Fair Value (e)			Incremental Increase in Fair Value (b)
Financial assets:
Interest rate swap agreements	$	(20	)	$	17
Financial liabilities:
Long-term debt (c)(d)	$	4,364		$	174

^(a) Fair values of cash and cash equivalents, receivables, notes payable, accounts payable and accrued interest approximate carrying value and are relatively insensitive to changes in interest rates due to the short-term maturity of the instruments. Accordingly, these instruments are excluded from the table.

^(b) For long-term debt, this assumes a 10 percent decrease in the weighted average yield to maturity of Marathon’s long-term debt at June 30, 2004. For interest rate swap agreements, this assumes a 10 percent decrease in the effective swap rate at June 30, 2004.

^(c) See below for sensitivity analysis.

^(d) Includes amounts due within one year.

^(e) Fair value was based on market prices where available, or current borrowing rates for financings with similar terms and maturities.

At June 30, 2004, Marathon’s portfolio of long-term debt was substantially comprised of fixed-rate instruments. Therefore, the fair value of the portfolio is relatively sensitive to effects of interest rate fluctuations. This sensitivity is illustrated by the $174 million increase in the fair value of long-term debt assuming a hypothetical 10 percent decrease in interest rates. However, Marathon’s sensitivity to interest rate declines and corresponding increases in the fair value of its debt portfolio would unfavorably affect Marathon’s results and cash flows only to the extent that Marathon would elect to repurchase or otherwise retire all or a portion of its fixed-rate debt portfolio at prices above carrying value.

Marathon has initiated a program to manage its exposure to interest rate movements by utilizing financial derivative instruments. The primary objective of this program is to reduce the Company’s overall cost of borrowing by managing the fixed and floating interest rate mix of the debt portfolio. Beginning in 2002, Marathon entered into several interest rate swap agreements, designated as fair value hedges, which effectively resulted in an exchange of existing obligations to pay fixed interest rates for obligations to pay floating rates. The following table summarizes interest rate swap activity as of June 30:

Floating Rate to be Paid	Fixed Rate to be Received		Notional Amount ($Millions)		Swap Maturity	Fair Value ($Millions)
Six Month LIBOR +4.226%	6.650	%	$	300	2006	$	(2	)
Six Month LIBOR +1.935%	5.375	%	$	450	2007	$	(2	)
Six Month LIBOR +3.285%	6.850	%	$	400	2008	$	(5	)
Six Month LIBOR +2.142%	6.125	%	$	200	2012	$	(11	)

31

Foreign Currency Exchange Rate Risk

Marathon, at times, manages its exposure to movements in foreign currency exchange rates by locking in foreign currency rates through the utilization of forward contracts. As of June 30, 2004, Marathon had no open contracts.

Credit Risk

Marathon has significant credit risk exposure to United States Steel arising from the Separation. That exposure is discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Obligations Associated with the Separation of United States Steel” on page 26.

Safe Harbor

Marathon’s quantitative and qualitative disclosures about market risk include forward-looking statements with respect to management’s opinion about risks associated with the use of derivative instruments. These statements are based on certain assumptions with respect to market prices and industry supply and demand for crude oil, natural gas, and refined products. To the extent that these assumptions prove to be inaccurate, future outcomes with respect to Marathon’s hedging programs may differ materially from those discussed in the forward-looking statements.

32

Item 4. Controls and Procedures

An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-14 and 15d-14 under the Securities Exchange Act of 1934) was carried out under the supervision and with the participation of Marathon’s management, including our Chief Executive Officer and Chief Financial Officer. As of the end of the period covered by this report based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective. No significant changes were made in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

Marathon reviews and modifies its financial and operational controls on an ongoing basis to ensure that those controls are adequate to address changes in its business as it evolves. Marathon believes that its existing financial and operational controls and procedures are adequate.

33

MARATHON OIL CORPORATION

Supplemental Statistics – (Unaudited)

	Second Quarter Ended June 30						Six Months Ended June 30
(Dollars in millions, except as noted)	2004			2003			2004			2003
INCOME FROM OPERATIONS(a)
Exploration and Production
United States	$	285		$	244		$	591		$	605
International		58			68			230			222
E&P Segment Income		343			312			821			827
Refining, Marketing and Transportation(b)		577			258			626			328
Integrated Gas		(8	)		27			7			29
Segment Income	$	912		$	597		$	1,454		$	1,184
Items not allocated to segments:
Administrative expenses	$	(84	)	$	(49	)	$	(148	)	$	(93	)
Gain on asset dispositions		—			106			—			106
Loss on dissolution of MKM Partners L.P.		—			(124	)		—			(124	)
Gain on ownership change - MAP		1			(4	)		1			—
Income from Operations	$	829		$	526		$	1,307		$	1,073
CAPITAL EXPENDITURES(a)
Exploration and Production	$	180		$	297		$	352		$	514
Refining, Marketing and Transportation		138			157			273			288
Integrated Gas		151			14			186			22
Corporate		4			1			6			2
Total	$	473		$	469		$	817		$	826
EXPLORATION EXPENSE
United States	$	15		$	12		$	23		$	50
International		12			15			29			25
Total	$	27		$	27		$	52		$	75
OPERATING STATISTICS
Net Liquid Hydrocarbon Production (mbpd)(c)
United States		87.2			114.4			89.5			116.0
Europe		41.0			40.8			43.0			45.0
Other International		16.1			9.8			16.1			5.7
West Africa		33.7			32.5			32.3			25.4
Total International		90.8			83.1			91.4			76.1
Worldwide continuing operations		178.0			197.5			180.9			192.1
Discontinued operations		—			3.8			—			4.1
Worldwide		178.0			201.3			180.9			196.2
Net Natural Gas Production (mmcfd)(c)(d)
United States		641.1			707.4			671.3			742.5
Europe		252.8			282.6			305.7			334.8
West Africa		71.0			74.3			73.6			73.4
Total International		323.8			356.9			379.3			408.2
Worldwide continuing operations		964.9			1,064.3			1,050.6			1,150.7
Discontinued operations		—			101.0			—			99.9
Worldwide		964.9			1,165.3			1,050.6			1,250.6
Total production (mboepd)		338.8			395.5			356.0			404.6

34

MARATHON OIL CORPORATION

Supplemental Statistics – (Unaudited)

	Second Quarter Ended June 30					Six Months Ended June 30
	2004			2003		2004		2003
OPERATING STATISTICS
Average Sales Prices (excluding derivative gains and losses)
Liquid Hydrocarbons ($ per bbl)
United States	$	31.74		$	25.23	$	30.71	$	27.59
Europe		34.69			24.96		32.81		28.35
Other International		20.19			15.94		18.95		18.20
West Africa		31.44			24.10		30.50		25.78
Total International		30.91			23.56		29.55		26.73
Worldwide continuing operations		31.32			24.53		30.13		27.25
Discontinued operations		—			27.93		—		29.64
Worldwide	$	31.32		$	24.59	$	30.13	$	27.30
Natural Gas ($ per mcf)
United States	$	5.02		$	4.40	$	4.86	$	4.91
Europe		3.85			3.01		4.02		3.22
West Africa		.26			.25		.25		.25
Total International		3.07			2.44		3.29		2.68
Worldwide continuing operations		4.37			3.75		4.29		4.12
Discontinued operations		—			5.23		—		5.68
Worldwide	$	4.37		$	3.87	$	4.29	$	4.25
Average Sales Prices (including derivative gains and losses)
Liquid Hydrocarbons ($ per bbl)
United States	$	29.09		$	24.86	$	28.58	$	26.92
Europe		32.34			24.65		31.18		27.73
Other International		20.19			15.94		18.89		18.20
West Africa		31.44			24.10		30.50		25.78
Total International		29.85			23.41		28.77		26.37
Worldwide continuing operations		29.48			24.25		28.67		26.70
Discontinued operations		—			27.93		—		29.64
Worldwide	$	29.48		$	24.32	$	28.67	$	26.76
Natural Gas ($ per mcf)
United States	$	5.00		$	4.14	$	4.82	$	4.52
Europe(e)		(.27	)		2.62		2.56		3.01
West Africa		.26			.25		.25		.25
Total International		(.16	)		2.12		2.11		2.51
Worldwide continuing operations		3.27			3.47		3.84		3.81
Discontinued operations		—			5.23		—		5.68
Worldwide	$	3.27		$	3.62	$	3.84	$	3.96

35

MARATHON OIL CORPORATION

Supplemental Statistics – (Unaudited)

	Second Quarter Ended June 30				Six Months Ended June 30
(Dollars in millions, except as noted)	2004		2003		2004		2003
MAP:
Refinery Runs (mbpd)
Crude oil refined		1,013.4		950.9		901.0		902.3
Other charge and blend stocks		141.8		129.4		169.0		113.0
Total		1,155.2		1,080.3		1,070.0		1,015.3
Refined Product Yields (mbpd)
Gasoline		623.0		582.1		587.6		533.1
Distillates		323.1		291.3		279.0		274.5
Propane		22.6		22.6		21.2		20.8
Feedstocks and special products		95.5		91.6		101.7		98.6
Heavy fuel oil		20.2		23.9		23.6		20.9
Asphalt		84.9		76.1		70.9		70.9
Total		1,169.3		1,087.6		1,084.0		1,018.8
Refined Products Sales Volumes (mbpd)(f)		1,440.2		1,346.4		1,373.8		1,313.5
Matching buy/sell volumes included in refined product sales volumes (mbpd)		74.2		65.8		76.9		72.0
Refining and Wholesale Marketing Margin(g)(h)	$	0.1255	$	0.0701	$	0.0822	$	0.0559
Number of SSA Retail Outlets		1,746		1,802		—		—
SSA Gasoline and Distillate Sales(i)		802		882		1,565		1,711
SSA Gasoline and Distillate Gross Margin(g)	$	0.1192	$	0.1229	$	0.1169	$	0.1198
SSA Merchandise Sales	$	600	$	590	$	1,122	$	1,112
SSA Merchandise Gross Margin	$	140	$	141	$	272	$	274

^(a) In January 2004, Marathon changed its business segments to fully reflect all the operations of the integrated gas strategy within a single segment and has realigned its segment reporting to reflect a new business segment, Integrated Gas. Segment income and capital expenditures for previous quarters in 2003 have been revised to reflect this change.

^(b) Includes MAP at 100 percent. RM&T segment income includes Ashland’s 38% interest in MAP of $222 million, $240 million, $98 million and $129 million in the second quarter and six months year-to-date 2004 and 2003, respectively.

^(c) Amounts reflect production after royalties, excluding the U.K., Ireland and the Netherlands where amounts are before royalties.

^(d) Includes gas acquired for injection and subsequent resale of 23.5, 22.7, 17.1, and 23.4 mmcfd in the second quarter and six months year to date 2004 and 2003, respectively.

^(e) Includes non-cash mark-to-market effects of the U.K. long-term gas contracts.

^(f) Total average daily volumes of all refined product sales to MAP’s wholesale, branded and retail (SSA) customers.

^(g) Per gallon

^(h) Sales revenue less cost of refinery inputs, purchased products and manufacturing expenses, including depreciation.

⁽ⁱ⁾ Millions of gallons

36

Part II - OTHER INFORMATION:

Item 1. Legal Proceedings

Environmental Proceedings

In May, 2003 Marathon received a Consolidated Compliance Order & Notice of Potential Penalty from the State of Louisiana for alleged various air permit regulatory violations. This matter was formally settled with the State in June 2004 for a civil penalty of $148,628, paid in July 2004.

Item 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities

The following table provides information about purchases by Marathon and its affiliated purchaser during the six months ended June 30, 2004 of equity securities that are registered by Marathon pursuant to Section 12 of the Exchange Act:

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares Purchased(1)(2)	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
01/01/04 - 01/31/04	5,713	$	33.62	N/A	N/A
02/01/04 - 02/29/04	3,002	$	33.39	N/A	N/A
03/01/04 - 03/31/04	59,316	$	33.64	N/A	N/A
04/01/04 - 04/30/04	5,722	$	33.67	N/A	N/A
05/01/04 - 05/31/04	40,002	$	33.59	N/A	N/A
06/01/04 - 06/30/04	34,703	$	34.36	N/A	N/A
Total:	148,458	$	33.79	N/A	N/A

⁽¹⁾ 86,823 shares were repurchased in open-market transactions under the Marathon Oil Corporation Dividend Reinvestment and Direct Stock Purchase Plan (the “Plan”) by the administrator of the Plan. Stock needed to meet the requirements of the Plan are either purchased in the open market or issued directly by Marathon.

⁽²⁾ 61,635 shares of restricted stock were delivered by employees to Marathon, upon vesting, to satisfy tax withholding requirements.

37

Part II – OTHER INFORMATION - (Continued):

Item 4. Submission of Matters to a Vote of Security Holders

The annual meeting of stockholders was held on April 28, 2004. In connection with the meeting, proxies were solicited pursuant to the Securities Exchange Act of 1934. The following are the voting results on proposals considered and voted upon at the meeting, all of which were described in Marathon’s 2004 Proxy Statement.

1. Votes regarding the persons elected to serve as Class II directors for a term expiring in 2007 were as follows:

NOMINEE	VOTES FOR	VOTES WITHELD
Charles F. Bolden, Jr.	262,030,197	13,468,049
Charles R. Lee	260,399,529	15,098,717
Dennis H. Reilley	261,790,512	13,707,734
Thomas J. Usher	260,557,022	14,941,224

Continuing as Class I directors for a term expiring in 2006 are Clarence P. Cazalot, Jr., David A. Daberko and William L. Davis. Continuing as Class III directors for a term expiring in 2005 are Dr. Shirley Ann Jackson, Philip Lader, Seth E. Schofield and Douglas C. Yearley.

2. PricewaterhouseCoopers LLP was ratified as the independent auditors for 2004. The voting results were:

VOTES FOR	VOTES AGAINST	VOTES ABSTAINED
266,131,447	6,919,644	2,447,155

3. The stockholder proposal to adopt a climate change resolution was not approved. This proposal asked that a committee of independent directors of the board assess how Marathon is responding to rising regulatory, competitive, and public pressure to significantly reduce carbon dioxide and other greenhouse gas emissions and report to shareholders (at reasonable cost and omitting proprietary information) by September 1, 2004. The voting results were:

VOTES FOR	VOTES AGAINST	VOTES ABSTAINED	BROKER NON-VOTES
59,907,052	161,863,986	20,865,937	32,861,271

4. The stockholder proposal to limit severance compensation for senior executive officers was approved. This proposal asked that the Board of Directors seek shareholder approval of future severance agreements with senior executives that provide benefits, which includes lump-sum cash payments and the estimated present value of periodic retirement payments, fringe benefits, perquisites and consulting fees to be paid to the executive, in an amount exceeding 2.99 times the sum of the executives’ base salary plus bonus. The voting results were:

VOTES FOR	VOTES AGAINST	VOTES ABSTAINED	BROKER NON-VOTES
169,853,992	69,583,115	3,198,213	32,862,926

38

Part II – OTHER INFORMATION - (Continued):

Item 6. Exhibits and Reports on Form 8-K

(a) EXHIBITS

4.1	Five Year Credit Agreement dated as of May 20, 2004 among Marathon Oil Corporation, the Co-Agents and other Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Ambro Bank N.V., Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent.
4.2	Five Year Credit Agreement dated as of May 20, 2004 among Marathon Ashland Petroleum LLC, the Co-Agents and other Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Ambro Bank N.V., Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent.
12.1	Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
12.2	Computation of Ratio of Earnings to Fixed Charges
31.1	Certification of President and Chief Executive Officer pursuant to Exchange Act Rules Rule 13a-14 and 15(d)-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Senior Vice President and Chief Financial Officer pursuant to Exchange Act Rules Rule 13a-14 and 15(d)-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Senior Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b) REPORTS ON FORM 8-K

Form 8-K dated April 27, 2004 (filed April 27, 2004), reporting under Item 12. Disclosure of Results of Operations and Financial Condition, that Marathon Oil Corporation issued a press release titled “Marathon Oil Corporation Reports First Quarter 2004 Results.”

Form 8-K dated June 15, 2004 (filed June 15, 2004), reporting under Item 5. Other Events, that effective with the first quarter of 2004, Marathon Oil Corporation (“Marathon”) realigned its segment reporting to reflect a new business segment, Integrated Gas. In order to present corresponding segment information for earlier periods on a comparative basis, Marathon is filing Management’s Discussion and Analysis of Financial Condition and Results of Operations and audited Financial Statements and Notes to conform Footnote 8 “Segment Information” to the new reportable segment composition for the years ended December 31, 2003, 2002 and 2001. In addition, filed herewith are supplemental schedules containing selected quarterly and full year segment and other statistical information for the year 2003.

Form 8-K dated July 7, 2004 (filed July 7, 2004), reporting under Item 12. Disclosure of Results of Operations and Financial Condition, that Marathon Oil Corporation (Marathon) issued a press release titled “Marathon Updates Guidance On Items Expected To Impact Second Quarter 2004 Financial Results.”

Form 8-K dated July 27, 2004 (filed July 27, 2004), reporting under Item 12. Disclosure of Results of Operations and Financial Condition, that Marathon Oil Corporation is furnishing information for the July 27, 2004 press release titled “Marathon Oil Corporation Reports Second Quarter 2004 Results.”

39

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned chief accounting officer thereunto duly authorized.

MARATHON OIL CORPORATION
By	/s/    A. G. ADKINS
	A. G. Adkins
	Vice President –Accounting and Controller

August 3, 2004

40

EX-4.1

EXHIBIT 4.1

CONFORMED COPY

$1,500,000,000

FIVE YEAR CREDIT AGREEMENT

dated as of

May 20, 2004

among

Marathon Oil Corporation

The Co-Agents and Other Lenders Party Hereto

Bank of America, N.A.,

as Syndication Agent

ABN Amro Bank NV,

Citibank, N.A. and

Morgan Stanley Bank,

as Documentation Agents,

and

JPMorgan Chase Bank,

as Administrative Agent

TABLE OF CONTENTS

		PAGE
ARTICLE 1 DEFINITIONS
Section 1.01.	Definitions	1
Section 1.02.	Accounting Terms and Determinations	10
Section 1.03.	Classes and Types of Borrowings	11
ARTICLE 2 THE CREDITS
Section 2.01.	Commitments to Lend	11
Section 2.02.	Notice of Committed Borrowing	11
Section 2.03.	Competitive Bid Borrowings	12
Section 2.04.	Notice to Lenders; Funding of Loans	16
Section 2.05.	Registry; Notes	16
Section 2.06.	Maturity of Loans	17
Section 2.07.	Interest Rates	17
Section 2.08.	Method of Electing Interest Rates	19
Section 2.09.	Fees	20
Section 2.10.	Termination or Reduction of Commitments	21
Section 2.11.	Optional Prepayments	21
Section 2.12.	General Provisions as to Payments	22
Section 2.13.	Funding Losses	22
Section 2.14.	Computation of Interest and Fees	23
Section 2.15.	Change of Control	23
Section 2.16.	Optional Increase in Commitments	24
Section 2.17.	Transfer of Commitments from MAP Facility	25
Section 2.18.	Letters of Credit	25
ARTICLE 3 CONDITIONS
Section 3.01.	Effectiveness	30
Section 3.02.	Borrowings, Transfers and Issuances of Letters of Credit	31
Section 3.03.	Existing Credit Agreements	31
ARTICLE 4 REPRESENTATIONS AND WARRANTIES
Section 4.01.	Corporate Existence and Power	32
Section 4.02.	Corporate and Governmental Authorization; Contravention	32

i

Section 4.03.	Binding Effect	32
Section 4.04.	Financial Information	32
Section 4.05.	Litigation	33
Section 4.06.	Environmental Matters	33
Section 4.07.	Taxes	33
Section 4.08.	Compliance with Laws	33
Section 4.09.	Marathon	34
ARTICLE 5 COVENANTS
Section 5.01.	Information	34
Section 5.02.	Consolidations and Mergers	35
Section 5.03.	Use of Proceeds	36
Section 5.04.	Negative Pledge	36
Section 5.05.	Sale and Leaseback	38
ARTICLE 6 DEFAULTS
Section 6.01.	Events of Default	39
Section 6.02.	Notice of Default	41
Section 6.03.	Cash Cover	41
ARTICLE 7 THE AGENTS
Section 7.01.	Appointment and Authorization	41
Section 7.02.	Agents and Affiliates	41
Section 7.03.	Action by Administrative Agent	41
Section 7.04.	Consultation with Experts	42
Section 7.05.	Liability of Agents	42
Section 7.06.	Indemnification	42
Section 7.07.	Credit Decision	43
Section 7.08.	Successor Administrative Agent	43
Section 7.09.	Administrative Agent’s Fee	43
Section 7.10.	Other Agents	43
ARTICLE 8 CHANGE IN CIRCUMSTANCES
Section 8.01.	Basis for Determining Interest Rate Inadequate or Unfair	44
Section 8.02.	Illegality	44
Section 8.03.	Increased Cost and Reduced Return	45
Section 8.04.	Base Rate Loans Substituted for Affected Fixed Rate Loans	48
Section 8.05.	Substitution of Lender	48
Section 8.06.	Notice Mandatory	48

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ARTICLE 9 MISCELLANEOUS
Section 9.01.	Notices	49
Section 9.02.	No Waivers	49
Section 9.03.	Expenses; Indemnification	49
Section 9.04.	Sharing	50
Section 9.05.	Amendments and Waivers	51
Section 9.06.	Successors and Assigns	51
Section 9.07.	Designated Lenders	53
Section 9.08.	No Reliance on Margin Stock	54
Section 9.09.	Governing Law; Submission to Jurisdiction	55
Section 9.10.	Counterparts; Integration	55
Section 9.11.	WAIVER OF JURY TRIAL	55
Section 9.12.	USA Patriot Act	55

COMMITMENT SCHEDULE

PRICING SCHEDULE

EXHIBIT A	-	NOTE
EXHIBIT B	-	FORM OF COMPETITIVE BID QUOTE REQUEST
EXHIBIT C	-	FORM OF INVITATION FOR COMPETITIVE BID QUOTES
EXHIBIT D	-	FORM OF COMPETITIVE BID QUOTE
EXHIBIT E	-	OPINION OF COUNSEL FOR THE BORROWER
EXHIBIT F	-	OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE ADMINISTRATIVE AGENT
EXHIBIT G	-	ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H	-	DESIGNATION AGREEMENT

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AGREEMENT dated as of May 20, 2004 among MARATHON OIL CORPORATION, the CO-AGENTS and other LENDERS party hereto, BANK OF AMERICA, N.A., as Syndication Agent, ABN AMRO BANK NV, CITIBANK, N.A. and MORGAN STANLEY BANK, as Documentation Agents and JPMORGAN CHASE BANK, as Administrative Agent.

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. The following terms, as used herein, have the following meanings:

“Absolute Rate Auction” means a solicitation of Competitive Bid Quotes setting forth Competitive Bid Absolute Rates pursuant to Section 2.03.

“Administrative Agent” means JPMorgan Chase Bank, in its capacity as administrative agent for the Lenders hereunder, and its successors in such capacity.

“Administrative Questionnaire” means, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Lender and returned to the Administrative Agent (with a copy to the Borrower).

“Agents” means the Administrative Agent, the Documentation Agents and the Syndication Agent.

“Applicable Euro-Dollar Margin” means, as of any date, a percentage per annum determined by reference to the Pricing Schedule.

“Applicable Lending Office” means, with respect to any Lender, (i) in the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its Competitive Bid Loans, its Competitive Bid Lending Office.

“Approved Fund” means any Fund that is administered or managed by (i) a Lender, (ii) an affiliate of a Lender or (iii) an entity or an affiliate of an entity that administers or manages a Lender.

“Base Rate” means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of one half of 1% plus the Federal Funds Rate for such day.

“Base Rate Loan” means a Committed Loan that bears interest at the Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or the last sentence of Section 2.08(a) or Article 8.

“Borrower” means Marathon Oil Corporation, a Delaware corporation, and its successors.

“Borrower’s 2003 Form 10-K” means the Borrower’s annual report on Form 10-K for 2003, as filed with the SEC pursuant to the Exchange Act.

“Borrowing” has the meaning specified in Section 1.03.

“Change of Control” has the meaning set forth in Section 2.15.

“Class” refers to the determination whether a Loan is a Committed Loan or a Competitive Bid Loan.

“Closing Date” means the date on or after the Effective Date on which all of the conditions specified in Section 3.01 shall have been satisfied.

“Co-Agent” means each Lender designated as a Co-Agent on the signature pages hereof.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute.

“Commitment” means (i) with respect to each Lender listed on the Commitment Schedule, the amount set forth opposite such Lender’s name on the Commitment Schedule, (ii) with respect to any financial institution which becomes a Lender pursuant to Section 2.16, the amount of the Commitment thereby assumed by it and (iii) with respect to any assignee which becomes a Lender pursuant to Section 9.06(b), the amount of the transferor Lender’s Commitment assigned to it pursuant to Section 9.06(b), in each case as such amount may be changed from time to time pursuant to Section 2.10, 2.16, 2.17 or Section 9.06(b); provided that, if the context so requires, the term “Commitment” means the obligation of a Lender to extend credit up to such amount to the Borrower hereunder.

“Commitment Schedule” means the Commitment Schedule attached hereto.

“Committed Loan” means a loan made by a Lender pursuant to Section 2.01; provided that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term “Committed Loan” shall refer to the combined principal amount resulting from such

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combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.

“Competitive Bid Absolute Rate” has the meaning specified in Section 2.03(d).

“Competitive Bid Absolute Rate Loan” means a loan made or to be made by a Lender pursuant to an Absolute Rate Auction.

“Competitive Bid Lending Office” means, as to each Lender, its Domestic Lending Office or such other office, branch or affiliate of such Lender as it may hereafter designate as its Competitive Bid Lending Office by notice to the Borrower and the Administrative Agent; provided that any Lender may from time to time by notice to the Borrower and the Administrative Agent designate separate Competitive Bid Lending Offices for its Competitive Bid LIBOR Loans, on the one hand, and its Competitive Bid Absolute Rate Loans, on the other hand, in which case all references herein to the Competitive Bid Lending Office of such Lender shall be deemed to refer to either or both of such offices, as the context may require.

“Competitive Bid LIBOR Loan” means a loan made or to be made by a Lender pursuant to a LIBOR Auction (including any such loan bearing interest at the Prime Rate pursuant to Section 8.01).

“Competitive Bid Loan” means a Competitive Bid LIBOR Loan or a Competitive Bid Absolute Rate Loan.

“Competitive Bid Margin” has the meaning specified in Section 2.03(d)(iii)(C).

“Competitive Bid Quote” means an offer by a Lender to make a Competitive Bid Loan in accordance with Section 2.03.

“Credit Exposure” means, with respect to any Lender at any time, (i) the amount of its Commitment (whether used or unused) at such time or (ii) if the Commitments have terminated in their entirety, the sum of the aggregate outstanding principal amount of its Loans and the aggregate amount of its Letter of Credit Liabilities at such time.

“Default” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“Designated Lender” means, with respect to any Designating Lender, an Approved Fund designated by it pursuant to Section 9.07(a) as a Designated Lender for purposes of this Agreement.

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“Designating Lender” means, with respect to each Designated Lender, the Lender that designated such Designated Lender pursuant to Section 9.07(a).

“Documentation Agents” means ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, in their capacity as documentation agents in connection with the credit facility provided under this Agreement.

“Domestic Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

“Domestic Lending Office” means, as to each Lender, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Lender may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent.

“Effective Date” means the date the Commitments become effective in accordance with Section 3.01.

“Eligible Assignee” means (i) a Lender; (ii) an affiliate of a Lender; (iii) an Approved Fund; and (iv) any other Person (other than a natural Person) approved by the Administrative Agent and, unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed). If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified in paragraph (b)(i) of Section 9.06), the Borrower shall be deemed to have given its consent five Domestic Business Days after the date notice thereof has been delivered by the assigning Lender (through the Administrative Agent) and receipt thereof has been acknowledged by the Borrower, unless such consent is expressly refused by the Borrower prior to such fifth Domestic Business Day.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

“ERISA Group” means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Code.

“Euro-Dollar Business Day” means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London.

“Euro-Dollar Lending Office” means, as to each Lender, its office, branch or affiliate located at its address set forth in its Administrative

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Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent.

“Euro-Dollar Loan” means a Committed Loan that bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election.

“Euro-Dollar Margin” has the meaning specified in the Pricing Schedule.

“Euro-Dollar Rate” means a rate of interest determined pursuant to Section 2.07(b) on the basis of a London Interbank Offered Rate.

“Events of Default” has the meaning specified in Section 6.01.

“Existing Credit Agreements” means (i) the Third Amended and Restated 364-Day Credit Agreement dated as of November 26, 2003 and (ii) the Five Year Credit Agreement dated as of November 30, 2000, each among the Borrower and the lenders, agents and other parties thereto, as amended to the Effective Date.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day; provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

“Fixed Rate Loans” means Euro-Dollar Loans or Competitive Bid Loans (excluding Competitive Bid LIBOR Loans bearing interest at the Prime Rate pursuant to Section 8.01) or any combination of the foregoing.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

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“Group of Loans” means, at any time, a group of Loans consisting of (i) all Committed Loans which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans having the same Interest Period at such time; provided that, if a Committed Loan of any particular Lender is converted to or made as a Base Rate Loan pursuant to Article 8, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made.

“Indemnitee” has the meaning specified in Section 9.03(b).

“Interest Period” means: (1) with respect to each Euro-Dollar Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing or on the date specified in an applicable Notice of Interest Rate Election and ending one, two, three or six months thereafter, as the Borrower may elect in such notice; provided that:

(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;

(b) any Interest Period which begins on the last Euro-Dollar Business Day in a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day in a calendar month; and

(c) no Interest Period shall end after the Termination Date;

(2) with respect to each Competitive Bid LIBOR Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such whole number of months thereafter as the Borrower may elect in accordance with Section 2.03(b); provided that:

(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;

(b) any Interest Period which begins on the last Euro-Dollar Business Day in a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day in a calendar month; and

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(c) no Interest Period shall end after the Termination Date; and

(3) with respect to each Competitive Bid Absolute Rate Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such number of days thereafter (but not less than 15 days) as the Borrower may elect in accordance with Section 2.03(b); provided that:

(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and

(b) no Interest Period shall end after the Termination Date.

“Issuing Bank” means JPMorgan Chase Bank or any other Lender designated by the Borrower that may agree to issue letters of credit hereunder pursuant to an instrument in form reasonably satisfactory to the Administrative Agent, each in its capacity as an issuer of a Letter of Credit hereunder.

“Lender” means (i) each bank or other institution listed on the Commitment Schedule, (ii) each financial institution which becomes a Lender pursuant to Section 2.16, (iii) each assignee which becomes a Lender pursuant to Section 9.06(b) and (iv) their respective successors.

“Lender Parties” means the Lenders, the Issuing Bank and the Agents.

“Letter of Credit” means a letter of credit to be issued hereunder by an Issuing Bank.

“Letter of Credit Liabilities” means, for any Lender and at any time, such Lender’s ratable participation in the sum of (x) the aggregate amount then owing by the Borrower in respect of amounts paid by the Issuing Bank upon a drawing under a Letter of Credit issued hereunder and (y) the aggregate amount then available for drawing under all outstanding Letters of Credit.

“Letter of Credit Termination Date” means the fifth Domestic Business Day prior to the Termination Date.

“LIBOR Auction” means a solicitation of Competitive Bid Quotes setting forth Competitive Bid Margins based on the London Interbank Offered Rate pursuant to Section 2.03.

“Loan” means a Committed Loan or a Competitive Bid Loan and “Loans” means Committed Loans or Competitive Bid Loans or any combination of the foregoing.

“London Interbank Offered Rate” has the meaning specified in Section 2.07(b).

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“MAP Facility” means the Five Year Credit Agreement dated as of the Effective Date (as such term is defined therein) among Marathon Ashland Petroleum, LLC and the agents, lenders and other parties thereto, as amended from time to time.

“Material Plan” means, at any time, a Plan or Plans having aggregate Unfunded Liabilities in excess of $50,000,000.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” has the meaning set forth in Section 5.04.

“Multiemployer Plan” means, at any time, an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period.

“Notes” means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the Borrower’s obligation to repay the Loans, and “Note” means any one of such promissory notes issued hereunder.

“Notice of Borrowing” means a Notice of Committed Borrowing (as defined in Section 2.02 or a Notice of Competitive Bid Borrowing (as defined in Section 2.03(f)).

“Notice of Interest Rate Election” has the meaning specified in Section 2.08(a).

“Notice of Issuance” has the meaning specified in Section 2.18(b).

“Outstanding Committed Amount” means, with respect to any Lender at any time, the sum of (i) the aggregate outstanding principal amount of its Committed Loans at such time and (ii) the aggregate amount of its Letter of Credit Liabilities at such time, determined at such time after giving effect to any prior assignments by or to such Lender pursuant to Section 9.06(b).

“Parent” means, with respect to any Lender, any Person controlling such Lender.

“Participant” has the meaning specified in Section 9.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Percentage” means, with respect to any Lender at any time, the percentage which the amount of its Commitment at such time represents the

8

aggregate amount of all the Commitments at such time. At any time after the Commitments shall have terminated, the term “Percentage” shall refer to a Lender’s Percentage immediately before such termination, adjusted to reflect any subsequent assignments pursuant to Section 9.06(b).

“Person” means an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Plan” means, at any time, an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

“Pricing Schedule” means the Pricing Schedule attached hereto.

“Prime Rate” means the rate of interest publicly announced by JPMorgan Chase Bank in New York City from time to time as its Prime Rate.

“Quarterly Payment Dates” means each March 31, June 30, September 30 and December 31.

