EXHIBIT 2.2
TAX MATTERS AGREEMENT dated as of March 18, 2004 (the
"TMA" or "Agreement") among Ashland Inc., a Kentucky
corporation ("Ashland"), ATB Holdings, Inc., a Delaware
corporation ("HoldCo"), EXM LLC, a Kentucky limited liability
company ("New Ashland LLC"), New EXM Inc., a Kentucky
corporation ("New Ashland Inc."), Marathon Oil Company, an Ohio
Company ("Marathon Company"), Marathon Oil Corporation, a
Delaware corporation ("Marathon"), Marathon Domestic LLC, a
Delaware limited liability company ("Merger Sub") and Marathon
Ashland Petroleum LLC, a Delaware limited liability company
owned by Marathon Company and Ashland ("MAP").
WHEREAS, Ashland is the common parent of an affiliated group of
domestic corporations that has elected to file consolidated Federal income tax
returns.
WHEREAS, Marathon is the common parent of an affiliated group of
domestic corporations that has elected to file consolidated Federal income tax
returns (the "Marathon Affiliated Group").
WHEREAS, Ashland and Marathon Company, a wholly-owned subsidiary of
Marathon, own all the limited liability company interests in MAP, which is
treated for Federal income tax purposes as a partnership.
WHEREAS, Ashland and Marathon and certain of their respective
related parties have entered into the Master Agreement pursuant to which they
have agreed to engage in the transactions contemplated by the Transaction
Agreements and the Ancillary Agreements, as those terms are defined in the
Master Agreement (collectively, the "Transactions").
WHEREAS, as part of the Transactions, HoldCo will become the common
parent of the Ashland Affiliated Group in a series of steps which are intended
to qualify as a reorganization described in Code Section 368(a)(1)(F) (the "F
Reorganization").
WHEREAS, as part of the F Reorganization, Ashland will contribute
its Membership Interest and the Acquired Businesses to HoldCo and will merge
with and into New Ashland LLC, which will assume all obligations of Ashland,
including the obligations of Ashland under this TMA (the "F Reorganization
Merger").
WHEREAS, as part of the Transactions, MAP will redeem a portion of
Ashland's interest in MAP in exchange for a distribution of cash and MAP
accounts receivable, as set forth in the Master Agreement (the "MAP Partial
Redemption").
WHEREAS, as part of the Transactions, New Ashland LLC will merge
with and into New Ashland Inc., which will assume all obligations of New
Ashland LLC, including the obligations that New Ashland LLC assumed from
Ashland (the "Conversion Merger").
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WHEREAS, as part of the Transactions, (i) HoldCo will distribute, to
the former holders of the stock of Ashland, all the stock of New Ashland Inc.
in a transaction intended to qualify as a distribution described in Code
Section 355 (the "Spinoff"), and (ii) HoldCo will merge with and into Merger
Sub in a transaction intended to qualify as a reorganization described in Code
Section 368(a)(1)(A) (the "Acquisition Merger") and as a result of such
merger, HoldCo will cease to exist.
WHEREAS after the Acquisition Merger, Marathon may cause Merger Sub
to contribute all or a portion of the assets and liabilities that it acquired
in the Acquisition Merger to a newly formed corporation that is a
wholly-owned, direct subsidiary of Merger Sub.
WHEREAS, immediately after the Spinoff, New Ashland Inc. will be the
common parent of an affiliated group of domestic corporations that elects to
file consolidated Federal income tax returns, which will not include HoldCo
(the "New Ashland Inc. Affiliated Group").
WHEREAS the parties to this TMA wish to allocate and assign certain
Tax responsibilities, liabilities and benefits among themselves and to provide
for certain other Tax matters.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in this TMA, the parties agree as follows:
ARTICLE I
Definitions
As used in this Agreement, the following terms shall have the
following meaning:
"Acquired Businesses" means the "Maleic Business" and the "VIOC
Centers", as each such term is defined in the Master Agreement.
"Acquisition Merger" has the meaning set forth in the ninth WHEREAS
clause of this TMA.
"affiliate" has the meaning ascribed to such term in the Master
Agreement.
"affiliated group" means an affiliated group of corporations within
the meaning of Code Section 1504(a) for the taxable period in question.
"Alternative Ruling" has the meaning set forth in Section 5.01(b) of
this TMA.
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"Ashland Affiliated Group" means the affiliated group of domestic
corporations that has elected to file consolidated Federal income tax returns
of which Ashland (and immediately after the F Reorganization, HoldCo) is the
common parent.
"Ashland Group" means (i) the corporations that are members of the
Ashland Affiliated Group and (ii) the corporations that would be members of
the Ashland Affiliated Group but for the fact that they are not includible
corporations under Code Section 1504(b).
"Ashland Asbestos Liabilities" means any obligation of Ashland or
any of its present or former subsidiaries (including but not limited to Xxxxx
Xxxxxx Inc.) relating to claims made at any time that are attributable to
allegations of exposure to asbestos on or before the Closing Date with respect
to Residual Business Operations, to the extent that New Ashland Inc. or any
member of the New Ashland Inc. Group is liable for such obligation after the
Closing Date.
"Ashland Residual Operations Liabilities" means any obligation of
Ashland or any of its present or former subsidiaries that is attributable to
Residual Business Operations or to the HoldCo Businesses, including but not
limited to Ashland Asbestos Liabilities, Ashland Employee Liabilities and
Ashland Environmental Liabilities.
"Ashland Employee Liabilities" means (i) any obligation of Ashland
or any of its present or former subsidiaries for any Employee Benefit
Obligation to be provided to or on behalf of present or former employees of
Ashland or any such subsidiaries for services that are attributable to
Residual Business Operations or to the HoldCo Businesses, in each case that
are performed on or before the Closing Date, to the extent that New Ashland
Inc. or any member of the New Ashland Inc. Group is liable for such obligation
after the Closing Date and (ii) any obligation pursuant to the exercise of any
Option by any current or former employees of HoldCo Businesses or Residual
Business Operations with respect to the capital stock of Ashland, HoldCo or
New Ashland Inc.
"Ashland Environmental Liabilities" means any obligation of Ashland
or any of its present or former subsidiaries relating to claims made at any
time for environmental damages or remediation or similar expenses arising from
acts, omissions or conditions occurring or existing on or before the Closing
Date that are attributable to Residual Business Operations or to the HoldCo
Businesses, to the extent that New Ashland Inc. or any member of the New
Ashland Inc. Group is liable for such obligation after the Closing Date.
"Bankruptcy Event" means, with respect to any Person, the occurrence
or existence of any of the following events or conditions: such Person (1) is
dissolved (other than the dissolution of a transferor in connection with a
transfer to a successor as contemplated by Section 10.14); (2) admits in
writing its inability generally to pay its debts; (3) makes a general
assignment for the benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or bankruptcy or any
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similar relief under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its winding up or
liquidation and, in the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for similar relief or the
making of an order for its winding up or liquidation or (B) is not dismissed
or discharged within 60 days of the institution or filing thereof; (5) has a
resolution passed by its Board of Directors for its winding up or liquidation
(other than the winding up or liquidation of a transferor in connection with a
transfer to a successor as contemplated by Section 10.14); (6) consents to, or
becomes subject to an order or judgment providing for, the appointment of an
administrator, receiver, trustee, custodian or other similar official for it
or for all or substantially all its assets and, in the case of an order or
judgment, such judgment or order is not dismissed, discharged, stayed or
restrained in each case within sixty (60) days of the entry or making thereof;
or (7) takes any action in furtherance of, or expressly indicates its consent
to, approval of, or acquiescence in, any of the foregoing.
"Bankruptcy Party" has the meaning set forth in Section 8.02(c) of
this TMA.
"Bankruptcy Tax Claims" has the meaning set forth in Section 8.02(c)
of this TMA.
"Basket One Amount" has the meaning set forth in Section 5.02(b)(i)
of this TMA.
"Basket One Cap" has the meaning set forth in Section 5.02(b)(ii)(C)
of this TMA.
"Basket One Cap Base Amount" has the meaning set forth in Section
5.02(b)(ii)(C).
"Basket One Cap Carryforward" has the meaning set forth in Section
5.02(b)(ii)(C) of this TMA.
"Basket One Deductions" has the meaning set forth in Section
5.02(b)(ii)(B) of this TMA.
"Basket One Tax Rate" has the meaning set forth in Section
5.02(b)(ii)(A) of this TMA.
"Basket Two Amount" has the meaning set forth in Section 5.02(c)(i)
of this TMA.
"Basket Two Carryovers" has the meaning set forth in Section
5.02(c)(ii)(B) of this TMA.
"Basket Two Deductions" has the meaning set forth in Section
5.02(c)(ii)(A) of this TMA.
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"Closing" and Closing Date" have the meanings set forth in the
Master Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Conversion Merger" has the meaning set forth in the eighth WHEREAS
clause of this TMA.
"Employee Benefit Obligation" means any obligation (whether current
or deferred) for any compensation, pension, severance payment, medical,
retirement or disability benefit, life insurance or any similar employee
benefit.
"Escrow" means the escrow created under the Escrow Agreement.
"Escrow Agreement" has the meaning set forth in Section 6.02(a) of
this TMA.
"Escrow Threshold" has the meaning set forth in Section
6.02(c)(i)(B) of this TMA.
"Extraordinary Events" means (i) unforeseen funding requirements
resulting from damage to MAP properties by storm, fire, or similar
catastrophic events, or (ii) unforeseen expenditures that are mandated by law,
regulation or administrative ruling, in each case that are promulgated after
the Closing Date.
"F Reorganization Merger" has the meaning set forth in the sixth
WHEREAS clause of this TMA.
"Federal Tax Benefit Payments" has the meaning set forth in Section
5.02(a)(i) of this TMA.