“Reference Banks” means the principal London offices (or any successor offices) of ABN Amro Bank N.V., Citibank, N.A. and JPMorgan Chase Bank.

“Register” has the meaning specified in Section 9.06(c).

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Reimbursement Obligation” has the meaning specified in Section 2.18(c).

“Required Lenders” means, at any time, Lenders having at least 67% in aggregate amount of the Credit Exposures at such time.

“Revolving Credit Period” means the period from and including the Effective Date to but not including the Termination Date.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“SEC” means the Securities and Exchange Commission.

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“Subsidiary” means, as to any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.

“Syndication Agent” means Bank of America, N.A., in its capacity as syndication agent in connection with the credit facility provided under this Agreement.

“Termination Date” means May 20, 2009, or, if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.

“Total Outstanding Amount” means, at any time, the sum of (i) the aggregate outstanding principal amount of the Loans (including both Committed Loans and Competitive Bid Loans) and (ii) the aggregate Letter of Credit Liabilities of all Lenders determined at such time after giving effect, if one or more Loans are being made at such time, to any substantially concurrent application of the proceeds thereof to repay one or more other Loans.

“Transfer” has the meaning specified in Section 2.17.

“Type” refers to the determination whether a Committed Loan is a Base Rate Loan or a Euro-Dollar Loan or whether a Competitive Bid Loan is a Competitive Bid Absolute Rate Loan or a Competitive Bid LIBOR Loan.

“Unfunded Liabilities” means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.

“Voting Power” has the meaning set forth in Section 2.15(a).

“Voting Stock” has the meaning set forth in Section 2.15(a).

Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Borrower’s independent public

10

accountants) with the most recent audited consolidated financial statements of the Borrower delivered to the Administrative Agent.

Section 1.03. Classes and Types of Borrowings. The term “Borrowing” denotes the aggregation of Loans of the same Type and Class of one or more Lenders to be made to the Borrower pursuant to Article 2 on a single date and for a single initial Interest Period. Borrowings are classified for purposes of this Agreement by reference to either or both the Class and Type of Loans comprising such Borrowing (e.g., a Euro-Dollar Borrowing is a Borrowing comprised of Euro-Dollar Loans while a Committed Borrowing is a Borrowing comprised of Committed Loans).

ARTICLE 2

THE CREDITS

Section 2.01. Commitments to Lend. Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make loans to the Borrower pursuant to this Section from time to time during the Revolving Credit Period; provided that, immediately after each such loan is made:

(i) such Lender’s Outstanding Committed Amount shall not exceed its Commitment; and

(ii) the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments.

Each Borrowing under this Section shall be in an aggregate principal amount of $50,000,000 or any larger integral multiple of $10,000,000 (except that any such Borrowing may be in the aggregate amount available within the limitations in the foregoing proviso) and shall be made from the several Lenders ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, prepay Loans to the extent permitted by Section 2.11 and reborrow at any time during the Revolving Credit Period under this Section.

Section 2.02. Notice of Committed Borrowing. The Borrower shall give the Administrative Agent notice (a “Notice of Committed Borrowing”) not later than 10:30 A.M. (New York City time) on (y) the date of each Base Rate Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

(a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;

(b) the aggregate amount of such Borrowing;

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(c) whether the Loans comprising such Borrowing are to bear interest initially at the Base Rate or a Euro-Dollar Rate; and

(d) in the case of a Euro-Dollar Borrowing, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period.

Section 2.03. Competitive Bid Borrowings. (a) The Competitive Bid Option. In addition to Committed Borrowings pursuant to Section 2.01 the Borrower may, as set forth in this Section, request the Lenders to make offers to make Competitive Bid Loans to the Borrower from time to time during the Revolving Credit Period. The Lenders may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section.

(b) Competitive Bid Quote Request. When the Borrower wishes to request offers to make Competitive Bid Loans under this Section, it shall transmit to the Administrative Agent by telex or facsimile a Competitive Bid Quote Request substantially in the form of Exhibit B hereto so as to be received not later than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day before the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business Day immediately before the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying:

(i) the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction,

(ii) the aggregate amount of such Borrowing, which shall be $50,000,000 or a larger integral multiple of $10,000,000,

(iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and

(iv) whether the Competitive Bid Quotes requested are to set forth a Competitive Bid Margin or a Competitive Bid Absolute Rate.

The Borrower may request offers to make Competitive Bid Loans for more than one Interest Period in a single Competitive Bid Quote Request. No Competitive Bid Quote Request shall be given within five Euro-Dollar Business Days (or such other number of days as the Borrower and the Administrative Agent may agree) of any other Competitive Bid Quote Request.

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(c) Invitation for Competitive Bid Quotes. Promptly after receiving a Competitive Bid Quote Request, the Administrative Agent shall send to each of the Lenders which shall have notified the Administrative Agent of its desire to receive the same an Invitation for Competitive Bid Quotes substantially in the form of Exhibit C hereto, which shall constitute an invitation by the Borrower to each Lender to submit Competitive Bid Quotes offering to make the Competitive Bid Loans to which such Competitive Bid Quote Request relates in accordance with this Section.

(d) Submission and Contents of Competitive Bid Quotes. (i) Each Lender to which an Invitation for Competitive Bid Quotes is sent may submit a Competitive Bid Quote containing an offer or offers to make Competitive Bid Loans in response to any Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must comply with the requirements of this Section 2.03(d) and must be submitted to the Administrative Agent by telex or facsimile at its address specified in or pursuant to Section 9.01 not later than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day before the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York City time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); provided that Competitive Bid Quotes submitted by the Administrative Agent (or any affiliate of the Administrative Agent) in the capacity of a Lender may be submitted, and may only be submitted, if the Administrative Agent or such affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than (x) one hour before the deadline for the other Lenders, in the case of a LIBOR Auction or (y) 15 minutes before the deadline for the other Lenders, in the case of an Absolute Rate Auction. Subject to Article 3 and 6, any Competitive Bid Quote so made shall not be revocable except with the written consent of the Administrative Agent given on the instructions of the Borrower.

(ii) Each Competitive Bid Quote shall be substantially in the form of Exhibit D hereto and shall in any case specify:

(A) the proposed date of Borrowing;

(B) the principal amount of the Competitive Bid Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment of the quoting Lender, (x) must be $5,000,000 or a larger integral multiple of $1,000,000, (y) may not exceed the principal amount of Competitive Bid Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Competitive Bid Loans for which offers being made by such quoting Lender may be accepted;

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(C) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the “Competitive Bid Margin”) offered for each such Competitive Bid Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate;

(D) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the “Competitive Bid Absolute Rate”) offered for each such Competitive Bid Loan; and

(E) the identity of the quoting Lender.

A Competitive Bid Quote may set forth up to five separate offers by the quoting Lender with respect to each Interest Period specified in the related Invitation for Competitive Bid Quotes.

(iii) Any Competitive Bid Quote shall be disregarded if it:

(A) is not substantially in conformity with Exhibit D hereto or does not specify all of the information required by subsection 2.03(d)(ii);

(B) contains qualifying, conditional or similar language (except as contemplated by subsection (d)(ii)(B)(z);

(C) proposes terms other than or in addition to those set forth in the applicable Invitation for Competitive Bid Quotes (except as contemplated by subsection (d)(ii)(B)(z); or

(D) arrives after the time set forth in subsection 2.03(d)(i).

(e) Notice to Borrower. The Administrative Agent shall promptly notify the Borrower of the terms of (i) any Competitive Bid Quote submitted by a Lender that is in accordance with Section 2.03(d) and (ii) any Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a previous Competitive Bid Quote submitted by such Lender with respect to the same Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by the Administrative Agent unless such subsequent Competitive Bid Quote is submitted solely to correct a manifest error in such former Competitive Bid Quote. The Administrative Agent’s notice to the Borrower shall specify (A) the aggregate principal amount of Competitive Bid Loans for which offers have been received for each Interest Period specified in the related Competitive Bid Quote Request, (B) the respective principal amounts and Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may

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be, so offered and (C) if applicable, limitations on the aggregate principal amount of Competitive Bid Loans for which offers in any single Competitive Bid Quote may be accepted.

(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New York City time) on (x) the third Euro-Dollar Business Day before the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective), the Borrower shall notify the Administrative Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to Section 2.03(e). In the case of acceptance, such notice (a “Notice of Competitive Bid Borrowing”) shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Competitive Bid Quote in whole or in part; provided that:

(i) the aggregate principal amount of each Competitive Bid Borrowing may not exceed the applicable amount set forth in the related Competitive Bid Quote Request;

(ii) the principal amount of each Competitive Bid Borrowing must be $50,000,000 or a larger integral multiple of $10,000,000;

(iii) acceptance of offers may only be made on the basis of ascending Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be;

(iv) the Borrower may not accept any offer that is described in subsection 2.03(d)(iii) or that otherwise fails to comply with the requirements of this Agreement; and

(v) immediately after such Competitive Bid Borrowing is made, the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments.

(g) Allocation by Administrative Agent. If offers are made by two or more Lenders with the same Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Competitive Bid Loans in respect of which such offers are accepted shall be allocated by the Administrative Agent among such Lenders as nearly as possible (in integral multiples of $1,000,000, as the Administrative Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. Determinations by the Administrative Agent of

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the amounts of Competitive Bid Loans shall be conclusive in the absence of manifest error.

Section 2.04. Notice to Lenders; Funding of Loans. (a) Promptly after receiving a Notice of Borrowing, the Administrative Agent shall notify each Lender of the contents thereof and of such Lender’s share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower.

(b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Lender participating therein shall make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address specified in or pursuant to Section 9.01. Unless the Administrative Agent determines that any applicable condition specified in Article 3 has not been satisfied, the Administrative Agent will make the funds so received from the Lenders available to the Borrower at the Administrative Agent’s aforesaid address.

(c) Unless the Administrative Agent shall have received notice from a Lender before the date of any Borrowing (or, in the case of a Base Rate Borrowing, prior to 12:00 Noon (New York City time) on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available to the Administrative Agent on the date of such Borrowing in accordance with Section 2.04(b) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such share available to the Administrative Agent, such Lender and, if such Lender shall not have done so within five Domestic Business Days of demand therefor by the Administrative Agent, then the Borrower, each agrees to pay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) if such amount is repaid by the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable to such Borrowing pursuant to Section 2.07 and (ii) if such amount is repaid by such Lender, the Federal Funds Rate. If such Lender shall repay to the Administrative Agent such corresponding amount, the Borrower shall not be required to repay such amount and the amount so repaid by such Lender shall constitute such Lender’s Loan included in such Borrowing for purposes of this Agreement. Nothing in this subsection (c) shall relieve any Lender of its obligation to make Loans in accordance with the terms and conditions of this Agreement or relieve any Lender from responsibility for default by it in such obligation.

Section 2.05. Registry; Notes. (a) The Borrower hereby agrees that, upon the request of any Lender at any time, any or all of such Lender’s Loans shall be

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evidenced by one or more Notes of the Borrower payable to the order of such Lender and representing the obligation of the Borrower to pay the unpaid principal amount of such Loans to the Borrower made by such Lender, with interest as provided herein on the unpaid principal amount of such Loans from time to time outstanding.

(b) Each Lender shall record the date, amount, Class, Type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Lender so elects in connection with any transfer or enforcement of a Note received pursuant to this Section, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the inaccuracy of, or the failure of any Lender to make, any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Lender is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required.

Section 2.06. Maturity of Loans. (a) Each Committed Loan shall mature, and the principal amount thereof shall be due and payable (together with interest accrued thereon), on the Termination Date.

(b) Each Competitive Bid Loan shall mature, and the principal amount thereof shall be due and payable (together with interest accrued thereon), on the last day of the Interest Period applicable thereto.

Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable quarterly in arrears on each Quarterly Payment Date and on the Termination Date and, with respect to the principal amount of any Base Rate Loan that is prepaid or converted to a Euro-Dollar Loan, on the date of such prepayment or conversion.

(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus the London Interbank Offered Rate applicable to such Interest Period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof and, with respect to the principal amount of any Euro-Dollar Loan that is prepaid or converted to a Base Rate Loan, on the date of such prepayment or conversion.

The “London Interbank Offered Rate” applicable to any Interest Period means (a) the offered rate for dollar deposits, for a period approximately equal to such Interest Period and, if the amount is so quoted, in an amount approximately

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equal to the average principal amount of the applicable Loans, quoted on the second Euro-dollar Business Day prior to the first day of such Interest Period, as such rate appears on the display designated as page “3750” on the Telerate service (or such other page as may replace page “3750” on the Telerate service or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for U.S. Dollar deposits) (“Telerate Page 3750”) as of 11:00 A.M. (London time) on such date, (b) if, as of 11:00 A.M. (London time) on any such date such rate does not appear on the Telerate Page 3750, the arithmetic mean (adjusted, if necessary, to the nearest 1/16th of 1%), of the offered rates for dollar deposits, for a period approximately equal to such Interest Period quoted on the second Euro-Dollar Business Day prior to the first day of such Interest Period, as such rates appear on the display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or such other page as may replace the “LIBO” page on that service for the purpose of displaying London interbank offered rates of major banks) (“Reuters Screen LIBO Page”) as of 11:00 A.M. (London time) on such date, or (c) if neither of the above rates is available (and in the case of clause (b), if on any such date at least two such rates do not appear on the Reuters Screen LIBO page), the average (adjusted, if necessary, to the next higher  ¹/16^th of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period.

(c) Subject to Section 8.01 each Competitive Bid LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.07(b) as if the related Competitive Bid LIBOR Borrowing were a Euro-Dollar Borrowing) plus (or minus) the Competitive Bid Margin quoted by the Lender making such Loan in accordance with Section 2.03 Each Competitive Bid Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Competitive Bid Absolute Rate quoted by the Lender making such Loan in accordance with Section 2.03 Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof.

(d) Any overdue principal of and interest on any Loan shall bear interest, payable on demand, for each day from and including the date payment thereof was due to but excluding the date of actual payment, at a rate per annum equal to the sum of 1% plus the Base Rate for such day.

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(e) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall promptly notify the Borrower and the participating Lenders of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.

(f) Each Reference Bank agrees to use its best efforts to furnish quotations to the Administrative Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation, the Administrative Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.01 shall apply.

Section 2.08. Method of Electing Interest Rates. (a) The Loans included in each Committed Borrowing shall bear interest initially at the type of rate specified by the Borrower in the applicable Notice of Committed Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Group of Loans (subject to Section 2.08(d) and the provisions of Article 8 as follows:

(i) if such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day; and

(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans to Base Rate Loans as of any Domestic Business Day, or may elect to continue such Loans as Euro-Dollar Loans, as of the end of any Interest Period applicable thereto, for an additional Interest Period, subject to Section 2.13 if any such conversion is effective on any day other than the last day of an Interest Period applicable to such Loans.

Each such election shall be made by delivering a notice (a “Notice of Interest Rate Election”) to the Administrative Agent not later than 10:30 A.M. (New York City time) on the third Euro-Dollar Business Day before the conversion or continuation selected in such notice is to be effective. A Notice of Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal amount of the relevant Group of Loans; provided that (i) such portion is allocated ratably among the Loans comprising such Group and (ii) the portion to which such Notice applies, and the remaining portion to which it does not apply, are each at least $50,000,000 (unless such portion is comprised of Base Rate Loans). If no such notice is timely received before the end of an Interest Period for any Group of Euro-Dollar Loans, the Borrower shall be deemed to have elected that such Group of Loans be converted to Base Rate Loans at the end of such Interest Period.

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(b) Each Notice of Interest Rate Election shall specify:

(i) the Group of Loans (or portion thereof) to which such notice applies;

(ii) the date on which the conversion or continuation selected in such notice is to be effective, which shall comply with the applicable clause of Section 2.08(a)

(iii) if the Loans comprising such Group are to be converted, the new Type of Loans and, if the Loans resulting from such conversion are to be Euro-Dollar Loans, the duration of the next succeeding Interest Period applicable thereto; and

(iv) if such Loans are to be continued as Euro-Dollar Loans for an additional Interest Period, the duration of such additional Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election shall comply with the provisions of the definition of Interest Period.

(c) Promptly after receiving a Notice of Interest Rate Election from the Borrower pursuant to Section 2.08(a), the Administrative Agent shall notify each Lender of the contents thereof and such notice shall not thereafter be revocable by the Borrower.

(d) The Borrower shall not be entitled to elect to convert any Committed Loans to, or continue any Committed Loans for an additional Interest Period as, Euro-Dollar Loans if (i) the aggregate principal amount of any Group of Euro-Dollar Loans created or continued as a result of such election would be less than $50,000,000 or (ii) a Default shall have occurred and be continuing when the Borrower delivers notice of such election to the Administrative Agent.

(e) If any Committed Loan is converted to a different Type of Loan, the Borrower shall pay, on the date of such conversion, the interest accrued to such date on the principal amount being converted.

Section 2.09. Fees. (a) Facility Fee. The Borrower shall pay to the Administrative Agent, for the account of the Lenders ratably in proportion to their Credit Exposures, a facility fee calculated for each day at the Facility Fee Rate for such day (determined in accordance with the Pricing Schedule) on the aggregate amount of the Credit Exposures on such day. Such facility fee shall accrue for each day from and including the Effective Date to but excluding the day on which the Credit Exposures are reduced to zero.

(b) Letter of Credit Fees. The Borrower shall pay (i) to the Administrative Agent for the account of the Lenders ratably a letter of credit fee

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accruing daily on the aggregate undrawn amount of all outstanding Letters of Credit at a rate per annum equal to the Applicable Euro-Dollar Margin for such day and (ii) to each Issuing Bank for its own account, a letter of credit fronting fee accruing daily on the aggregate amount then available for drawing under all Letters of Credit issued by such Issuing Bank at the rate of 0.125% per annum or such other rate as may be mutually agreed between the Borrower and such Issuing Bank from time to time.

(c) Payments. Fees accrued for the account of the Lenders under this Section shall be payable quarterly in arrears on each Quarterly Payment Date and on the day on which the Commitments terminate in their entirety (and, if later, on the day on which the Credit Exposures are reduced to zero).

Section 2.10. Termination or Reduction of Commitments. (a) The Borrower may, upon at least three Domestic Business Days’ notice to the Administrative Agent, (i) terminate the Commitments at any time, if no Loans or Letter of Credit Liabilities are outstanding at such time, or (ii) ratably reduce from time to time by an aggregate amount of $25,000,000 or any larger integral multiple thereof, the aggregate amount of the Commitments in excess of the Total Outstanding Amount. Promptly after receiving a notice pursuant to this subsection, the Administrative Agent shall notify each Lender of the contents thereof.

(b) Unless previously terminated, the Commitments shall terminate in their entirety on the Termination Date.

Section 2.11. Optional Prepayments. (a) Subject in the case of Fixed Rate Loans to Section 2.13, the Borrower may (i) upon at least one Domestic Business Day’s notice to the Administrative Agent, prepay any Group of Base Rate Loans (or any Competitive Bid Borrowing bearing interest at the Prime Rate pursuant to Section 8.01) or (ii) upon at least three Euro-Dollar Business Days’ notice to the Administrative Agent, prepay any Group of Euro-Dollar Loans, in each case in whole at any time, or from time to time in part in amounts aggregating $50,000,000 or any larger integral multiple of $10,000,000, by paying the principal amount to be prepaid together with interest accrued thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Lenders included in such Group of Loans (or such Competitive Bid Borrowing).

(b) Except as provided in Section 2.11(a) or 2.17, the Borrower may not prepay all or any portion of the principal amount of any Competitive Bid Loan before the maturity thereof.

(c) Promptly after receiving a notice of prepayment pursuant to this Section, the Administrative Agent shall notify each Lender of the contents thereof and of such Lender’s ratable share (if any) of such prepayment, and such notice shall not thereafter be revocable by the Borrower.

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Section 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and interest thereon and of fees hereunder not later than 12:00 Noon (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address specified in or pursuant to Section 9.01 and without reduction by reason of any set-off, counterclaim or deduction of any kind. The Administrative Agent will promptly distribute to each Lender its ratable share of each such payment received by the Administrative Agent for the account of the Lenders. Whenever any payment of principal of, or interest on, the Base Rate Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. Whenever any payment of principal of, or interest on, the Competitive Bid Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.

(b) Unless the Borrower notifies the Administrative Agent before the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance on such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that such payment shall not have been so made by the Borrower, each Lender shall repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.

Section 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is converted to a different type of Loan (whether such payment or conversion is pursuant to Article 2, 6 or 8 otherwise) on any day other than the last day of an Interest Period applicable thereto, or if the Borrower fails to borrow, prepay, convert or continue any Fixed Rate Loan after notice has been given to any Lender in accordance with Section 2.04(a), 2.08(c) 2.11(c) the Borrower shall reimburse each Lender within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or

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employing deposits from third parties, but excluding loss of margin for the period after such payment or conversion or failure to borrow, prepay, convert or continue; provided that such Lender shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error.

Section 2.14. Computation of Interest and Fees. Interest based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).

Section 2.15. Change of Control. If a Change of Control shall occur the Borrower will, within ten days after the occurrence thereof, give the Administrative Agent notice thereof, and the Administrative Agent shall promptly notify each Lender thereof. Such notice shall describe in reasonable detail the facts and circumstances giving rise thereto and the date of such Change of Control and each Lender may, by notice to the Borrower and the Administrative Agent given not later than fifty days after the date of such Change of Control, terminate its Commitment, which shall be terminated, and declare the Note held by it (together with accrued interest thereon) and any other amounts payable hereunder for its account to be, and such Note and such amounts shall become, due and payable, in each case on the sixtieth day after the date of such Change of Control (or if such day is not a Domestic Business Day, the next succeeding Domestic Business Day), without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

For purposes of this Section, the following terms have the following meanings:

A “Change of Control” shall occur if (i) any “person” or “group” of persons shall have acquired “beneficial ownership” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder), of shares of Voting Stock representing 35% or more of the Voting Power of the Borrower, (ii) during any period of twenty-five consecutive months, commencing before or after the date of this Agreement, individuals who at the beginning of such twenty-five month period were directors of the Borrower (together with any replacement or additional directors whose election was recommended by incumbent management of the Borrower or who were elected by a majority of directors then in office) cease to constitute a majority of the board of directors of the Borrower, or (iii) any Person or group of related Persons shall acquire all or substantially all of the assets of the Borrower; provided, that a Change of Control shall not be deemed to have occurred pursuant to clause (iii) above if the Borrower shall have merged or consolidated with or transferred all or substantially all of its assets to another corporation in compliance with the provisions of Section 5.02 and the surviving

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or successor or transferee corporation is no more leveraged than was the Borrower immediately prior to such event. For purposes of this definition, the term “leveraged” when used with respect to any corporation shall mean the percentage represented by the total assets of that corporation divided by its stockholders’ equity, in each case determined and as would be shown in a consolidated balance sheet of such corporation prepared in accordance with generally accepted accounting principles in the United States of America.

“Voting Power” as applied to the stock of any corporation means the total voting power represented by all outstanding Voting Stock of such corporation.

“Voting Stock” as applied to the stock of any corporation means stock of any class or classes (however designated) having ordinary voting power for the election of the directors of such corporation, other than stock having such power only by reason of the happening of a contingency.

Section 2.16. Optional Increase in Commitments. At any time, if no Default shall have occurred and be continuing, the Borrower, may, if it so elects, increase the aggregate amount of the Commitments, either by designating a financial institution not theretofore a Lender to become a Lender (such designation to be effective only with the prior written consent of the Administrative Agent, which consent will not be unreasonably withheld or delayed), or by agreeing with an existing Lender that such Lender’s Commitment shall be increased. Upon execution and delivery by the Borrower and such Lender or other financial institution of an instrument in form reasonably satisfactory to the Administrative Agent, such existing Lender shall have a Commitment as therein set forth or such other financial institution shall become a Lender with a Commitment as therein set forth and all the rights and obligations of a Lender with such a Commitment hereunder; provided:

(a) that the Borrower shall provide prompt notice of such increase to the Administrative Agent, who shall promptly notify the Lenders; and

(b) that immediately after such increase is made, the aggregate amount of the Commitments shall not exceed $2,000,000,000 plus the amount of any Transfers made pursuant to Section 2.17.

Upon any increase in the aggregate amount of the Commitments pursuant to this Section 2.16 within five Domestic Business Days, in the case of any Group of Base Rate Loans then outstanding, and at the end of the then current Interest Period with respect thereto, in the case of any Group of Euro-Dollar Loans then outstanding, the Borrower shall prepay such Group in its entirety and, to the extent the Borrower elects to do so and subject to the conditions specified in Article 3, the Borrower shall reborrow Committed Loans from the Lenders in proportion to their respective Commitments after giving effect to such increase, until such time as all outstanding Committed Loans are held by the Lenders in such proportion. Effective upon such increase, the amount of the participations

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held by each Lender in each Letter of Credit then outstanding shall be adjusted such that, after giving effect to such adjustments, each Lender shall hold participations in each such Letter of Credit in the proportion its respective Commitment bears to the aggregate Commitments after giving effect to such increase.

Section 2.17. Transfer of Commitments from MAP Facility. (a) Subject to Section 3.02, the Borrower and Marathon Ashland Petroleum, LLC (“MAP”) may, by joint election in a written notice to the Administrative Agent (which shall promptly provide a copy of such notice to the Lenders) and to the “Administrative Agent” under the MAP Facility, transfer all or any portion (in an amount of $25,000,000 or an integral multiple of $5,000,000 in excess thereof) of the unused Commitments (as such term is defined in the MAP Facility) under the MAP Facility to the Commitments hereunder (any such addition, the “Transfer”).

(b) On the effective date of a Transfer, which shall be specified in the notice delivered pursuant to Section 2.17(a) and which shall be not less than three Domestic Business Days subsequent to the date of giving of such notice, then subject to satisfaction of the conditions precedent specified in Section 3.02, (i) the “Commitments” under the MAP Facility shall be ratably reduced by the aggregate amount specified in such notice and (ii) the aggregate amount of the Commitments hereunder shall be ratably increased by such amount. Such Transfer and the consequent increases and decreases shall be irrevocable.

Section 2.18. Letters of Credit. (a) Commitment to Issue Letters of Credit. Subject to the terms and conditions hereof, each Issuing Bank agrees to issue Letters of Credit from time to time before the Letter of Credit Termination Date upon the request of the Borrower; provided that, immediately after each Letter of Credit is issued the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments and the aggregate amount of the Letter of Credit Liabilities shall not exceed $500,000,000. Upon the date of issuance by an Issuing Bank of a Letter of Credit, the Issuing Bank shall be deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Bank, a participation in such Letter of Credit and the related Letter of Credit Liabilities in the proportion its respective Commitment bears to the aggregate Commitments.

(b) Method for Issuance; Terms; Extensions.

(i) The Borrower shall give the Issuing Bank notice at least three Domestic Business Days (or such shorter notice as may be acceptable to the Issuing Bank in its discretion) prior to the requested issuance of a Letter of Credit (or, in the case of renewal or extension, prior to the Issuing Bank’s deadline for notice of nonextension) specifying the date such Letter of Credit is to be issued, and describing the terms of such Letter of Credit and the nature of the transactions to be supported thereby

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(such notice, including any such notice given in connection with the extension of a Letter of Credit, a “Notice of Issuance”). Upon receipt of a Notice of Issuance, the Issuing Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Lender of the contents thereof and of the amount of such Lender’s participation in such Letter of Credit.

(ii) The obligation of the Issuing Bank to issue each Letter of Credit shall, in addition to the conditions precedent set forth in Section 3.02 be subject to the conditions precedent that such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory to the Issuing Bank and that the Borrower shall have executed and delivered such other customary instruments and agreements relating to such Letter of Credit as the Issuing Bank shall have reasonably requested. The Borrower shall also pay to the Issuing Bank for its own account issuance, drawing, amendment, settlement and extension charges, if any, in the amounts and at the times as agreed between the Borrower and the Issuing Bank.

(iii) The extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit, and if any Letter of Credit contains a provision pursuant to which it is deemed to be extended unless notice of termination is given by the Issuing Bank, the Issuing Bank shall timely give such notice of termination unless it has theretofore timely received a Notice of Issuance and the other conditions to issuance of a Letter of Credit have also theretofore been met with respect to such extension. Each Letter of Credit shall expire at or before the close of business on the date that is one year after such Letter of Credit is issued (or, in the case of any renewal or extension thereof, one year after such renewal or extension); provided that (i) a Letter of Credit may contain a provision pursuant to which it is deemed to be extended on an annual basis unless notice of termination is given by the Issuing Bank and (ii) in no event will a Letter of Credit expire (including pursuant to a renewal or extension thereof) on a date later than the Letter of Credit Termination Date.

(c) Payments; Reimbursement Obligations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Bank shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid as a result of such demand or drawing and the date such payment is to be made by the Issuing Bank (the “Payment Date”). The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any amounts paid by the Issuing Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other

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formalities of any kind. Such reimbursement shall be due on the Payment Date; provided that no such payment shall be due from the Borrower any earlier than the date of receipt by it of notice of its obligation to make such payment (or, if such notice is received by the Borrower after 10:00 A.M. (New York City time) on any date, on the next succeeding Domestic Business Day); and provided further that if and to the extent any such reimbursement is not made by the Borrower in accordance with this clause (i) or clause (ii) below on the Payment Date, then (irrespective of when notice thereof is received by the Borrower), such reimbursement obligation shall bear interest, payable on demand, for each day from and including the Payment Date to but not including the date such reimbursement obligation is paid in full at a rate per annum equal to the rate applicable to Base Rate Loans for such day.

(ii) If the Commitments remain in effect on the Payment Date, all such amounts paid by the Issuing Bank and remaining unpaid by the Borrower after the date and time required by Section 2.18(c)(i) (a “Reimbursement Obligation”) shall, if and to the extent that the amount of such Reimbursement Obligation would be permitted as a Borrowing of Committed Loans pursuant to Section 3.02, and unless the Borrower otherwise instructs the Administrative Agent by not less than one Domestic Business Day’s prior notice, convert automatically to Base Rate Loans on the date such Reimbursement Obligation arises. The Administrative Agent shall, on behalf of the Borrower (which hereby irrevocably directs the Administrative Agent so to act on its behalf), give notice no later than 12:00 Noon (New York City time) on such date requesting each Lender to make, and each Lender hereby agrees to make, a Base Rate Loan, in an amount equal to such Lender’s Percentage of the Reimbursement Obligation with respect to which such notice relates. Each Lender shall make such Loan available to the Administrative Agent at its address referred to in Section 9.01 in immediately available funds, not later than 2:00 P.M. (New York City time), on the date specified in such notice. The Administrative Agent shall pay the proceeds of such Loans to the Issuing Bank, which shall immediately apply such proceeds to repay the Reimbursement Obligation.

(iii) To the extent the Reimbursement Obligation is not refunded by a Lender pursuant to clause (ii) above, such Lender will pay to the Administrative Agent, for the account of the Issuing Bank, immediately upon the Issuing Bank’s demand at any time during the period commencing after such Reimbursement Obligation arises until reimbursement therefor in full by the Borrower, an amount equal to such Lender’s Percentage of such Reimbursement Obligation, together with interest on such amount for each day from the date of the Issuing Bank’s demand for such payment (or, if such demand is made after 1:00 P.M. (New York City time) on such date, from the next succeeding Domestic

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Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the Federal Funds Rate for the first three Domestic Business Days after the date of such demand and thereafter at a rate per annum equal to the Base Rate for each additional day. The Issuing Bank receives such payment as agent for and for the account of each Lender and will pay to each Lender ratably all amounts received from the Borrower for application in payment of its Reimbursement Obligations in respect of any Letter of Credit, but only to the extent such Lender has made payment to the Issuing Bank in respect of such Letter of Credit pursuant hereto; provided that in the event such payment received by the Issuing Bank is required to be returned, such Lender will return to the Issuing Bank any portion thereof previously distributed to it by the Issuing Bank.

(d) Obligations Absolute. The obligations of the Borrower and each Lender under subsection (c) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any Letter of Credit or any document related hereto or thereto;

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of this Agreement or any Letter of Credit or any document related hereto or thereto, provided by any party affected thereby;

(iii) the use which may be made of the Letter of Credit by, or any acts or omission of, a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting);

(iv) the existence of any claim, set-off, defense or other rights that the Borrower may have at any time against a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting), any Lender (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;

(v) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;

(vi) payment under a Letter of Credit against presentation to the Issuing Bank of documents that do not comply with the terms of such Letter of Credit;

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(vii) any termination of the Commitments prior to, on or after the Payment Date for any Letter of Credit, whether at the scheduled termination thereof, by operation of Section 6.01 or otherwise; or

(viii) any other act or omission to act or delay of any kind by any Lender (including the Issuing Bank), the Administrative Agent or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this subsection (viii), constitute a legal or equitable discharge of or defense to the Borrower’s or the Lender’s obligations hereunder;

provided, that this Section 2.18(d) shall not limit the rights of the Borrower under Section 2.18(e)(ii).

(e) Indemnification; Expenses.

(i) The Borrower hereby indemnifies and holds harmless each Lender (including each Issuing Bank) and the Administrative Agent from and against any and all claims, damages, losses, liabilities, costs or expenses which it may reasonably incur in connection with a Letter of Credit issued pursuant to this Section 2.18; provided that the Borrower shall not be required to indemnify any Lender, or the Administrative Agent, for any claims, damages, losses, liabilities, costs or expenses, to the extent found by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of such Person.

(ii) None of the Lenders (including, an Issuing Bank) nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including without limitation any of the circumstances enumerated in subsection (d) above; provided that, notwithstanding Section 2.18(d), the Borrower shall have a claim for direct (but not consequential) damage suffered by it, to the extent finally determined by a court of competent jurisdiction to have been caused by (x) the Issuing Bank’s gross negligence or willful misconduct in determining whether documents presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Bank’s failure to pay under any Letter of Credit after the presentation to it of documents strictly complying with the terms and conditions of the Letter of Credit. The parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

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(iii) Nothing in this subsection (e) is intended to limit the obligations of the Borrower under any other provision of this Agreement. To the extent the Borrower does not indemnify an Issuing Bank as required by this subsection, the Lenders agree to do so ratably in accordance with their Commitments.

(f) Stop Issuance Notice. If the Required Lenders reasonably determine at any time that the conditions set forth in Section 3.02 would not be satisfied in respect of a Borrowing at such time, then the Required Lenders may request that the Administrative Agent issue a “Stop Issuance Notice”, and the Administrative Agent shall issue such notice to each Issuing Bank. Such Stop Issuance Notice shall be withdrawn upon a determination by the Required Lenders that the circumstances giving rise thereto no longer exist. No Letter of Credit shall be issued while a Stop Issuance Notice is in effect. The Required Lenders may request issuance of a Stop Issuance Notice only if there is a reasonable basis therefor, and shall consider reasonably and in good faith a request from the Borrower for withdrawal of the same on the basis that the conditions in Section 3.02 are satisfied, provided that the Administrative Agent and the Issuing Banks may and shall conclusively rely upon any Stop Issuance Notice while it remains in effect.

ARTICLE 3

CONDITIONS

Section 3.01. Effectiveness. The Commitments shall become effective only when all the following conditions have been satisfied:

(a) the Administrative Agent shall have received, from each party listed on the signature pages hereof, either a counterpart hereof signed by such party or facsimile or other written confirmation satisfactory to the Administrative Agent confirming that such party has signed a counterpart hereof;

(b) the Administrative Agent shall have received an opinion of General Counsel of the Borrower (or such other counsel for the Borrower as may be acceptable to the Agent), substantially in the form of Exhibit E hereto, and covering such additional matters relating to the transactions contemplated hereby as the Required Lenders may reasonably request;

(c) the Administrative Agent shall have received an opinion of Davis Polk & Wardwell, special counsel for the Administrative Agent, substantially in the form of Exhibit F hereto, and covering such additional matters relating to the transactions contemplated hereby as the Required Lenders may reasonably request;

(d) the Borrower shall have paid to the Administrative Agent for the account of each Lender a fee in the amount heretofore mutually agreed;

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(e) the Administrative Agent shall have received all documents the Administrative Agent may reasonably request relating to the existence of the Borrower, the corporate authority for and the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Administrative Agent; and

(f) the Administrative Agent shall have received evidence satisfactory to it that all principal of any loans outstanding under, and all accrued interest and fees under, the Existing Credit Agreements shall have been paid in full;

provided that the Commitments shall not become effective unless all of the foregoing conditions are satisfied not later than May 20, 2004. Promptly after the Effective Date occurs, the Administrative Agent shall notify the Borrower and the Lenders thereof, and such notice shall be conclusive and binding on all parties hereto.

Section 3.02. Borrowings, Transfers and Issuances of Letters of Credit. The obligation of any Lender to make a Loan on the occasion of any Borrowing or to increase its Commitment pursuant to any Transfer and the obligation of an Issuing Bank to issue (or renew or extend the term of) any Letter of Credit (a “Credit Event”) is subject to the satisfaction of the following conditions:

(a) receipt by the Administrative Agent of notice of such Credit Event as required hereunder;

(b) the fact that, immediately before and after such Credit Event, no Default shall exist; and

(c) the fact that the representations and warranties of the Borrower contained in this Agreement shall be true in all material respects on and as of the date of such Credit Event.

Each Credit Event shall be deemed to be a representation and warranty by the Borrower on the date of such Credit Event as to the facts specified in the foregoing clauses 3.02(b) and 3.02(c).

Section 3.03. Existing Credit Agreements. (a) On the Effective Date, the commitments under the Existing Credit Agreements shall terminate, without further action by any party thereto.

(b) The Lenders which are parties to the Existing Credit Agreements, comprising the “Required Banks” as defined therein, hereby waive any requirement of notice of termination of the commitments pursuant to the Existing Credit Agreements and of prepayment of loans to the extent necessary to give effect to the subsections 3.01(f) and 3.03(a), provided that any such prepayment of loans shall be subject to Section 2.12 of the Existing Credit Agreements.

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

Section 4.01. Corporate Existence and Power. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

Section 4.02. Corporate and Governmental Authorization; Contravention. The execution, delivery and performance by the Borrower of this Agreement and the Notes are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of incorporation or by-laws of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or result in the creation or imposition of any Mortgage on any asset of the Borrower or any of its Subsidiaries.

Section 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and any Notes executed and delivered in accordance with this Agreement will constitute valid and binding obligations of the Borrower.

Section 4.04. Financial Information.

(a) The consolidated balance sheet of the Borrower as of December 31, 2003 and the related consolidated statements of income and cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, and included in the Borrower’s 2003 Form 10-K, copies of which have been delivered to the Administrative Agent for each of the Lenders, fairly present in all material respects, in conformity with generally accepted accounting principles, the consolidated financial position of the Borrower as of such date and its consolidated results of operations and cash flows for such fiscal year.

(b) The unaudited consolidated balance sheet of the Borrower as of March 31, 2004 and the related unaudited consolidated statements of income and cash flows for the three months then ended, set forth in the Borrower’s most recent report on Form 10-Q, copies of which have been delivered to the Administrative Agent for each of the Lenders, fairly present in all material respects, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in paragraph (a) of this Section, the consolidated financial position of the Borrower as of such date and its

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consolidated results of operations and cash flows for such three month period (subject to normal year-end adjustments).

(c) Since March 31, 2004 there has been no change in the consolidated financial position or operations of the Borrower, considered as a whole, which would materially and adversely affect the ability of the Borrower to perform its obligations hereunder and under the Notes.

Section 4.05. Litigation. Except as set forth in the Borrower’s 2003 Form 10-K and in the Borrower’s quarterly report on Form 10-Q filed with the SEC on May 4, 2004, there is no action, suit, arbitration or other proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, arbitrator or arbitral body, pending against the Borrower or of which the Borrower has otherwise received official notice or which to the knowledge of the Borrower is threatened against the Borrower, wherein there is a reasonable possibility of an unfavorable decision, ruling or finding which would materially adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes and since the dates of the respective descriptions of proceedings contained in the reports identified above, there has been no change in the status of such proceedings which would materially adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.06. Environmental Matters. The Borrower does not presently anticipate that remediation costs and penalties associated with environmental laws, to the extent not previously provided for, will have a material adverse effect on the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.07. Taxes. United States Federal income tax returns of the Borrower have been examined and closed through the fiscal year ended December 31, 1994. The Borrower has filed all United States Federal income tax returns and all other material tax returns that are required to be filed by it and has paid all material taxes due pursuant to such returns or pursuant to any assessment received by it, except for any such taxes being diligently contested in good faith and by appropriate proceedings. Adequate reserves have been provided on the books of the Borrower in respect of all taxes or other governmental charges in accordance with generally accepted accounting principles, and no tax liabilities in excess of the amount so provided are anticipated that would materially and adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.08. Compliance with Laws. The Borrower and Marathon Oil Company are in compliance with all applicable laws, rules and regulations, other than such laws, rules or regulations (i) the validity or applicability of which the Borrower or Marathon Oil Company is contesting in good faith or (ii) failure to comply with which cannot reasonably be expected to have consequences which

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would materially and adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.09. Marathon. Marathon Oil Company is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation, and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

ARTICLE 5

COVENANTS

The Borrower agrees that, so long as any Bank has any Credit Exposure hereunder:

Section 5.01. Information. The Borrower will deliver to the Administrative Agent for each of the Lenders:

(a) as soon as available and in any event within 60 days after the end of each fiscal year of the Borrower (or such shorter period as may be required by the SEC), a consolidated balance sheet of the Borrower as of the end of such fiscal year and the related consolidated statements of income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of nationally recognized standing;

(b) as soon as available and in any event within 40 days after the end of each of the first three quarters of each fiscal year of the Borrower (or such shorter period as may be required by the SEC), a consolidated balance sheet of the Borrower as of the end of such quarter and the related consolidated statements of income and cash flows for such quarter and for the portion of the Borrower’s fiscal year ended at the end of such quarter, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of the Borrower’s previous fiscal year;

(c) simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a certificate of the chief financial officer or the chief accounting officer of the Borrower stating whether there exists on the date of such certificate any Default and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto;

(d) forthwith upon the occurrence of any Default, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto;

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(e) promptly upon the mailing thereof to the shareholders of the Borrower generally, copies of all financial statements, reports and proxy statements so mailed;

(f) promptly upon the filing thereof, copies of all annual, quarterly or other reports which the Borrower shall have filed with the SEC; and

(g) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries and affiliates as the Administrative Agent, at the request of any Lender, may reasonably request.

Information required to be delivered pursuant to Section 5.01(a), 5.01(b), 5.01(e) or 5.01(f) above shall be deemed to have been delivered on the date on which the Borrower provides notice to the Administrative Agent that such information has been posted on the Borrower’s website on the Internet at the website address listed on the signature pages hereof, at sec.gov/edaux/searches.htm or at another website identified in such notice and accessible by the Lenders without charge; provided that (i) such notice may be included in a certificate delivered pursuant to Section 5.01(c) and (ii) the Borrower shall deliver paper copies of the information referred to in Section 5.01(a), 5.01(b), 5.01(e) or 5.01(f) to the Administrative Agent for any Lender which requests such delivery.

Section 5.02. Consolidations and Mergers. So long as this Agreement shall remain in effect, the Borrower shall not consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its assets as an entirety to any Person, unless:

(i) either (x) the Borrower shall be the corporation surviving such merger or (y) the corporation formed by such consolidation or into which Borrower is merged or the Person which acquires by conveyance, transfer or lease all or substantially all of the assets of the Borrower as an entirety shall be a corporation organized and existing under the laws of the United States of America or any state or the District of Columbia and shall execute and deliver to each Bank an agreement, in form and substance satisfactory to each Bank, containing an assumption by such successor corporation of the due and punctual performance and observance of each covenant and condition of this Agreement to be performed or observed by the Borrower;

(ii) the Borrower or such successor corporation, as the case may be, shall have a consolidated net worth (that is, total consolidated assets less total consolidated liabilities) of no less than the net worth (as so determined) of the Borrower immediately prior to such consolidation, merger or conveyance, transfer or lease of all or substantially all of the Borrower’s assets as an entirety to such Person; and

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(iii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.

Upon any consolidation or merger in which the Borrower is not the surviving corporation or any conveyance, transfer or lease of all or substantially all of the assets of the Borrower as an entirety in accordance with this Section, the successor corporation formed by such consolidation or into which the Borrower is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Borrower under this Agreement with the same effect as if such successor corporation had been named as the Borrower herein. No such conveyance, transfer or lease of all or substantially all of the assets of the Borrower as an entirety shall have the effect of releasing the Borrower or any successor corporation which shall theretofore have become such in the manner prescribed in this Section from any liability hereunder.

The Borrower will not directly or indirectly convey, transfer or lease all or substantially all of its assets except pursuant to a transaction subject to and in compliance with this Section 5.02.

Section 5.03. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for its general corporate purposes. None of such proceeds will be used in violation of any applicable law or regulation including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System.

Section 5.04. Negative Pledge. If the Borrower or any Subsidiary of the Borrower shall mortgage, pledge, encumber, or subject to a lien (hereinafter to “Mortgage” or a “Mortgage”) as security for any indebtedness for money borrowed any property capable of producing oil or gas or any property or asset used primarily in the refining, marketing or transportation of oil or gas which is located in the United States and determined by the Board of Directors of the Borrower, in good faith, to be a principal property (any such property, a “Principal Property”), the Borrower will secure or will cause such Subsidiary to secure the Borrower’s obligations hereunder equally and ratably with all indebtedness or obligations secured by the Mortgage then being given and with any other indebtedness of the Borrower or such Subsidiary then entitled thereto; provided, however, this covenant shall not apply in the case of:

(i) any Mortgage existing on the date of this Agreement (whether or not such Mortgage includes an after-acquired property provision);

(ii) any Mortgage, including a purchase money Mortgage, incurred in connection with the acquisition of any property (for purposes hereof the creation of any Mortgage within 180 days after the acquisition or completion of construction of such property shall be deemed to be

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incurred in connection with the acquisition of such property), the assumption of any Mortgage previously existing on such acquired property or any Mortgage existing on the property of any corporation when such corporation becomes a Subsidiary of the Borrower;

(iii) any Mortgage on such property in favor of the United States of America, any state, or any agency, department, political subdivision or other instrumentality of either, to secure partial, progress or advance payments to the Borrower or any Subsidiary of the Borrower pursuant to the provisions of any contract or any statute;

(iv) any Mortgage on such property in favor of the United States of America, any state, or any agency, department, political subdivision or other instrumentality of either, to secure borrowings by the Borrower or any Subsidiary of the Borrower for the purchase or construction of the property mortgaged;

(v) any Mortgage in connection with a sale or other transfer of (i) oil or gas in place for a period of time or in an amount such that the purchaser will realize therefrom a specified amount of money or specified amount of minerals or (ii) any interest in property of the character commonly referred to as an “oil payment” or “production payment”;

(vi) any Mortgage on any property arising in connection with or to secure all or any part of the cost of the repair, construction, improvement, alteration, exploration, development or drilling of such property or any portion thereof;

(vii) any Mortgage on any pipeline, gathering system, pumping or compressor station, pipeline storage facility, other pipeline facility, drilling equipment, drilling platform, drilling barge, any movable railway, marine or automotive equipment, gas plant, office building, storage tank, or warehouse facility, any of which is located on a Principal Property;

(viii) any Mortgage on any equipment or other personal property used in connection with a Principal Property;

(ix) any Mortgage on a Principal Property arising in connection with the sale of accounts receivable resulting from the sale of oil or gas at the wellhead; or

(x) any renewal of or substitution for any Mortgage permitted under the preceding clauses.

Notwithstanding the foregoing restriction contained in this Section 5.04, the Borrower may and may permit its Subsidiaries to incur liens or grant Mortgages on property covered by the restriction above so long as the net book value of the

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property so encumbered together with all property subject to the restriction on sale and leasebacks contained in Section 5.05 does not at the time such lien or Mortgage is granted exceed 12.5% of Consolidated Net Tangible Assets. “Consolidated Net Tangible Assets” means the aggregate value of all assets of the Borrower and its Subsidiaries on a consolidated basis after deducting therefrom (a) all current liabilities (excluding all long-term debt due within one year), (b) all investments in unconsolidated subsidiaries and all investments accounted for on the equity basis and (c) all goodwill, patent and trademarks, unamortized debt discount and other similar intangibles (all determined in conformity with generally accepted accounting principles and calculated on a basis consistent with the Borrower’s most recent audited consolidated financial statements).

Section 5.05. Sale and Leaseback. The Borrower will not, nor will it permit any Subsidiary of the Borrower to, sell or transfer any Principal Property, with the intention of taking back a lease of such property; provided, however, this covenant shall not apply if:

(i) the sale is to a Subsidiary of the Borrower (or to the Borrower in the case of a Subsidiary);

(ii) the lease is for a temporary period by the end of which it is intended that the use of such property by the lessee will be discontinued;

(iii) the Borrower or a Subsidiary of the Borrower could, in accordance with Section 5.04, Mortgage such property without equally and ratably securing the Borrower’s obligations hereunder;

(iv) the transfer is incident to or necessary to effect any operating, farm out, farm in, unitization, acreage exchange, acreage contributions, bottom hole or dry hole arrangements or pooling agreement or any other agreement of the same general nature relating to the acquisition, exploration, maintenance, development and operation of oil or gas properties in the ordinary course of business or as required by regulatory agencies having jurisdiction over the property; or

(v) (A) the Borrower promptly informs the Administrative Agent of such sale, (B) the net proceeds of such sale are at least equal to the fair value (as determined by resolution adopted by the Board of Directors of the Borrower) of such property and (C) the Borrower shall, and in any such case the Borrower covenants that it will, within 180 days after such sale, apply an amount equal to the net proceeds of such sale to the retirement of debt of the Borrower, or of a Subsidiary of the Borrower in the case of property of such Subsidiary, maturing by its terms more than one year after the date on which it was originally incurred (herein called “funded debt”); provided that the amount to be applied to the retirement of funded debt of the Borrower or of a Subsidiary of the Borrower shall be

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reduced by the amount equal to the amount below if, within 75 days after such sale, the Borrower shall deliver to the Administrative Agent an officer’s certificate (1) stating that on a specified date after such sale the Borrower or a Subsidiary of the Borrower, as the case may be, voluntarily retired a specified principal amount of funded debt, (2) stating that such retirement was not effected by payment at maturity or pursuant to any applicable mandatory sinking fund or prepayment provision (other than provisions requiring retirement of any funded debt of the Borrower or a Subsidiary of the Borrower, as the case may be, under the circumstances referred to in this Section 5.05) and (3) stating the then optional redemption or prepayment price applicable to funded debt so retired or, if there is no such price applicable, the amount applied by the Borrower or a Subsidiary of the Borrower, as the case may be, to the retirement of such funded debt. The Borrower shall deliver to the Administrative Agent a certified copy of the resolution of the Board of Directors of the Borrower referred to in paragraph (v)(B) above and an officer’s certificate setting forth all material facts under this Section 5.05. The term retirement of such funded debt shall include the in-substance defeasance of such funded debt in accordance with then applicable accounting rules.

ARTICLE 6

DEFAULTS

Section 6.01. Events of Default. If one or more of the following events (“Events of Default”) shall have occurred and be continuing:

(a) the Borrower shall fail to pay when due any principal of any Loan or any Reimbursement Obligation or shall fail to pay within five Domestic Business Days after the due date thereof any interest or fees payable hereunder;

(b) the Borrower shall fail to observe or perform any covenant contained in Section 5.01(d) or 5.02;

(c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those contained in Section 5.04 or 5.05 or those covered by clauses (a) or (b) above) for 10 days after written notice thereof has been given to the Borrower by the Administrative Agent at the request of any Lender;

(d) the Borrower shall fail to observe or perform any covenant contained in Section 5.04 or 5.05 for 30 days after written notice thereof has been given to the Borrower by the Administrative Agent at the request of any Lender; provided that the continuation of such failure for 30 days or longer after such notice shall not constitute an Event of Default if (i) such failure is curable but cannot be cured within 30 days, (ii) the Borrower, upon the aforesaid notice from the Administrative Agent, institutes curative action as promptly as practicable,

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and (iii) the Borrower diligently pursues such action to completion within a reasonable period, which period shall not, in any event, continue for more than 90 days after the aforesaid notice from the Administrative Agent;

(e) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made or deemed made;

(f) the Borrower shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing;

(g) an involuntary case or other proceeding shall be commenced against the Borrower seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower under the federal bankruptcy laws as now or hereafter in effect; or

(h) notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or any member of the ERISA Group shall incur and not satisfy a withdrawal liability under Title IV of ERISA in respect of a Multiemployer Plan in excess of (i) $50,000,000 for any year or (ii) $250,000,000 in the aggregate;

then, and in every such event, the Administrative Agent shall (i) if requested by Lenders having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Lenders holding more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Loans (together with accrued interest thereon) and any other amounts payable hereunder to be, and the Loans and such amounts shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all

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of which are hereby waived by the Borrower; provided that in the case of any of the Events of Default specified in paragraph (f) or (g) above, without any notice to the Borrower or any other act by the Administrative Agent or the Lenders, the Commitments shall thereupon terminate and the Loans (together with accrued interest thereon) and any other amounts payable hereunder shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

Section 6.02. Notice of Default. The Administrative Agent shall give notice to the Borrower under Section 6.01(c) or (d) promptly upon being requested to do so by any Lender and shall thereupon notify all the Lenders thereof.

Section 6.03. Cash Cover. The Borrower agrees, in addition to the provisions of Section 6.01 hereof, that upon the occurrence and during the continuance of any Event of Default, it shall, if requested by the Administrative Agent upon the instruction of the Lenders having more than 50% of the Letter of Credit Liabilities, pay to the Administrative Agent an amount in immediately available funds (which funds shall be held as collateral pursuant to arrangements satisfactory to the Administrative Agent) equal to the aggregate amount available for drawing under all Letters of Credit outstanding at such time, provided that, upon the occurrence of any Event of Default specified in Section 6.01(f) or 6.01(g) with respect to the Borrower, the Borrower shall pay such amount forthwith without any notice or demand or any other act by the Administrative Agent or the Lenders.

ARTICLE 7

THE AGENTS

Section 7.01. Appointment and Authorization. Each Lender irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with all such powers as are reasonably incidental thereto.

Section 7.02. Agents and Affiliates. Each Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise or refrain from exercising the same as though it were not one of the Agents. Each Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or affiliate of the Borrower as if it were not one of the Agents.

Section 7.03. Action by Administrative Agent. The obligations of the Administrative Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Administrative Agent shall

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not be required to take any action with respect to any Default, except as expressly provided in Article 6.

Section 7.04. Consultation with Experts. Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

Section 7.05. Liability of Agents. None of the Agents, their affiliates and their respective directors, officers, agents and employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Lenders (or such different number of Lenders as any provision hereof expressly requires for such consent or request) or (ii) in the absence of its own gross negligence or willful misconduct; provided that the provisions of this sentence are for the sole benefit of the Agents, their affiliates and their respective directors, officers, agents and employees and shall not release any Bank from liability it would otherwise have to the Borrower. None of the Agents, their affiliates and their respective directors, officers, agents and employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing or any issuance of a Letter of Credit hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified in Article 3 except, in the case of the Administrative Agent, receipt of items required to be delivered to it; or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes or any other instrument or writing furnished in connection herewith. No Agent shall incur any liability by acting in reliance upon any notice, consent, certificate, statement or other writing (which may be a bank wire, telex, facsimile or similar writing) believed by it to be genuine or to be signed by the proper party or parties. Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.

Section 7.06. Indemnification. The Lenders shall, ratably in proportion to their Credit Exposures, indemnify the Administrative Agent and each Issuing Bank, their respective affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any Letter of Credit or any action taken or omitted by such indemnitees hereunder or thereunder.

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Section 7.07. Credit Decision. Each Lender acknowledges that it has, independently and without reliance on any other Lender Party, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance on any other Lender Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement.

Section 7.08. Successor Administrative Agent. The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower. Upon any such resignation, the Borrower shall have the right to appoint a successor Administrative Agent from among the Lenders, subject to the approval of the Required Lenders, which shall not be unreasonably withheld. If no successor Administrative Agent shall have been so appointed by the Borrower and approved by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States or of any State thereof and having a combined capital and surplus of at least $100,000,000. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent resigns as Administrative Agent hereunder, the provisions of this Article shall inure to its benefit as to actions taken or omitted to be taken by it while it was Administrative Agent.

Section 7.09. Administrative Agent’s Fee. The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon by the Borrower and the Administrative Agent.

Section 7.10. Other Agents. None of the Co-Agents, the Documentation Agents and the Syndication Agent, in their capacities as such, shall have any duties or obligations of any kind under this Agreement.

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ARTICLE 8

CHANGE IN CIRCUMSTANCES

Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or before the first day of any Interest Period for any Euro-Dollar Loans or Competitive Bid LIBOR Loan:

(a) the Administrative Agent is advised by the Reference Banks that deposits in dollars in the applicable amounts are not being offered to the Reference Banks in the London interbank market for such Interest Period, or

(b) in the case of Euro-Dollar Loans, Lenders having at least 50% in aggregate amount of the Commitments advise the Administrative Agent that the London Interbank Offered Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Lenders of funding their Euro-Dollar Loans for such Interest Period, or

the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders, whereupon until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such suspension no longer exist, (i) the obligations of the Lenders to make Euro-Dollar Loans, or to continue or convert outstanding Loans as or into Euro-Dollar Loans, shall be suspended and (ii) each outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of the then current Interest Period applicable thereto. Unless the Borrower notifies the Administrative Agent at least two Domestic Business Days before the date of any affected Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, (i) if such affected Borrowing is a Euro-Dollar Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such affected Borrowing is a Competitive Bid LIBOR Borrowing, the Competitive Bid LIBOR Loans comprising such Borrowing shall bear interest for each day from and including the first day to but excluding the last day of the Interest Period applicable thereto at the Prime Rate for such day.

Section 8.02. Illegality. (a) If, on or after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, shall make it unlawful or impossible for any Lender (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Lender shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Lenders and the Borrower, whereupon until such Lender notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans or continue outstanding Loans as Euro-Dollar Loans, shall be suspended. Before giving any notice to the Administrative Agent pursuant to this Section, such Lender shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

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(b) If such notice is given, each Euro-Dollar Loan of such Lender then outstanding shall be converted to a Base Rate Loan either (a) on the last day of the then current Interest Period applicable to such Euro-Dollar Loan if such Lender may lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such day or (b) immediately if such Lender shall determine that it may not lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such day. Interest and principal on any such Base Rate Loan shall be payable on the same dates as, and on a pro rata basis with, the interest and principal payable on the related Euro-Dollar Loans of the other Lenders.

Section 8.03. Increased Cost and Reduced Return. (a) If on or after (x) the date hereof, in the case of any Committed Loan or Letters of Credit or any obligation to make Committed Loans or issue or participate in Letters of Credit or (y) the date of the related Competitive Bid Quote, in the case of any Competitive Bid Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

(A) shall subject any Lender (or its Applicable Lending Office) to any tax, duty or other charge with respect to its Fixed Rate Loans or the Letters of Credit, its Note or its obligation to make Fixed Rate Loans or its obligations hereunder in respect of Letters of Credit, or shall change the basis of taxation of payments to any Lender (or its Applicable Lending Office) of the principal of or interest on its Fixed Rate Loans or the Letters of Credit or any other amounts due under this Agreement in respect of its Fixed Rate Loans or the Letters of Credit or its obligation to make Fixed Rate Loans or its obligations hereunder in respect of Letters of Credit (except for taxes based on or measured in whole or in part by the gross income, net income, gross revenue or gross receipts of such Lender or its Applicable Lending Office imposed by the jurisdiction in which such Lender’s principal executive office or Applicable Lending Office is located); or

(B) shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding (y) with respect to any Euro-Dollar Loan any such requirement with respect to which such Lender is entitled to compensation during the relevant Interest Period under Section 8.03(d) and (z) any such requirement with respect to which such Lender is entitled to compensation pursuant to Section 8.03(b)), special deposit, insurance assessment or similar

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requirement against assets of, deposits with or for the account of, or credit (including Letters of Credit and participations therein) extended by, any Lender (or its Applicable Lending Office) or shall impose on any Lender (or its Applicable Lending Office) or on the London interbank market any other condition affecting its Fixed Rate Loans or the Letters of Credit, its Notes or its obligation to make Fixed Rate Loans or its obligations hereunder in respect of Letters of Credit;

and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of making or maintaining any Fixed Rate Loan or of issuing or participating in any Letters of Credit, or to reduce the amount of any sum received or receivable by such Lender (or its Applicable Lending Office) or such Issuing Bank under this Agreement or under its Note with respect thereto, by an amount deemed by such Lender or such Issuing Bank to be material, then, within 15 days after demand by such Lender or such Issuing Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Lender or such Issuing Bank such additional amount or amounts as will compensate such Lender or such Issuing Bank for such increased cost or reduction.

(b) If any Lender shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Lender (or its Parent) as a consequence of such Lender’s obligations hereunder to a level below that which such Lender (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender (or its Parent) for such reduction, provided that the Borrower shall not be obligated to compensate any Lender (or its Parent) in respect of any such reduction in respect of periods more than six months prior to the date on which such Lender shall have notified the Borrower of its intention to demand such compensation and setting forth the amount or the specific basis of computation thereof.

(c) Each Lender will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to Section 8.03(a) or (b) and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it.

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A certificate of any Lender claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods.

(d) The Borrower shall pay for the account of each Lender on the last day of each Interest Period with respect to any Euro-Dollar Loan (and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof), if at any time during such Interest Period such Lender shall be required to maintain (and shall maintain in amounts deemed by such Lender to be material) reserves against any category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined as provided in this Agreement or against any category of extensions of credit or other assets of such Lender which includes loans by a non-United States office of such Lender to United States residents (including without limitation reserves against “Eurocurrency liabilities” under Regulation D), an additional amount (determined by such Lender and notified to the Borrower and the Administrative Agent) equal to the product of the following for each day during such Interest Period:

(i) the principal amount of the Euro-Dollar Loan of such Lender to which such Interest Period relates outstanding on such day; and

(ii) the remainder of (x) a fraction the numerator of which is the applicable London Interbank Offered Rate (expressed as a decimal) and the denominator of which is one minus the stated rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender on such day minus (y) such numerator; and

(iii) 1/360.

If a Lender which is entitled to require payment by the Borrower of the amount provided for in this Section 8.03(d) determines that a lesser amount is required to compensate it for the costs of the reserve requirements referred to therein, such Lender may, but shall not be obligated to, reduce the amount payable by the Borrower thereunder to a lesser amount specified in the notice delivered pursuant to this Section 8.03(d).

(e) Each Lender organized under the laws of a jurisdiction outside the United States of America agrees that it shall deliver to the Borrower (with a copy to the Administrative Agent) (i) within 30 days after the date of execution of this Agreement, two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, promulgated pursuant to the Code, indicating that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes as permitted by the Code, (ii) from time to time, such extensions or renewals of such forms (or successor forms) as may reasonably be requested by the Borrower but

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only to the extent such Lender determines that it may properly effect such extensions or renewals under applicable tax treaties, laws, regulations and directives and (iii) in the event of a transfer of any Loan to an affiliate of such Lender, a new Internal Revenue Service Form W-8BEN or W-8ECI (or any successor form), as the case may be, for such affiliate. The Borrower and the Administrative Agent shall each be entitled to rely on such forms in its possession until receipt of any revised or successor form pursuant to the preceding sentence.

Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans. If (i) the obligation of any Lender to make, or to continue or convert outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03 with respect to its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business Days’ prior notice to such Lender through the Administrative Agent, have elected that the provisions of this Section shall apply to the Lender demanding such compensation, then, unless and until such Lender notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist, all Loans which would otherwise be made by such Lender as (or continued as or converted to) Euro-Dollar Loans shall instead be Base Rate Loans on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Lenders. If such Lender notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist, the principal amount of each such Base Rate Loan shall be converted into a Euro-Dollar Loan on the first day of the next succeeding Interest Period applicable to the related Euro-Dollar Loans of the other Lenders.

Section 8.05. Substitution of Lender. If (i) the obligation of any Lender to make or to convert or continue outstanding Loans as or into Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03, the Borrower shall have the right, with the assistance of the Administrative Agent, to designate a substitute bank or banks (which may be one or more of the Lenders) mutually satisfactory to the Borrower and the Administrative Agent to purchase for cash, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit G hereto, the outstanding Loans of such Lender and assume the Commitment of such Lender, without recourse to or warranty by, or expense to, such Lender, for a purchase price equal to the principal amount of all of such Lender’s outstanding Loans and Reimbursement Obligations plus any accrued but unpaid interest thereon and the accrued but unpaid fees for the account of such Lender hereunder plus such amount, if any, as would be payable pursuant to Section 2.11 if the outstanding Loans of such Lender were prepaid in their entirety on the date of consummation of such assignment.

Section 8.06. Notice Mandatory. The Administrative Agent or the affected Lender, as the case may be, shall promptly give notice to the Borrower when circumstances which gave rise to a suspension of the obligations of the

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Lenders or a Lender to make or maintain Euro-Dollar Loans pursuant to Section 8.01 or 8.02, or to a demand for compensation under Section 8.03, no longer exist.

ARTICLE 9

MISCELLANEOUS

Section 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile or similar writing) and shall be given to such party: (a) in the case of the Borrower or the Administrative Agent, at its address, facsimile number or telex number set forth on the signature pages hereof, (b) in the case of any Lender, at its address, facsimile number or telex number set forth in its Administrative Questionnaire or (c) in the case of any party, at such other address, facsimile number or telex number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when transmitted to the telex number referred to in this Section and the appropriate answerback is received, (ii) if given by facsimile, when transmitted to the facsimile number referred to in this Section and confirmation of receipt is received, (iii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address referred to in this Section; provided that notices to the Administrative Agent under Article 2 or Article 8 shall not be effective until received.

Section 9.02. No Waivers. No failure or delay by any Lender Party in exercising any right, power or privilege hereunder or under any Note or Letter of Credit shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i) all reasonable and documented (with itemized invoices) out-of-pocket expenses of the Administrative Agent, including fees and disbursements of special counsel for the Administrative Agent, in connection with the preparation of this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (ii) if an Event of Default occurs, all reasonable and documented (with itemized invoices) out-of-pocket expenses incurred by each Lender Party, including (without duplication) the fees and disbursements of outside counsel and the allocated cost of inside counsel, in connection with such Event of Default and collection, or any bankruptcy, insolvency, reorganization or other enforcement proceedings resulting therefrom. The Borrower shall indemnify each Lender Party against any transfer taxes, documentary taxes,

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assessments or charges made by any governmental authority by reason of the execution and delivery of this Agreement or the Notes.

(b) The Borrower agrees to indemnify each Lender Party, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this Agreement or any actual or proposed use of proceeds of Loans or Letters of Credit hereunder; provided that (i) no Indemnitee shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct or for its breach of the express terms of this Agreement, in each case as determined by final judgment of a court of competent jurisdiction; (ii) the Borrower shall not, in connection with any such proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm at any one time for the Indemnitees (which shall be selected by the Administrative Agent after consultation with the Borrower); (iii) each Indemnitee shall consult with the Borrower from time to time at the request of the Borrower regarding the conduct of the defense in any such proceeding; and (iv) the Borrower shall not be obligated to pay an amount of any settlement entered into without its consent (which shall not be unreasonably withheld).