"Final Determination" means the final resolution of liability for
any Tax for any taxable period by or as a result of: (i) a final and
unappealable decision, judgment, decree or other order by any court of
competent jurisdiction; (ii) a final closing agreement or accepted offer in
compromise under Code Sections 7121 or 7122, or a comparable agreement under
the laws of any other jurisdiction, which resolves the entire Tax liability
for the entire taxable period; (iii) a duly executed IRS Form 870 or 870-AD
(or any successor forms thereto), on the date such form is effective, or by a
comparable form under the laws of other jurisdictions; except that a Form 870
or 870-AD or comparable form that reserves (whether by its terms or by
operation of law) the right of the taxpayer to file a claim for Refund and/or
the right of the Tax Authority to assert a further deficiency shall not
constitute a Final Determination with respect to the right so reserved; (iv)
any allowance of a Refund or credit in respect of an overpayment of such Tax,
but only after the expiration of all periods during which such Refund may be
recovered (including by way of offset) by the jurisdiction imposing such Tax;
(v) the execution of a closing agreement with respect to a pre-filing
agreement described in Rev. Proc. 2001-22, or (vi) any other final disposition
by reason of the expiration of the applicable statute of limitations or by
mutual agreement of the parties hereto.
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"Fully Funded" has the meaning set forth in Section 6.02(c)(i)(A) of
this TMA.
"HoldCo Businesses" means the Acquired Businesses and the JV
Interests.
"Income Taxes" means any Taxes imposed on or determined by reference
to gross or net income or profits or any other measure of income or profits.
"Independent Entity" has the meaning set forth in Section 9.01 of
this TMA.
"Inflation Factor" means the U.S. GDP Implicit Price Deflator, which
shall be applied annually to adjust prices to constant dollar amounts
beginning with the calendar year following the year of the Closing Date.
"IRS" means the U.S. Internal Revenue Service.
"JV Interests" means the "Membership Interest" and the "LOOP/LOCAP
Interests", as each such term is defined in the Master Agreement.
"JV Entities" means the entities wholly or partially owned, directly
or indirectly, through the ownership of the JV Interests.
"Master Agreement" means the Master Agreement dated as of the date
of this Agreement, among Ashland, HoldCo, New Ashland LLC, New Ashland Inc.,
Marathon, Marathon Company, Merger Sub and MAP.
"Marathon Affiliated Group" has the meaning set forth in the second
WHEREAS clause of this TMA.
"Marathon Group" means (i) the corporations that are members of the
Marathon Affiliated Group and (ii) the corporations that would be members of
the Marathon Affiliated Group but for the fact that they are not includible
corporations under Code Section 1504(b), including in both cases, beginning on
the day after the Closing Date, former members of the Ashland Group that
become members of the Marathon Group by reason of the Acquisition Merger.
"Marathon Tax Matter" means any Tax Item arising from or related to
the ownership or operation of HoldCo or the HoldCo Businesses attributable to
a Post-Closing Period.
"MAP LLC Agreement" means the Amended and Restated Limited Liability
Company Agreement of MAP, dated as of December 31, 1998, as amended to the
date of this TMA.
"Net Deduction Method" means, with respect to Specified Liability
Deductions, the deduction of such amounts as they are accrued and recognized
under the accrual method of accounting, net of actual and anticipated
insurance recoveries
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determined under the accrual method of accounting, in each case applied
consistently from year to year.
"New Ashland Inc. Affiliated Group" has the meaning set forth in the
eleventh WHEREAS clause of this TMA.
"New Ashland Inc. Group" means (i) the corporations that are members
of the New Ashland Inc. Affiliated Group and (ii) the corporations that would
be members of the New Ashland Inc. Affiliated Group but for the fact that they
are not includible corporations under Code Section 1504(b).
"New Ashland Inc. Tax Matter" means any Tax Item (i) arising during
a Pre-Closing Period or (ii) from or related to a Post-Closing Period that is
not a Marathon Tax Matter.
"Non-Bankruptcy Party" has the meaning set forth in Section 8.02(c)
of this TMA.
"Non-Federal Tax Benefit Payment" has the meaning set forth in
Section 5.02(a)(i) of this TMA.
"Option" means any compensatory stock option, stock appreciation
right, restricted stock or similar instrument.
"Other Taxes" means any Taxes other than Income Taxes.
"Pass-Though Items" mean any Tax Items that are passed through to,
and reportable on the Tax Returns of, one or more of the owners of MAP or any
other JV Entity and that could result in an increase or decrease in any such
owner's liability for Taxes.
"Post-Closing Period" means any taxable period, and in the case of a
Straddle Period the portion of any such period, beginning after the Closing
Date.
"Pre-Closing Period" means the Pre-Closing Taxable Periods, and the
portion of any Straddle Period ending on the Closing Date.
"Pre-Closing Taxable Period" means any taxable period ending on or
before the Closing Date.
"Refund" means any refund of Taxes, including any reductions of
Taxes paid or payable by means of credits, offsets or otherwise.
"Residual Business Operations" means former business operations of
Ashland or any current or former member of the Ashland Group, in each case
determined as of the date of this Agreement, that will not be transferred or
deemed to be transferred to New Ashland Inc. pursuant to the Conversion
Merger.
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"Section 355(e) Taxes" means any Taxes, arising in any taxable
period, resulting from the application of Code Section 355(e) to the Spinoff.
"Specified Liability Deductions" means the amount, in any taxable
period, allowable as deductible expenses for Federal income tax purposes in
respect of Ashland Residual Operations Liabilities (after applying the
applicable limitations, if any, under Code Sections 382 and 384 and Treasury
Regulation Section 1.1502-15).
"Spinoff" has the meaning set forth in the ninth WHEREAS clause of
this TMA.
"Straddle Period" means any taxable period that includes, but does
not end on, the Closing Date.
"subsidiary" has the meaning ascribed to such term in the Master
Agreement.
"Tax" or "Taxes" means all forms of taxation imposed by any federal,
state, local or foreign jurisdiction (including any subdivision and any
revenue agency of such a jurisdiction), including without limitation net
income, gross income, alternative minimum, sales, use, ad valorem, gross
receipts, value added, franchise, license, transfer, withholding, payroll,
employment, excise, severance, stamp, property, custom duty, taxes or
governmental charges, together with any related interest, penalties or other
additional amounts imposed by any federal, state, local or foreign
jurisdiction (including any subdivision and any revenue agency of such a
jurisdiction), and including all liability for or in respect of any of the
foregoing as a result of being a member of a consolidated or similar group or
a partner in an entity treated as a partnership or other pass-through entity
for Tax purposes or as a result of any tax sharing or similar contractual
agreement.
"Tax Authority" means any federal, state, local or foreign
jurisdiction (including any subdivision and any revenue agency of such a
jurisdiction) imposing Taxes and the agency, if any, charged with the
collection of such Taxes for such authority.
"Tax Benefit" means any item of loss, deduction, credit, or any
other Tax Item that decreases Taxes paid or payable.
"Tax Benefit Payments" has the meaning set forth in Section
5.02(a)(i) of this TMA.
"Tax Certificate" means any letter or certificate that is referred
to in, and forms a basis for, a Tax Opinion.
"Tax Claim" has the meaning set forth in Section 8.02(a)(i) of this
TMA.
"Tax Detriment" means any item of income, gain, recapture of credit
or any other Tax Item that increases Taxes paid or payable, or any reduction
in or limitation
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of, any Tax Item due to the application of Code Sections 382, 384 or Treasury
Regulation Section 1.1502-15.
"Tax Item" means any item of income, gain, loss, deduction, credit,
recapture of credit, or other similar item, that may have the effect of
increasing or decreasing any Tax paid or payable, including any adjustment to
tax basis or any adjustment under Code Section 481.
"Tax Loss" means the increase in Tax paid or payable to the relevant
Tax Authority (or, without duplication, the reduction in any Refund)
attributable to a Tax Detriment.
"Tax Opinion" means the opinions of Cravath, Swaine & Xxxxx LLP and
Xxxxxx & Xxxxxxxxx Chartered concerning certain Federal income tax issues
related to the Transactions to be delivered to Ashland and Marathon,
respectively, pursuant to Section 10.01(f) of the Master Agreement.
"Tax Return" means any return, filing, questionnaire, information
statement, or other document required to be filed, including amended returns
that may be filed for any period or portion thereof with any Tax Authority in
connection with any Tax (whether or not a payment is required to be made with
respect to such filing).
"Tax Ruling" means the IRS private letter ruling received in
response to the Tax Ruling Request.
"Tax Ruling Request" means the private letter ruling request that
will be filed with the IRS by Ashland and Marathon with respect to the
Transactions, together with all exhibits, appendices, and supplements to that
filing.
"Tax Savings" means the decrease in Tax paid or payable to the
relevant Tax Authority (or, without duplication, the increase in any Refund)
attributable to a Tax Benefit.
"Tax Structure" means the manner, order or form in which the
Transactions (currently as contemplated or as amended prior to the Closing)
are effected pursuant to the Master Agreement or any Transaction Agreement.
"Transactions" has the meaning set forth in the fourth WHEREAS
clause of this TMA.
"Transaction Taxes" means Taxes, other than Transfer Taxes, of any
member of the Ashland Group for any Pre-Closing Period or the New Ashland Inc.
Group or the Marathon Group for any taxable period resulting from, or arising
in connection with any portion of the Transactions; for the avoidance of
doubt, Transaction Taxes includes Section 355(e) Taxes.
"Transfer Taxes" has the meaning set forth in Section 2.03 of this
TMA.
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"Valvoline" means the active trade or business conducted by the
business division of Ashland (and immediately following the Transactions, of
New Ashland Inc.) of the same name.
All capitalized terms used but not defined in this TMA shall have
the meanings ascribed to such terms in the Master Agreement.
ARTICLE II
Indemnification for Taxes
SECTION 2.01. General. (a) Indemnification by New Ashland Inc.