Section 9.04. Sharing. Each Lender agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest then due with respect to the Loans and Letters of Credit Liabilities held by it which is greater than the proportion received by any other Lender in respect of the aggregate amount of principal and interest then due with respect to the Loans and Letter of Credit Liabilities held by such other Lender, the Lender receiving such proportionately greater payment shall purchase such participations in the Loans and Letter of Credit Liabilities held by the other Lenders, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Loans and Letter of Credit Liabilities held by the Lenders shall be shared by the Lenders pro rata; provided that nothing in this Section shall impair the right of any Lender to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness hereunder.

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Section 9.05. Amendments and Waivers. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Lenders (and, if the rights or duties of any Issuing Bank or the Agent are affected thereby, by it); provided that no such amendment or waiver shall:

(a) unless signed by each affected Lender, (i) increase or decrease the Commitment of any Lender (except for a ratable decrease in the Commitments of all the Lenders) or subject any Lender to any additional obligation, (ii) reduce the principal of or interest on any Loan or the amount to be reimbursed in respect of any Letter of Credit or any interest thereon or any fees hereunder or (iii) postpone the date fixed for any payment of principal of or interest on any Loan or for reimbursement in respect of any Letter of Credit or any fees hereunder or for the termination of any Commitment or (except as expressly provided in Section 2.18) the expiry date of any Letter of Credit;

(b) unless signed by all Lenders, (i) change the percentage of the Credit Exposures which shall be required for the Lenders or any of them to take any action under this Section or any other provision of this Agreement, (ii) change clause 9.05(a) or this clause 9.05(b) or (iii) change the pro rata distribution of payments to Lenders under this Agreement; or

(c) unless signed by a Designated Lender or its Designating Lender, (i) subject such Designated Lender to any additional obligation, (ii) affect its rights hereunder (unless the rights of all the Lenders hereunder are similarly affected) or (iii) change this clause 9.05(c).

For avoidance of doubt, the operation of Section 2.16 or Section 2.17 in accordance with its terms is not an amendment subject to this Section 9.05.

Section 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).

(b) Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) subject to each such assignment (determined as of the date the Assignment and Assumption Agreement, as hereinafter defined, with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consent (each such consent not to be unreasonably withheld or delayed), (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment

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assigned, except that this clause (ii) shall not apply to rights in respect of outstanding Competitive Bid Loans, (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an agreement, substantially in the form of Exhibit G hereto (an “Assignment and Assumption Agreement”), together with a processing and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and (iv) any Lender assigning all or a portion of its rights and obligations under this Agreement pursuant to an Assignment and Assumption Agreement shall enter into an Assignment and Assumption Agreement (as such term is defined in the MAP Facility) with the same Eligible Assignee(s) in an amount representing an equal proportion of such Lender’s Commitment (as such term is defined in the MAP Facility) under the MAP Facility. Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption Agreement, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 8.03 8.04 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

(c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in the State of Delaware or New York a copy of each Assignment and Assumption Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment, Loans and/or Letter of Credit Liabilities owing to it); provided that (i) such

52

Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clause (i), (ii) or (iii) of Section 9.05(a) that affects such Participant. Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 9.05(a) and Article 8 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.04 as though it were a Lender, provided such Participant agrees to be subject to Section 9.04 as though it were a Lender.

(e) A Participant shall not be entitled to receive any greater payment under Section 8.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant organized under the laws of a jurisdiction outside the United States shall not be entitled to the benefits of Section 8.03(a) unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 8.03(e) as though it were a Lender.

(f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 9.07. Designated Lenders. (a) Subject to the provisions of this subsection (a), any Lender may at any time designate an Approved Fund to provide all or a portion of the Loans to be made by such Lender pursuant to this Agreement; provided that such designation shall not be effective unless the Borrower and the Administrative Agent consent thereto (which consents shall not be unreasonably withheld). When a Lender and its Approved Fund shall have signed an agreement substantially in the form of Exhibit H hereto (a “Designation Agreement”) and the Borrower and the Administrative Agent shall have signed their respective consents thereto, such Approved Fund shall become a Designated Lender for purposes of this Agreement. The Designating Lender shall thereafter

53

have the right to permit such Designated Lender to provide all or a portion of the Loans to be made by such Designating Lender pursuant to Section 2.01 or 2.03, and the making of such Loans or portion thereof shall satisfy the obligation of the Designating Lender to the same extent, and as if, such Loans or portion thereof were made by the Designating Lender. As to any Loans or portion thereof made by it, each Designated Lender shall have all the rights that a Lender making such Loans or portion thereof would have had under this Agreement and otherwise; provided that (x) its voting rights under this Agreement shall be exercised solely by its Designating Lender and (y) its Designating Lender shall remain solely responsible to the other parties hereto for the performance of such Designated Lender’s obligations under this Agreement, including its obligations in respect of the Loans or portion thereof made by it. No additional Note shall be required to evidence the Loans or portion thereof made by a Designated Lender; and the Designating Lender shall be deemed to hold its Note as agent for its Designated Lender to the extent of the Loans or portion thereof funded by such Designated Lender. Each Designating Lender shall act as administrative agent for its Designated Lender and give and receive notices and other communications on its behalf. Any payments for the account of any Designated Lender shall be paid to its Designating Lender as administrative agent for such Designated Lender and neither the Borrower nor the Administrative Agent shall be responsible for any Designating Lender’s application of such payments. In addition, any Designated Lender may, with notice to (but without the prior written consent of) the Borrower and the Administrative Agent, (i) assign all or portions of its interest in any Loans to its Designating Lender or to any financial institutions consented to by the Borrower and the Administrative Agent that provide liquidity and/or credit facilities to or for the account of such Designated Lender to support the funding of Loans or portions thereof made by it and (ii) disclose on a confidential basis any non-public information relating to its Loans or portions thereof to any rating agency, commercial paper dealer or provider of any guarantee, surety, credit or liquidity enhancement to such Designated Lender.

(b) Each party to this Agreement agrees that it will not institute against, or join any other person in instituting against, any Designated Lender any bankruptcy, insolvency, reorganization or other similar proceeding under any federal or state bankruptcy or similar law, for one year and a day after all outstanding senior indebtedness of such Designated Lender is paid in full. The Designating Lender for each Designated Lender agrees to indemnify, save, and hold harmless each other party hereto for any loss, cost, damage and expense arising out of its inability to institute any such proceeding against such Designated Lender. This subsection (b) shall survive the termination of this Agreement.

Section 9.08. No Reliance on Margin Stock. Each Lender represents to the Administrative Agent and each of the other Lenders that it in good faith is not relying upon any “margin stock” (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement.

54

Section 9.09. Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be governed by and construed in accordance with the laws of the State of New York. The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 9.10. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

Section 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 9.12. USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with said Act.

55

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

MARATHON OIL CORPORATION
By:	/s/    PAUL C. REINBOLT
	Name:	PAUL C. REINBOLT
	Title:	VICE PRESIDENT FINANCE AND TREASURER
	539 South Main Street
	Findlay, Ohio 45840
	Attention: Treasurer
Administrative Agent
JPMORGAN CHASE BANK, as Administrative Agent and as Lender
By:	/s/    BETH LAWRENCE
	Name:	BETH LAWRENCE
	Title:	MANAGING DIRECTOR
	270 Park Avenue
	New York, NY 10017
	Attention:
	Facsimile
Syndication Agent
BANK OF AMERICA, N.A., as Syndication Agent and as Lender
By:	/s/    RONALD E. MCKAIG
	Name:	RONALD E. MCKAIG
	Title:	MANAGING DIRECTOR

Documentation Agents
ABN AMRO BANK NV, as a Documentation Agent and as a Lender
By:	/s/    JAMES L. MOYES
	Name:	JAMES L. MOYES
	Title:	VICE PRESIDENT
By:	/s/    FRANK R. RUSSO
	Name:	FRANK R. RUSSO
	Title:	VICE PRESIDENT
CITIBANK, N.A., as a Documentation Agent and as a Lender
By:	/s/    GORDON DEKUYPER
	Name:	GORDON DEKUYPER
	Title:	ATTORNEY-IN-FACT
MORGAN STANLEY BANK, as a Documentation Agent and as Lender
By:	/s/    DANIEL TWENGE
	Name:	DANIEL TWENGE
	Title:	VICE PRESIDENT

Lenders:
THE BANK OF NOVA SCOTIA
By:	/s/    M. D. SMITH
	Name:	M. D. SMITH
	Title:	AGENT
BNP PARIBAS
By:	/s/    BRIAN M. MALONE
	Name:	BRIAN M. MALONE
	Title:	MANAGING DIRECTOR
By:	/s/    GABE ELLISOR
	Name:	GABE ELLISOR
	Title:	VICE PRESIDENT
DEUTSCHE BANK AG NEW YORK BRANCH
By:	/s/    PHILLIPE SANDMEIER
	Name:	PHILLIPE SANDMEIER
	Title:	DIRECTOR
By:	/s/    OLIVER RIEDINGER
	Name:	OLIVER RIEDINGER
	Title:	VICE PRESIDENT

LEHMAN BROTHERS BANK, FSB
By:	/s/    GARY T. TAYLOR
	Name:	GARY T. TAYLOR
	Title:	VICE PRESIDENT
NATIONAL CITY BANK
By:	/s/    THOMAS E. REDMOND
	Name:	THOMAS E. REDMOND
	Title:	SENIOR VICE PRESIDENT
SOCIETE GENERALE
By:	/s/    STEPHEN W. WARFEL
	Name:	STEPHEN W. WARFEL
	Title:	VICE PRESIDENT
THE BANK OF NEW YORK
By:	/s/    CRAIG J. ANDERSON
	Name:	CRAIG J. ANDERSON
	Title:	VICE PRESIDENT
COMERICA BANK
By:	/s/    WILLIAM S. ROGERS
	Name:	WILLIAM S. ROGERS
	Title:	VICE PRESIDENT

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch
By:	/s/    SARAH WU
	Name:	SARAH WU
	Title:	VICE PRESIDENT
By:	/s/    THOMAS R. CANTELLO
	Name:	THOMAS R. CANTELLO
	Title:	VICE PRESIDENT
DEN NOR BANK ASA
By:	/s/    PETER M. DODGE
	Name:	PETER M. DODGE
	Title:	FIRST VICE PRESIDENT
By:	/s/    NILS FYKSE
	Name:	NILE FYKSE
	Title:	SENIOR VICE PRESIDENT
FIFTH THIRD BANK
By:	/s/    CHRISTOPHER C. MOTLEY
	Name:	CHRISTOPHER C. MOTLEY
	Title:	ASSISTANT VICE PRESIDENT
MIZUHO CORPORATE BANK, LTD.
By:	/s/    GREG BOTSHON
	Name:	GREG BOTSHON
	Title:	SENIOR VICE PRESIDENT

THE ROYAL BANK OF SCOTLAND PLC
By:	/s/    PATRICIA J. DUNDEE
	Name:	PATRICIA J. DUNDEE
	Title:	SENIOR VICE PRESIDENT
STANDARD CHARTERED BANK
By:	/s/    JOHN ROBINSON
	Name:	JOHN ROBINSON
	Title:	SENIOR VICE PRESIDENT
By:	/s/    ROBERT K. REDDINGTON
	Name:	ROBERT K. REDDINGTON
	Title:	ASSISTANT VICE PRESIDENT
SUMITOMO MITSUI BANKING CORPORATION
By:	/s/    LEO E. PAGARIGAN
	Name:	LEO E. PAGARIGAN
	Title:	SENIOR VICE PRESIDENT
WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/    JOHN DALNOKY
	Name:	JOHN DALNOKY
	Title:	VICE PRESIDENT

WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets of William Street Commitment Corporation)
By:	/s/    JENNIFER M. HILL
	Name:	JENNIFER M. HILL
	Title:	CHIEF FINANCIAL OFFICER
BAYERISCHE LANDESBANK
By:	/s/    WOLFGANG KOTTMANN
	Name:	WOLFGANG KOTTMAN
	Title:	FIRST VICE PRESIDENT
By:	/s/    RICHARD JACKSON JR.
	Name:	RICHARD JACKSON JR.
	Title:	SECOND VICE PRESIDENT
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:	/s/    DONALD W. HERRICK, JR.
	Name:	DONALD W. HERRICK, JR.
	Title:	VICE PRESIDENT
RIYAD BANK
By:	/s/    KEITH S. TENNY
	Name:	KEITH S. TENNY
	Title:	GENERAL MANAGER
By:	/s/    PIERRE J. HERSZDORFER
	Name:	PIERRE J. HERZDORFER
	Title:	VICE PRESIDENT

SOUTHWEST BANK OF TEXAS
By:	/s/    W. BRYAN CHAPMAN
	Name:	W. BRYAN CHAPMAN
	Title:	SENIOR VICE PRESIDENT
US BANK, N.A.
By:	/s/    PATRICK MCGRAW
	Name:	PATRICK MCGRAW
	Title:	ASSISTANT VICE PRESIDENT
ARAB BANKING CORPORATION
By:	/s/    ROBERT IVOSEVICH
	Name:	ROBERT IVOSEVICH
	Title:	GENERAL MANAGER
By:	/s/    TAREK SHERLALA
	Name:	TAREK SHERLALA
	Title:	VICE PRESIDENT

COMMITMENT SCHEDULE

Lender	Commitment
JPMorgan Chase Bank	$	138,750,000
Bank of America, N.A.	$	138,750,000
ABN Amro Bank NV	$	138,750,000
Citibank, N.A.	$	138,750,000
Morgan Stanley Bank	$	138,750,000
The Bank of Nova Scotia	$	63,750,000
BNP Paribas	$	63,750,000
Deutsche Bank AG New York Branch	$	63,750,000
Lehman Brothers Bank, FSB	$	63,750,000
National City Bank	$	63,750,000
Societe Generale	$	63,750,000
The Bank of New York	$	30,000,000
Comerica Bank	$	30,000,000
Credit Suisse First Boston, acting through its Cayman Islands Branch	$	30,000,000
DNB Nor Bank ASA	$	30,000,000
Fifth Third Bank	$	30,000,000
Mizuho Corporate Bank, Ltd.	$	30,000,000
The Royal Bank of Scotland plc	$	30,000,000
Standard Chartered Bank	$	30,000,000
Sumitomo Mitsui Banking Corporation	$	30,000,000
Wachovia Bank, National Association	$	30,000,000
William Street Commitment Corporation	$	30,000,000
Bayerische Landesbank	$	16,500,000
The Bank of Tokyo-Mitsubishi, Ltd.	$	16,500,000
Riyad Bank	$	16,500,000
Southwest Bank of Texas	$	16,500,000
US Bank, N.A.	$	16,500,000
Arab Banking Corporation	$	11,250,000
Total	$	1,500,000,000.00

FIVE YEAR PRICING SCHEDULE

Each of “Facility Fee Rate” and “Euro-Dollar Margin” means, for any day, the rate per annum set forth below in the row opposite such term and in the column corresponding to the Pricing Level and usage that apply on such date:

Pricing Level	Level I		Level II		Level III		Level IV		Level V		Level VI
Facility Fee Rate	0.080	%	0.100	%	0.125	%	0.150	%	0.200	%	0.250	%
Euro-Dollar Margin
Usage < 50%	0.170	%	0.250	%	0.375	%	0.475	%	0.675	%	1.000	%
Usage > 50%	0.270	%	0.350	%	0.500	%	0.600	%	0.800	%	1.125	%

For purposes of this Schedule, the following terms have the following meanings, subject to the concluding paragraph of this Schedule:

“Level I Pricing” applies on any day on which the Borrower’s long-term debt is rated A or higher by S&P or A2 or higher by Moody’s.

“Level II Pricing” applies on any day on which (i) the Borrower’s long-term debt is rated A- or higher by S&P or A3 or higher by Moody’s and (ii) Level I Pricing does not apply.

“Level III Pricing” applies on any day on which (i) the Borrower’s long-term debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody’s and (ii) none of Level I Pricing and Level II Pricing applies.

“Level IV Pricing” applies on any day on which (i) the Borrower’s long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody’s and (ii) none of Level I Pricing, Level II Pricing and Level III applies.

“Level V Pricing” applies on any day on which (i) the Borrower’s long-term debt is rated BBB- or higher by S&P or Baa3 or higher by Moody’s and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing and Level IV Pricing applies.

“Level VI Pricing” applies on any day if no other Pricing Level applies on such day.

“Pricing Level” refers to the determination of which of Level I, Level II, Level III, Level IV, Level V or Level VI Pricing applies on any day.

The “Usage” applicable to any date is the percentage equivalent of a fraction the numerator of which is the Total Outstanding Amount at such date and the denominator of which is the aggregate amount of the Commitments at such date. If for any reason any Total Outstanding Amount remains following the termination of the Commitments, Usage will be deemed to be 100%.

The credit ratings to be utilized for purposes of this Schedule are those assigned to the senior unsecured long-term debt securities of the Borrower

without third-party credit enhancement, and any rating assigned to any other debt security of the Borrower shall be disregarded. The ratings in effect for any day are those in effect at the close of business on such day.

In the case of split ratings from S&P and Moody’s, the rating to be used to determine the applicable Pricing Level is the higher of the two (e.g., A-/Baa1 results in Level II Pricing); provided that if the split is more than one full rating category, the intermediate (or higher of the two intermediate ratings) will be used (e.g., A-/Baa2 results in Level III Pricing, as does A-/Baa3).

EXHIBIT A

NOTE

New York, New York

May     , 2004

For value received, MARATHON OIL CORPORATION, a Delaware corporation (the “Borrower”), promises to pay to the order of                                                   (the “Lender”), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Lender to the Borrower pursuant to the Credit Agreement referred to below on the maturity date provided for in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of JPMorgan Chase Bank, at 270 Park Avenue, New York, New York.

The date, amount and maturity of each Loan made by the Lender and all repayments of the principal thereof shall be recorded by the Lender and, if the Lender so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Lender on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Lender to make (or any error in making) any such recordation or endorsement shall not affect the Borrower’s obligations hereunder or under the Credit Agreement.

This note is one of the Notes referred to in the Five Year Credit Agreement dated as of May 20, 2004 among Marathon Oil Corporation, the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent (as the same may be amended from time to time, the “Credit Agreement”). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof.

MARATHON OIL CORPORATION
By:
	Name:
	Title:

LOANS AND PAYMENTS OF PRINCIPAL

Date Amount of Loan Amount of Principal Repaid Notation Made By

A-2

EXHIBIT B

FORM OF COMPETITIVE BID QUOTE REQUEST

[Date]

To: JPMorgan Chase Bank

(the “Administrative Agent”)

From: Marathon Oil Corporation (the “Borrower”)

Re: Five Year Credit Agreement (the “Credit Agreement”) dated as of May 20, 2004 among the Borrower, the Lenders party thereto and the Agents party thereto.

We hereby give notice pursuant to Section 2.03 of the Credit Agreement that we request Competitive Bid Quotes for the following proposed Competitive Bid Borrowing(s):

Date of Borrowing:                     

Principal Amount1	Interest Period2
$

Such Competitive Bid Quotes should offer a Competitive Bid [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.]

Terms used herein have the meanings assigned to them in the Credit Agreement.

¹ Amount must be $50,000,000 or a larger multiple of $10,000,000.

² Not less than one month (LIBOR Auction) or not less than 30 days (Absolute Rate Auction), subject to the provisions of the definition of Interest Period.

Marathon Oil Corporation
By:
	Name:
	Title:

B-2

EXHIBIT C

FORM OF INVITATION FOR COMPETITIVE BID QUOTES

To: [Name of Lender]

Re: Invitation for Competitive Bid Quotes to Marathon Oil Corporation (the “Borrower”)

Pursuant to Section 2.03 of the Five Year Credit Agreement dated as of May 20, 2004 among the Borrower, the Lenders party thereto and the Agents party thereto, we are pleased on behalf of the Borrower to invite you to submit Competitive Bid Quotes to the Borrower for the following proposed Competitive Bid Borrowing(s):

Date of Borrowing:                     

Principal Amount	Interest Period
$

Such Competitive Bid Quotes should offer a Competitive Bid [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.]

Please respond to this invitation by no later than [2:00 P.M.] [9:30 A.M.] (New York City time) on [date].

JPMorgan Chase Bank, as Administratie Agent
By:
	Authorized Officer

EXHIBIT D

FORM OF COMPETITIVE BID QUOTE

To: JPMorgan Chase Bank, as Administrative Agent

Re: Competitive Bid Quote to Marathon Oil Corporation (the “Borrower”)

In response to your invitation on behalf of the Borrower dated                     ,             , we hereby make the following Competitive Bid Quote on the following terms:

1. Quoting Lender: ________________________________

2. Person to contact at Quoting Lender:

_____________________________

3. Date of Borrowing:                     ¹

4. We hereby offer to make Competitive Bid Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates:

Principal Amount2	Interest Period3	Competitive Bid [Margin]4	[Absolute Rate]5
$
$

[provided that the aggregate principal amount of Competitive Bid Loans for which the above offers may be accepted shall not exceed $                    .]

¹ As specified in the related Invitation.

² Principal amount bid for each Interest Period may not exceed principal amount requested. Specify aggregate limitation if the sum of the individual offers exceeds the amount the Bank is willing to lend. Each bid must be made for $5,000,000 or a larger multiple of $1,000,000.

³ Not less than one month or not less than 30 days, as specified in the related Invitation. No more than five bids are permitted for each Interest Period.

⁴ Margin over or under the London Interbank Offered Rate determined for the applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%) and specify whether “PLUS” or “MINUS”.

⁵ Specify rate of interest per annum (to the nearest 1/10,000 of 1%).

We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Five Year Credit Agreement dated as of May 20, 2004 among the Borrower, the Lenders party thereto and the Agents party thereto, irrevocably obligate(s) us to make the Competitive Bid Loan(s) for which such offer(s) are accepted, in whole or in part.

Very truly yours,
[NAME OF LENDER]
By:
	Authorized Officer

Dated:                     

D-2

EXHIBIT E

OPINION OF COUNSEL FOR THE BORROWER

[Effective Date]

To the Banks and the Agents

Referred to Below

c/o JPMorgan Chase Bank,

as Administrative Agent

270 Park Avenue

New York, New York 10017

Dear Sirs:

I am the General Counsel of Marathon Oil Corporation, a Delaware corporation (the “Borrower”). This opinion is being delivered pursuant to Section 3.01(b) of the $1,500,000,000 Five Year Credit Agreement dated as of May 20, 2004 among the Borrower, the Lenders party thereto as listed on the signature pages thereof, Bank of America, N.A. as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents, and JPMorgan Chase Bank, as Administrative Agent (the “Agreement”). Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed to them in the Agreement.

I have examined, or caused to be examined, originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion.

Upon the basis of the foregoing, I am of the opinion that:

1. The Borrower is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware and has all corporate powers and all material governmental licenses, authorizations, consents and approvals required to conduct its business as now conducted.

2. The execution, delivery and performance by the Borrower of the Agreement and the Notes are within the Borrower’s corporate powers, have been duly authorized by all necessary corporate action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the Restated Certificate of Incorporation or by-laws of the

Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or result in the creation or imposition of any Mortgage on any asset of the Borrower or any Subsidiary.

3. The Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower, in each case enforceable in accordance with its terms.

4. Except as set forth in the Borrower’s 2003 Form 10-K and subsequent quarterly reports on Form 10-Q filed by the Borrower with the SEC, there is no action, suit, arbitration or other proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, arbitrator or arbitral body, pending against the Borrower or of which the Borrower has otherwise received official notice or which to my knowledge is threatened against the Borrower, wherein there is a reasonable possibility of an unfavorable decision, ruling or finding which would materially adversely affect the Borrower’s ability to perform its obligations under the Agreement and the Notes. Since the dates of the respective descriptions of proceedings contained in the reports identified in the immediately proceeding sentence there has been no change in the status of such proceedings which would materially adversely affect the Borrower’s ability to perform its obligations under the Agreement and the Notes.

The opinion set forth in paragraph 3 hereof is qualified by the effect of: (i) bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting the rights and remedies of creditors generally, (ii) general principles of equity, and (iii) applicable rules of law which: (A) limit or affect the enforcement of provisions of a contract that purport to require waiver of the obligations of good faith, fair dealing, diligence and reasonableness, (B) limit the availability of a remedy under certain circumstances where another remedy has been elected, (C) limit the enforceability of provisions releasing, exculpating, or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, and (D) may, where less than all of a contract may be unenforceable, limit the enforceability of the balance of the contract to circumstances in which the unenforceable portion is not an essential part of the agreed exchange.

The foregoing opinion is limited to the laws of the State of Texas, the Federal laws of the United States of America and the General Corporation Law of the State of Delaware. As the Agreement and the Notes are by their terms governed by the laws of the State of New York, the foregoing opinion should be understood to conclude that (i) a Texas court or a Federal court sitting in Texas would give effect to the choice of New York law to govern the Agreement and the Notes and (ii) under the internal laws of the State of Texas the Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower.

Very truly yours,

E-2

EXHIBIT F

OPINION OF DAVIS POLK & WARDWELL,

SPECIAL COUNSEL FOR THE ADMINISTRATIVE AGENT

[Effective Date]

To the Lenders and Agents

Referred to Below

c/o JPMorgan Chase Bank,

as Administrative Agent

270 Park Avenue

New York, New York 10017

Dear Sirs:

We have participated in the preparation of the Five Year Credit Agreement dated as of May 20, 2004 (the “Credit Agreement”) among Marathon Oil Corporation, a Delaware corporation (the “Borrower”), the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent (the “Administrative Agent”), and have acted as special counsel for the Administrative Agent for the purpose of rendering this opinion pursuant to Section 3.01(c) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined.

We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion.

Upon the basis of the foregoing, we are of the opinion that:

1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower’s corporate powers and have been duly authorized by all necessary corporate action.

2. The Credit Agreement constitutes a valid and binding agreement of the Borrower enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and general principles of equity.

We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the General Corporation Law of the State of Delaware. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Lender is located which limits the rate of interest that such Lender may charge or collect.

This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other Person without our prior written consent.

Very truly yours,

F-2

EXHIBIT G

ASSIGNMENT AND ASSUMPTION AGREEMENT

AGREEMENT dated as of                          ,              among [NAME OF ASSIGNOR] (the “Assignor”) and [NAME OF ASSIGNEE] (the “Assignee”).

WHEREAS, this Assignment and Assumption Agreement (the “Agreement”) relates to the Five Year Credit Agreement dated as of May 20, 2004 (as amended from time to time, the “Credit Agreement”) among the Marathon Oil Corporation, the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent;

WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans to the Borrower in an aggregate principal amount at any time outstanding not to exceed $                    ;

WHEREAS, [Committed] Loans made to the Borrower by the Assignor under the Credit Agreement in the aggregate principal amount of $                     are outstanding at the date hereof; and

WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment thereunder in an amount equal to $                     (the “Assigned Amount”), together with a corresponding portion of each of its outstanding [Committed] Loans, and the Assignee proposes to accept such assignment and assume the corresponding obligations of the Assignor under the Credit Agreement;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows:

SECTION 1. Definitions. All capitalized terms not otherwise defined herein have the respective meanings set forth in the Credit Agreement.

SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount and a corresponding portion of each of its outstanding [Committed] Loans, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount. Upon the execution and delivery hereof by the Assignor and the Assignee [and the execution of the consent attached hereto by the Borrower and the Administrative

Agent]¹ and the payment of the amounts specified in Section 3 required to be paid on the date hereof, (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Lender under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount and acquire the rights of the Assignor with respect to a corresponding portion of each of its outstanding [Committed] Loans and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced by the Assigned Amount, and the Assignor shall be released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor.

SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the amount heretofore agreed between them.² Fees accrued before the date hereof with respect to amounts assigned to the Assignee hereunder are for the account of the Assignor and such fees accruing on and after the date hereof with respect to such amounts are for the account of the Assignee. Each of the Assignor and the Assignee agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party’s interest therein and promptly pay the same to such other party.

[SECTION 4. Consent of the Borrower, the Administrative Agent. This Agreement is conditioned upon the consent of the Borrower and the Administrative Agent pursuant to Section 9.06(b) of the Credit Agreement.³]

[SECTION 5. Note. The Borrower has agreed to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein.]⁴

SECTION 6. No Reliance on Assignor. The Assignor represents and warrants that it is the legal and beneficial owner of the interest being assigned hereby and that such interest is free and clear of any other adverse claim created by it. The Assignor makes no representation or warranty (other than that mentioned immediately above) in connection with, and shall have no responsibility with respect to, the solvency, financial condition or statements of

¹ Delete if consent is not required.

² Amount should combine principal together with accrued interest and breakage compensation, if any, to be paid by the Assignee, net of any portion of any upfront fee to be paid by the Assignor to the Assignee. It may be preferable in an appropriate case to specify these amounts generically or by formula rather than as a fixed sum.

³ Delete if consent is not required.

⁴ Delete if execution and delivery of a Note is not required.

G-2

the Borrower, or the validity and enforceability of the Borrower’s obligations under the Credit Agreement or any Note. The Assignee acknowledges that it has, independently and without reliance on the Assignor, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower.

SECTION 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

SECTION 8. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

[NAME OF ASSIGNOR]
By:
	Name:
	Title:
[NAME OF ASSIGNEE]
By:
	Name:
	Title:

G-3

The undersigned consent to the foregoing assignment.

Marathon Oil Corporation
By:
	Name:
	Title:
JPMorgan Chase Bank, as Administrative Agent
By:
	Name:
	Title:

EXHIBIT H

DESIGNATION AGREEMENT

dated as of                          ,             

Reference is made to the Five Year Credit Agreement dated as of May 20, 2004 (as amended from time to time, the “Credit Agreement”) among Marathon Oil Corporation, a Delaware corporation (the “Borrower”), the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meaning.

                             (the “Designator”) and                              (the “Designee”) agree as follows:

1. The Designator designates the Designee as its Designated Lender under the Credit Agreement and the Designee accepts such designation.

2. The Designator makes no representations or warranties and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto.

3. The Designee (i) confirms that it is an Approved Fund; (ii) appoints and authorizes the Designator as its administrative agent and attorney-in-fact and grants the Designator an irrevocable power of attorney to receive payments made for the benefit of the Designee under the Credit Agreement and to deliver and receive all communications and notices under the Credit Agreement, if any, that the Designee is obligated to deliver or has the right to receive thereunder; (iii) acknowledges that the Designator retains the sole right and responsibility to vote under the Credit Agreement, including, without limitation, the right to approve any amendment or waiver of any provision of the Credit Agreement; and (iv) agrees that the Designee shall be bound by all such votes, approvals, amendments and waivers and all other agreements of the Designator pursuant to or in connection with the Credit Agreement, all subject to Section 9.05(b) of the Credit Agreement.

4. The Designee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements referred to in Article 4 or delivered pursuant to Article 4 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Designation Agreement and (ii) agrees that it will,

independently and without reliance upon the Administrative Agent, the Designator or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action it may be permitted to take under the Credit Agreement.

5. Following the execution of this Designation Agreement by the Designator and the Designee and the consent hereto by the Borrower, it will be delivered to the Administrative Agent for its consent. This Designation Agreement shall become effective when the Administrative Agent consents hereto or on any later date specified on the signature page hereof.

6. Upon the effectiveness hereof, the Designee shall have the right to make Loans or portions thereof as a Lender pursuant to Section 2.01 or 2.03 of the Credit Agreement and the rights of a Lender related thereto. The making of any such Loans or portions thereof by the Designee shall satisfy the obligations of the Designator under the Credit Agreement to the same extent, and as if, such Loans or portions thereof were made by the Designator.

7. This Designation Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the parties have caused this Designation Agreement to be executed by their respective officers hereunto duly authorized, as of the date first above written.

Effective Date:                         ,             

[NAME OF DESIGNATOR]
By:
	Name:
	Title:
[NAME OF DESIGNEE]
By:
	Name:
	Title:

H-2

The undersigned consent to the foregoing designation.