Except as otherwise provided in Sections 2.03, 2.04, 2.05 and Articles V and
VI of this TMA, New Ashland Inc. and each member of the New Ashland Inc. Group
shall be liable for, shall indemnify each member of the Marathon Group
against, and shall be entitled to all Refunds of, less reasonable
out-of-pocket costs and expenses incurred in connection with such Refund, (i)
all Taxes for all Pre-Closing Periods of each member of the Ashland Group and
the Acquired Businesses; (ii) all Taxes for all Post-Closing Periods that are
imposed on or collected from any member of the Marathon Affiliated Group as a
transferee of or successor to HoldCo, pursuant to any law, rule or regulation,
imposed on taxable income or gain that is attributable, in whole or in part,
to events or transactions that occur on or before the Closing Date but that is
recognized for tax purposes in a Post-Closing Period as a result of the
installment method of accounting, completed contract method of accounting, the
long-term contract method of accounting, the recapture of a dual consolidated
loss, Section 481 of the Code (other than any such Taxes imposed by reason of
a change in accounting method by HoldCo or a successor to HoldCo made or
applied for by Marathon or a Member of the Marathon Group after the Closing
Date, unless such change was contemplated by this TMA, or made or applied for
by New Ashland Inc. or a member of the New Ashland Inc. Group, or made by
Marathon with New Ashland Inc.'s consent, or required as a condition of the
Transactions by the Tax Ruling or otherwise), or other provisions of Federal,
state, local or foreign tax law that have a similar effect and all Taxes
attributable to the adoption by HoldCo of the Net Deduction Method with
respect to Specified Liability Deductions; (iii) all Taxes for all taxable
periods of each member of the New Ashland Inc. Group; (iv) all Taxes imposed
on any member of the Marathon Group with respect to insurance recoveries
received by any member of the New Ashland Inc. Group that are attributable to
Residual Business Operations; (v) all Taxes for which any current or former
member of the Ashland Group or the New Ashland Inc. Group is liable under
Treasury Regulation Section 1.1502-6 (or any analogous provision of state,
local or foreign law); (vi) all Taxes payable by Ashland or HoldCo that are
attributable to Pass-Through Items of MAP or any other JV Entity with respect
to any Pre-Closing Period; (vii) all Transaction Taxes; and (viii) all Tax
Losses of any member of the Marathon Group resulting from the failure by any
member of the Ashland Group or the New Ashland Inc. Group, as the case may be,
to use a consistent position as described in the last sentence of Section 3.04
of this TMA.
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(b) Indemnification by Marathon. Except as otherwise provided in
Sections 2.03, 2.04, 2.05 and Articles V and VI of this TMA, Marathon and each
member of the Marathon Group shall be liable for, and shall indemnify each
member of the New Ashland Inc. Group against, and shall be entitled to all
Refunds of, less reasonable out-of-pocket costs and expenses incurred in
connection with such Refund, (i) all Taxes for all taxable periods of each
member of the Marathon Group, other than as a successor to or transferee of a
former member of the Ashland Affiliated Group by reason of the Acquisition
Merger, and (ii) all Taxes for all taxable periods that are imposed on and
payable by MAP or any JV Entities.
SECTION 2.02. Apportionment of Items for Straddle Periods. (a)
Taxes. Taxes and Refunds of any entity or with respect to the Acquired
Businesses for any Straddle Period shall be apportioned between the
Pre-Closing Period and the Post-Closing Period on the basis of a "closing of
the books" as of the end of the Closing Date, provided that Other Taxes that
are not based on revenues, sales or a similar measure shall be apportioned
between the Pre-Closing Period and the Post-Closing Period based on the number
of days of the relevant taxable period that are in the Pre-Closing Period and
the Post-Closing Period respectively.
(b) Apportionment of Pass-Through Items of MAP and certain other JV
Entities. For purposes of determining the Taxes payable by the owner of a JV
Interest in MAP or any other JV Entity that is treated for purposes of the
relevant Tax as a pass-through entity, the Pass-Through Items for any Straddle
Period of such JV Entity shall be apportioned between the Pre-Closing Period
and the Post-Closing Period on the basis of a "closing of the books" as of the
end of the Closing Date in accordance with Code Section 706(c)(2)(A) and
Treasury Regulation Section 1.706-1(c)(2)(i) (or corresponding principles of
state, local or foreign laws, rules or regulations); provided that Other Taxes
of MAP or such JV Entity that are not based on revenues, sales or a similar
measure shall be apportioned between the Pre-Closing and the Post-Closing
Period based on the number of days of the relevant taxable period that are in
the Pre-Closing Period and the Post-Closing Period respectively.
SECTION 2.03. Transfer Taxes. New Ashland Inc. shall be liable for,
shall indemnify each member of the Marathon Group against, and shall be
entitled to retain all Refunds of, less reasonable out-of-pocket costs and
expenses incurred in connection with such Refund, all transfer, documentary,
sales, use, registration and similar Taxes and related fees incurred in
connection with the Transactions (collectively "Transfer Taxes"). New Ashland
Inc., with Marathon's cooperation, shall timely prepare and file all Tax
Returns relating to Transfer Taxes as may be required to comply with the
provisions of such Tax laws.
SECTION 2.04. Certain Transaction Taxes. Marathon shall be liable
for, shall indemnify each member of the New Ashland Inc. Group against, and
shall be entitled to retain all Refunds of, less reasonable out-of-pocket
costs and expenses incurred in connection with such Refund, any Transaction
Taxes to the extent that such Taxes are primarily attributable to:
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(a) any inaccurate, written representation or warranty of fact or
intent specifically made by, or specifically attributed to, any member of
the Marathon Group (other than HoldCo) in the Tax Ruling Request, the Tax
Ruling or a Tax Certificate and that is specified on Schedule 2.04
attached hereto (as amended from time to time by the unanimous agreement
of Marathon and Ashland).
(b) any breach by any member of the Marathon Group of a covenant in
Section 7.03(b) of this TMA,
unless such Transaction Taxes would have been imposed without regard to such
inaccuracy or breach.
SECTION 2.05. Gain Recognition Agreement Taxes. Each member of the
New Ashland Inc. Group shall comply with the terms of any Section 367 "gain
recognition agreement" executed by a member of the Ashland Group during a
Pre-Closing Period, including, without limitation, by including the gain, if
any, required to be recognized pursuant to the terms of any such agreement (or
by virtue of the application of any provision of Treasury Regulation Section
1.367(a)-8) and the payment of any Tax that is required to be paid pursuant to
Treasury Regulation Section 1.367(a)-8(b)(3). If a Tax Authority determines
that any member of the Ashland Group or the New Ashland Inc. Group has failed
to comply with the terms of any such agreement or any provision of Treasury
Regulation Section 1.367(a)-8, the New Ashland Inc. Group shall be liable for
any resulting liability for Taxes and each member of the New Ashland Inc.
Group shall indemnify each member of the Marathon Group against any such Tax
liability.
ARTICLE III
Preparation and Filing of Tax Returns
SECTION 3.01. Preparation and Filing of Original Tax Returns. (a)
Ashland (before the F Reorganization Merger), and New Ashland Inc. LLC and New
Ashland Inc. (after the F Reorganization Merger), shall prepare and file, or
cause to be prepared and filed, all Tax Returns (i) of each member of the
Ashland Group (including any Tax Returns related to the Acquired Businesses)
for all Pre-Closing Periods, (ii) of each member of the New Ashland Inc. Group
for all taxable periods and (iii) that it is required to file pursuant to
Section 3.02. Ashland and New Ashland Inc., as the case may be, shall timely
pay all Taxes with respect to such Tax Returns.
(b) On or before the first date following the Closing Date on which
the Ashland Group or the New Ashland Inc. Group is required to make a payment
of actual or estimated Federal income tax for the taxable year in which the
Closing Date occurs or the succeeding taxable year, New Ashland Inc. shall
make, or cause to be made, a payment of actual or estimated Federal income tax
that includes an amount equal to the estimated liability for Section 355(e)
Taxes. At least 20 days prior to making such payment, New Ashland Inc. shall
prepare and deliver to Marathon a schedule setting forth New Ashland Inc.'s
calculation of the estimated amount of the Section 355(e)
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Taxes. If Marathon, within 10 business days after delivery of any such
schedule, notifies New Ashland Inc. in writing that it objects to the
calculations, which notice shall specify in reasonable detail the basis for
the dispute, both parties shall attempt in good faith to resolve the dispute
and, if they are unable to do so, the disputed items shall be resolved within
a reasonable time by a mutually acceptable certified public accounting firm.
New Ashland Inc.'s calculation of its actual or estimated Federal income tax
payment under this Section 3.01(b) shall take into account the resolution of
the disputed items.
(c) Marathon shall prepare and file, or cause to be prepared and
filed, all Tax Returns (i) of former members of the Ashland Group and
successors thereof that become members of the Marathon Group by reason of the
Acquisition Merger for all Post-Closing Periods, (ii) of each other member of
the Marathon Group for all taxable periods, and (iii) that it is required to
prepare and file pursuant to Section 3.02. Marathon shall timely pay all Taxes
with respect to such Tax Returns.
(d) MAP shall prepare and file, or cause to be prepared and filed,
all Tax Returns of MAP and its subsidiaries for any Pre-Closing Period and any
Straddle Period, and such Tax Returns shall be prepared and filed in a manner
consistent with past practice and in accordance with the MAP LLC Agreement as
in effect immediately prior to the Closing.
SECTION 3.02. Straddle Period Tax Returns. (a) Following the Closing
Date, Marathon and New Ashland Inc. shall meet and prepare a written schedule
that allocates the responsibility for preparing and filing Straddle Period Tax
Returns in each jurisdiction of former members of the Ashland Group and
successors thereof that become members of the Marathon Group by reason of the
Acquisition Merger. If the parties are unable to agree, the party with the
most substantial presence in the jurisdiction, taking into account their
respective assets or businesses, shall have preparation and filing
responsibility. If Marathon and New Ashland Inc. are not able to agree upon
the party with the most substantial presence in a jurisdiction within 60 days
after the Closing Date, the preparation and filing responsibility for the
disputed jurisdictions shall be determined by a mutually acceptable certified
public accounting firm. The filing party shall timely pay all Taxes with
respect to such Straddle Period Tax Returns.
(b) For each Straddle Period Tax Return described in Section 3.01(a)
of this TMA that includes any Marathon Tax Matter, Marathon shall promptly
prepare and provide to New Ashland Inc. any information or documentation
reasonably requested by New Ashland Inc. to facilitate the preparation and
filing of such Tax Return. For each Straddle Period Tax Return described in
Section 3.01(c) of this TMA that includes any New Ashland Inc. Tax Matter, New
Ashland Inc. shall promptly prepare and provide to Marathon any information or
documentation reasonably requested by Marathon to facilitate the preparation
and filing of such Tax Return.
(c) All Straddle Period Tax Returns shall be submitted to the other
party not later than 30 days prior to the due date, including extensions, for
the filing of such Tax Returns (or if such due date is within 45 days
following the Closing Date, as promptly as practicable following the Closing
Date). Such other party shall have
14
the right to review such Tax Returns and to review all workpapers and
procedures used to prepare any such Tax Return. If the nonfiling party, within
10 business days after delivery of any such Tax Return, notifies the filing
party in writing that it objects to any of the Tax Items in such Tax Return,
both parties shall attempt in good faith to resolve the dispute and, if they
are unable to do so, the disputed items shall be resolved within a reasonable
time, taking into account the deadline for filing such Tax Return, by a
mutually acceptable certified public accounting firm. Upon resolution of all
such Tax Items, the filing party shall file the relevant Straddle Period Tax
Return on that basis. The accounting firm shall treat all Tax Returns of the
parties as confidential, and shall not reveal any information contained in, or
any part of, the Tax Returns of one party to the other without prior written
consent. The costs, fees, and expenses of such certified public accounting
firm shall be borne equally by Marathon and New Ashland Inc.
(d) Marathon and New Ashland Inc., as the case may be, shall provide
the other party with a calculation and determination of the amount of the
Straddle Period Taxes that are included in any returns filed by the other
party under Sections 3.01(a) and 3.01(c) of this TMA. In the absence of a
Final Determination, all such determinations shall be prepared in a manner
consistent with past practice. If either party disputes such a determination,
it may make a written request that the other party obtain written confirmation
from a mutually acceptable certified public accounting firm that the
determination is consistent with the preceding sentence. If the accounting
firm issues a confirmation, then such determination shall be binding upon the
parties. If the accounting firm does not issue a confirmation, then the
determination in the returns shall be amended to permit a confirmation to be
issued by the accounting firm in respect of the amended determination. If a
dispute is not resolved prior to the due date of a Tax Return, the Tax Return
shall be filed in accordance with the determination made by the filing party,
and both parties hereby agree to file or cause to be filed an amended Tax
Return, if necessary, reflecting the resolution of the issue by the accounting
firm. The accounting firm shall treat all Tax Returns of the parties as
confidential, and shall not reveal any information contained in, or any part
of, the Tax Returns of one party to the other without prior written consent.
The costs, fees, and expenses of such certified public accounting firm shall
be borne equally by Marathon and New Ashland Inc.
SECTION 3.03. Amended Tax Returns. (a) New Ashland Inc. shall be
entitled to amend any Tax Return described in Section 3.01(a) of this TMA;
provided that, to the extent that such an amendment with respect to a Straddle
Period Tax Return adversely affects any Marathon Tax Matter or would result in
a Tax Detriment to Marathon, such amendment may not be made without the prior
written consent of Marathon, which may not be unreasonably withheld or
delayed. New Ashland Inc. may request that Marathon amend any Straddle Period
Tax Return described in Section 3.01(c) of this TMA that Marathon is obligated
to file, but only to the extent that such amendment affects a New Ashland Inc.
Tax Matter; provided that such an amendment shall be filed only with the prior
written consent of Marathon, which may not be unreasonably withheld or
delayed.
(b) Marathon shall be entitled to amend any Tax Return described in
Section 3.01(c) of this TMA; provided that, to the extent that such an
amendment with
15
respect to a Straddle Period Tax Return adversely affects any New Ashland Inc.
Tax Matter or would result in a Tax Detriment to New Ashland Inc., such
amendment may not be made without the prior written consent of New Ashland
Inc., which may not be unreasonably withheld or delayed. Marathon may request
that New Ashland Inc. amend any Straddle Period Tax Return described in
Section 3.01(a) of this TMA, but only to the extent that such amendment
affects a Marathon Tax Matter or a Tax Item that could result in a Tax
Detriment to Marathon; provided that such an amendment shall be filed only
with the prior written consent of New Ashland Inc., which may not be
unreasonably withheld or delayed.
(c) MAP shall not, and Marathon shall not permit MAP to, amend any
Tax Return of MAP or any of its subsidiaries for any Pre-Closing Period or any
Straddle Period if such amendment would result in a Tax Detriment to New
Ashland Inc. without the prior written consent of New Ashland Inc., which may
not be unreasonably withheld or delayed.
(d) In the event that a party refuses to consent to an amendment to
a Tax Return to which such consent is required pursuant to this Section 3.03
and the parties are unable to resolve their disagreements after good faith
attempts to do so, the parties shall engage a mutually acceptable certified
public accounting firm to estimate the present value of the realizable Tax
Savings of the amendment to the party proposing such amendment and the present
value of the realizable Tax Loss of the amendment to the party withholding its
consent to such amendment. If the accounting firm determines that the present
value of such estimated Tax Savings exceeds the present value of such
estimated Tax Loss, the party proposing such amendment shall be entitled to so
amend the applicable Tax Return, provided that such party agrees to pay to the
party withholding its consent an amount equal to the present value of any such
Tax Loss. The accounting firm shall treat all Tax Returns of the parties as
confidential, and shall not reveal any information contained in, or any part
of, the Tax Returns of one party to the other without prior written consent.
The fees and expenses of the accounting firm shall be borne by the party
proposing such amendment.
SECTION 3.04. Manner of Preparation and Filing. All Tax Returns, and
amendments thereto, described in this Article III shall be filed on a timely
basis by the party responsible for filing such Tax Returns under this
Agreement. Except as provided in this Section 3.04, Section 5.01(b) and
Section 7.03, and except as otherwise required by a Final Determination, all
Tax Returns, and amendments thereto, shall be prepared and filed in a manner
consistent with the provisions of this TMA, the Tax Ruling Request, the Tax
Ruling, and the Tax Opinion. If any Tax Return of a member of the Ashland
Group or the New Ashland Inc. Group (including any Tax Return related to the
Acquired Businesses) for any Pre-Closing Period or any Straddle Period is
prepared and filed in a manner inconsistent with the elections (other than
elections relating to carrybacks and carryforwards described in Section 4.01),
accounting methods, conventions and principles of taxation used for the most
recent taxable period of members of the Ashland Group or New Ashland Inc.
Group, as the case may be, for which Tax Returns involving similar Tax Items
have been filed, New Ashland Inc. and each member of the New Ashland Inc.
Group shall indemnify each member of the Marathon Group against all Tax
16
Detriments and reductions in Tax Benefits that result from the failure to use
a consistent position as provided in Section 2.01(a) of this TMA and shall pay
to Marathon the amount of any resulting Tax Loss within 30 days of the date of
that such Tax Loss is considered to arise under the principles of Section
4.01(c) below.
SECTION 3.05. Agent for Filing Tax Returns. (a) Subject to Section
8.02(c), Marathon, Ashland and HoldCo each hereby designates New Ashland Inc.
as its agent to take any and all actions necessary or incidental to the
preparation and filing by New Ashland Inc. of any Tax Return described in
Section 3.01(a). In addition, Ashland and HoldCo agree that they shall
designate 565 Corporation as the "substitute agent" (as such term is used in
Treasury Regulation Section 1.1502-77(d)) for the Ashland Affiliated Group.
Marathon shall take any and all actions necessary or incidental to obtain the
approval of such designation by the IRS.
(b) Marathon shall be the "Tax Matters Partner" (as defined under
Code Section 6231(a)(7)) of MAP for all Pre-Closing Periods and all
Post-Closing Periods and shall manage the audits of MAP conducted by the IRS
or any other Tax Authority.
SECTION 3.06. Payments And Refunds. (a) To the extent that Marathon
is responsible for filing Straddle Period or other Tax Returns that include
Taxes for which New Ashland Inc. has indemnified Marathon, New Ashland Inc.
shall pay to Marathon the amount of any such Taxes two days prior to the due
date of the Tax Return. To the extent that New Ashland Inc. is responsible for
filing Straddle Period or other Tax Returns that include Taxes for which
Marathon has indemnified New Ashland Inc., Marathon shall pay to New Ashland
Inc. the amount of any such Taxes two days prior to the due date of such Tax
Return.
(b) At any time, either party in its sole discretion may make a
payment to a Tax Authority with respect to Straddle Period Tax Return to stop
the running of interest in whole or in part. The paying party shall provide
the other party with a calculation and determination of the amount of
non-paying party's share of such payment and the non-paying party shall pay
such amount to the paying party within two days after receipt of such notice.
(c) To the extent that Marathon receives a Refund of Taxes for which
New Ashland Inc. has indemnified Marathon, Marathon shall pay to New Ashland
Inc. the amount of such Refund (including any interest received by Marathon)
within ten days. To the extent that New Ashland Inc. receives a Refund of
Taxes for which Marathon has indemnified New Ashland Inc., New Ashland Inc.
shall pay to Marathon the amount of such Refund (including any interest
received by New Ashland Inc.) within ten days.
ARTICLE IV
Certain Tax Items and Tax Positions
SECTION 4.01. Carrybacks and Carryforwards. (a) To the extent
permissible by the applicable Tax law, Marathon shall cause each member of the
17
Marathon Group (including former members of the Ashland Group) not to
carryback any Tax Item attributable to a Post-Closing Tax Period to a
Pre-Closing Tax Period of a member of the Ashland Group or of the New Ashland
Inc. Group. To the extent that Marathon is not permitted by applicable law to
forgo such carryback and requests that New Ashland Inc. obtain a Refund of Tax
with respect to such carryback, then New Ashland Inc. shall take all
reasonable measures to obtain a Refund with respect to the carryback
(including by filing an amended return) and shall pay to Marathon the Tax
Savings realized by any member of the New Ashland Inc. Group by reason of such
carryback, including any interest received thereon (provided, further, that
the out-of-pocket costs associated with claiming any such carryback shall be
borne by Marathon). To the extent that a carryback of a Tax Item attributable
to a Post-Closing Tax Period to a Pre-Closing Tax Period of a member of the
New Ashland Inc. Group (including a former member of the Ashland Group)
results in a Tax Detriment to any member of the New Ashland Inc. Group (or
former member of the Ashland Group), Marathon shall pay to New Ashland Inc.
the Tax Loss realized by the New Ashland Inc. Group by reason of such
carryback.