Marathon Oil Corporation
By:
	Name:
	Title:
JPMorgan Chase Bank, as Administrative Agent
By:
	Name:
	Title:

H-3

EX-4.2

EXHIBIT 4.2

CONFORMED COPY

$500,000,000

FIVE YEAR CREDIT AGREEMENT

dated as of

May 20, 2004

among

Marathon Ashland Petroleum LLC

The Co-Agents and Other Lenders Party Hereto

Bank of America, N.A.,

as Syndication Agent

ABN Amro Bank NV,

Citibank, N.A. and

Morgan Stanley Bank,

as Documentation Agents,

and

JPMorgan Chase Bank,

as Administrative Agent

CONFORMED COPY

TABLE OF CONTENTS

	PAGE
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions	1
Section 1.02. Accounting Terms and Determinations	11
Section 1.03. Classes and Types of Borrowings	11
ARTICLE 2
THE CREDITS
Section 2.01. Commitments to Lend	11
Section 2.02. Notice of Committed Borrowing	12
Section 2.03. Competitive Bid Borrowings	12
Section 2.04. Notice to Lenders; Funding of Loans	16
Section 2.05. Registry; Notes	17
Section 2.06. Maturity of Loans	18
Section 2.07. Interest Rates	18
Section 2.08. Method of Electing Interest Rates	20
Section 2.09. Fees	21
Section 2.10. Termination or Reduction of Commitments	22
Section 2.11. Optional Prepayments	22
Section 2.12. General Provisions as to Payments	23
Section 2.13. Funding Losses	24
Section 2.14. Computation of Interest and Fees	24
Section 2.15. Change of Control	24
Section 2.16. Transfer of Commitments to Marathon Facility	25
Section 2.17. Letters of Credit	26
ARTICLE 3
CONDITIONS
Section 3.01. Effectiveness	31
Section 3.02. Borrowings, Transfers and Issuances of Letters of Credit	32
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.01. Company Existence and Power	33
Section 4.02. Company and Governmental Authorization; Contravention	33
Section 4.03. Binding Effect	33
Section 4.04. Financial Information	33

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Section 4.05. Litigation	34
Section 4.06. Environmental Matters	34
Section 4.07. Taxes	34
Section 4.08. Compliance with Laws	35
ARTICLE 5
COVENANTS
Section 5.01. Information	35
Section 5.02. Consolidations and Mergers	36
Section 5.03. Use of Proceeds	37
Section 5.04. Negative Pledge	37
Section 5.05. Sale and Leaseback	39
ARTICLE 6
DEFAULTS
Section 6.01. Events of Default	40
Section 6.02. Notice of Default	42
Section 6.03. Cash Cover	42
ARTICLE 7
THE AGENTS
Section 7.01. Appointment and Authorization	42
Section 7.02. Agents and Affiliates	43
Section 7.03. Action by Administrative Agent	43
Section 7.04. Consultation with Experts	43
Section 7.05. Liability of Agents	43
Section 7.06. Indemnification	44
Section 7.07. Credit Decision	44
Section 7.08. Successor Administrative Agent	44
Section 7.09. Administrative Agent’s Fee	45
Section 7.10. Other Agents	45
ARTICLE 8
CHANGE IN CIRCUMSTANCES
Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair	45
Section 8.02. Illegality	46
Section 8.03. Increased Cost and Reduced Return	47
Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans	49
Section 8.05. Substitution of Lender	50
Section 8.06. Notice Mandatory	50

ii

ARTICLE 9
MISCELLANEOUS
Section 9.01. Notices	50
Section 9.02. No Waivers	51
Section 9.03. Expenses; Indemnification	51
Section 9.04. Sharing	52
Section 9.05. Amendments and Waivers	52
Section 9.06. Successors and Assigns	53
Section 9.07. Designated Lenders	55
Section 9.08. No Reliance on Margin Stock	57
Section 9.09. Governing Law; Submission to Jurisdiction	57
Section 9.10. Counterparts; Integration	57
Section 9.11. WAIVER OF JURY TRIAL	57
Section 9.12. USA Patriot Act	57

COMMITMENT SCHEDULE

PRICING SCHEDULE

EXHIBIT A	-	NOTE
EXHIBIT B	-	FORM OF COMPETITIVE BID QUOTE REQUEST
EXHIBIT C	-	FORM OF INVITATION FOR COMPETITIVE BID QUOTES
EXHIBIT D	-	FORM OF COMPETITIVE BID QUOTE
EXHIBIT E	-	OPINION OF COUNSEL FOR THE BORROWER
EXHIBIT F	-	OPINION OF DAVIS POLK & WARDWELL, SPECIAL COUNSEL FOR THE ADMINISTRATIVE AGENT
EXHIBIT G	-	ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT H	-	DESIGNATION AGREEMENT

iii

CONFORMED COPY

AGREEMENT dated as of May 20, 2004 among MARATHON ASHLAND PETROLEUM LLC, the CO-AGENTS and other LENDERS party hereto, BANK OF AMERICA, N.A., as Syndication Agent, ABN AMRO BANK NV, CITIBANK, N.A. and MORGAN STANLEY BANK, as Documentation Agents and JPMORGAN CHASE BANK, as Administrative Agent.

The parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. The following terms, as used herein, have the following meanings:

“Absolute Rate Auction” means a solicitation of Competitive Bid Quotes setting forth Competitive Bid Absolute Rates pursuant to Section 2.03.

“Administrative Agent” means JPMorgan Chase Bank, in its capacity as administrative agent for the Lenders hereunder, and its successors in such capacity.

“Administrative Questionnaire” means, with respect to each Lender, an administrative questionnaire in the form prepared by the Administrative Agent, completed by such Lender and returned to the Administrative Agent (with a copy to the Borrower).

“Agents” means the Administrative Agent, the Documentation Agents and the Syndication Agent.

“Applicable Euro-Dollar Margin” means, as of any date, a percentage per annum determined by reference to the Pricing Schedule.

“Applicable Lending Office” means, with respect to any Lender, (i) in the case of its Base Rate Loans, its Domestic Lending Office, (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar Lending Office and (iii) in the case of its Competitive Bid Loans, its Competitive Bid Lending Office.

“Approved Fund” means any Fund that is administered or managed by (i) a Lender, (ii) an affiliate of a Lender or (iii) an entity or an affiliate of an entity that administers or manages a Lender.

“Base Rate” means, for any day, a rate per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of one half of 1% plus the Federal Funds Rate for such day.

“Base Rate Loan” means a Committed Loan that bears interest at the Base Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election or the last sentence of Section 2.08(a) or Article 8.

“Borrower” means Marathon Ashland Petroleum LLC, a Delaware limited liability company, and its successors.

“Borrowing” has the meaning specified in Section 1.03.

“Change of Control” has the meaning set forth in Section 2.15.

“Class” refers to the determination whether a Loan is a Committed Loan or a Competitive Bid Loan.

“Closing Date” means the date on or after the Effective Date on which all of the conditions specified in Section 3.01 shall have been satisfied.

“Co-Agent” means each Lender designated as a Co-Agent on the signature pages hereof.

“Code” means the Internal Revenue Code of 1986, as amended, or any successor statute.

“Commitment” means (i) with respect to each Lender listed on the Commitment Schedule, the amount set forth opposite such Lender’s name on the Commitment Schedule and (ii) with respect to any assignee which becomes a Lender pursuant to Section 9.06(b), the amount of the transferor Lender’s Commitment assigned to it pursuant to Section 9.06(b), in each case as such amount may be changed from time to time pursuant to Section 2.10, Section 2.16 or Section 9.06(b); provided that, if the context so requires, the term “Commitment” means the obligation of a Lender to extend credit up to such amount to the Borrower hereunder.

“Commitment Schedule” means the Commitment Schedule attached hereto.

“Committed Loan” means a loan made by a Lender pursuant to Section 2.01; provided that, if any such loan or loans (or portions thereof) are combined or subdivided pursuant to a Notice of Interest Rate Election, the term “Committed Loan” shall refer to the combined principal amount resulting from such

2

combination or to each of the separate principal amounts resulting from such subdivision, as the case may be.

“Competitive Bid Absolute Rate” has the meaning specified in Section 2.03(d).

“Competitive Bid Absolute Rate Loan” means a loan made or to be made by a Lender pursuant to an Absolute Rate Auction.

“Competitive Bid Lending Office” means, as to each Lender, its Domestic Lending Office or such other office, branch or affiliate of such Lender as it may hereafter designate as its Competitive Bid Lending Office by notice to the Borrower and the Administrative Agent; provided that any Lender may from time to time by notice to the Borrower and the Administrative Agent designate separate Competitive Bid Lending Offices for its Competitive Bid LIBOR Loans, on the one hand, and its Competitive Bid Absolute Rate Loans, on the other hand, in which case all references herein to the Competitive Bid Lending Office of such Lender shall be deemed to refer to either or both of such offices, as the context may require.

“Competitive Bid LIBOR Loan” means a loan made or to be made by a Lender pursuant to a LIBOR Auction (including any such loan bearing interest at the Prime Rate pursuant to Section 8.01).

“Competitive Bid Loan” means a Competitive Bid LIBOR Loan or a Competitive Bid Absolute Rate Loan.

“Competitive Bid Margin” has the meaning specified in Section 2.03(d)(iii)(C).

“Competitive Bid Quote” means an offer by a Lender to make a Competitive Bid Loan in accordance with Section 2.03.

“Credit Exposure” means, with respect to any Lender at any time, (i) the amount of its Commitment (whether used or unused) at such time or (ii) if the Commitments have terminated in their entirety, the sum of the aggregate outstanding principal amount of its Loans and the aggregate amount of its Letter of Credit Liabilities at such time.

“Default” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

3

“Designated Lender” means, with respect to any Designating Lender, an Approved Fund designated by it pursuant to Section 9.07(a) as a Designated Lender for purposes of this Agreement.

“Designating Lender” means, with respect to each Designated Lender, the Lender that designated such Designated Lender pursuant to Section 9.07(a).

“Documentation Agents” means ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, in their capacity as documentation agents in connection with the credit facility provided under this Agreement.

“Domestic Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to close.

“Domestic Lending Office” means, as to each Lender, its office located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Domestic Lending Office) or such other office as such Lender may hereafter designate as its Domestic Lending Office by notice to the Borrower and the Administrative Agent.

“Effective Date” means the date the Commitments become effective in accordance with Section 3.01.

“Eligible Assignee” means (i) a Lender; (ii) an affiliate of a Lender; (iii) an Approved Fund; and (iv) any other Person (other than a natural Person) approved by the Administrative Agent and, unless an Event of Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed). If the consent of the Borrower to an assignment or to an Eligible Assignee is required hereunder (including a consent to an assignment which does not meet the minimum assignment thresholds specified in paragraph (b)(i) of Section 9.06), the Borrower shall be deemed to have given its consent five Domestic Business Days after the date notice thereof has been delivered by the assigning Lender (through the Administrative Agent) and receipt thereof has been acknowledged by the Borrower, unless such consent is expressly refused by the Borrower prior to such fifth Domestic Business Day.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute.

“ERISA Group” means the Borrower, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrower or any Subsidiary, are treated as a single employer under Section 414 of the Code.

4

“Euro-Dollar Business Day” means any Domestic Business Day on which commercial banks are open for international business (including dealings in dollar deposits) in London.

“Euro-Dollar Lending Office” means, as to each Lender, its office, branch or affiliate located at its address set forth in its Administrative Questionnaire (or identified in its Administrative Questionnaire as its Euro-Dollar Lending Office) or such other office, branch or affiliate of such Lender as it may hereafter designate as its Euro-Dollar Lending Office by notice to the Borrower and the Administrative Agent.

“Euro-Dollar Loan” means a Committed Loan that bears interest at a Euro-Dollar Rate pursuant to the applicable Notice of Committed Borrowing or Notice of Interest Rate Election.

“Euro-Dollar Margin” has the meaning specified in the Pricing Schedule.

“Euro-Dollar Rate” means a rate of interest determined pursuant to Section 2.07(b) on the basis of a London Interbank Offered Rate.

“Events of Default” has the meaning specified in Section 6.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Federal Funds Rate” means, for any day, the rate per annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Domestic Business Day next succeeding such day; provided that (i) if such day is not a Domestic Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Domestic Business Day as so published on the next succeeding Domestic Business Day and (ii) if no such rate is so published on such next succeeding Domestic Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.

“Fixed Rate Loans” means Euro-Dollar Loans or Competitive Bid Loans (excluding Competitive Bid LIBOR Loans bearing interest at the Prime Rate pursuant to Section 8.01) or any combination of the foregoing.

5

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“Group of Loans” means, at any time, a group of Loans consisting of (i) all Committed Loans which are Base Rate Loans at such time or (ii) all Euro-Dollar Loans having the same Interest Period at such time; provided that, if a Committed Loan of any particular Lender is converted to or made as a Base Rate Loan pursuant to Article 8, such Loan shall be included in the same Group or Groups of Loans from time to time as it would have been in if it had not been so converted or made.

“Indemnitee” has the meaning specified in Section 9.03(b).

“Interest Period” means: (1) with respect to each Euro-Dollar Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing or on the date specified in an applicable Notice of Interest Rate Election and ending one, two, three or six months thereafter, as the Borrower may elect in such notice; provided that:

(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;

(b) any Interest Period which begins on the last Euro-Dollar Business Day in a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day in a calendar month; and

(c) no Interest Period shall end after the Termination Date;

(2) with respect to each Competitive Bid LIBOR Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such whole number of months thereafter as the Borrower may elect in accordance with Section 2.03(b); provided that:

(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Euro-Dollar Business Day;

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(b) any Interest Period which begins on the last Euro-Dollar Business Day in a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (c) below, end on the last Euro-Dollar Business Day in a calendar month; and

(c) no Interest Period shall end after the Termination Date; and

(3) with respect to each Competitive Bid Absolute Rate Loan, the period commencing on the date of borrowing specified in the applicable Notice of Borrowing and ending such number of days thereafter (but not less than 15 days) as the Borrower may elect in accordance with Section 2.03(b); provided that:

(a) any Interest Period which would otherwise end on a day which is not a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day; and

(b) no Interest Period shall end after the Termination Date.

“Issuing Bank” means JPMorgan Chase Bank or any other Lender designated by the Borrower that may agree to issue letters of credit hereunder pursuant to an instrument in form reasonably satisfactory to the Administrative Agent, each in its capacity as an issuer of a Letter of Credit hereunder.

“Lender” means (i) each bank or other institution listed on the Commitment Schedule, (ii) each assignee which becomes a Lender pursuant to Section 9.06(b) and (iii) their respective successors.

“Lender Parties” means the Lenders, the Issuing Bank and the Agents.

“Letter of Credit” means a letter of credit to be issued hereunder by an Issuing Bank.

“Letter of Credit Liabilities” means, for any Lender and at any time, such Lender’s ratable participation in the sum of (x) the aggregate amount then owing by the Borrower in respect of amounts paid by the Issuing Bank upon a drawing under a Letter of Credit issued hereunder and (y) the aggregate amount then available for drawing under all outstanding Letters of Credit.

“Letter of Credit Termination Date” means the fifth Domestic Business Day prior to the Termination Date.

“LIBOR Auction” means a solicitation of Competitive Bid Quotes setting forth Competitive Bid Margins based on the London Interbank Offered Rate pursuant to Section 2.03.

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“Loan” means a Committed Loan or a Competitive Bid Loan and “Loans” means Committed Loans or Competitive Bid Loans or any combination of the foregoing.

“London Interbank Offered Rate” has the meaning specified in Section 2.07(b).

“Marathon” means Marathon Oil Corporation, a Delaware corporation, and its successors.

“Marathon Facility” means the Five Year Credit Agreement dated as of the Effective Date (as such term is defined therein) among Marathon and the agents, lenders and other parties thereto, as amended from time to time.

“Material Plan” means, at any time, a Plan or Plans having aggregate Unfunded Liabilities in excess of $50,000,000.

“Moody’s” means Moody’s Investors Service, Inc.

“Mortgage” has the meaning set forth in Section 5.04.

“Multiemployer Plan” means, at any time, an employee pension benefit plan within the meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions, including for these purposes any Person which ceased to be a member of the ERISA Group during such five year period.

“Notes” means promissory notes of the Borrower, substantially in the form of Exhibit A hereto, evidencing the Borrower’s obligation to repay the Loans, and “Note” means any one of such promissory notes issued hereunder.

“Notice of Borrowing” means a Notice of Committed Borrowing (as defined in Section 2.02 or a Notice of Competitive Bid Borrowing (as defined in Section 2.03(f)).

“Notice of Interest Rate Election” has the meaning specified in Section 2.08(a).

“Notice of Issuance” has the meaning specified in Section 2.18(b).

“Outstanding Committed Amount” means, with respect to any Lender at any time, the sum of (i) the aggregate outstanding principal amount of its Committed Loans at such time and (ii) the aggregate amount of its Letter of

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Credit Liabilities at such time, determined at such time after giving effect to any prior assignments by or to such Lender pursuant to Section 9.06(b).

“Parent” means, with respect to any Lender, any Person controlling such Lender.

“Participant” has the meaning specified in Section 9.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Percentage” means, with respect to any Lender at any time, the percentage which the amount of its Commitment at such time represents the aggregate amount of all the Commitments at such time. At any time after the Commitments shall have terminated, the term “Percentage” shall refer to a Lender’s Percentage immediately before such termination, adjusted to reflect any subsequent assignments pursuant to Section 9.06(b).

“Person” means an individual, a corporation, a limited liability company, a partnership, an association, a trust or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Plan” means, at any time, an employee pension benefit plan (other than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group.

“Pricing Schedule” means the Pricing Schedule attached hereto.

“Prime Rate” means the rate of interest publicly announced by JPMorgan Chase Bank in New York City from time to time as its Prime Rate.

“Quarterly Payment Dates” means each March 31, June 30, September 30 and December 31.

“Reference Banks” means the principal London offices (or any successor offices) of ABN Amro Bank N.V., Citibank, N.A. and JPMorgan Chase Bank.

“Register” has the meaning specified in Section 9.06(c).

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“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as in effect from time to time.

“Reimbursement Obligation” has the meaning specified in Section 2.18(c).

“Required Lenders” means, at any time, Lenders having at least 67% in aggregate amount of the Credit Exposures at such time.

“Revolving Credit Period” means the period from and including the Effective Date to but not including the Termination Date.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“SEC” means the Securities and Exchange Commission.

“Subsidiary” means, as to any Person, any corporation or other entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person. Unless otherwise specified, “Subsidiary” means a Subsidiary of the Borrower.

“Syndication Agent” means Bank of America, N.A., in its capacity as syndication agent in connection with the credit facility provided under this Agreement.

“Termination Date” means May 20, 2009, or, if such day is not a Euro-Dollar Business Day, the next preceding Euro-Dollar Business Day.

“Total Outstanding Amount” means, at any time, the sum of (i) the aggregate outstanding principal amount of the Loans (including both Committed Loans and Competitive Bid Loans) and (ii) the aggregate Letter of Credit Liabilities of all Lenders determined at such time after giving effect, if one or more Loans are being made at such time, to any substantially concurrent application of the proceeds thereof to repay one or more other Loans.

“Transfer” has the meaning specified in Section 2.16.

“Type” refers to the determination whether a Committed Loan is a Base Rate Loan or a Euro-Dollar Loan or whether a Competitive Bid Loan is a Competitive Bid Absolute Rate Loan or a Competitive Bid LIBOR Loan.

“Unfunded Liabilities” means, with respect to any Plan at any time, the amount (if any) by which (i) the value of all benefit liabilities under such Plan,

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determined on a plan termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the ERISA Group to the PBGC or any other Person under Title IV of ERISA.

“Voting Power” has the meaning set forth in Section 2.15(a).

“Voting Stock” has the meaning set forth in Section 2.15(a).

Section 1.02. Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with generally accepted accounting principles as in effect from time to time, applied on a basis consistent (except for changes concurred in by the Borrower’s independent public accountants) with the most recent audited consolidated financial statements of the Borrower delivered to the Administrative Agent.

Section 1.03. Classes and Types of Borrowings. The term “Borrowing” denotes the aggregation of Loans of the same Type and Class of one or more Lenders to be made to the Borrower pursuant to Article 2 on a single date and for a single initial Interest Period. Borrowings are classified for purposes of this Agreement by reference to either or both the Class and Type of Loans comprising such Borrowing (e.g., a Euro-Dollar Borrowing is a Borrowing comprised of Euro-Dollar Loans while a Committed Borrowing is a Borrowing comprised of Committed Loans).

ARTICLE 2

THE CREDITS

Section 2.01. Commitments to Lend. Each Lender severally agrees, on the terms and conditions set forth in this Agreement, to make loans to the Borrower pursuant to this Section from time to time during the Revolving Credit Period; provided that, immediately after each such loan is made:

(i) such Lender’s Outstanding Committed Amount shall not exceed its Commitment; and

(ii) the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments.

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Each Borrowing under this Section shall be in an aggregate principal amount of $10,000,000 or any larger integral multiple of $5,000,000 (except that any such Borrowing may be in the aggregate amount available within the limitations in the foregoing proviso) and shall be made from the several Lenders ratably in proportion to their respective Commitments. Within the foregoing limits, the Borrower may borrow under this Section, prepay Loans to the extent permitted by Section 2.11 and reborrow at any time during the Revolving Credit Period under this Section.

Section 2.02. Notice of Committed Borrowing. The Borrower shall give the Administrative Agent notice (a “Notice of Committed Borrowing”) not later than 10:30 A.M. (New York City time) on (y) the date of each Base Rate Borrowing and (z) the third Euro-Dollar Business Day before each Euro-Dollar Borrowing, specifying:

(a) the date of such Borrowing, which shall be a Domestic Business Day in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the case of a Euro-Dollar Borrowing;

(b) the aggregate amount of such Borrowing;

(c) whether the Loans comprising such Borrowing are to bear interest initially at the Base Rate or a Euro-Dollar Rate; and

(d) in the case of a Euro-Dollar Borrowing, the duration of the initial Interest Period applicable thereto, subject to the provisions of the definition of Interest Period.

Section 2.03. Competitive Bid Borrowings. (a) The Competitive Bid Option. In addition to Committed Borrowings pursuant to Section 2.01 the Borrower may, as set forth in this Section, request the Lenders to make offers to make Competitive Bid Loans to the Borrower from time to time during the Revolving Credit Period. The Lenders may, but shall have no obligation to, make such offers and the Borrower may, but shall have no obligation to, accept any such offers in the manner set forth in this Section.

(b) Competitive Bid Quote Request. When the Borrower wishes to request offers to make Competitive Bid Loans under this Section, it shall transmit to the Administrative Agent by telex or facsimile a Competitive Bid Quote Request substantially in the form of Exhibit B hereto so as to be received not later than 10:30 A.M. (New York City time) on (x) the fifth Euro-Dollar Business Day before the date of Borrowing proposed therein, in the case of a LIBOR Auction or (y) the Domestic Business Day immediately before the date of Borrowing proposed therein, in the case of an Absolute Rate Auction (or, in either case, such

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other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective) specifying:

(i) the proposed date of Borrowing, which shall be a Euro-Dollar Business Day in the case of a LIBOR Auction or a Domestic Business Day in the case of an Absolute Rate Auction,

(ii) the aggregate amount of such Borrowing, which shall be $10,000,000 or a larger integral multiple of $5,000,000,

(iii) the duration of the Interest Period applicable thereto, subject to the provisions of the definition of Interest Period, and

(iv) whether the Competitive Bid Quotes requested are to set forth a Competitive Bid Margin or a Competitive Bid Absolute Rate.

The Borrower may request offers to make Competitive Bid Loans for more than one Interest Period in a single Competitive Bid Quote Request. No Competitive Bid Quote Request shall be given within five Euro-Dollar Business Days (or such other number of days as the Borrower and the Administrative Agent may agree) of any other Competitive Bid Quote Request.

(c) Invitation for Competitive Bid Quotes. Promptly after receiving a Competitive Bid Quote Request, the Administrative Agent shall send to each of the Lenders which shall have notified the Administrative Agent of its desire to receive the same an Invitation for Competitive Bid Quotes substantially in the form of Exhibit C hereto, which shall constitute an invitation by the Borrower to each Lender to submit Competitive Bid Quotes offering to make the Competitive Bid Loans to which such Competitive Bid Quote Request relates in accordance with this Section.

(d) Submission and Contents of Competitive Bid Quotes. (i) Each Lender to which an Invitation for Competitive Bid Quotes is sent may submit a Competitive Bid Quote containing an offer or offers to make Competitive Bid Loans in response to any Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must comply with the requirements of this Section 2.03(d) and must be submitted to the Administrative Agent by telex or facsimile at its address specified in or pursuant to Section 9.01 not later than (x) 2:00 P.M. (New York City time) on the fourth Euro-Dollar Business Day before the proposed date of Borrowing, in the case of a LIBOR Auction or (y) 9:30 A.M. (New York City time) on the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative

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Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate Auction for which such change is to be effective); provided that Competitive Bid Quotes submitted by the Administrative Agent (or any affiliate of the Administrative Agent) in the capacity of a Lender may be submitted, and may only be submitted, if the Administrative Agent or such affiliate notifies the Borrower of the terms of the offer or offers contained therein not later than (x) one hour before the deadline for the other Lenders, in the case of a LIBOR Auction or (y) 15 minutes before the deadline for the other Lenders, in the case of an Absolute Rate Auction. Subject to Article 3 and 6, any Competitive Bid Quote so made shall not be revocable except with the written consent of the Administrative Agent given on the instructions of the Borrower.

(ii) Each Competitive Bid Quote shall be substantially in the form of Exhibit D hereto and shall in any case specify:

(A) the proposed date of Borrowing;

(B) the principal amount of the Competitive Bid Loan for which each such offer is being made, which principal amount (w) may be greater than or less than the Commitment of the quoting Lender, (x) must be $5,000,000 or a larger integral multiple of $1,000,000, (y) may not exceed the principal amount of Competitive Bid Loans for which offers were requested and (z) may be subject to an aggregate limitation as to the principal amount of Competitive Bid Loans for which offers being made by such quoting Lender may be accepted;

(C) in the case of a LIBOR Auction, the margin above or below the applicable London Interbank Offered Rate (the “Competitive Bid Margin”) offered for each such Competitive Bid Loan, expressed as a percentage (specified to the nearest 1/10,000th of 1%) to be added to or subtracted from such base rate;

(D) in the case of an Absolute Rate Auction, the rate of interest per annum (specified to the nearest 1/10,000th of 1%) (the “Competitive Bid Absolute Rate”) offered for each such Competitive Bid Loan; and

(E) the identity of the quoting Lender.

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A Competitive Bid Quote may set forth up to five separate offers by the quoting Lender with respect to each Interest Period specified in the related Invitation for Competitive Bid Quotes.

(iii) Any Competitive Bid Quote shall be disregarded if it:

(A) is not substantially in conformity with Exhibit D hereto or does not specify all of the information required by subsection 2.03(d)(ii);

(B) contains qualifying, conditional or similar language (except as contemplated by subsection (d)(ii)(B)(z);

(C) proposes terms other than or in addition to those set forth in the applicable Invitation for Competitive Bid Quotes (except as contemplated by subsection (d)(ii)(B)(z); or

(D) arrives after the time set forth in subsection 2.03(d)(i).

(e) Notice to Borrower. The Administrative Agent shall promptly notify the Borrower of the terms of (i) any Competitive Bid Quote submitted by a Lender that is in accordance with Section 2.03(d) and (ii) any Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a previous Competitive Bid Quote submitted by such Lender with respect to the same Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall be disregarded by the Administrative Agent unless such subsequent Competitive Bid Quote is submitted solely to correct a manifest error in such former Competitive Bid Quote. The Administrative Agent’s notice to the Borrower shall specify (A) the aggregate principal amount of Competitive Bid Loans for which offers have been received for each Interest Period specified in the related Competitive Bid Quote Request, (B) the respective principal amounts and Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be, so offered and (C) if applicable, limitations on the aggregate principal amount of Competitive Bid Loans for which offers in any single Competitive Bid Quote may be accepted.

(f) Acceptance and Notice by Borrower. Not later than 10:30 A.M. (New York City time) on (x) the third Euro-Dollar Business Day before the proposed date of Borrowing, in the case of a LIBOR Auction or (y) the proposed date of Borrowing, in the case of an Absolute Rate Auction (or, in either case, such other time or date as the Borrower and the Administrative Agent shall have mutually agreed and shall have notified to the Lenders not later than the date of the Competitive Bid Quote Request for the first LIBOR Auction or Absolute Rate

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Auction for which such change is to be effective), the Borrower shall notify the Administrative Agent of its acceptance or non-acceptance of the offers so notified to it pursuant to Section 2.03(e). In the case of acceptance, such notice (a “Notice of Competitive Bid Borrowing”) shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Borrower may accept any Competitive Bid Quote in whole or in part; provided that:

(i) the aggregate principal amount of each Competitive Bid Borrowing may not exceed the applicable amount set forth in the related Competitive Bid Quote Request;

(ii) the principal amount of each Competitive Bid Borrowing must be $10,000,000 or a larger integral multiple of $5,000,000;

(iii) acceptance of offers may only be made on the basis of ascending Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be;

(iv) the Borrower may not accept any offer that is described in subsection 2.03(d)(iii) or that otherwise fails to comply with the requirements of this Agreement; and

(v) immediately after such Competitive Bid Borrowing is made, the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments.

(g) Allocation by Administrative Agent. If offers are made by two or more Lenders with the same Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which such offers are accepted for the related Interest Period, the principal amount of Competitive Bid Loans in respect of which such offers are accepted shall be allocated by the Administrative Agent among such Lenders as nearly as possible (in integral multiples of $1,000,000, as the Administrative Agent may deem appropriate) in proportion to the aggregate principal amounts of such offers. Determinations by the Administrative Agent of the amounts of Competitive Bid Loans shall be conclusive in the absence of manifest error.

Section 2.04. Notice to Lenders; Funding of Loans. (a) Promptly after receiving a Notice of Borrowing, the Administrative Agent shall notify each Lender of the contents thereof and of such Lender’s share (if any) of such Borrowing and such Notice of Borrowing shall not thereafter be revocable by the Borrower.

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(b) Not later than 12:00 Noon (New York City time) on the date of each Borrowing, each Lender participating therein shall make available its share of such Borrowing, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address specified in or pursuant to Section 9.01. Unless the Administrative Agent determines that any applicable condition specified in Article 3 has not been satisfied, the Administrative Agent will make the funds so received from the Lenders available to the Borrower at the Administrative Agent’s aforesaid address.

(c) Unless the Administrative Agent shall have received notice from a Lender before the date of any Borrowing (or, in the case of a Base Rate Borrowing, prior to 12:00 Noon (New York City time) on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available to the Administrative Agent on the date of such Borrowing in accordance with Section 2.04(b) and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a corresponding amount. If and to the extent that such Lender shall not have so made such share available to the Administrative Agent, such Lender and, if such Lender shall not have done so within five Domestic Business Days of demand therefor by the Administrative Agent, then the Borrower, each agrees to pay to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) if such amount is repaid by the Borrower, a rate per annum equal to the higher of the Federal Funds Rate and the interest rate applicable to such Borrowing pursuant to Section 2.07 and (ii) if such amount is repaid by such Lender, the Federal Funds Rate. If such Lender shall repay to the Administrative Agent such corresponding amount, the Borrower shall not be required to repay such amount and the amount so repaid by such Lender shall constitute such Lender’s Loan included in such Borrowing for purposes of this Agreement. Nothing in this subsection (c) shall relieve any Lender of its obligation to make Loans in accordance with the terms and conditions of this Agreement or relieve any Lender from responsibility for default by it in such obligation.

Section 2.05. Registry; Notes. (a) The Borrower hereby agrees that, upon the request of any Lender at any time, any or all of such Lender’s Loans shall be evidenced by one or more Notes of the Borrower payable to the order of such Lender and representing the obligation of the Borrower to pay the unpaid principal amount of such Loans to the Borrower made by such Lender, with interest as provided herein on the unpaid principal amount of such Loans from time to time outstanding.

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(b) Each Lender shall record the date, amount, Class, Type and maturity of each Loan made by it and the date and amount of each payment of principal made by the Borrower with respect thereto, and may, if such Lender so elects in connection with any transfer or enforcement of a Note received pursuant to this Section, endorse on the schedule forming a part thereof appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding; provided that the inaccuracy of, or the failure of any Lender to make, any such recordation or endorsement shall not affect the obligations of the Borrower hereunder or under the Notes. Each Lender is hereby irrevocably authorized by the Borrower so to endorse its Note and to attach to and make a part of its Note a continuation of any such schedule as and when required.

Section 2.06. Maturity of Loans. (a) Each Committed Loan shall mature, and the principal amount thereof shall be due and payable (together with interest accrued thereon), on the Termination Date.

(b) Each Competitive Bid Loan shall mature, and the principal amount thereof shall be due and payable (together with interest accrued thereon), on the last day of the Interest Period applicable thereto.

Section 2.07. Interest Rates. (a) Each Base Rate Loan shall bear interest on the outstanding principal amount thereof, for each day from the date such Loan is made until it becomes due, at a rate per annum equal to the Base Rate for such day. Such interest shall be payable quarterly in arrears on each Quarterly Payment Date and on the Termination Date and, with respect to the principal amount of any Base Rate Loan that is prepaid or converted to a Euro-Dollar Loan, on the date of such prepayment or conversion.

(b) Each Euro-Dollar Loan shall bear interest on the outstanding principal amount thereof, for each day during each Interest Period applicable thereto, at a rate per annum equal to the sum of the Euro-Dollar Margin for such day plus the London Interbank Offered Rate applicable to such Interest Period. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof and, with respect to the principal amount of any Euro-Dollar Loan that is prepaid or converted to a Base Rate Loan, on the date of such prepayment or conversion.

The “London Interbank Offered Rate” applicable to any Interest Period means (a) the offered rate for dollar deposits, for a period approximately equal to such Interest Period and, if the amount is so quoted, in an amount approximately equal to the average principal amount of the applicable Loans, quoted on the second Euro-dollar Business Day prior to the first day of such Interest Period, as such rate appears on the display designated as page “3750” on the Telerate service

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(or such other page as may replace page “3750” on the Telerate service or such other service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for U.S. Dollar deposits) (“Telerate Page 3750”) as of 11:00 A.M. (London time) on such date, (b) if, as of 11:00 A.M. (London time) on any such date such rate does not appear on the Telerate Page 3750, the arithmetic mean (adjusted, if necessary, to the nearest 1/16th of 1%), of the offered rates for dollar deposits, for a period approximately equal to such Interest Period quoted on the second Euro-Dollar Business Day prior to the first day of such Interest Period, as such rates appear on the display designated as page “LIBO” on the Reuters Monitor Money Rates Service (or such other page as may replace the “LIBO” page on that service for the purpose of displaying London interbank offered rates of major banks) (“Reuters Screen LIBO Page”) as of 11:00 A.M. (London time) on such date, or (c) if neither of the above rates is available (and in the case of clause (b), if on any such date at least two such rates do not appear on the Reuters Screen LIBO page), the average (adjusted, if necessary, to the next higher  ¹/16^th of 1%) of the respective rates per annum at which deposits in dollars are offered to each of the Reference Banks in the London interbank market at approximately 11:00 A.M. (London time) two Euro-Dollar Business Days before the first day of such Interest Period in an amount approximately equal to the principal amount of the Euro-Dollar Loan of such Reference Bank to which such Interest Period is to apply and for a period of time comparable to such Interest Period.