(b) To the extent permissible by the applicable Tax law, with
respect to any Tax Item attributable to a Pre-Closing Tax Period that may be
carried forward to a Post-Closing Tax Period of a member of the Marathon Group
(including a former member of the Ashland Group), New Ashland Inc. shall cause
each member of the New Ashland Inc. Group or of the Ashland Group to carry
back any such Tax Item and not to carry forward any such Tax Item to such a
Post-Closing Tax Period of a member of the Marathon Group (including a former
member of the Ashland Group). To the extent that New Ashland Inc. is not
permitted by applicable law to carry back such Tax Item or to forgo such carry
forward of such Tax Item and requests that Marathon obtain a Refund, reduction
or offset of Tax with respect to such carry forward, then Marathon shall take
all reasonable measures to obtain such a Refund, reduction or offset with
respect to the carry forward (including by filing an amended return) and shall
pay to New Ashland Inc. the Tax Savings realized by any member of the Marathon
Group by reason of such carry forward, including any interest received thereon
(provided, further, that the out-of-pocket costs associated with claiming any
such carryforward shall be borne by New Ashland Inc.). To the extent that a
carry forward of a Tax Item, including without limitation, a foreign oil
extraction loss as defined in Code Section 907(c), attributable to a
Pre-Closing Tax Period to a Post-Closing Tax Period of a member of the
Marathon Group (including a former member of the Ashland Group) results in a
Tax Detriment to any member of the Marathon Group, New Ashland Inc. shall pay
to Marathon the Tax Loss realized by the Marathon Group by reason of such
carry forward.
(c) A party shall be considered to realize a Tax Savings with
respect to a Tax Benefit, or a Tax Loss with respect to a Tax Detriment, to
the extent, and only to the extent, that the amount of Taxes it is actually
required to pay to the applicable Tax Authority for a taxable period is
-decreased or increased (respectively) from the amount of Taxes it would have
actually been required to pay to such Tax Authority for such taxable period in
the absence of such Tax Benefit or Tax Detriment. Such Tax Savings or Tax Loss
shall be considered to arise at the time that such party's decreased or
increased payment (respectively) for such taxable period is first due or
otherwise actually realized
18
as a change in the amount of Tax or Refund, reductions or credit of Tax then
due and payable. If any party is considered under subsection (a) or (b) of
this Section 4.01 to realize a Tax Savings for which it is required to make a
payment, or Tax Loss with respect to which the other party is required to make
a payment, the party required to make such payment shall make such payment
within 30 days of the date such Tax Savings or Tax Loss is considered to
arise.
(d) For purposes of this Section 4.01, a Tax Item is deemed to be
attributable to the taxable period in which it first accrued or was otherwise
taken into account for Tax purposes. For the avoidance of doubt, a net
operating loss, foreign tax credit or similar Tax Item is deemed to be
attributable to the taxable period in which the loss, foreign tax or
equivalent event giving rise to such Tax Item first accrued or was otherwise
taken into account for Tax purposes.
SECTION 4.02. Special Allocation of Certain Deductions. Ashland and
Marathon Company shall execute and deliver an amendment to the MAP LLC
Agreement, in the form attached hereto as Exhibit A, that shall specially
allocate to Marathon Company any Pass-Through Items that would be allocable to
New Ashland Inc. in the absence of such amendment and that are attributable to
a payment that is (1) described in Section 12.01(d)(vii) of the Master
Agreement, which results in a special non-pro rata distribution to Ashland, or
(2) made with respect to the St. Xxxx Park QQQ Project or the Plains
Settlement (as both are described in Section 9.09 of the Master Agreement). If
any such payment produces a Tax Benefit for any member of the New Ashland Inc.
Group, then New Ashland Inc. shall pay to Marathon the amount of any resulting
Tax Savings actually realized by such member of the New Ashland Inc. Group
within 30 days of the date that such Tax Savings is realized. Such Tax Savings
shall be considered to be realized by a member of the New Ashland Inc. Group
or the Marathon Group, as the case may be, pursuant to the principles of
Section 4.01(c) above.
SECTION 4.03. Increase in Tax Basis of Certain MAP Deductions for
Post-Closing Payments. If as a result of a Final Determination with respect to
whether certain refinery assets contributed by Ashland to MAP are considered
to be asset class 13.3 (Petroleum Refining) or 28.0 (Manufacture of Chemicals
and Allied Products), New Ashland Inc. pays any additional Tax with respect to
a Pre-Closing Tax Period, and such Final Determination results in the increase
in the adjusted Tax basis as of the date of such contribution of any asset or
property of MAP that was contributed by Ashland to MAP, Marathon shall cause
MAP to take depreciation deductions with respect to such additional Tax basis
to the maximum extent allowed, and as promptly as permitted, by applicable
law, which shall include Marathon causing MAP to amend any relevant Tax Return
of MAP. Marathon shall pay to New Ashland Inc. the amount of any Tax Savings
realized by a member of the Marathon Group as a result of the use of such
additional Tax basis within 30 days of the date that such Tax Savings is
realized under the principles of Section 4.01(c) above.
19
ARTICLE V
Specified Liability Deductions
SECTION 5.01. Deduction of Specified Liability Deductions. (a)
Request for Tax Ruling. The parties will request the IRS to issue a private
letter ruling holding that New Ashland Inc. is entitled to claim the Specified
Liability Deductions. If the IRS issues such a private letter ruling, the
Specified Liability Deductions shall be claimed by New Ashland Inc. on the New
Ashland Inc. Affiliated Group's consolidated Federal income tax return and not
by Marathon or any member of the Marathon Group.
(b) Request for Alternative IRS Ruling. If the IRS is unwilling to
issue the ruling described in Section 5.01(a) above, the parties will request
the IRS to issue a private letter ruling holding that HoldCo (which shall
include for purposes of this Article V Marathon or any member of the Marathon
Affiliated Group that is the "acquiring corporation" of HoldCo in the
Acquisition Merger within the meaning of Code Section 381(a)) is entitled to
claim the Specified Liability Deductions under the Net Deduction Method and
that the use of the Specified Liability Deductions by HoldCo is not limited
under Code Sections 382, 384 or Treasury Regulation Section 1.1502-15 (the
"Alternative Ruling"). If the IRS issues the Alternative Ruling, the Specified
Liability Deductions shall be claimed by HoldCo on the Marathon Affiliated
Group's consolidated Federal income tax return for each taxable period in
which the Alternative Ruling is in effect and not by New Ashland Inc. or any
member of the New Ashland Inc. Group, except as otherwise provided in Section
5.01(c) below. The amount of the Specified Liability Deductions claimed by
Marathon shall be determined under the Net Deduction Method unless the parties
agree in writing that a different method should be used or unless there is a
Final Determination requiring a different method. Unless explicitly provided
to the contrary in this Article V, Marathon shall retain full control over all
Tax Items on its Tax Returns.
(c) Litigation in the Event of Alternative IRS Ruling. (i) If the
IRS issues the Alternative Ruling, the parties will use their commercially
reasonable best efforts to initiate a judicial proceeding (and any necessary
administrative proceedings) to obtain a Final Determination that New Ashland
Inc. is entitled to claim the Specified Liability Deductions; provided,
however, that the parties shall not initiate such a judicial proceeding unless
and until they have entered into the agreement described in Section
5.01(c)(ii) below; and provided further that the parties shall not initiate
such a judicial proceeding if either New Ashland Inc. or Marathon determines,
in its good faith judgment, that it is reasonably possible that such a
proceeding may result in adverse consequences to New Ashland Inc. or Marathon,
respectively. Possible adverse consequences include but are not limited to
causing the Tax Ruling not to be binding on the IRS; credit risk; possible
impairment of the reputation of either party; and possible impairment of the
relationship between either party and the IRS. The parties expect that any
such proceeding shall be initiated by an amended return filed by New Ashland
Inc. claiming the Specified Liability Deductions and requesting a Refund of
Tax based on that claim and, if the IRS does not timely grant that Refund, a
lawsuit filed by New Ashland Inc.
20
in the appropriate Federal court (as determined by New Ashland Inc. in its
sole reasonable discretion) seeking such Refund.
(ii) Before initiating such a proceeding, the parties shall
negotiate in good faith to attempt to reach and enter into an agreement
specifying the appropriate actions, if any, to be taken by the Marathon
Affiliated Group with respect to its claim of such Specified Liability
Deductions for such taxable years, and the recomputation and possible reversal
of any Tax Benefit Payments made by Marathon with respect to such taxable
years. The goals of such negotiation shall be to preserve the Tax Benefits of
the Specified Liability Deductions for all relevant taxable years in a manner
that is consistent with such Final Determination, the Tax Ruling and the
economic arrangements described in this Article V, and that keeps Marathon
whole for any assessments of Tax resulting from such Final Determination
without subjecting Marathon to any significant incremental credit risk. If
agreement is reached, the parties shall execute an agreement binding on both
parties.
(iii) If such a proceeding results in a Final Determination that New
Ashland Inc. is entitled to claim the Specified Liability Deductions, then New
Ashland Inc. shall claim the Specified Liability Deductions on the New Ashland
Inc. Affiliated Group's consolidated Federal income tax returns that are due
on or after the date of such Final Determination and neither Marathon nor any
member of the Marathon Group shall claim such deductions on returns filed
after such date. New Ashland Inc. shall be entitled to claim Specified
Liability Deductions for prior years only to the extent provided in the
agreement described in Section 5.01(c)(ii) above.
SECTION 5.02 Tax Benefit Payments from Marathon to New Ashland Inc.
(a) (i) If the IRS issues the Alternative Ruling, then for each taxable year
for which HoldCo claims the Specified Liability Deductions it shall make a
payment to New Ashland Inc. in respect of the Federal Tax Benefits
attributable to such Specified Liability Deductions (the "Federal Tax Benefit
Payment") and one or more payments to New Ashland Inc. in respect of the
state, local or foreign Tax Benefits attributable to such Specified Liability
Deductions (the "Non-Federal Tax Benefit Payment" and, together with the
Federal Tax Benefit Payment, the "Tax Benefit Payments").
(ii) The Federal Tax Benefit Payment for a taxable year shall equal
the sum of the Basket One Amount and the Basket Two Amount for such taxable
year. The Non-Federal Tax Benefit Payment for a taxable year shall be
determined with respect to the entire amount of Specified Liability Deductions
for such taxable year on a "with and without" basis under the methodology and
principles applicable solely to the Basket Two Amount, with appropriate
adjustments to reflect the differences between the Code and the applicable Tax
law for such purpose, and there shall be no Basket One Amount or Basket One
Deductions for such purpose. For purposes of calculating the Tax Benefit
Payments, the amount of the Specified Liability Deductions shall be determined
using the Net Deduction Method unless the parties agree in writing that a
different method should be used or unless there is a Final Determination
requiring a different method.
21
(iii) The Tax Benefit Payments shall be paid directly to New Ashland
Inc. or placed in escrow as provided in Article VI below.
(b) (i) Basket One Amount. For each taxable year of HoldCo ending on
or before January 1, 2025, the Basket One Amount shall equal the Basket One
Tax Rate multiplied by the Basket One Deductions for such taxable year. For
each taxable year ending on or after January 1, 2025, the Basket One Amount,
and the Basket One Deductions, shall be $0.00.
(ii) Definitions.
(A) The Basket One Tax Rate for a taxable year shall equal the
highest marginal Federal income tax rate applicable to corporations for
such taxable year minus 3 percentage points. As of the date of this TMA,
the Basket One Tax Rate is 32% (35% -- currently the highest marginal
Federal income tax rate applicable to corporations (Section 11 of the
Code) -- minus 3 percentage points).
(B) The Basket One Deductions for a taxable year shall equal the
lesser of (I) the Specified Liability Deductions for such taxable year
and (II) the Basket One Cap for such taxable year.
(C) The Basket One Cap for a taxable year shall equal (I) $30
million adjusted by the Inflation Factor, but in no event more than $60
million (the "Basket One Cap Base Amount"), plus (II) the unused Basket
One Cap Carryforward, if any, from each of the two preceding taxable
years. The Basket One Cap Carryforward originating in a taxable year
shall equal the excess, if any, of the Basket One Cap Base Amount for
such taxable year over the Specified Liability Deductions for such
taxable year. Specified Liability Deductions for a taxable year shall be
considered to be used first against, and to the extent of, the Basket One
Cap Base Amount for such taxable year. For purposes of determining the
amount of the Basket One Cap Carryforward "used" in a particular taxable
year, the excess, if any, of the Specified Liability Deductions for that
taxable year over the Basket One Cap Base Amount for such taxable year
shall be considered to be used first against, and the extent of, the
Basket One Cap Carryforward originating in the second preceding taxable
year; and next against, and to the extent of, the Basket One Cap
Carryforward originating in the immediately preceding taxable year.
(c) (i) Basket Two Amount. The Basket Two Amount for a taxable year
shall be determined on a "with and without" basis to measure the actual Tax
savings realized by the Marathon Affiliated Group from its use of Basket Two
Deductions and Basket Two Carryovers, and shall equal the excess (if any) of
(A) the amount of Federal income tax that the Marathon Affiliated Group would
have been required to pay with respect to such taxable year if there were no
Basket Two Deductions for, and no Basket Two Carryovers to, such taxable year
over (B) the amount of Federal income tax that the Marathon Affiliated Group
was actually required to pay with respect to such taxable year.
22
(ii) Definitions.
(A) The Basket Two Deductions for a taxable year shall equal the
excess, if any, of (I) the total Specified Liability Deductions for such
taxable year over (II) the Basket One Deductions for such taxable year.
(B) The Basket Two Carryovers to a taxable year shall equal the
amount of Basket Two Carryovers originating in other taxable years and
carried forward or carried back to such taxable year. The Basket Two
Carryovers originating in a taxable year are the carryovers of net
operating losses, excess foreign tax credits, minimum tax credits or
other Tax Items of the Marathon Affiliated Group, if any, that originate
in such year under the principles of the Code, but only to the extent
such carryovers are greater than the amount of such carryovers that would
have originated in such taxable year if the Marathon Affiliated Group had
no Basket Two Deductions for such taxable year and no Basket Two
Carryovers to such taxable year. Carryovers of all Tax Items shall be
considered to be subject to the rules of the Internal Revenue Code and
the Treasury Regulations governing the carry forward, carryback, use,
limitation and expiration of carryovers of the relevant type of Tax Item.
If the carryover of a Tax Item originating in a taxable year includes a
portion that is a Basket Two Carryover and another portion that is not a
Basket Two Carryover, such portions shall be considered to be used on a
"with and without basis" as described in Section 5.02(c)(i) above.
(d) Redeterminations. The Basket One Amount for a taxable year, once
determined, shall not be redetermined for any reason other than an adjustment
in the amount of the Specified Liability Deductions for such taxable year
resulting from a Tax Claim with respect to the New Ashland Inc. Affiliated
Group or the Marathon Affiliated Group by a Tax Authority. The Basket Two
Amount for a taxable year shall be redetermined at appropriate times (e.g.,
payment, refund, or Final Determination), taking into account actual
adjustments with respect to Tax Claims and subsequent events that affect the
calculation of the Basket Two Amount, including carry forwards and carrybacks.
Payments of the increased or decreased amount of any Tax Benefit Payments for
any taxable year shall be made as provided in Article VI below.
(e) Verification by Accounting Firm. For each taxable year, unless
Marathon and New Ashland Inc. otherwise agree, New Ashland Inc. at its own
expense will cause a nationally recognized accounting firm to prepare and
deliver to Marathon a certificate, in a form acceptable to Marathon, verifying
the amount and deductibility of the Specified Liability Deductions for such
taxable year (taking into account any issues raised by the IRS from time to
time). New Ashland Inc. will at its own expense provide to Marathon a written
opinion of Cravath, Swaine & Xxxxx LLP or any other law firm acceptable to
Marathon, which opinion shall be addressed to New Ashland Inc. and may rely on
the Alternative Ruling, to the effect that Marathon will be entitled to deduct
the Specified Liability Deductions on its Tax Return. Such opinion shall be
updated or amended, from time to time, as Marathon may reasonably request to
take into account material changes in facts or in law. For each taxable year,
unless Marathon and New Ashland Inc. otherwise agree, Marathon at its own
expense will cause a nationally
23
recognized accounting firm to prepare and deliver to New Ashland Inc. a
certificate verifying the amount of Tax Benefit Payments for such taxable
year, provided that no such verification shall be required with respect to
Non-Federal Tax Benefit Payments with respect to any jurisdiction in which the
Tax liability of Marathon and the other members of the Marathon Group for such
taxable year is less than $500,000 unless New Ashland Inc. agrees to bear the
cost of such verification.
(f) (i) Principles and Examples. The parties have set forth the
examples in Exhibit B attached hereto to illustrate the application of this
Article V and of Article VI below. The parties have also agreed that Tax
Benefit Payments in respect of the Basket One Amount shall be payable without
regard to whether Marathon or any member of the Marathon Group realizes an
actual Tax savings from the use of the Basket One Deductions; that Tax Benefit
Payments in respect of the Basket Two Amount shall be payable only to the
extent that the Marathon Affiliated Group realizes an actual Tax savings from
the use of the Basket Two Deductions on a "with and without" basis; and that
any Specified Liability Deduction shall potentially give rise to a single
Basket One Amount or Basket Two Amount and shall not be double-counted. Any
uncertainties or ambiguities in the computation of the Tax Benefit Payments
for any taxable year shall be resolved in a manner that is consistent with the
examples in Exhibit B and with such principles.
(ii) Short Taxable Years. The provisions of Article V and Article VI
are based on taxable years of twelve full months. The application of such
provisions shall be appropriately adjusted in the event of one or more taxable
years of less than 12 months to effectuate the goals and principles of Article
V and Article VI.
(iii) Successors. In the event that there is a successor to the New
Ashland Inc. Affiliated Group or the Marathon Affiliated Group, the provisions
of this Article V shall be applied to such successors as if they were the New
Ashland Inc. Affiliated Group or the Marathon Affiliated Group, respectively.
ARTICLE VI
Payments of Tax Benefit Amounts; Escrow
SECTION 6.01 Time of Tax Benefit Payments. (a) Original Payments.
Subject to Section 6.02 below, Marathon shall pay to New Ashland Inc. or place
in Escrow, as the case may be, the amount of the Tax Benefit Payment as
follows:
(i) Federal Tax Benefit Payments. If New Ashland Inc. provides to
Marathon a good faith estimate of the amount of the Specified Liability
Deductions for a calendar year by November 30th of such year, and verification
of the Specified Liability Deductions as required in Section 5.02(e) for such
calendar year by February 28th of the following year, then Marathon shall pay
to New Ashland Inc. or Escrow, as the case may be, the amount of the Federal
Tax Benefit Payment for the taxable year corresponding to
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such calendar year either (A) within 10 days after the due date of the
Marathon corporate income Tax Return without extensions for such taxable year
(generally March 15th), or (B) within 10 days after the due date of the
corporate income Tax Return for the Marathon Affiliated Group, with extensions
for such calendar year (generally September 15th), with interest from the due
date of such Tax Return without extension to the date of payment at the
Marathon short-term borrowing rate for the applicable period. If New Ashland
Inc. does not provide to Marathon the estimate and the actual determination of
the Specified Liability Deductions within the time requirements of the
preceding sentence, then Marathon shall pay to New Ashland Inc. or Escrow, as
the case may be, the amount of the Federal Tax Benefit Payment for such
taxable year within 10 days of the later of (A) the date on which New Ashland
Inc. provides such determination to Marathon and (B) the due date of the
Federal corporate income Tax Return for the Marathon Affiliated Group, with
extensions for such taxable year (generally September 15th), in each case
without interest.