(c) Subject to Section 8.01 each Competitive Bid LIBOR Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the sum of the London Interbank Offered Rate for such Interest Period (determined in accordance with Section 2.07(b) as if the related Competitive Bid LIBOR Borrowing were a Euro-Dollar Borrowing) plus (or minus) the Competitive Bid Margin quoted by the Lender making such Loan in accordance with Section 2.03. Each Competitive Bid Absolute Rate Loan shall bear interest on the outstanding principal amount thereof, for the Interest Period applicable thereto, at a rate per annum equal to the Competitive Bid Absolute Rate quoted by the Lender making such Loan in accordance with Section 2.03. Such interest shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof.

(d) Any overdue principal of and interest on any Loan shall bear interest, payable on demand, for each day from and including the date payment thereof was due to but excluding the date of actual payment, at a rate per annum equal to the sum of 1% plus the Base Rate for such day.

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(e) The Administrative Agent shall determine each interest rate applicable to the Loans hereunder. The Administrative Agent shall promptly notify the Borrower and the participating Lenders of each rate of interest so determined, and its determination thereof shall be conclusive in the absence of manifest error.

(f) Each Reference Bank agrees to use its best efforts to furnish quotations to the Administrative Agent as contemplated by this Section. If any Reference Bank does not furnish a timely quotation, the Administrative Agent shall determine the relevant interest rate on the basis of the quotation or quotations furnished by the remaining Reference Bank or Banks or, if none of such quotations is available on a timely basis, the provisions of Section 8.01 shall apply.

Section 2.08. Method of Electing Interest Rates. (a) The Loans included in each Committed Borrowing shall bear interest initially at the type of rate specified by the Borrower in the applicable Notice of Committed Borrowing. Thereafter, the Borrower may from time to time elect to change or continue the type of interest rate borne by each Group of Loans (subject to Section 2.08(d) and the provisions of Article 8 as follows:

(i) if such Loans are Base Rate Loans, the Borrower may elect to convert such Loans to Euro-Dollar Loans as of any Euro-Dollar Business Day; and

(ii) if such Loans are Euro-Dollar Loans, the Borrower may elect to convert such Loans to Base Rate Loans as of any Domestic Business Day, or may elect to continue such Loans as Euro-Dollar Loans, as of the end of any Interest Period applicable thereto, for an additional Interest Period, subject to Section 2.13 if any such conversion is effective on any day other than the last day of an Interest Period applicable to such Loans.

Each such election shall be made by delivering a notice (a “Notice of Interest Rate Election”) to the Administrative Agent not later than 10:30 A.M. (New York City time) on the third Euro-Dollar Business Day before the conversion or continuation selected in such notice is to be effective. A Notice of Interest Rate Election may, if it so specifies, apply to only a portion of the aggregate principal amount of the relevant Group of Loans; provided that (i) such portion is allocated ratably among the Loans comprising such Group and (ii) the portion to which such Notice applies, and the remaining portion to which it does not apply, are each at least $10,000,000 (unless such portion is comprised of Base Rate Loans). If no such notice is timely received before the end of an Interest Period for any Group of Euro-Dollar Loans, the Borrower shall be deemed to have elected that

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such Group of Loans be converted to Base Rate Loans at the end of such Interest Period.

(b) Each Notice of Interest Rate Election shall specify:

(i) the Group of Loans (or portion thereof) to which such notice applies;

(ii) the date on which the conversion or continuation selected in such notice is to be effective, which shall comply with the applicable clause of Section 2.08(a);

(iii) if the Loans comprising such Group are to be converted, the new Type of Loans and, if the Loans resulting from such conversion are to be Euro-Dollar Loans, the duration of the next succeeding Interest Period applicable thereto; and

(iv) if such Loans are to be continued as Euro-Dollar Loans for an additional Interest Period, the duration of such additional Interest Period.

Each Interest Period specified in a Notice of Interest Rate Election shall comply with the provisions of the definition of Interest Period.

(c) Promptly after receiving a Notice of Interest Rate Election from the Borrower pursuant to Section 2.08(a), the Administrative Agent shall notify each Lender of the contents thereof and such notice shall not thereafter be revocable by the Borrower.

(d) The Borrower shall not be entitled to elect to convert any Committed Loans to, or continue any Committed Loans for an additional Interest Period as, Euro-Dollar Loans if (i) the aggregate principal amount of any Group of Euro-Dollar Loans created or continued as a result of such election would be less than $10,000,000 or (ii) a Default shall have occurred and be continuing when the Borrower delivers notice of such election to the Administrative Agent.

(e) If any Committed Loan is converted to a different Type of Loan, the Borrower shall pay, on the date of such conversion, the interest accrued to such date on the principal amount being converted.

Section 2.09. Fees. (a) Facility Fee. The Borrower shall pay to the Administrative Agent, for the account of the Lenders ratably in proportion to their Credit Exposures, a facility fee calculated for each day at the Facility Fee Rate for such day (determined in accordance with the Pricing Schedule) on the aggregate amount of the Credit Exposures on such day. Such facility fee shall accrue for

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each day from and including the Effective Date to but excluding the day on which the Credit Exposures are reduced to zero.

(b) Letter of Credit Fees. The Borrower shall pay (i) to the Administrative Agent for the account of the Lenders ratably a letter of credit fee accruing daily on the aggregate undrawn amount of all outstanding Letters of Credit at a rate per annum equal to the Applicable Euro-Dollar Margin for such day and (ii) to each Issuing Bank for its own account, a letter of credit fronting fee accruing daily on the aggregate amount then available for drawing under all Letters of Credit issued by such Issuing Bank at the rate of 0.125% per annum or such other rate as may be mutually agreed between the Borrower and such Issuing Bank from time to time.

(c) Payments. Fees accrued for the account of the Lenders under this Section shall be payable quarterly in arrears on each Quarterly Payment Date and on the day on which the Commitments terminate in their entirety (and, if later, on the day on which the Credit Exposures are reduced to zero).

Section 2.10. Termination or Reduction of Commitments. (a) The Borrower may, upon at least three Domestic Business Days’ notice to the Administrative Agent, (i) terminate the Commitments at any time, if no Loans or Letter of Credit Liabilities are outstanding at such time, or (ii) ratably reduce from time to time by an aggregate amount of $10,000,000 or any larger integral multiple thereof, the aggregate amount of the Commitments in excess of the Total Outstanding Amount. Promptly after receiving a notice pursuant to this subsection, the Administrative Agent shall notify each Lender of the contents thereof.

(b) Unless previously terminated, the Commitments shall terminate in their entirety on the Termination Date.

Section 2.11. Optional Prepayments. (a) Subject in the case of Fixed Rate Loans to Section 2.13, the Borrower may (i) upon at least one Domestic Business Day’s notice to the Administrative Agent, prepay any Group of Base Rate Loans (or any Competitive Bid Borrowing bearing interest at the Prime Rate pursuant to Section 8.01) or (ii) upon at least three Euro-Dollar Business Days’ notice to the Administrative Agent, prepay any Group of Euro-Dollar Loans, in each case in whole at any time, or from time to time in part in amounts aggregating $10,000,000 or any larger integral multiple of $5,000,000, by paying the principal amount to be prepaid together with interest accrued thereon to the date of prepayment. Each such optional prepayment shall be applied to prepay ratably the Loans of the several Lenders included in such Group of Loans (or such Competitive Bid Borrowing).

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(b) Except as provided in Section 2.11(a) or 2.17, the Borrower may not prepay all or any portion of the principal amount of any Competitive Bid Loan before the maturity thereof.

(c) Promptly after receiving a notice of prepayment pursuant to this Section, the Administrative Agent shall notify each Lender of the contents thereof and of such Lender’s ratable share (if any) of such prepayment, and such notice shall not thereafter be revocable by the Borrower.

Section 2.12. General Provisions as to Payments. (a) The Borrower shall make each payment of principal of, and interest on, the Loans and interest thereon and of fees hereunder not later than 12:00 Noon (New York City time) on the date when due, in Federal or other funds immediately available in New York City, to the Administrative Agent at its address specified in or pursuant to Section 9.01 and without reduction by reason of any set-off, counterclaim or deduction of any kind. The Administrative Agent will promptly distribute to each Lender its ratable share of each such payment received by the Administrative Agent for the account of the Lenders. Whenever any payment of principal of, or interest on, the Base Rate Loans or of fees shall be due on a day which is not a Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day. Whenever any payment of principal of, or interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be the next preceding Euro-Dollar Business Day. Whenever any payment of principal of, or interest on, the Competitive Bid Loans shall be due on a day which is not a Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or otherwise, interest thereon shall be payable for such extended time.

(b) Unless the Borrower notifies the Administrative Agent before the date on which any payment is due to the Lenders hereunder that the Borrower will not make such payment in full, the Administrative Agent may assume that the Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance on such assumption, cause to be distributed to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent that such payment shall not have been so made by the Borrower, each Lender shall repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender together with interest thereon, for each day from the date such amount is distributed to such Lender until the date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.

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Section 2.13. Funding Losses. If the Borrower makes any payment of principal with respect to any Fixed Rate Loan or any Fixed Rate Loan is converted to a different type of Loan (whether such payment or conversion is pursuant to Article 2, 6 or 8 otherwise) on any day other than the last day of an Interest Period applicable thereto, or if the Borrower fails to borrow, prepay, convert or continue any Fixed Rate Loan after notice has been given to any Lender in accordance with Section 2.04(a), 2.08(c) 2.11(c) the Borrower shall reimburse each Lender within 15 days after demand for any resulting loss or expense incurred by it (or by an existing or prospective Participant in the related Loan), including (without limitation) any loss incurred in obtaining, liquidating or employing deposits from third parties, but excluding loss of margin for the period after such payment or conversion or failure to borrow, prepay, convert or continue; provided that such Lender shall have delivered to the Borrower a certificate as to the amount of such loss or expense, which certificate shall be conclusive in the absence of manifest error.

Section 2.14. Computation of Interest and Fees. Interest based on the Prime Rate hereunder shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and paid for the actual number of days elapsed (including the first day but excluding the last day). All other interest and fees shall be computed on the basis of a year of 360 days and paid for the actual number of days elapsed (including the first day but excluding the last day).

Section 2.15. Change of Control. If a Change of Control shall occur the Borrower will, within ten days after the occurrence thereof, give the Administrative Agent notice thereof, and the Administrative Agent shall promptly notify each Lender thereof. Such notice shall describe in reasonable detail the facts and circumstances giving rise thereto and the date of such Change of Control and each Lender may, by notice to the Borrower and the Administrative Agent given not later than fifty days after the date of such Change of Control, terminate its Commitment, which shall be terminated, and declare the Note held by it (together with accrued interest thereon) and any other amounts payable hereunder for its account to be, and such Note and such amounts shall become, due and payable, in each case on the sixtieth day after the date of such Change of Control (or if such day is not a Domestic Business Day, the next succeeding Domestic Business Day), without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

For purposes of this Section, the following terms have the following meanings:

A “Change of Control” shall occur if (i) any “person” or “group” of persons shall have acquired “beneficial ownership” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and

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the applicable rules and regulations thereunder), of shares of Voting Stock representing 35% or more of the Voting Power of the Borrower, (ii) during any period of twenty-five consecutive months, commencing before or after the date of this Agreement, individuals who at the beginning of such twenty-five month period were directors of the Borrower (together with any replacement or additional directors whose election was recommended by incumbent management of the Borrower or who were elected by a majority of directors then in office) cease to constitute a majority of the board of directors of the Borrower, or (iii) any Person or group of related Persons shall acquire all or substantially all of the assets of the Borrower; provided, that a Change of Control shall not be deemed to have occurred pursuant to clause (iii) above if the Borrower shall have merged or consolidated with or transferred all or substantially all of its assets to another corporation in compliance with the provisions of Section 5.02 and the surviving or successor or transferee corporation is no more leveraged than was the Borrower immediately prior to such event; and provided further, that a change of control shall not be deemed to have occurred in connection with the acquisition of the Borrower by Marathon or any of its Subsidiaries. For purposes of this definition, the term “leveraged” when used with respect to any corporation or other entity shall mean the percentage represented by the total assets of that corporation or entity divided by its stockholders’ equity or members’ capital, in each case determined and as would be shown in a consolidated balance sheet of such corporation or entity prepared in accordance with generally accepted accounting principles in the United States of America.

“Voting Power” as applied to the stock or other ownership interests of any corporation or other entity means the total voting power represented by all outstanding Voting Stock of such corporation.

“Voting Stock” as applied to the stock or other ownership interests of any corporation or other entity means stock or other ownership interests of any class or classes (however designated) having ordinary voting power for the election of the directors or equivalent of such corporation or entity, other than stock or other ownership interests having such power only by reason of the happening of a contingency.

Section 2.16. Transfer of Commitments to Marathon Facility. (a) Subject to Section 3.02 of the Marathon Facility, the Borrower and Marathon may, by joint election in a written notice to the Administrative Agent (which shall promptly provide a copy of such notice to the Lenders) and to the “Administrative Agent” under the Marathon Facility, transfer all or any portion (in an amount of $25,000,000 or an integral multiple of $5,000,000 in excess thereof) of the unused Commitments hereunder to the Commitments (as such term is defined in the Marathon Facility) under the Marathon Facility (any such addition, the “Transfer”).

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(b) On the effective date of a Transfer, which shall be specified in the notice delivered pursuant to Section 2.16(a) and which shall be not less than three Domestic Business Days subsequent to the date of giving of such notice, then subject to satisfaction of the conditions precedent specified in Section 3.02 of the Marathon Facility, (i) the Commitments hereunder shall be ratably reduced by the aggregate amount specified in such notice and (ii) the aggregate amount of the “Commitments” under the Marathon Facility shall be ratably increased by such amount. Such Transfer and the consequent increases and decreases shall be irrevocable.

Section 2.17. Letters of Credit. (a) Commitment to Issue Letters of Credit. Subject to the terms and conditions hereof, each Issuing Bank agrees to issue Letters of Credit from time to time before the Letter of Credit Termination Date upon the request of the Borrower; provided that, immediately after each Letter of Credit is issued the Total Outstanding Amount shall not exceed the aggregate amount of the Commitments and the aggregate amount of the Letter of Credit Liabilities shall not exceed $200,000,000. Upon the date of issuance by an Issuing Bank of a Letter of Credit, the Issuing Bank shall be deemed, without further action by any party hereto, to have sold to each Lender, and each Lender shall be deemed, without further action by any party hereto, to have purchased from the Issuing Bank, a participation in such Letter of Credit and the related Letter of Credit Liabilities in the proportion its respective Commitment bears to the aggregate Commitments.

(b) Method for Issuance; Terms; Extensions.

(i) The Borrower shall give the Issuing Bank notice at least three Domestic Business Days (or such shorter notice as may be acceptable to the Issuing Bank in its discretion) prior to the requested issuance of a Letter of Credit (or, in the case of renewal or extension, prior to the Issuing Bank’s deadline for notice of nonextension) specifying the date such Letter of Credit is to be issued, and describing the terms of such Letter of Credit and the nature of the transactions to be supported thereby (such notice, including any such notice given in connection with the extension of a Letter of Credit, a “Notice of Issuance”). Upon receipt of a Notice of Issuance, the Issuing Bank shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Lender of the contents thereof and of the amount of such Lender’s participation in such Letter of Credit.

(ii) The obligation of the Issuing Bank to issue each Letter of Credit shall, in addition to the conditions precedent set forth in Section 3.02 be subject to the conditions precedent that such Letter of Credit shall be in such form and contain such terms as shall be reasonably satisfactory

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to the Issuing Bank and that the Borrower shall have executed and delivered such other customary instruments and agreements relating to such Letter of Credit as the Issuing Bank shall have reasonably requested. The Borrower shall also pay to the Issuing Bank for its own account issuance, drawing, amendment, settlement and extension charges, if any, in the amounts and at the times as agreed between the Borrower and the Issuing Bank.

(iii) The extension or renewal of any Letter of Credit shall be deemed to be an issuance of such Letter of Credit, and if any Letter of Credit contains a provision pursuant to which it is deemed to be extended unless notice of termination is given by the Issuing Bank, the Issuing Bank shall timely give such notice of termination unless it has theretofore timely received a Notice of Issuance and the other conditions to issuance of a Letter of Credit have also theretofore been met with respect to such extension. Each Letter of Credit shall expire at or before the close of business on the date that is one year after such Letter of Credit is issued (or, in the case of any renewal or extension thereof, one year after such renewal or extension); provided that (i) a Letter of Credit may contain a provision pursuant to which it is deemed to be extended on an annual basis unless notice of termination is given by the Issuing Bank and (ii) in no event will a Letter of Credit expire (including pursuant to a renewal or extension thereof) on a date later than the Letter of Credit Termination Date.

(c) Payments; Reimbursement Obligations.

(i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the Issuing Bank shall notify the Administrative Agent and the Administrative Agent shall promptly notify the Borrower and each other Lender as to the amount to be paid as a result of such demand or drawing and the date such payment is to be made by the Issuing Bank (the “Payment Date”). The Borrower shall be irrevocably and unconditionally obligated to reimburse the Issuing Bank for any amounts paid by the Issuing Bank upon any drawing under any Letter of Credit, without presentment, demand, protest or other formalities of any kind. Such reimbursement shall be due on the Payment Date; provided that no such payment shall be due from the Borrower any earlier than the date of receipt by it of notice of its obligation to make such payment (or, if such notice is received by the Borrower after 10:00 A.M. (New York City time) on any date, on the next succeeding Domestic Business Day); and provided further that if and to the extent any such reimbursement is not made by the Borrower in accordance with this clause (i) or clause (ii) below on the Payment Date, then (irrespective of when

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notice thereof is received by the Borrower), such reimbursement obligation shall bear interest, payable on demand, for each day from and including the Payment Date to but not including the date such reimbursement obligation is paid in full at a rate per annum equal to the rate applicable to Base Rate Loans for such day.

(ii) If the Commitments remain in effect on the Payment Date, all such amounts paid by the Issuing Bank and remaining unpaid by the Borrower after the date and time required by Section 2.18(c)(i) (a “Reimbursement Obligation”) shall, if and to the extent that the amount of such Reimbursement Obligation would be permitted as a Borrowing of Committed Loans pursuant to Section 3.02, and unless the Borrower otherwise instructs the Administrative Agent by not less than one Domestic Business Day’s prior notice, convert automatically to Base Rate Loans on the date such Reimbursement Obligation arises. The Administrative Agent shall, on behalf of the Borrower (which hereby irrevocably directs the Administrative Agent so to act on its behalf), give notice no later than 12:00 Noon (New York City time) on such date requesting each Lender to make, and each Lender hereby agrees to make, a Base Rate Loan, in an amount equal to such Lender’s Percentage of the Reimbursement Obligation with respect to which such notice relates. Each Lender shall make such Loan available to the Administrative Agent at its address referred to in Section 9.01 in immediately available funds, not later than 2:00 P.M. (New York City time), on the date specified in such notice. The Administrative Agent shall pay the proceeds of such Loans to the Issuing Bank, which shall immediately apply such proceeds to repay the Reimbursement Obligation.

(iii) To the extent the Reimbursement Obligation is not refunded by a Lender pursuant to clause (ii) above, such Lender will pay to the Administrative Agent, for the account of the Issuing Bank, immediately upon the Issuing Bank’s demand at any time during the period commencing after such Reimbursement Obligation arises until reimbursement therefor in full by the Borrower, an amount equal to such Lender’s Percentage of such Reimbursement Obligation, together with interest on such amount for each day from the date of the Issuing Bank’s demand for such payment (or, if such demand is made after 1:00 P.M. (New York City time) on such date, from the next succeeding Domestic Business Day) to the date of payment by such Lender of such amount at a rate of interest per annum equal to the Federal Funds Rate for the first three Domestic Business Days after the date of such demand and thereafter at a rate per annum equal to the Base Rate for each additional day. The Issuing Bank receives such payment as agent for and for the account of each Lender and will pay to each Lender ratably all amounts

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received from the Borrower for application in payment of its Reimbursement Obligations in respect of any Letter of Credit, but only to the extent such Lender has made payment to the Issuing Bank in respect of such Letter of Credit pursuant hereto; provided that in the event such payment received by the Issuing Bank is required to be returned, such Lender will return to the Issuing Bank any portion thereof previously distributed to it by the Issuing Bank.

(d) Obligations Absolute. The obligations of the Borrower and each Lender under subsection (c) above shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including without limitation the following circumstances:

(i) any lack of validity or enforceability of this Agreement or any Letter of Credit or any document related hereto or thereto;

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of this Agreement or any Letter of Credit or any document related hereto or thereto, provided by any party affected thereby;

(iii) the use which may be made of the Letter of Credit by, or any acts or omission of, a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting);

(iv) the existence of any claim, set-off, defense or other rights that the Borrower may have at any time against a beneficiary of a Letter of Credit (or any Person for whom the beneficiary may be acting), any Lender (including the Issuing Bank) or any other Person, whether in connection with this Agreement or the Letter of Credit or any document related hereto or thereto or any unrelated transaction;

(v) any statement or any other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;

(vi) payment under a Letter of Credit against presentation to the Issuing Bank of documents that do not comply with the terms of such Letter of Credit;

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(vii) any termination of the Commitments prior to, on or after the Payment Date for any Letter of Credit, whether at the scheduled termination thereof, by operation of Section 6.01 or otherwise; or

(viii) any other act or omission to act or delay of any kind by any Lender (including the Issuing Bank), the Administrative Agent or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this subsection (viii), constitute a legal or equitable discharge of or defense to the Borrower’s or the Lender’s obligations hereunder;

provided, that this Section 2.18(d) shall not limit the rights of the Borrower under Section 2.18(e)(ii).

(e) Indemnification; Expenses.

(i) The Borrower hereby indemnifies and holds harmless each Lender (including each Issuing Bank) and the Administrative Agent from and against any and all claims, damages, losses, liabilities, costs or expenses which it may reasonably incur in connection with a Letter of Credit issued pursuant to this Section 2.18; provided that the Borrower shall not be required to indemnify any Lender, or the Administrative Agent, for any claims, damages, losses, liabilities, costs or expenses, to the extent found by a court of competent jurisdiction to have been caused by the gross negligence or willful misconduct of such Person.

(ii) None of the Lenders (including, an Issuing Bank) nor the Administrative Agent nor any of their officers or directors or employees or agents shall be liable or responsible, by reason of or in connection with the execution and delivery or transfer of or payment or failure to pay under any Letter of Credit, including without limitation any of the circumstances enumerated in subsection (d) above; provided that, notwithstanding Section 2.18(d), the Borrower shall have a claim for direct (but not consequential) damage suffered by it, to the extent finally determined by a court of competent jurisdiction to have been caused by (x) the Issuing Bank’s gross negligence or willful misconduct in determining whether documents presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Bank’s failure to pay under any Letter of Credit after the presentation to it of documents strictly complying with the terms and conditions of the Letter of Credit. The parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of

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any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.

(iii) Nothing in this subsection (e) is intended to limit the obligations of the Borrower under any other provision of this Agreement. To the extent the Borrower does not indemnify an Issuing Bank as required by this subsection, the Lenders agree to do so ratably in accordance with their Commitments.

(f) Stop Issuance Notice. If the Required Lenders reasonably determine at any time that the conditions set forth in Section 3.02 would not be satisfied in respect of a Borrowing at such time, then the Required Lenders may request that the Administrative Agent issue a “Stop Issuance Notice”, and the Administrative Agent shall issue such notice to each Issuing Bank. Such Stop Issuance Notice shall be withdrawn upon a determination by the Required Lenders that the circumstances giving rise thereto no longer exist. No Letter of Credit shall be issued while a Stop Issuance Notice is in effect. The Required Lenders may request issuance of a Stop Issuance Notice only if there is a reasonable basis therefor, and shall consider reasonably and in good faith a request from the Borrower for withdrawal of the same on the basis that the conditions in Section 3.02 are satisfied, provided that the Administrative Agent and the Issuing Banks may and shall conclusively rely upon any Stop Issuance Notice while it remains in effect.

ARTICLE 3

CONDITIONS

Section 3.01. Effectiveness. The Commitments shall become effective only when all the following conditions have been satisfied:

(a) the Administrative Agent shall have received, from each party listed on the signature pages hereof, either a counterpart hereof signed by such party or facsimile or other written confirmation satisfactory to the Administrative Agent confirming that such party has signed a counterpart hereof;

(b) the Administrative Agent shall have received an opinion of General Counsel of the Borrower (or such other counsel for the Borrower as may be acceptable to the Agent), substantially in the form of Exhibit E hereto, and covering such additional matters relating to the transactions contemplated hereby as the Required Lenders may reasonably request;

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(c) the Administrative Agent shall have received an opinion of Davis Polk & Wardwell, special counsel for the Administrative Agent, substantially in the form of Exhibit F hereto, and covering such additional matters relating to the transactions contemplated hereby as the Required Lenders may reasonably request;

(d) the Borrower shall have paid to the Administrative Agent for the account of each Lender a fee in the amount heretofore mutually agreed;

(e) the Administrative Agent shall have received all documents the Administrative Agent may reasonably request relating to the existence of the Borrower, the corporate authority for and the validity of this Agreement and the Notes, and any other matters relevant hereto, all in form and substance satisfactory to the Administrative Agent; and

(f) the Administrative Agent shall have received evidence satisfactory to it that the “Commitments” under and as defined in the Marathon Facility have become effective prior to or simultaneously with the Commitments becoming effective hereunder;

provided that the Commitments shall not become effective unless all of the foregoing conditions are satisfied not later than May 20, 2004. Promptly after the Effective Date occurs, the Administrative Agent shall notify the Borrower and the Lenders thereof, and such notice shall be conclusive and binding on all parties hereto.

Section 3.02. Borrowings, Transfers and Issuances of Letters of Credit. The obligation of any Lender to make a Loan on the occasion of any Borrowing and the obligation of an Issuing Bank to issue (or renew or extend the term of) any Letter of Credit (a “Credit Event”) is subject to the satisfaction of the following conditions:

(a) receipt by the Administrative Agent of notice of such Credit Event as required hereunder;

(b) the fact that, immediately before and after such Credit Event, no Default shall exist; and

(c) the fact that the representations and warranties of the Borrower contained in this Agreement shall be true in all material respects on and as of the date of such Credit Event.

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Each Credit Event shall be deemed to be a representation and warranty by the Borrower on the date of such Credit Event as to the facts specified in the foregoing clauses 3.02(b) and 3.02(c).

ARTICLE 4

REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants that:

Section 4.01. Company Existence and Power. The Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of Delaware, and has all limited liability company powers and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

Section 4.02. Company and Governmental Authorization; Contravention. The execution, delivery and performance by the Borrower of this Agreement and the Notes are within the Borrower’s limited liability company powers, have been duly authorized by all necessary limited liability company action, require no action by or in respect of, or filing with, any governmental body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the certificate of formation or by-laws of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or result in the creation or imposition of any Mortgage on any asset of the Borrower or any of its Subsidiaries.

Section 4.03. Binding Effect. This Agreement constitutes a valid and binding agreement of the Borrower and any Notes executed and delivered in accordance with this Agreement will constitute valid and binding obligations of the Borrower.

Section 4.04. FinancialInformation.

(a) The consolidated balance sheet of the Borrower as of December 31, 2003 and the related consolidated statements of income and cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, copies of which have been delivered to the Administrative Agent for each of the Lenders, fairly present in all material respects, in conformity with generally accepted accounting principles, the consolidated financial position of the Borrower as of such date and its consolidated results of operations and cash flows for such fiscal year.

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(b) The unaudited consolidated balance sheet of the Borrower as of March 31, 2004 and the related unaudited consolidated statements of income and cash flows for the three months then ended, copies of which have been delivered to the Administrative Agent for each of the Lenders, fairly present in all material respects, in conformity with generally accepted accounting principles applied on a basis consistent with the financial statements referred to in paragraph (a) of this Section, the consolidated financial position of the Borrower as of such date and its consolidated results of operations and cash flows for such three month period (subject to normal year-end adjustments).

(c) Since March 31, 2004 there has been no change in the consolidated financial position or operations of the Borrower, considered as a whole, which would materially and adversely affect the ability of the Borrower to perform its obligations hereunder and under the Notes.

Section 4.05. Litigation. Except as set forth in the notes to the consolidated balance sheet of the Borrower as of December 31, 2003 and the related consolidated statements of income and cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, there is no action, suit, arbitration or other proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, arbitrator or arbitral body, pending against the Borrower or of which the Borrower has otherwise received official notice or which to the knowledge of the Borrower is threatened against the Borrower, wherein there is a reasonable possibility of an unfavorable decision, ruling or finding which would materially adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes and since the dates of the respective descriptions of proceedings contained in the reports identified above, there has been no change in the status of such proceedings which would materially adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.06. Environmental Matters. The Borrower does not presently anticipate that remediation costs and penalties associated with environmental laws, to the extent not previously provided for, will have a material adverse effect on the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.07. Taxes. The Borrower has filed all United States Federal income tax returns and all other material tax returns that are required to be filed by it and has paid all material taxes due pursuant to such returns or pursuant to any assessment received by it, except for any such taxes being diligently contested in good faith and by appropriate proceedings. Adequate reserves have been provided on the books of the Borrower in respect of all taxes or other governmental charges in accordance with generally accepted accounting

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principles, and no tax liabilities in excess of the amount so provided are anticipated that would materially and adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes.

Section 4.08. Compliance with Laws. The Borrower is in compliance with all applicable laws, rules and regulations, other than such laws, rules or regulations (i) the validity or applicability of which the Borrower is contesting in good faith or (ii) failure to comply with which cannot reasonably be expected to have consequences which would materially and adversely affect the Borrower’s ability to perform its obligations under this Agreement and the Notes.

ARTICLE 5

COVENANTS

The Borrower agrees that, so long as any Bank has any Credit Exposure hereunder:

Section 5.01. Information. The Borrower will deliver to the Administrative Agent for each of the Lenders:

(a) as soon as available and in any event within 60 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower as of the end of such fiscal year and the related consolidated statements of income and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by PricewaterhouseCoopers LLP or other independent public accountants of nationally recognized standing;

(b) as soon as available and in any event within 40 days after the end of each of the first three quarters of each fiscal year of the Borrower, a consolidated balance sheet of the Borrower as of the end of such quarter and the related consolidated statements of income and cash flows for such quarter and for the portion of the Borrower’s fiscal year ended at the end of such quarter, setting forth in each case in comparative form the figures for the corresponding quarter and the corresponding portion of the Borrower’s previous fiscal year;

(c) simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a certificate of the chief financial officer or the chief accounting officer of the Borrower stating whether there exists on the date of such certificate any Default and, if any Default then exists, setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto;

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(d) forthwith upon the occurrence of any Default, a certificate of the chief financial officer or the chief accounting officer of the Borrower setting forth the details thereof and the action which the Borrower is taking or proposes to take with respect thereto;

(e) promptly upon the filing thereof, copies of all annual, quarterly, or other reports and copies of proxy statements or other materials which the Borrower shall have filed with the SEC; and

(f) from time to time such additional information regarding the financial position or business of the Borrower and its Subsidiaries and affiliates as the Administrative Agent, at the request of any Lender, may reasonably request.

Information required to be delivered pursuant to Section 5.01(a), 5.01(b), 5.01(e) or 5.01(f) may be delivered by electronic transmission; provided that the Borrower shall deliver paper copies of the information referred to in Section 5.01(a), 5.01(b), 5.01(e) or 5.01(f) to the Administrative Agent for any Lender which requests such delivery.

Section 5.02. Consolidations and Mergers. So long as this Agreement shall remain in effect, the Borrower shall not consolidate or merge with or into any other Person or convey, transfer or lease all or substantially all of its assets as an entirety to any Person, unless:

(i) either (x) the Borrower shall be the Person surviving such merger or (y) the Person formed by such consolidation or into which Borrower is merged or the Person which acquires by conveyance, transfer or lease all or substantially all of the assets of the Borrower as an entirety shall be a Person existing under the laws of the United States of America or any state or the District of Columbia and shall execute and deliver to each Bank an agreement, in form and substance satisfactory to each Bank, containing an assumption by such successor Person of the due and punctual performance and observance of each covenant and condition of this Agreement to be performed or observed by the Borrower;

(ii) the Borrower or such successor Person, as the case may be, shall have a consolidated net worth (that is, total consolidated assets less total consolidated liabilities) of no less than the net worth (as so determined) of the Borrower immediately prior to such consolidation, merger or conveyance, transfer or lease of all or substantially all of the Borrower’s assets as an entirety to such Person; and

(iii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing.

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Upon any consolidation or merger in which the Borrower is not the surviving Person or any conveyance, transfer or lease of all or substantially all of the assets of the Borrower as an entirety in accordance with this Section, the successor Person formed by such consolidation or into which the Borrower is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Borrower under this Agreement with the same effect as if such successor Person had been named as the Borrower herein. No such conveyance, transfer or lease of all or substantially all of the assets of the Borrower as an entirety shall have the effect of releasing the Borrower or any successor Person which shall theretofore have become such in the manner prescribed in this Section from any liability hereunder.

The Borrower will not directly or indirectly convey, transfer or lease all or substantially all of its assets except pursuant to a transaction subject to and in compliance with this Section 5.02.

Section 5.03. Use of Proceeds. The proceeds of the Loans made under this Agreement will be used by the Borrower for its general limited liability company purposes. None of such proceeds will be used in violation of any applicable law or regulation including, without limitation, Regulation U of the Board of Governors of the Federal Reserve System.