(ii) Non-Federal Tax Benefit Payments. Marathon shall pay to New
Ashland Inc. or Escrow, as the case may be, in each case without interest, the
amount of the Non-Federal Tax Benefit Payments for a taxable year within 30
days after the due date of the relevant HoldCo separate or combined, as the
case may be, state, local or foreign Tax Returns, with extensions.
(b) Redeterminations. If an event giving rise to the redetermination
of a Tax Benefit Payment for any taxable year occurs as provided in Section
5.02(d) above, the party becoming aware of such event shall promptly notify
the other party.
(i) If such redetermination increases the amount of such Tax Benefit
Payment, then within 30 days after the receipt by Marathon of a Refund
corresponding to such Tax Benefit Payment, or, if there is no such Refund,
then within 30 days after such redetermination, Marathon shall pay to New
Ashland Inc. or Escrow, as the case may be, the amount of such increase,
together with the corresponding amount of interest (if any) payable by the
relevant Tax Authority with respect to such redetermination.
(ii) If such redetermination decreases the amount of such Tax
Benefit Payment, then, within 30 days after the payment by Marathon of the Tax
corresponding to such redetermination, or, if there is no such Tax payment,
then within 30 days after such redetermination, the amount of such decrease
(including any interest, penalty or addition to Tax resulting from such
redetermination) shall be paid to Marathon as provided in this Section
6.01(b)(ii). Such decrease shall be paid first by paying to Marathon amounts
in Escrow up to the amount of such decrease (and all future payments to New
Ashland Inc. under this TMA for the current taxable year and subsequent
taxable years shall be escrowed until the Escrow is Fully Funded, as provided
in Section 6.02(c) below). If such decrease exceeds the amount so paid to
Marathon from the Escrow, New Ashland Inc. shall pay such excess to Marathon;
provided that if the total amount that New Ashland Inc. would be required to
pay to Marathon in a particular calendar year under this Section 6.01(b)(ii)
as a result of any and all redeterminations exceeds $25 million, then New
Ashland Inc. may pay such excess over $25 million in eight equal semi-annual
payments, with the first payment due six months from the date of such
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redetermination, with interest computed at an interest rate as reasonably
determined by Marathon to be the market rate for four-year amortizing loans
available to companies with credit ratings similar to that of New Ashland
Inc.; provided further that if New Ashland Inc. undergoes a Bankruptcy Event,
all such amounts shall be immediately due and payable to Marathon.
SECTION 6.02 Escrow. (a) Escrow Agreement. In the event that any Tax
Benefit Payments are required under this Agreement to be placed in Escrow, the
parties will execute an Escrow Agreement in the form as to be agreed to by the
parties and attached hereto as Exhibit C to this TMA. Unless otherwise agreed
by the parties, The Bank of New York shall serve as escrow agent under the
Escrow Agreement. The out-of-pocket costs and expenses of creating and
maintaining the Escrow, including the fees of the escrow agent, shall be
shared equally by Marathon and New Ashland Inc.
(b) Basket One Benefits. Except as otherwise provided in this
Section 6.02(b), all Tax Benefit Payments in respect of Basket One Amounts
shall be paid by Marathon directly to New Ashland Inc. and shall not be placed
in Escrow. Notwithstanding the foregoing, Tax Benefit Payments in respect of
Basket One Amounts shall be placed in Escrow in the following circumstances:
(i) If New Ashland Inc. has undergone a Bankruptcy Event, all Tax
Benefit Payments in respect of Basket One Amounts otherwise payable by
Marathon to New Ashland Inc. on or after the date of such Bankruptcy Event
shall be placed in Escrow as if they were in respect of Basket Two Amounts
until such time that any judgment, order, proceeding or petition that
constitutes a Bankruptcy Event has been dismissed or discharged.
(ii) In the circumstances described in Section 6.02(d) below.
(c) Basket Two Benefits. Except as otherwise provided in this
Section 6.02(c) all Tax Benefit Payments in respect of Basket Two Amounts
shall be paid by Marathon directly to New Ashland Inc. and shall not be placed
in Escrow. Notwithstanding the foregoing, Tax Benefit Payments in respect of
Basket Two Amounts shall be placed in Escrow in the following circumstances:
(i) If the Escrow is not Fully Funded at the time that such a Tax
Benefit Payment for a taxable year is required to be made, then the amount of
such Tax Benefit Payment necessary to cause the Escrow to be Fully Funded
shall be placed in Escrow.
(A) The Escrow shall be considered to be Fully Funded at the time a
Tax Benefit Payment for a taxable year is required to be made if the
amount in the Escrow at such time is equal to the excess (if any) of
(I) the total amount of Tax Benefit Payments other than Basket One
Amounts paid or payable for such taxable year and the four preceding
taxable years over (II) the Escrow Threshold at such time.
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(B) If New Ashland Inc. has a credit rating provided by Xxxxx'x or
Standard & Poor (or successors thereto) at the relevant time, the
Escrow Threshold at any time shall equal:
a. If the credit rating of New Ashland Inc. is either a BB+
or Ba1 or higher, unlimited.
b. If the credit rating of New Ashland Inc. is either a BB or
Ba2, $50 million (for the calendar years 2005 through
2009); $55 million (for the calendar years 2010 through
2014); or $60 million (for calendar years after 2014).
c. If the credit rating of New Ashland Inc. is either a BB-
or Ba3, $25 million.
d. If the credit rating of New Ashland Inc. is (A) below BB-
or Ba3, or (B) New Ashland Inc. undergoes a Bankruptcy
Event, $0; provided, however, that this subparagraph (B)
will not apply after the date that any judgment, order,
proceeding or petition that constitutes a Bankruptcy Event
has been dismissed or discharged.
(C) If, at the time any Tax Benefit Payment for a taxable year is
required to be made, New Ashland Inc. does not have a credit rating
provided by Xxxxx'x or Standard & Poor (or successors thereto), New
Ashland Inc. will obtain, at its own cost, from Xxxxx'x or Standard
& Poor, or both, a pro forma credit rating and provide such rating
to Marathon prior to the time of such Tax Benefit Payment. Such
rating will be updated at least annually.
(ii) In the circumstances described in Section 6.02(d) below.
(d) Certain Changes in Escrow Threshold. If the Escrow Threshold
decreases as a result of a reduction in the credit rating of New Ashland Inc.,
the occurrence of a Bankruptcy Event with respect to New Ashland Inc. or the
payment of Escrowed funds to Marathon in respect of a redetermination of a Tax
Benefit Payment as provided in Section 6.01(b) above, and as a result the
Escrow is not Fully Funded, then all payments to New Ashland Inc. under this
TMA, net of set-off, including all Tax Benefit Payments in respect of Basket
One Amounts and Basket Two Amounts, shall be placed in Escrow until the Escrow
is Fully Funded.
(e) Release of Escrowed Amounts. Except as provided in Section
6.02(d) above, any amounts placed in Escrow in respect of a Tax Benefit
Payment for a taxable year shall be released from Escrow upon the fifth
anniversary of the filing of the corporate income Tax Return for the Marathon
Affiliated Group for such taxable year and shall be paid directly to New
Ashland Inc. If, as a result of an upgrade in New Ashland Inc.'s credit rating
or any other event, the amount in the Escrow exceeds the amount required to
cause the Escrow to be Fully Funded, then the amount of such
27
excess shall be promptly released from the Escrow and paid directly to New
Ashland Inc. Whenever Escrowed Amounts are required to be released to New
Ashland Inc. pursuant to this Section 6.02(e), Marathon and New Ashland Inc.
shall promptly deliver to the escrow agent detailed written instructions
directing the release of such Escrowed Amounts, signed on behalf of both
Marathon and New Ashland Inc.
(f) Other Arrangements. The Escrow arrangements described in this
Section 6.02 may be replaced with other credit support reasonably acceptable
to and approved by Marathon, which approval shall not be unreasonably
withheld.
ARTICLE VII
Covenants, Representations and Warranties
SECTION 7.01. Representations and Warranties of Ashland and New
Ashland Inc. Ashland and New Ashland Inc., jointly and severally, represent
and warrant to Marathon that, as of the date of this Agreement and as of the
Closing Date as though made on the Closing Date:
(a) It knows of no fact that could reasonably be expected to cause
any representation, warranty or other statement contained in the Tax Ruling
Request, the Tax Ruling, a Tax Certificate or the Tax Opinion to be incorrect
(including by omission of a material fact).
(b) No member of the New Ashland Inc. Group has any current plan or
intention to take any action, or fail to take any action, that would be
inconsistent with any representation, warranty or other statement made by, or
that relates primarily to, any member of the New Ashland Inc. Group and is
contained in the Tax Ruling Request, the Tax Ruling, a Tax Certificate or the
Tax Opinion.
(c) New Ashland Inc. will use its reasonable best efforts, with the
assistance and participation of Marathon, to have at least $25 million dollars
on deposit, decreased for any amounts applied against Taxes for Pre-Closing
Tax Periods (other than Federal Income Taxes shown as owing on any Tax Returns
for the Ashland Affiliated Group's 2003, 2004 and 2005 fiscal years), with the
IRS with respect to liabilities for Taxes for Pre-Closing Tax Periods
(including interest on such amounts). This amount shall be used (to the extent
necessary) for the payment or settlement of such Taxes and interest and shall
not be withdrawn prior to a Final Determination with respect to such Taxes and
interest. Any portion of such deposit that is not used for the payment or
settlement of Taxes for such periods (including interest on such amounts)
shall be paid to New Ashland Inc.
(d) Following the Transactions, New Ashland Inc. intends to continue
the active conduct of Valvoline, independently and with its separate officers,
directors, and employees, and New Ashland Inc. does not plan any substantial
reduction in business activity of Valvoline.