Section 5.04. Negative Pledge. If the Borrower or any Subsidiary of the Borrower shall mortgage, pledge, encumber, or subject to a lien (hereinafter to “Mortgage” or a “Mortgage”) as security for any indebtedness for money borrowed any property capable of producing oil or gas or any property or asset used primarily in the refining, marketing or transportation of oil or gas which is located in the United States and determined by the Board of Directors of the Borrower, in good faith, to be a principal property (any such property, a “Principal Property”), the Borrower will secure or will cause such Subsidiary to secure the Borrower’s obligations hereunder equally and ratably with all indebtedness or obligations secured by the Mortgage then being given and with any other indebtedness of the Borrower or such Subsidiary then entitled thereto; provided, however, this covenant shall not apply in the case of:

(i) any Mortgage existing on the date of this Agreement (whether or not such Mortgage includes an after-acquired property provision);

(ii) any Mortgage, including a purchase money Mortgage, incurred in connection with the acquisition of any property (for purposes hereof the creation of any Mortgage within 180 days after the acquisition or completion of construction of such property shall be deemed to be

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incurred in connection with the acquisition of such property), the assumption of any Mortgage previously existing on such acquired property or any Mortgage existing on the property of any corporation when such corporation becomes a Subsidiary of the Borrower;

(iii) any Mortgage on such property in favor of the United States of America, any state, or any agency, department, political subdivision or other instrumentality of either, to secure partial, progress or advance payments to the Borrower or any Subsidiary of the Borrower pursuant to the provisions of any contract or any statute;

(iv) any Mortgage on such property in favor of the United States of America, any state, or any agency, department, political subdivision or other instrumentality of either, to secure borrowings by the Borrower or any Subsidiary of the Borrower for the purchase or construction of the property mortgaged;

(v) any Mortgage in connection with a sale or other transfer of (i) oil or gas in place for a period of time or in an amount such that the purchaser will realize therefrom a specified amount of money or specified amount of minerals or (ii) any interest in property of the character commonly referred to as an “oil payment” or “production payment”;

(vi) any Mortgage on any property arising in connection with or to secure all or any part of the cost of the repair, construction, improvement, alteration, exploration, development or drilling of such property or any portion thereof;

(vii) any Mortgage on any pipeline, gathering system, pumping or compressor station, pipeline storage facility, other pipeline facility, drilling equipment, drilling platform, drilling barge, any movable railway, marine or automotive equipment, gas plant, office building, storage tank, or warehouse facility, any of which is located on a Principal Property;

(viii) any Mortgage on any equipment or other personal property used in connection with a Principal Property;

(ix) any Mortgage on a Principal Property arising in connection with the sale of accounts receivable resulting from the sale of oil or gas at the wellhead; or

(x) any renewal of or substitution for any Mortgage permitted under the preceding clauses.

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Notwithstanding the foregoing restriction contained in this Section 5.04, the Borrower may and may permit its Subsidiaries to incur liens or grant Mortgages on property covered by the restriction above so long as the net book value of the property so encumbered together with all property subject to the restriction on sale and leasebacks contained in Section 5.05 does not at the time such lien or Mortgage is granted exceed 12.5% of Consolidated Net Tangible Assets. “Consolidated Net Tangible Assets” means the aggregate value of all assets of Marathon and its Subsidiaries on a consolidated basis after deducting therefrom (a) all current liabilities (excluding all long-term debt due within one year), (b) all investments in unconsolidated subsidiaries and all investments accounted for on the equity basis and (c) all goodwill, patent and trademarks, unamortized debt discount and other similar intangibles (all determined in conformity with generally accepted accounting principles and calculated on a basis consistent with Marathon’s most recent audited consolidated financial statements).

Section 5.05. Sale and Leaseback. The Borrower will not, nor will it permit any Subsidiary of the Borrower to, sell or transfer any Principal Property, with the intention of taking back a lease of such property; provided, however, this covenant shall not apply if:

(i) the sale is to a Subsidiary of the Borrower (or to the Borrower in the case of a Subsidiary);

(ii) the lease is for a temporary period by the end of which it is intended that the use of such property by the lessee will be discontinued;

(iii) the Borrower or a Subsidiary of the Borrower could, in accordance with Section 5.04, Mortgage such property without equally and ratably securing the Borrower’s obligations hereunder;

(iv) the transfer is incident to or necessary to effect any operating, farm out, farm in, unitization, acreage exchange, acreage contributions, bottom hole or dry hole arrangements or pooling agreement or any other agreement of the same general nature relating to the acquisition, exploration, maintenance, development and operation of oil or gas properties in the ordinary course of business or as required by regulatory agencies having jurisdiction over the property; or

(v) (A) the Borrower promptly informs the Administrative Agent of such sale, (B) the net proceeds of such sale are at least equal to the fair value (as determined by resolution adopted by the Board of Directors of the Borrower) of such property and (C) the Borrower shall, and in any such case the Borrower covenants that it will, within 180 days after such sale, apply an amount equal to the net proceeds of such sale to

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the retirement of debt of the Borrower, or of a Subsidiary of the Borrower in the case of property of such Subsidiary, maturing by its terms more than one year after the date on which it was originally incurred (herein called “funded debt”); provided that the amount to be applied to the retirement of funded debt of the Borrower or of a Subsidiary of the Borrower shall be reduced by the amount equal to the amount below if, within 75 days after such sale, the Borrower shall deliver to the Administrative Agent an officer’s certificate (1) stating that on a specified date after such sale the Borrower or a Subsidiary of the Borrower, as the case may be, voluntarily retired a specified principal amount of funded debt, (2) stating that such retirement was not effected by payment at maturity or pursuant to any applicable mandatory sinking fund or prepayment provision (other than provisions requiring retirement of any funded debt of the Borrower or a Subsidiary of the Borrower, as the case may be, under the circumstances referred to in this Section 5.05) and (3) stating the then optional redemption or prepayment price applicable to funded debt so retired or, if there is no such price applicable, the amount applied by the Borrower or a Subsidiary of the Borrower, as the case may be, to the retirement of such funded debt. The Borrower shall deliver to the Administrative Agent a certified copy of the resolution of the Board of Directors of the Borrower referred to in paragraph (v)(B) above and an officer’s certificate setting forth all material facts under this Section 5.05. The term retirement of such funded debt shall include the in-substance defeasance of such funded debt in accordance with then applicable accounting rules.

ARTICLE 6

DEFAULTS

Section 6.01. Events of Default. If one or more of the following events (“Events of Default”) shall have occurred and be continuing:

(a) the Borrower shall fail to pay when due any principal of any Loan or any Reimbursement Obligation or shall fail to pay within five Domestic Business Days after the due date thereof any interest or fees payable hereunder;

(b) the Borrower shall fail to observe or perform any covenant contained in Section 5.01(d) or Section 5.02;

(c) the Borrower shall fail to observe or perform any covenant or agreement contained in this Agreement (other than those contained in Section 5.04 or 5.05 or those covered by clauses (a) or (b) above) for 10 days after written notice thereof has been given to the Borrower by the Administrative Agent at the request of any Lender;

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(d) the Borrower shall fail to observe or perform any covenant contained in Section 5.04 or 5.05 for 30 days after written notice thereof has been given to the Borrower by the Administrative Agent at the request of any Lender; provided that the continuation of such failure for 30 days or longer after such notice shall not constitute an Event of Default if (i) such failure is curable but cannot be cured within 30 days, (ii) the Borrower, upon the aforesaid notice from the Administrative Agent, institutes curative action as promptly as practicable, and (iii) the Borrower diligently pursues such action to completion within a reasonable period, which period shall not, in any event, continue for more than 90 days after the aforesaid notice from the Administrative Agent;

(e) any representation, warranty, certification or statement made by the Borrower in this Agreement or in any certificate, financial statement or other document delivered pursuant to this Agreement shall prove to have been incorrect in any material respect when made or deemed made;

(f) the Borrower shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing;

(g) an involuntary case or other proceeding shall be commenced against the Borrower seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against the Borrower under the federal bankruptcy laws as now or hereafter in effect; or

(h) notice of intent to terminate a Material Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Material Plan; or any member of the ERISA Group shall incur and not satisfy a withdrawal liability under Title IV of ERISA in respect of a

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Multiemployer Plan in excess of (i) $50,000,000 for any year or (ii) $250,000,000 in the aggregate;

then, and in every such event, the Administrative Agent shall (i) if requested by Lenders having more than 50% in aggregate amount of the Commitments, by notice to the Borrower terminate the Commitments and they shall thereupon terminate, and (ii) if requested by Lenders holding more than 50% in aggregate principal amount of the Loans, by notice to the Borrower declare the Loans (together with accrued interest thereon) and any other amounts payable hereunder to be, and the Loans and such amounts shall thereupon become, immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; provided that in the case of any of the Events of Default specified in paragraph (f) or (g) above, without any notice to the Borrower or any other act by the Administrative Agent or the Lenders, the Commitments shall thereupon terminate and the Loans (together with accrued interest thereon) and any other amounts payable hereunder shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.

Section 6.02. Notice of Default. The Administrative Agent shall give notice to the Borrower under Section 6.01(c) or (d) promptly upon being requested to do so by any Lender and shall thereupon notify all the Lenders thereof.

Section 6.03. Cash Cover. The Borrower agrees, in addition to the provisions of Section 6.01 hereof, that upon the occurrence and during the continuance of any Event of Default, it shall, if requested by the Administrative Agent upon the instruction of the Lenders having more than 50% of the Letter of Credit Liabilities, pay to the Administrative Agent an amount in immediately available funds (which funds shall be held as collateral pursuant to arrangements satisfactory to the Administrative Agent) equal to the aggregate amount available for drawing under all Letters of Credit outstanding at such time, provided that, upon the occurrence of any Event of Default specified in Section 6.01(f) or 6.01(g) with respect to the Borrower, the Borrower shall pay such amount forthwith without any notice or demand or any other act by the Administrative Agent or the Lenders.

ARTICLE 7

THE AGENTS

Section 7.01. Appointment and Authorization. Each Lender irrevocably appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers under this Agreement as are delegated to

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the Administrative Agent by the terms hereof, together with all such powers as are reasonably incidental thereto.

Section 7.02. Agents and Affiliates. Each Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise or refrain from exercising the same as though it were not one of the Agents. Each Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of business with the Borrower or any Subsidiary or affiliate of the Borrower as if it were not one of the Agents.

Section 7.03. Action by Administrative Agent. The obligations of the Administrative Agent hereunder are only those expressly set forth herein. Without limiting the generality of the foregoing, the Administrative Agent shall not be required to take any action with respect to any Default, except as expressly provided in Article 6.

Section 7.04. Consultation with Experts. Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken by it in good faith in accordance with the advice of such counsel, accountants or experts.

Section 7.05. Liability of Agents. None of the Agents, their affiliates and their respective directors, officers, agents and employees shall be liable for any action taken or not taken by it in connection herewith (i) with the consent or at the request of the Required Lenders (or such different number of Lenders as any provision hereof expressly requires for such consent or request) or (ii) in the absence of its own gross negligence or willful misconduct; provided that the provisions of this sentence are for the sole benefit of the Agents, their affiliates and their respective directors, officers, agents and employees and shall not release any Bank from liability it would otherwise have to the Borrower. None of the Agents, their affiliates and their respective directors, officers, agents and employees shall be responsible for or have any duty to ascertain, inquire into or verify (i) any statement, warranty or representation made in connection with this Agreement or any borrowing or any issuance of a Letter of Credit hereunder; (ii) the performance or observance of any of the covenants or agreements of the Borrower; (iii) the satisfaction of any condition specified in Article 3 except, in the case of the Administrative Agent, receipt of items required to be delivered to it; or (iv) the validity, effectiveness or genuineness of this Agreement, the Notes or any other instrument or writing furnished in connection herewith. No Agent shall incur any liability by acting in reliance upon any notice, consent, certificate, statement or other writing (which may be a bank wire, telex, facsimile or similar writing) believed by it to be genuine or to be signed by the proper party or parties. Without limiting the generality of the foregoing, the use of the term “agent” in

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this Agreement with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom and is intended to create or reflect only an administrative relationship between independent contracting parties.

Section 7.06. Indemnification. The Lenders shall, ratably in proportion to their Credit Exposures, indemnify the Administrative Agent and each Issuing Bank, their respective affiliates and their respective directors, officers, agents and employees (to the extent not reimbursed by the Borrower) against any cost, expense (including counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from such indemnitees’ gross negligence or willful misconduct) that such indemnitees may suffer or incur in connection with this Agreement or any Letter of Credit or any action taken or omitted by such indemnitees hereunder or thereunder.

Section 7.07. Credit Decision. Each Lender acknowledges that it has, independently and without reliance on any other Lender Party, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance on any other Lender Party, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under this Agreement.

Section 7.08. Successor Administrative Agent. The Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Borrower. Upon any such resignation, the Borrower shall have the right to appoint a successor Administrative Agent from among the Lenders, subject to the approval of the Required Lenders, which shall not be unreasonably withheld. If no successor Administrative Agent shall have been so appointed by the Borrower and approved by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent gives notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States or of any State thereof and having a combined capital and surplus of at least $100,000,000. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent resigns as Administrative Agent hereunder, the provisions

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of this Article shall inure to its benefit as to actions taken or omitted to be taken by it while it was Administrative Agent.

Section 7.09. Administrative Agent’s Fee. The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times previously agreed upon by the Borrower and the Administrative Agent.

Section 7.10. Other Agents. None of the Co-Agents, the Documentation Agents and the Syndication Agent, in their capacities as such, shall have any duties or obligations of any kind under this Agreement.

ARTICLE 8

CHANGE IN CIRCUMSTANCES

Section 8.01. Basis for Determining Interest Rate Inadequate or Unfair. If on or before the first day of any Interest Period for any Euro-Dollar Loans or Competitive Bid LIBOR Loan:

(a) the Administrative Agent is advised by the Reference Banks that deposits in dollars in the applicable amounts are not being offered to the Reference Banks in the London interbank market for such Interest Period, or

(b) in the case of Euro-Dollar Loans, Lenders having at least 50% in aggregate amount of the Commitments advise the Administrative Agent that the London Interbank Offered Rate as determined by the Administrative Agent will not adequately and fairly reflect the cost to such Lenders of funding their Euro-Dollar Loans for such Interest Period, or

the Administrative Agent shall forthwith give notice thereof to the Borrower and the Lenders, whereupon until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such suspension no longer exist, (i) the obligations of the Lenders to make Euro-Dollar Loans, or to continue or convert outstanding Loans as or into Euro-Dollar Loans, shall be suspended and (ii) each outstanding Euro-Dollar Loan shall be converted into a Base Rate Loan on the last day of the then current Interest Period applicable thereto. Unless the Borrower notifies the Administrative Agent at least two Domestic Business Days before the date of any affected Borrowing for which a Notice of Borrowing has previously been given that it elects not to borrow on such date, (i) if such affected Borrowing is a Euro-Dollar Borrowing, such Borrowing shall instead be made as a Base Rate Borrowing and (ii) if such affected Borrowing is a Competitive Bid LIBOR Borrowing, the Competitive Bid LIBOR Loans comprising such Borrowing shall bear interest for each day from and including the first day to but

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excluding the last day of the Interest Period applicable thereto at the Prime Rate for such day.

Section 8.02. Illegality. (a) If, on or after the date hereof, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Euro-Dollar Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency, shall make it unlawful or impossible for any Lender (or its Euro-Dollar Lending Office) to make, maintain or fund its Euro-Dollar Loans and such Lender shall so notify the Administrative Agent, the Administrative Agent shall forthwith give notice thereof to the other Lenders and the Borrower, whereupon until such Lender notifies the Borrower and the Administrative Agent that the circumstances giving rise to such suspension no longer exist, the obligation of such Lender to make Euro-Dollar Loans, or to convert outstanding Loans into Euro-Dollar Loans or continue outstanding Loans as Euro-Dollar Loans, shall be suspended. Before giving any notice to the Administrative Agent pursuant to this Section, such Lender shall designate a different Euro-Dollar Lending Office if such designation will avoid the need for giving such notice and will not, in the judgment of such Lender, be otherwise disadvantageous to such Lender.

(b) If such notice is given, each Euro-Dollar Loan of such Lender then outstanding shall be converted to a Base Rate Loan either (a) on the last day of the then current Interest Period applicable to such Euro-Dollar Loan if such Lender may lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such day or (b) immediately if such Lender shall determine that it may not lawfully continue to maintain and fund such Loan as a Euro-Dollar Loan to such day. Interest and principal on any such Base Rate Loan shall be payable on the same dates as, and on a pro rata basis with, the interest and principal payable on the related Euro-Dollar Loans of the other Lenders.

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Section 8.03. Increased Cost and Reduced Return. (a) If on or after (x) the date hereof, in the case of any Committed Loan or Letters of Credit or any obligation to make Committed Loans or issue or participate in Letters of Credit or (y) the date of the related Competitive Bid Quote, in the case of any Competitive Bid Loan, the adoption of any applicable law, rule or regulation, or any change in any applicable law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency:

(A) shall subject any Lender (or its Applicable Lending Office) to any tax, duty or other charge with respect to its Fixed Rate Loans or the Letters of Credit, its Note or its obligation to make Fixed Rate Loans or its obligations hereunder in respect of Letters of Credit, or shall change the basis of taxation of payments to any Lender (or its Applicable Lending Office) of the principal of or interest on its Fixed Rate Loans or the Letters of Credit or any other amounts due under this Agreement in respect of its Fixed Rate Loans or the Letters of Credit or its obligation to make Fixed Rate Loans or its obligations hereunder in respect of Letters of Credit (except for taxes based on or measured in whole or in part by the gross income, net income, gross revenue or gross receipts of such Lender or its Applicable Lending Office imposed by the jurisdiction in which such Lender’s principal executive office or Applicable Lending Office is located); or

(B) shall impose, modify or deem applicable any reserve (including, without limitation, any such requirement imposed by the Board of Governors of the Federal Reserve System, but excluding (y) with respect to any Euro-Dollar Loan any such requirement with respect to which such Lender is entitled to compensation during the relevant Interest Period under Section 8.03(d) and (z) any such requirement with respect to which such Lender is entitled to compensation pursuant to Section 8.03(b)), special deposit, insurance assessment or similar requirement against assets of, deposits with or for the account of, or credit (including Letters of Credit and participations therein) extended by, any Lender (or its Applicable Lending Office) or shall impose on any Lender (or its Applicable Lending Office) or on the London interbank market any other condition affecting its Fixed Rate Loans or the Letters of Credit, its Notes or its obligation to make Fixed Rate Loans or its obligations hereunder in respect of Letters of Credit;

and the result of any of the foregoing is to increase the cost to such Lender (or its Applicable Lending Office) of making or maintaining any Fixed Rate Loan or of issuing or participating in any Letters of Credit, or to reduce the amount of any sum received or receivable by such Lender (or its Applicable Lending Office) or such Issuing Bank under this Agreement or under its Note with respect thereto, by an amount deemed by such Lender or such Issuing Bank to be material, then, within 15 days after demand by such Lender or such Issuing Bank (with a copy to the Administrative Agent), the Borrower shall pay to such Lender or such Issuing Bank such additional amount or amounts as will compensate such Lender or such Issuing Bank for such increased cost or reduction.

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(b) If any Lender shall have determined that, after the date hereof, the adoption of any applicable law, rule or regulation regarding capital adequacy, or any change in any such law, rule or regulation, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Lender (or its Parent) as a consequence of such Lender’s obligations hereunder to a level below that which such Lender (or its Parent) could have achieved but for such adoption, change, request or directive (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender (or its Parent) for such reduction, provided that the Borrower shall not be obligated to compensate any Lender (or its Parent) in respect of any such reduction in respect of periods more than six months prior to the date on which such Lender shall have notified the Borrower of its intention to demand such compensation and setting forth the amount or the specific basis of computation thereof.

(c) Each Lender will promptly notify the Borrower and the Administrative Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to Section 8.03(a) or (b) and will designate a different Applicable Lending Office if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the judgment of such Lender, be otherwise disadvantageous to it. A certificate of any Lender claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such amount, such Lender may use any reasonable averaging and attribution methods.

(d) The Borrower shall pay for the account of each Lender on the last day of each Interest Period with respect to any Euro-Dollar Loan (and, if such Interest Period is longer than three months, at intervals of three months after the first day thereof), if at any time during such Interest Period such Lender shall be required to maintain (and shall maintain in amounts deemed by such Lender to be material) reserves against any category of liabilities which includes deposits by reference to which the interest rate on Euro-Dollar Loans is determined as provided in this Agreement or against any category of extensions of credit or other assets of such Lender which includes loans by a non-United States office of such Lender to United States residents (including without limitation reserves against “Eurocurrency liabilities” under Regulation D), an additional amount (determined by such Lender and notified to the Borrower and the Administrative

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Agent) equal to the product of the following for each day during such Interest Period:

(i) the principal amount of the Euro-Dollar Loan of such Lender to which such Interest Period relates outstanding on such day; and

(ii) the remainder of (x) a fraction the numerator of which is the applicable London Interbank Offered Rate (expressed as a decimal) and the denominator of which is one minus the stated rate (expressed as a decimal) at which such reserve requirements are imposed on such Lender on such day minus (y) such numerator; and

(iii) 1/360.

If a Lender which is entitled to require payment by the Borrower of the amount provided for in this Section 8.03(d) determines that a lesser amount is required to compensate it for the costs of the reserve requirements referred to therein, such Lender may, but shall not be obligated to, reduce the amount payable by the Borrower thereunder to a lesser amount specified in the notice delivered pursuant to this Section 8.03(d).

(e) Each Lender organized under the laws of a jurisdiction outside the United States of America agrees that it shall deliver to the Borrower (with a copy to the Administrative Agent) (i) within 30 days after the date of execution of this Agreement, two duly completed copies of United States Internal Revenue Service Form W-8BEN or W-8ECI, as appropriate, promulgated pursuant to the Code, indicating that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any United States federal income taxes as permitted by the Code, (ii) from time to time, such extensions or renewals of such forms (or successor forms) as may reasonably be requested by the Borrower but only to the extent such Lender determines that it may properly effect such extensions or renewals under applicable tax treaties, laws, regulations and directives and (iii) in the event of a transfer of any Loan to an affiliate of such Lender, a new Internal Revenue Service Form W-8BEN or W-8ECI (or any successor form), as the case may be, for such affiliate. The Borrower and the Administrative Agent shall each be entitled to rely on such forms in its possession until receipt of any revised or successor form pursuant to the preceding sentence.

Section 8.04. Base Rate Loans Substituted for Affected Fixed Rate Loans. If (i) the obligation of any Lender to make, or to continue or convert outstanding Loans as or to, Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03 with respect to its Euro-Dollar Loans and the Borrower shall, by at least five Euro-Dollar Business Days’ prior notice to such Lender through the Administrative Agent, have elected

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that the provisions of this Section shall apply to the Lender demanding such compensation, then, unless and until such Lender notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist, all Loans which would otherwise be made by such Lender as (or continued as or converted to) Euro-Dollar Loans shall instead be Base Rate Loans on which interest and principal shall be payable contemporaneously with the related Euro-Dollar Loans of the other Lenders. If such Lender notifies the Borrower that the circumstances giving rise to such suspension or demand for compensation no longer exist, the principal amount of each such Base Rate Loan shall be converted into a Euro-Dollar Loan on the first day of the next succeeding Interest Period applicable to the related Euro-Dollar Loans of the other Lenders.

Section 8.05. Substitution of Lender. If (i) the obligation of any Lender to make or to convert or continue outstanding Loans as or into Euro-Dollar Loans has been suspended pursuant to Section 8.02 or (ii) any Lender has demanded compensation under Section 8.03, the Borrower shall have the right, with the assistance of the Administrative Agent, to designate a substitute bank or banks (which may be one or more of the Lenders) mutually satisfactory to the Borrower and the Administrative Agent to purchase for cash, pursuant to an Assignment and Assumption Agreement in substantially the form of Exhibit G hereto, the outstanding Loans of such Lender and assume the Commitment of such Lender, without recourse to or warranty by, or expense to, such Lender, for a purchase price equal to the principal amount of all of such Lender’s outstanding Loans and Reimbursement Obligations plus any accrued but unpaid interest thereon and the accrued but unpaid fees for the account of such Lender hereunder plus such amount, if any, as would be payable pursuant to Section 2.11 if the outstanding Loans of such Lender were prepaid in their entirety on the date of consummation of such assignment.

Section 8.06. Notice Mandatory. The Administrative Agent or the affected Lender, as the case may be, shall promptly give notice to the Borrower when circumstances which gave rise to a suspension of the obligations of the Lenders or a Lender to make or maintain Euro-Dollar Loans pursuant to Section 8.01 or 8.02, or to a demand for compensation under Section 8.03, no longer exist.

ARTICLE 9

MISCELLANEOUS

Section 9.01. Notices. All notices, requests and other communications to any party hereunder shall be in writing (including bank wire, telex, facsimile or similar writing) and shall be given to such party: (a) in the case of the Borrower or the Administrative Agent, at its address, facsimile number or telex number set forth on the signature pages hereof, (b) in the case of any Lender, at its address,

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facsimile number or telex number set forth in its Administrative Questionnaire or (c) in the case of any party, at such other address, facsimile number or telex number as such party may hereafter specify for the purpose by notice to the Administrative Agent and the Borrower. Each such notice, request or other communication shall be effective (i) if given by telex, when transmitted to the telex number referred to in this Section and the appropriate answerback is received, (ii) if given by facsimile, when transmitted to the facsimile number referred to in this Section and confirmation of receipt is received, (iii) if given by mail, 72 hours after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iv) if given by any other means, when delivered at the address referred to in this Section; provided that notices to the Administrative Agent under Article 2 or Article 8 shall not be effective until received.

Section 9.02. No Waivers. No failure or delay by any Lender Party in exercising any right, power or privilege hereunder or under any Note or Letter of Credit shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 9.03. Expenses; Indemnification. (a) The Borrower shall pay (i) all reasonable and documented (with itemized invoices) out-of-pocket expenses of the Administrative Agent, including fees and disbursements of special counsel for the Administrative Agent, in connection with the preparation of this Agreement, any waiver or consent hereunder or any amendment hereof or any Default or alleged Default hereunder and (ii) if an Event of Default occurs, all reasonable and documented (with itemized invoices) out-of-pocket expenses incurred by each Lender Party, including (without duplication) the fees and disbursements of outside counsel and the allocated cost of inside counsel, in connection with such Event of Default and collection, or any bankruptcy, insolvency, reorganization or other enforcement proceedings resulting therefrom. The Borrower shall indemnify each Lender Party against any transfer taxes, documentary taxes, assessments or charges made by any governmental authority by reason of the execution and delivery of this Agreement or the Notes.

(b) The Borrower agrees to indemnify each Lender Party, their respective affiliates and the respective directors, officers, agents and employees of the foregoing (each an “Indemnitee”) and hold each Indemnitee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind, including, without limitation, reasonable fees and disbursements of counsel, which may be incurred by such Indemnitee in connection with any investigative, administrative or judicial proceeding (whether or not such Indemnitee shall be designated a party thereto) brought or threatened relating to or arising out of this

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Agreement or any actual or proposed use of proceeds of Loans or Letters of Credit hereunder; provided that (i) no Indemnitee shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct or for its breach of the express terms of this Agreement, in each case as determined by final judgment of a court of competent jurisdiction; (ii) the Borrower shall not, in connection with any such proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees and expenses of more than one separate law firm at any one time for the Indemnitees (which shall be selected by the Administrative Agent after consultation with the Borrower); (iii) each Indemnitee shall consult with the Borrower from time to time at the request of the Borrower regarding the conduct of the defense in any such proceeding; and (iv) the Borrower shall not be obligated to pay an amount of any settlement entered into without its consent (which shall not be unreasonably withheld).

Section 9.04. Sharing. Each Lender agrees that if it shall, by exercising any right of set-off or counterclaim or otherwise, receive payment of a proportion of the aggregate amount of principal and interest then due with respect to the Loans and Letters of Credit Liabilities held by it which is greater than the proportion received by any other Lender in respect of the aggregate amount of principal and interest then due with respect to the Loans and Letter of Credit Liabilities held by such other Lender, the Lender receiving such proportionately greater payment shall purchase such participations in the Loans and Letter of Credit Liabilities held by the other Lenders, and such other adjustments shall be made, as may be required so that all such payments of principal and interest with respect to the Loans and Letter of Credit Liabilities held by the Lenders shall be shared by the Lenders pro rata; provided that nothing in this Section shall impair the right of any Lender to exercise any right of set-off or counterclaim it may have and to apply the amount subject to such exercise to the payment of indebtedness of the Borrower other than its indebtedness hereunder.

Section 9.05. Amendments and Waivers. Any provision of this Agreement or the Notes may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Borrower and the Required Lenders (and, if the rights or duties of any Issuing Bank or the Agent are affected thereby, by it); provided that no such amendment or waiver shall:

(a) unless signed by each affected Lender, (i) increase or decrease the Commitment of any Lender (except for a ratable decrease in the Commitments of all the Lenders) or subject any Lender to any additional obligation, (ii) reduce the principal of or interest on any Loan or the amount to be reimbursed in respect of any Letter of Credit or any interest thereon or any fees hereunder or (iii) postpone the date fixed for any payment of principal of or interest on any Loan or for reimbursement in respect of any Letter of Credit or any fees hereunder or for the

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termination of any Commitment or (except as expressly provided in Section 2.18) the expiry date of any Letter of Credit;

(b) unless signed by all Lenders, (i) change the percentage of the Credit Exposures which shall be required for the Lenders or any of them to take any action under this Section or any other provision of this Agreement, (ii) change clause 9.05(a) or this clause Section 9.05(b) or (iii) change the pro rata distribution of payments to Lenders under this Agreement; or

(c) unless signed by a Designated Lender or its Designating Lender, (i) subject such Designated Lender to any additional obligation, (ii) affect its rights hereunder (unless the rights of all the Lenders hereunder are similarly affected) or (iii) change this clause 9.05(c).

For avoidance of doubt, the operation of Section 2.16 in accordance with its terms is not an amendment subject to this Section 9.05.

Section 9.06. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void).

(b) Any Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) subject to each such assignment (determined as of the date the Assignment and Assumption Agreement, as hereinafter defined, with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consent (each such consent not to be unreasonably withheld or delayed), (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of outstanding Competitive Bid Loans, (iii) the parties to each assignment shall execute and deliver to the Administrative Agent an agreement, substantially in the form of Exhibit G hereto (an “Assignment and Assumption Agreement”),

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together with a processing and recordation fee of $3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and (iv) any Lender assigning all or a portion of its rights and obligations under this Agreement pursuant to an Assignment and Assumption Agreement shall enter into an Assignment and Assumption Agreement (as such term is defined in the Marathon Facility) with the same Eligible Assignee(s) in an amount representing an equal proportion of such Lender’s Commitment (as such term is defined in the Marathon Facility) under the Marathon Facility. Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption Agreement, the Eligible Assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption Agreement, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 8.03 8.04 and 9.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section.

(c) The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one of its offices in the State of Delaware or New York a copy of each Assignment and Assumption Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Any Lender may, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment, Loans and/or Letter of Credit Liabilities owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such

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Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in clause (i), (ii) or (iii) of Section 9.05(a) that affects such Participant. Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 9.05(a) and Article 8 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.04 as though it were a Lender, provided such Participant agrees to be subject to Section 9.04 as though it were a Lender.

(e) A Participant shall not be entitled to receive any greater payment under Section 8.03 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Borrower’s prior written consent. A Participant organized under the laws of a jurisdiction outside the United States shall not be entitled to the benefits of Section 8.03(a) unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 8.03(e) as though it were a Lender.

(f) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

Section 9.07. Designated Lenders. (a) Subject to the provisions of this subsection (a), any Lender may at any time designate an Approved Fund to provide all or a portion of the Loans to be made by such Lender pursuant to this Agreement; provided that such designation shall not be effective unless the Borrower and the Administrative Agent consent thereto (which consents shall not be unreasonably withheld). When a Lender and its Approved Fund shall have signed an agreement substantially in the form of Exhibit H hereto (a “Designation Agreement”) and the Borrower and the Administrative Agent shall have signed

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their respective consents thereto, such Approved Fund shall become a Designated Lender for purposes of this Agreement. The Designating Lender shall thereafter have the right to permit such Designated Lender to provide all or a portion of the Loans to be made by such Designating Lender pursuant to Section 2.01 or 2.03, and the making of such Loans or portion thereof shall satisfy the obligation of the Designating Lender to the same extent, and as if, such Loans or portion thereof were made by the Designating Lender. As to any Loans or portion thereof made by it, each Designated Lender shall have all the rights that a Lender making such Loans or portion thereof would have had under this Agreement and otherwise; provided that (x) its voting rights under this Agreement shall be exercised solely by its Designating Lender and (y) its Designating Lender shall remain solely responsible to the other parties hereto for the performance of such Designated Lender’s obligations under this Agreement, including its obligations in respect of the Loans or portion thereof made by it. No additional Note shall be required to evidence the Loans or portion thereof made by a Designated Lender; and the Designating Lender shall be deemed to hold its Note as agent for its Designated Lender to the extent of the Loans or portion thereof funded by such Designated Lender. Each Designating Lender shall act as administrative agent for its Designated Lender and give and receive notices and other communications on its behalf. Any payments for the account of any Designated Lender shall be paid to its Designating Lender as administrative agent for such Designated Lender and neither the Borrower nor the Administrative Agent shall be responsible for any Designating Lender’s application of such payments. In addition, any Designated Lender may, with notice to (but without the prior written consent of) the Borrower and the Administrative Agent, (i) assign all or portions of its interest in any Loans to its Designating Lender or to any financial institutions consented to by the Borrower and the Administrative Agent that provide liquidity and/or credit facilities to or for the account of such Designated Lender to support the funding of Loans or portions thereof made by it and (ii) disclose on a confidential basis any non-public information relating to its Loans or portions thereof to any rating agency, commercial paper dealer or provider of any guarantee, surety, credit or liquidity enhancement to such Designated Lender.

(b) Each party to this Agreement agrees that it will not institute against, or join any other person in instituting against, any Designated Lender any bankruptcy, insolvency, reorganization or other similar proceeding under any federal or state bankruptcy or similar law, for one year and a day after all outstanding senior indebtedness of such Designated Lender is paid in full. The Designating Lender for each Designated Lender agrees to indemnify, save, and hold harmless each other party hereto for any loss, cost, damage and expense arising out of its inability to institute any such proceeding against such Designated Lender. This subsection (b) shall survive the termination of this Agreement.

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Section 9.08. No Reliance on Margin Stock. Each Lender represents to the Administrative Agent and each of the other Lenders that it in good faith is not relying upon any “margin stock” (as defined in Regulation U) as collateral in the extension or maintenance of the credit provided for in this Agreement.

Section 9.09. Governing Law; Submission to Jurisdiction. This Agreement and each Note shall be governed by and construed in accordance with the laws of the State of New York. The Borrower hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 9.10. Counterparts; Integration. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral or written, relating to the subject matter hereof.

Section 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 9.12. USA Patriot Act. Each Lender hereby notifies the Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), it is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow such Lender to identify the Borrower in accordance with said Act.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

MARATHON ASHLAND PETROLEUM LLC
By:	/s/    R. R. YOUNG
Name:	R. R. YOUNG
Title:	TREASURER
	539 South Main Street
	Findlay, Ohio 45840
	Attention: Treasurer
Administrative Agent
JPMORGAN CHASE BANK, as Administrative Agent and as Lender
By:	/s/    BETH LAWRENCE
Name:	BETH LAWRENCE
Title:	MANAGING DIRECTOR
	270 Park Avenue
	New York, NY 10017
	Attention:
	Facsimile
Syndication Agent
BANK OF AMERICA, N.A., as Syndication Agent and as Lender
By:	/s/    RONALD E. MCKAIG
Name:	RONALD E. MCKAIG
Title:	MANAGING DIRECTOR

Documentation Agents
ABN AMRO BANK NV, as a Documentation Agent and as a Lender
By:	/s/    JAMES L. MOYES
Name:	JAMES L. MOYES
Title:	VICE PRESIDENT
By:	/s/    FRANK R. RUSSO
Name:	FRANK R. RUSSO
Title:	VICE PRESIDENT
CITIBANK, N.A., as a Documentation Agent and as a Lender
By:	/s/    GORDON DEKUYPER
Name:	GORDON DEKUYPER
Title:	ATTORNEY-IN-FACT
MORGAN STANLEY BANK, as a Documentation Agent and as Lender
By:	/s/    DANIEL TWENGE
Name:	DANIEL TWENGE
Title:	VICE PRESIDENT

Lenders:
THE BANK OF NOVA SCOTIA
By:	/s/    M. D. SMITH
Name:	M. D. SMITH
Title:	AGENT
BNP PARIBAS
By:	/s/    BRIAN M. MALONE
Name:	BRIAN M. MALONE
Title:	MANAGING DIRECTOR
By:	/s/    GABE ELLISOR
Name:	GABE ELLISOR
Title:	VICE PRESIDENT
DEUTSCHE BANK AG NEW YORK BRANCH
By:	/s/    PHILLIPE SANDMEIER
Name:	PHILLIPE SANDMEIER
Title:	DIRECTOR
By:	/s/    OLIVER RIEDINGER
Name:	OLIVER RIEDINGER
Title:	VICE PRESIDENT

LEHMAN COMMERCIAL PAPER INC.
By:	/s/    JANINE M. SHUGAN
Name:	JANINE M. SHUGAN
Title:	AUTHORIZED SIGNATORY
NATIONAL CITY BANK
By:	/s/    THOMAS E. REDMOND
Name:	THOMAS E. REDMOND
Title:	SENIOR VICE PRESIDENT
SOCIETE GENERALE
By:	/s/    STEPHEN W. WARFEL
Name:	STEPHEN W. WARFEL
Title:	VICE PRESIDENT
THE BANK OF NEW YORK
By:	/s/    CRAIG J. ANDERSON
Name:	CRAIG J. ANDERSON
Title:	VICE PRESIDENT
COMERICA BANK
By:	/s/    WILLIAM S. ROGERS
Name:	WILLIAM S. ROGERS
Title:	VICE PRESIDENT

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch
By:	/s/    SARAH WU
Name:	SARAH WU
Title:	VICE PRESIDENT
By:	/s/    THOMAS R. CANTELLO
Name:	THOMAS R. CANTELLO
Title:	VICE PRESIDENT
DEN NOR BANK ASA
By:	/s/    PETER M. DODGE
Name:	PETER M. DODGE
Title:	FIRST VICE PRESIDENT
By:	/s/    NILS FYKSE
Name:	NILE FYKSE
Title:	SENIOR VICE PRESIDENT
FIFTH THIRD BANK
By:	/s/    CHRISTOPHER C. MOTLEY
Name:	CHRISTOPHER C. MOTLEY
Title:	ASSISTANT VICE PRESIDENT

MIZUHO CORPORATE BANK, LTD.
By:	/s/    GREG BOTSHON
Name:	GREG BOTSHON
Title:	SENIOR VICE PRESIDENT
THE ROYAL BANK OF SCOTLAND PLC
By:	/s/    PATRICIA J. DUNDEE
Name:	PATRICIA J. DUNDEE
Title:	SENIOR VICE PRESIDENT
STANDARD CHARTERED BANK
By:	/s/    JOHN ROBINSON
Name:	JOHN ROBINSON
Title:	SENIOR VICE PRESIDENT
By:	/s/    ROBERT K. REDDINGTON
Name:	ROBERT K. REDDINGTON
Title:	ASSISTANT VICE PRESIDENT
SUMITOMO MITSUI BANKING CORPORATION
By:	/s/    LEO E. PAGARIGAN
Name:	LEO E. PAGARIGAN
Title:	SENIOR VICE PRESIDENT

WACHOVIA BANK, NATIONAL ASSOCIATION
By:	/s/    JOHN DALNOKY
Name:	JOHN DALNOKY
Title:	VICE PRESIDENT
WILLIAM STREET COMMITMENT CORPORATION (Recourse only to assets of William Street Commitment Corporation)
By:	/s/    JENNIFER M. HILL
Name:	JENNIFER M. HILL
Title:	CHIEF FINANCIAL OFFICER
BAYERISCHE LANDESBANK
By:	/s/    WOLFGANG KOTTMANN
Name:	WOLFGANG KOTTMAN
Title:	FIRST VICE PRESIDENT
By:	/s/    RICHARD JACKSON JR.
Name:	RICHARD JACKSON JR.
Title:	SECOND VICE PRESIDENT
THE BANK OF TOKYO-MITSUBISHI, LTD.
By:	/s/    DONALD W. HERRICK, JR.
Name:	DONALD W. HERRICK, JR.
Title:	VICE PRESIDENT

RIYAD BANK
By:	/s/    KEITH S. TENNY
Name:	KEITH S. TENNY
Title:	GENERAL MANAGER
By:	/s/    PIERRE J. HERSZDORFER
Name:	PIERRE J. HERZDORFER
Title:	VICE PRESIDENT
SOUTHWEST BANK OF TEXAS
By:	/s/    W. BRYAN CHAPMAN
Name:	W. BRYAN CHAPMAN
Title:	SENIOR VICE PRESIDENT
US BANK, N.A.
By:	/s/    PATRICK MCGRAW
Name:	PATRICK MCGRAW
Title:	ASSISTANT VICE PRESIDENT

ARAB BANKING CORPORATION
By:	/s/    ROBERT IVOSEVICH
Name:	ROBERT IVOSEVICH
Title:	GENERAL MANAGER
By:	/s/    TAREK SHERLALA
Name:	TAREK SHERLALA
Title:	VICE PRESIDENT

COMMITMENT SCHEDULE

Lender	Commitment
JPMorgan Chase Bank	$	46,250,000
Bank of America, N.A.	$	46,250,000
ABN Amro Bank NV	$	46,250,000
Citibank, N.A.	$	46,250,000
Morgan Stanley Bank	$	46,250,000
The Bank of Nova Scotia	$	21,250,000
BNP Paribas	$	21,250,000
Deutsche Bank AG New York Branch	$	21,250,000
Lehman Commerical Paper Inc.	$	21,250,000
National City Bank	$	21,250,000
Societe Generale	$	21,250,000
The Bank of New York	$	10,000,000
Comerica Bank	$	10,000,000
Credit Suisse First Boston, acting through its Cayman Islands Branch	$	10,000,000
DNB Nor Bank ASA	$	10,000,000
Fifth Third Bank	$	10,000,000
Mizuho Corporate Bank, Ltd.	$	10,000,000
The Royal Bank of Scotland plc	$	10,000,000
Standard Chartered Bank	$	10,000,000
Sumitomo Mitsui Banking Corporation	$	10,000,000
Wachovia Bank, National Association	$	10,000,000
William Street Commitment Corporation	$	10,000,000
Bayerische Landesbank	$	5,500,000
The Bank of Tokyo-Mitsubishi, Ltd.	$	5,500,000
Riyad Bank	$	5,500,000
Southwest Bank of Texas	$	5,500,000
US Bank, N.A.	$	5,500,000
Arab Banking Corporation	$	3,750,000
Total	$	500,000,000.00

FIVE YEAR PRICING SCHEDULE

Each of “Facility Fee Rate” and “Euro-Dollar Margin” means, for any day, the rate per annum set forth below in the row opposite such term and in the column corresponding to the Pricing Level and usage that apply on such date:

Pricing Level	Level I		Level II		Level III		Level IV		Level V		Level VI
Facility Fee Rate	0.080	%	0.100	%	0.125	%	0.150	%	0.200	%	0.250	%
Euro-Dollar Margin
Usage < 50%	0.170	%	0.250	%	0.375	%	0.475	%	0.675	%	1.000	%
Usage ³ 50%	0.270	%	0.350	%	0.500	%	0.600	%	0.800	%	1.125	%

For purposes of this Schedule, the following terms have the following meanings, subject to the concluding paragraph of this Schedule:

“Level I Pricing” applies on any day on which Marathon’s long-term debt is rated A or higher by S&P or A2 or higher by Moody’s.

“Level II Pricing” applies on any day on which (i) Marathon’s long-term debt is rated A- or higher by S&P or A3 or higher by Moody’s and (ii) Level I Pricing does not apply.

“Level III Pricing” applies on any day on which (i) Marathon’s long-term debt is rated BBB+ or higher by S&P or Baa1 or higher by Moody’s and (ii) none of Level I Pricing and Level II Pricing applies.

“Level IV Pricing” applies on any day on which (i) Marathon’s long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody’s and (ii) none of Level I Pricing, Level II Pricing and Level III applies.

“Level V Pricing” applies on any day on which (i) Marathon’s long-term debt is rated BBB- or higher by S&P or Baa3 or higher by Moody’s and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing and Level IV Pricing applies.

“Level VI Pricing” applies on any day if no other Pricing Level applies on such day.

“Pricing Level” refers to the determination of which of Level I, Level II, Level III, Level IV, Level V or Level VI Pricing applies on any day.

The “Usage” applicable to any date is the percentage equivalent of a fraction the numerator of which is the Total Outstanding Amount at such date and the denominator of which is the aggregate amount of the Commitments at such date. If for any reason any Total Outstanding Amount remains following the termination of the Commitments, Usage will be deemed to be 100%.

The credit ratings to be utilized for purposes of this Schedule are those assigned to the senior unsecured long-term debt securities of Marathon without third-party credit enhancement, and any rating assigned to any other debt security of Marathon shall be disregarded. The ratings in effect for any day are those in effect at the close of business on such day.

In the case of split ratings from S&P and Moody’s, the rating to be used to determine the applicable Pricing Level is the higher of the two (e.g., A-/Baa1 results in Level II Pricing); provided that if the split is more than one full rating category, the intermediate (or higher of the two intermediate ratings) will be used (e.g., A-/Baa2 results in Level III Pricing, as does A-/Baa3).

EXHIBIT A

NOTE

New York, New York

May     , 2004

For value received, MARATHON ASHLAND PETROLEUM LLC, a Delaware limited liability company (the “Borrower”), promises to pay to the order of                                                   (the “Lender”), for the account of its Applicable Lending Office, the unpaid principal amount of each Loan made by the Lender to the Borrower pursuant to the Credit Agreement referred to below on the maturity date provided for in the Credit Agreement. The Borrower promises to pay interest on the unpaid principal amount of each such Loan on the dates and at the rate or rates provided for in the Credit Agreement. All such payments of principal and interest shall be made in lawful money of the United States in Federal or other immediately available funds at the office of JPMorgan Chase Bank, at 270 Park Avenue, New York, New York.

The date, amount and maturity of each Loan made by the Lender and all repayments of the principal thereof shall be recorded by the Lender and, if the Lender so elects in connection with any transfer or enforcement hereof, appropriate notations to evidence the foregoing information with respect to each such Loan then outstanding may be endorsed by the Lender on the schedule attached hereto, or on a continuation of such schedule attached to and made a part hereof; provided that the failure of the Lender to make (or any error in making) any such recordation or endorsement shall not affect the Borrower’s obligations hereunder or under the Credit Agreement.

This note is one of the Notes referred to in the Five Year Credit Agreement dated as of May 20, 2004 among Marathon Ashland Petroleum LLC, the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent (as the same may be amended from time to time, the “Credit Agreement”). Terms defined in the Credit Agreement are used herein with the same meanings. Reference is made to the Credit Agreement for provisions for the prepayment hereof and the acceleration of the maturity hereof.

MARATHON ASHLAND PETROLEUM LLC
By:
	Name:
	Title:

A-1

LOANS AND PAYMENTS OF PRINCIPAL

Date Amount of
Loan Amount of
Principal
Repaid Notation Made By

A-2

EXHIBIT B

FORM OF COMPETITIVE BID QUOTE REQUEST

[Date]

To:	JPMorgan Chase Bank
	(the “Administrative Agent”)
From:	Marathon Ashland Petroleum LLC (the “Borrower”)
Re:	Five Year Credit Agreement (the “Credit Agreement”) dated as of May 20, 2004 among the Borrower, the Lenders party thereto and the Agents party thereto.

We hereby give notice pursuant to Section 2.03 of the Credit Agreement that we request Competitive Bid Quotes for the following proposed Competitive Bid Borrowing(s):

Date of Borrowing:                                         

Principal Amount1	Interest Period2
$

Such Competitive Bid Quotes should offer a Competitive Bid [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.]

Terms used herein have the meanings assigned to them in the Credit Agreement.

Marathon Ashland Petroleum LLC
By:
	Name:
	Title:

¹ Amount must be $10,000,000 or a larger multiple of $5,000,000.

² Not less than one month (LIBOR Auction) or not less than 30 days (Absolute Rate Auction), subject to the provisions of the definition of Interest Period.

B-1

EXHIBIT C

FORM OF INVITATION FOR COMPETITIVE BID QUOTES

To:	[Name of Lender]
Re:	Invitation for Competitive Bid Quotes to Marathon Ashland Petroleum LLC (the “Borrower”)

Pursuant to Section 2.03 of the Five Year Credit Agreement dated as of May 20, 2004 among the Borrower, the Lenders party thereto and the Agents party thereto, we are pleased on behalf of the Borrower to invite you to submit Competitive Bid Quotes to the Borrower for the following proposed Competitive Bid Borrowing(s):

Date of Borrowing:                                         

Principal Amount	Interest Period
$

Such Competitive Bid Quotes should offer a Competitive Bid [Margin] [Absolute Rate]. [The applicable base rate is the London Interbank Offered Rate.]

Please respond to this invitation by no later than [2:00 P.M.] [9:30 A.M.] (New York City time) on [date].

JPMorgan Chase Bank, as Administrative Agent
By:
	Authorized Officer

C-1

EXHIBIT D

FORM OF COMPETITIVE BID QUOTE

To:	JPMorgan Chase Bank, as Administrative Agent
Re:	Competitive Bid Quote to Marathon Ashland Petroleum LLC (the “Borrower”)

In response to your invitation on behalf of the Borrower dated                     ,             , we hereby make the following Competitive Bid Quote on the following terms:

1. Quoting Lender:                                                                          

2. Person to contact at Quoting Lender:                                                                          

3. Date of Borrowing:                                                          ¹

4. We hereby offer to make Competitive Bid Loan(s) in the following principal amounts, for the following Interest Periods and at the following rates:

Principal Amount2	Interest Period3	Competitive Bid [Margin]4	[Absolute Rate]5
$
$

[provided that the aggregate principal amount of Competitive Bid Loans for which the above offers may be accepted shall not exceed $                        .]

¹ As specified in the related Invitation.

² Principal amount bid for each Interest Period may not exceed principal amount requested. Specify aggregate limitation if the sum of the individual offers exceeds the amount the Bank is willing to lend. Each bid must be made for $5,000,000 or a larger multiple of $1,000,000.

³ Not less than one month or not less than 30 days, as specified in the related Invitation. No more than five bids are permitted for each Interest Period.

⁴ Margin over or under the London Interbank Offered Rate determined for the applicable Interest Period. Specify percentage (to the nearest 1/10,000 of 1%) and specify whether “PLUS” or “MINUS”.

⁵ Specify rate of interest per annum (to the nearest 1/10,000 of 1%).

D-1

We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Five Year Credit Agreement dated as of May 20, 2004 among the Borrower, the Lenders party thereto and the Agents party thereto, irrevocably obligate(s) us to make the Competitive Bid Loan(s) for which such offer(s) are accepted, in whole or in part.

Very truly yours,
[NAME OF LENDER]
By:
	Authorized Officer

Dated:                                                          

D-2

EXHIBIT E

OPINION OF COUNSEL FOR THE BORROWER

[Effective Date]

To the Banks and the Agents

Referred to Below

c/o JPMorgan Chase Bank,

as Administrative Agent

270 Park Avenue

New York, New York 10017

Dear Sirs:

I am the General Counsel of Marathon Ashland Petroleum LLC, a Delaware limited liability company (the “Borrower”). This opinion is being delivered pursuant to Section 3.01(b) of the $500,000,000 Five Year Credit Agreement dated as of May 20, 2004 among the Borrower, the Lenders party thereto as listed on the signature pages thereof, Bank of America, N.A. as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents, and JPMorgan Chase Bank, as Administrative Agent (the “Agreement”). Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed to them in the Agreement.

I have examined, or caused to be examined, originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as I have deemed necessary or advisable for purposes of this opinion.

Upon the basis of the foregoing, I am of the opinion that:

1. The Borrower is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all limited liability company powers and all material governmental licenses, authorizations, consents and approvals required to conduct its business as now conducted.

2. The execution, delivery and performance by the Borrower of the Agreement and the Notes are within the Borrower’s limited liability company powers, have been duly authorized by all necessary limited liability company action, require no action by or in respect of, or filing with, any governmental

E-1

body, agency or official and do not contravene, or constitute a default under, any provision of applicable law or regulation or of the Certificate of Formation or by-laws of the Borrower or of any agreement, judgment, injunction, order, decree or other instrument binding upon the Borrower or result in the creation or imposition of any Mortgage on any asset of the Borrower or any Subsidiary.

3. The Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower, in each case enforceable in accordance with its terms.

4. Except as set forth in the notes to the consolidated balance sheet of the Borrower as of December 31, 2003 and the related consolidated statements of income and cash flows for the fiscal year then ended, reported on by PricewaterhouseCoopers LLP, there is no action, suit, arbitration or other proceeding, inquiry or investigation, at law or in equity, or before or by any court, public board or body, arbitrator or arbitral body, pending against the Borrower or of which the Borrower has otherwise received official notice or which to my knowledge is threatened against the Borrower, wherein there is a reasonable possibility of an unfavorable decision, ruling or finding which would materially adversely affect the Borrower’s ability to perform its obligations under the Agreement and the Notes. Since the dates of the respective descriptions of proceedings contained in the reports identified in the immediately proceeding sentence there has been no change in the status of such proceedings which would materially adversely affect the Borrower’s ability to perform its obligations under the Agreement and the Notes.

The opinion set forth in paragraph 3 hereof is qualified by the effect of: (i) bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting the rights and remedies of creditors generally, (ii) general principles of equity, and (iii) applicable rules of law which: (A) limit or affect the enforcement of provisions of a contract that purport to require waiver of the obligations of good faith, fair dealing, diligence and reasonableness, (B) limit the availability of a remedy under certain circumstances where another remedy has been elected, (C) limit the enforceability of provisions releasing, exculpating, or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, and (D) may, where less than all of a contract may be unenforceable, limit the enforceability of the balance of the contract to circumstances in which the unenforceable portion is not an essential part of the agreed exchange.

E-2

The foregoing opinion is limited to the laws of the State of Ohio, the Federal laws of the United States of America and the Limited Liability Company Act of the State of Delaware. As the Agreement and the Notes are by their terms governed by the laws of the State of New York, the foregoing opinion should be understood to conclude that (i) an Ohio court or a Federal court sitting in Ohio would give effect to the choice of New York law to govern the Agreement and the Notes and (ii) under the internal laws of the State of Ohio the Agreement constitutes a valid and binding agreement of the Borrower and the Notes constitute valid and binding obligations of the Borrower.

Very truly yours,

E-3

EXHIBIT F

OPINION OF DAVIS POLK & WARDWELL,

SPECIAL COUNSEL FOR THE ADMINISTRATIVE AGENT

[Effective Date]

To the Lenders and Agents

Referred to Below

c/o JPMorgan Chase Bank,

as Administrative Agent

270 Park Avenue

New York, New York 10017

Dear Sirs:

We have participated in the preparation of the Five Year Credit Agreement dated as of May 20, 2004 (the “Credit Agreement”) among Marathon Ashland Petroleum LLC, a Delaware limited liability company (the “Borrower”), the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent (the “Administrative Agent”), and have acted as special counsel for the Administrative Agent for the purpose of rendering this opinion pursuant to Section 3.01(c) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined.

We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion.

Upon the basis of the foregoing, we are of the opinion that:

1. The execution, delivery and performance by the Borrower of the Credit Agreement and the Notes are within the Borrower’s limited liability company powers and have been duly authorized by all necessary limited liability company action.

2. The Credit Agreement constitutes a valid and binding agreement of the Borrower enforceable in accordance with its terms, subject to applicable

F-1

bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and general principles of equity.

We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York, the federal laws of the United States of America and the Limited Liability Company Act of the State of Delaware. In giving the foregoing opinion, we express no opinion as to the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Lender is located which limits the rate of interest that such Lender may charge or collect.

This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon by you for any other purpose or relied upon by any other Person without our prior written consent.

Very truly yours,

F-2

EXHIBIT G

ASSIGNMENT AND ASSUMPTION AGREEMENT

AGREEMENT dated as of                          ,          among [NAME OF ASSIGNOR] (the “Assignor”) and [NAME OF ASSIGNEE] (the “Assignee”).

WHEREAS, this Assignment and Assumption Agreement (the “Agreement”) relates to the Five Year Credit Agreement dated as of May 20, 2004 (as amended from time to time, the “Credit Agreement”) among the Marathon Ashland Petroleum LLC, the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent;

WHEREAS, as provided under the Credit Agreement, the Assignor has a Commitment to make Loans to the Borrower in an aggregate principal amount at any time outstanding not to exceed $                        ;

WHEREAS, [Committed] Loans made to the Borrower by the Assignor under the Credit Agreement in the aggregate principal amount of $                     are outstanding at the date hereof; and

WHEREAS, the Assignor proposes to assign to the Assignee all of the rights of the Assignor under the Credit Agreement in respect of a portion of its Commitment thereunder in an amount equal to $                     (the “Assigned Amount”), together with a corresponding portion of each of its outstanding [Committed] Loans, and the Assignee proposes to accept such assignment and assume the corresponding obligations of the Assignor under the Credit Agreement;

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements contained herein, the parties hereto agree as follows:

SECTION 1. Definitions. All capitalized terms not otherwise defined herein have the respective meanings set forth in the Credit Agreement.

SECTION 2. Assignment. The Assignor hereby assigns and sells to the Assignee all of the rights of the Assignor under the Credit Agreement to the extent of the Assigned Amount and a corresponding portion of each of its outstanding [Committed] Loans, and the Assignee hereby accepts such assignment from the Assignor and assumes all of the obligations of the Assignor under the Credit Agreement to the extent of the Assigned Amount. Upon the execution and delivery hereof by the Assignor and the Assignee [and the execution of the consent attached hereto by the Borrower and the Administrative

G-1

Agent]¹ and the payment of the amounts specified in Section 3 required to be paid on the date hereof, (i) the Assignee shall, as of the date hereof, succeed to the rights and be obligated to perform the obligations of a Lender under the Credit Agreement with a Commitment in an amount equal to the Assigned Amount and acquire the rights of the Assignor with respect to a corresponding portion of each of its outstanding [Committed] Loans and (ii) the Commitment of the Assignor shall, as of the date hereof, be reduced by the Assigned Amount, and the Assignor shall be released from its obligations under the Credit Agreement to the extent such obligations have been assumed by the Assignee. The assignment provided for herein shall be without recourse to the Assignor.

SECTION 3. Payments. As consideration for the assignment and sale contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the date hereof in Federal funds the amount heretofore agreed between them.² Fees accrued before the date hereof with respect to amounts assigned to the Assignee hereunder are for the account of the Assignor and such fees accruing on and after the date hereof with respect to such amounts are for the account of the Assignee. Each of the Assignor and the Assignee agrees that if it receives any amount under the Credit Agreement which is for the account of the other party hereto, it shall receive the same for the account of such other party to the extent of such other party’s interest therein and promptly pay the same to such other party.

[SECTION 4. Consent of the Borrower, the Administrative Agent. This Agreement is conditioned upon the consent of the Borrower and the Administrative Agent pursuant to Section 9.06(b) of the Credit Agreement.³]

[SECTION 5. Note. The Borrower has agreed to execute and deliver a Note payable to the order of the Assignee to evidence the assignment and assumption provided for herein.]⁴

SECTION 6. No Reliance on Assignor. The Assignor represents and warrants that it is the legal and beneficial owner of the interest being assigned hereby and that such interest is free and clear of any other adverse claim created by it. The Assignor makes no representation or warranty (other than that

¹ Delete if consent is not required.

² Amount should combine principal together with accrued interest and breakage compensation, if any, to be paid by the Assignee, net of any portion of any upfront fee to be paid by the Assignor to the Assignee. It may be preferable in an appropriate case to specify these amounts generically or by formula rather than as a fixed sum.

³ Delete if consent is not required.

⁴ Delete if execution and delivery of a Note is not required.

G-2

mentioned immediately above) in connection with, and shall have no responsibility with respect to, the solvency, financial condition or statements of the Borrower, or the validity and enforceability of the Borrower’s obligations under the Credit Agreement or any Note. The Assignee acknowledges that it has, independently and without reliance on the Assignor, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement and will continue to be responsible for making its own independent appraisal of the business, affairs and financial condition of the Borrower.

SECTION 7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

SECTION 8. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

[NAME OF ASSIGNOR]
By:
	Name:
	Title:
[NAME OF ASSIGNEE]
By:
	Name:
	Title:

G-3

The undersigned consent to the foregoing assignment.

Marathon Ashland Petroleum LLC
By:
	Name:
	Title:
JPMorgan Chase Bank, as Administrative Agent
By:
	Name:
	Title:

G-4

EXHIBIT H

DESIGNATION AGREEMENT

dated as of                              ,         

Reference is made to the Five Year Credit Agreement dated as of May 20, 2004 (as amended from time to time, the “Credit Agreement”) among Marathon Ashland Petroleum LLC, a Delaware limited liability company (the “Borrower”), the Lenders party thereto, Bank of America, N.A., as Syndication Agent, ABN Amro Bank NV, Citibank, N.A. and Morgan Stanley Bank, as Documentation Agents and JPMorgan Chase Bank, as Administrative Agent (the “Administrative Agent”). Terms defined in the Credit Agreement are used herein with the same meaning.

                                          (the “Designator”) and                                  (the “Designee”) agree as follows:

1. The Designator designates the Designee as its Designated Lender under the Credit Agreement and the Designee accepts such designation.

2. The Designator makes no representations or warranties and assumes no responsibility with respect to the financial condition of the Borrower or the performance or observance by the Borrower of any of its obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto.

3. The Designee (i) confirms that it is an Approved Fund; (ii) appoints and authorizes the Designator as its administrative agent and attorney-in-fact and grants the Designator an irrevocable power of attorney to receive payments made for the benefit of the Designee under the Credit Agreement and to deliver and receive all communications and notices under the Credit Agreement, if any, that the Designee is obligated to deliver or has the right to receive thereunder; (iii) acknowledges that the Designator retains the sole right and responsibility to vote under the Credit Agreement, including, without limitation, the right to approve any amendment or waiver of any provision of the Credit Agreement; and (iv) agrees that the Designee shall be bound by all such votes, approvals, amendments and waivers and all other agreements of the Designator pursuant to or in connection with the Credit Agreement, all subject to Section 9.05(b) of the Credit Agreement.

4. The Designee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the most recent financial statements referred to in Article 4 or delivered pursuant to Article 4 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and

H-1

decision to enter into this Designation Agreement and (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Designator or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action it may be permitted to take under the Credit Agreement.

5. Following the execution of this Designation Agreement by the Designator and the Designee and the consent hereto by the Borrower, it will be delivered to the Administrative Agent for its consent. This Designation Agreement shall become effective when the Administrative Agent consents hereto or on any later date specified on the signature page hereof.

6. Upon the effectiveness hereof, the Designee shall have the right to make Loans or portions thereof as a Lender pursuant to Section 2.01 or 2.03 of the Credit Agreement and the rights of a Lender related thereto. The making of any such Loans or portions thereof by the Designee shall satisfy the obligations of the Designator under the Credit Agreement to the same extent, and as if, such Loans or portions thereof were made by the Designator.

7. This Designation Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

IN WITNESS WHEREOF, the parties have caused this Designation Agreement to be executed by their respective officers hereunto duly authorized, as of the date first above written.

Effective Date:                             ,         

[NAME OF DESIGNATOR]
By:
	Name:
	Title:
[NAME OF DESIGNEE]
By:
	Name:
	Title:

H-2

The undersigned consent to the foregoing designation.

Marathon Ashland Petroleum LLC
By:
	Name:
	Title:
JPMorgan Chase Bank, as Administrative Agent
By:
	Name:
	Title:

H-3

EX-12.1

Exhibit 12.1

Marathon Oil Corporation

Computation of Ratio of Earnings to Combined Fixed Charges

and Preferred Stock Dividends

TOTAL ENTERPRISE BASIS - Unaudited

(Dollars in Millions)

	Six Months Ended June 30				Year Ended December 31
	2004		2003		2003		2002		2001		2000		1999
Portion of rentals representing interest	$	30	$	30	$	63	$	66	$	54	$	50	$	47
Capitalized interest, including discontinued operations		23		18		41		16		27		19		26
Other interest and fixed charges, including discontinued operations		136		155		270		316		349		375		365
Pretax earnings which would be required to cover preferred stock dividend requirements of parent		—		—		—		—		12		12		14
Combined fixed charges and preferred stock dividends (A)	$	189	$	203	$	374	$	398	$	442	$	456	$	452
Earnings-pretax income with applicable adjustments (B).	$	1,388	$	1,287	$	2,422	$	1,446	$	3,365	$	1,884	$	1,830
Ratio of (B) to (A)		7.34		6.34		6.48		3.63		7.61		4.12		4.04

EX-12.2

Exhibit 12.2

Marathon Oil Corporation

Computation of Ratio of Earnings to Fixed Charges

TOTAL ENTERPRISE BASIS - Unaudited

(Dollars in Millions)

	Three Months Ended March 31				Year Ended December 31
	2004		2003		2003		2002		2001		2000		1999
Portion of rentals representing interest	$	30	$	30	$	63	$	66	$	54	$	50	$	47
Capitalized interest, including discontinued operations		23		18		41		16		27		19		26
Other interest and fixed charges, including discontinued operations		136		155		270		316		349		375		365
Total fixed charges (A)	$	189	$	203	$	374	$	398	$	430	$	444	$	438
Earnings-pretax income with applicable adjustments (B)	$	1,388	$	1,287	$	2,422	$	1,446	$	3,365	$	1,884	$	1,830
Ratio of (B) to (A)		7.34		6.34		6.48		3.63		7.83		4.24		4.18

EX-31.1

Exhibit 31.1

MARATHON OIL CORPORATION

CERTIFICATION PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Clarence P. Cazalot, Jr., President and Chief Executive Officer, certify that:

(1) I have reviewed this report on Form 10-Q of Marathon Oil Corporation;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2004

/s/    CLARENCE P. CAZALOT, JR.        

President & Chief Executive Officer

EX-31.2

Exhibit 31.2

MARATHON OIL CORPORATION

CERTIFICATION PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Janet F. Clark, Senior Vice President and Chief Financial Officer, certify that:

(1) I have reviewed this report on Form 10-Q of Marathon Oil Corporation;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 3, 2004

/s/    JANET F. CLARK        

Senior Vice President and

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Marathon Oil Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Clarence P. Cazalot, Jr., President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 3, 2004

/s/    CLARENCE P. CAZALOT, JR.        

Clarence P. Cazalot, Jr.

President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Marathon Oil Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Janet F. Clark, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 3, 2004

/s/    JANET F. CLARK        

Janet F. Clark

Senior Vice President and

Chief Financial Officer