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SECTION 7.02. Representations and Warranties of Marathon. Marathon
represents and warrants to Ashland and New Ashland Inc. that, as of the date
of this Agreement and as of the Closing Date as though made on the Closing
Date:
(a) It knows of no fact that could reasonably be expected to cause
any representation, warranty or other statement contained in the Tax Ruling
Request, the Tax Ruling, a Tax Certificate or the Tax Opinion to be incorrect
(including by omission of a material fact).
(b) No current member of the Marathon Group has any current plan or
intention to take any action, or fail to take any action, that would be
inconsistent with any representation, warranty or other statement made by, or
that relates primarily to, any member of the Marathon Group and is contained
in the Tax Ruling Request, the Tax Ruling, a Tax Certificate or the Tax
Opinion.
(c) For the two-year period following the Transactions, Marathon
intends to continue the active conduct of the Acquired Businesses,
independently and, except as described in the Tax Ruling Request, with their
separate officers, directors and employees, and Marathon does not plan any
substantial reduction in business activity for the Acquired Businesses during
such period.
SECTION 7.03. Covenants of New Ashland Inc. and Marathon. (a) (i)
Each of Ashland and New Ashland Inc. agrees that it shall not take or omit to
take, and shall not permit any of the Ashland Group or the New Ashland Inc.
Group, respectively, to take or omit to take, any action that will, or would
reasonably be expected to, cause any written representation contained in the
Tax Ruling Request, Tax Ruling, a Tax Certificate or the Tax Opinion to be
incorrect.
(ii) Each of Ashland and New Ashland Inc. agrees that it shall, and
shall cause each member of the Ashland Group and the New Ashland Inc. Group,
respectively, to prepare and file all Tax Returns on a basis consistent with
the Tax Ruling and the Tax Opinion, except as otherwise required by Article V
or a Final Determination; provided that, to the extent that the Tax Ruling and
the Tax Opinion are inconsistent in any respect, such Tax Returns shall be
prepared and filed on a basis consistent with the Tax Ruling.
(iii) New Ashland Inc. will use its reasonable best efforts, with
the assistance and participation of Marathon, to maintain at least $25 million
dollars, decreased for any amounts applied against Taxes for Pre-Closing Tax
Periods (other than Federal Income Taxes shown as owing on any Tax Returns for
the Ashland Affiliated Group's 2003, 2004 and 2005 fiscal years), on deposit
with the IRS for Taxes for Pre-Closing Tax Periods (including interest on such
amounts). This amount shall be used (to the extent necessary) for the payment
or settlement of such Taxes and interest and shall not be withdrawn prior to a
Final Determination with respect to such Taxes and interest. Any portion of
such deposit that is not used for the payment or settlement of Taxes for such
periods (including interest on such amounts) shall be paid to New Ashland Inc.
29
(b) (i) Marathon agrees that, for a period beginning on the Closing
Date and ending two years after the Closing Date, it shall not take or omit to
take, and shall not permit any member of the Marathon Group to take or omit to
take, any action that will, or would reasonably be expected to, cause any
written representation contained in the Tax Ruling Request, Tax Ruling, or a
Tax Certificate, and that is specified on Schedule 2.04 attached hereto, to be
incorrect.
(ii) Marathon agrees that it shall, and shall cause each member of
the Marathon Group to, prepare and file all Tax Returns on a basis consistent
with the Tax Ruling and the Tax Opinion, except as otherwise required by
Article V or a Final Determination; provided that, to the extent that the Tax
Ruling and the Tax Opinion are inconsistent in any respect, such Tax Returns
shall be prepared and filed on a basis consistent with the Tax Ruling.
(iii) Marathon agrees that, for a period beginning on the Closing
Date and ending two years after the Closing Date, it (A) shall not, and shall
cause each member of the Marathon Group not to, amend the Company Leverage
Policy set forth in Schedule 8.14 to the MAP LLC Agreement, as such Policy is
amended and restated as of March 18, 2004 and (B) shall cause MAP to comply at
all times with such Company Leverage Policy; provided that, Marathon may amend
the Company Leverage Policy to the extent that both Marathon and New Ashland
Inc. reasonably agree is consistent with the Tax Ruling.
(iv) Marathon agrees that, for a period beginning on the Closing
Date and ending two years after the Closing Date, it shall not, and shall
cause each member of the Marathon Group not to, make any capital contribution
of money or other property to MAP or any JV Entity (including any capital
contribution pursuant to Article IV of the MAP LLC Agreement or any other
provision of the MAP LLC Agreement) other than capital contributions (i) that
are the result of, and in response to, Extraordinary Events; or (ii) if the
Tax Ruling includes a ruling that the MAP Partial Redemption does not
constitute a disguised sale, capital contributions for purposes specifically
identified in the Tax Ruling or the Tax Ruling Request.
(v) During the period beginning on October 1, 2004 (or, if earlier,
the day before the Closing Date) and ending on the date two years after the
Closing Date, Marathon shall cause MAP and its subsidiaries not to, and MAP
and its subsidiaries shall not (A) incur any indebtedness owed to Marathon or
any affiliate of Marathon or (B) incur any indebtedness under one or more
revolving credit facilities, uncommitted money market credit facilities or
other comparable debt facilities to the extent such indebtedness is
guaranteed, directly or indirectly, by Marathon or any affiliate of Marathon
(other than such an affiliate that is MAP or any wholly-owned subsidiary of
MAP), except such Marathon guaranteed debt will be permissible if the Tax
Ruling includes a ruling that the MAP Partial Redemption does not constitute a
disguised sale and such ruling or the Tax Ruling Request contemplates debt
guaranteed by Marathon.
(vi) Marathon agrees that during the two-year period beginning on
the Closing Date, it shall cause MAP not to make any sales of
30
receivables except for sales of receivables pursuant to the Receivables Sales
Facility (as such term is defined in the MAP LLC Agreement). Marathon and MAP
agree that if MAP makes any sales of receivables pursuant to the Receivables
Sales Facility they will treat such sales (A) as sales for Federal income tax
purposes and (B) based on the relevant accounting pronouncements, as they
exist on the date of this Agreement, as sales for financial accounting
purposes. If as a result of any change or modification to such accounting
pronouncements between the date of this Agreement and the Closing Date,
Marathon concludes that it and MAP will not be able to treat such sales of
receivables as sales for financial accounting purposes, it shall cause MAP to
use its reasonable best efforts to modify the Receivables Sales Facility in
order to achieve sale treatment for financial accounting purposes, if such
modification can be made in a manner that is (i) acceptable to Marathon from a
tax point of view and otherwise reasonably acceptable to Marathon, and (ii)
acceptable to Ashland from a tax point of view. If such a change in accounting
pronouncements arises and Marathon, after discussions with Ashland, concludes
that it cannot so modify the Receivables Sales Facility, Marathon shall
deliver a written notice to Ashland attesting to this conclusion at least two
business days prior to the Closing Date. The failure of Marathon to deliver
such written notice shall constitute its agreement to the second sentence of
this paragraph (vi) notwithstanding any such change in accounting
pronouncements. Marathon further agrees that if the relevant accounting
pronouncements change after the Closing Date and, as a result of such changes,
Marathon concludes that it and MAP will not be able to treat sales of
receivables pursuant to the Receivables Sales Facility as sales for financial
accounting purposes, Marathon shall cause MAP to modify the Receivables Sales
Facility in order to achieve sale treatment for financial accounting purposes
if it can do so at an insignificant cost (provided that such modification is
acceptable to New Ashland Inc. from a tax point of view) or if New Ashland
Inc. agrees to indemnify Marathon and MAP for any increased costs that result
from such changes.
SECTION 7.04. Valuation Report. Each of Ashland and Marathon shall
use its reasonable best efforts to cause Deloitte & Touche LLP to deliver to
Ashland and Marathon, no later than July 15, 2004, a report, in form and
substance reasonably satisfactory to each of Ashland and Marathon and
consistent with the Engagement Letter dated as of November 24, 2003, among
Ashland, Marathon and Deloitte & Touche LLP. Each of Ashland and Marathon
shall, and shall cause each of its affiliates (including MAP) to, cooperate
with Deloitte & Touche LLP in connection with the preparation of such report,
which cooperation shall include the provision of any relevant books, records,
documentation and other information and the making available of its employees
and facilities as Deloitte & Touche LLP may reasonably request.
SECTION 7.05. Cooperation and Exchange of Information. (a) Each of
Marathon and New Ashland Inc. shall, and shall cause each of its affiliates
to, cooperate fully with all reasonable requests from the other party in all
matters relating to Taxes covered by this Agreement, including without
limitation, in connection with the preparation and filing of Tax Returns, any
amendments or claims for Refund with respect thereto, the conduct and
resolution of Tax Claims and the implementation of this TMA (including,
without limitation, the provisions of Articles V and VI). Such cooperation
shall include (i) provision on a mutually convenient basis upon reasonable
request of Tax
31
Returns, books, records (including information regarding ownership and Tax
basis of property), documentation and other information related to such Tax
Returns and Tax Claims, including accompanying schedules, related work papers,
and documents related to rulings or other determinations by Tax Authorities,
(ii) the execution of any document or the certification of any information
that may be necessary or beneficial in connection with the filing of any Tax
Returns or claims for Refund or the conduct or resolution of any Tax Claim,
(iii) obtaining any document or information that is necessary or beneficial in
connection with the foregoing, (iv) upon reasonable request, the making
available of its employees and facilities on a reasonable and mutually
convenient basis to facilitate the foregoing and (v) the reasonable good faith
effort of New Ashland Inc. to provide to Marathon information reasonably
requested by Marathon for the preparation of its published financial
statements.
(b) Marathon and New Ashland Inc. shall meet regularly to review
major issues with respect to Tax Claims and the status of audits with respect
to Pre-Closing Periods and Straddle Periods as long as the relevant statute of
limitations remains open with respect to any Pre-Closing Period or Straddle
Period. New Ashland Inc. shall make available appropriate personnel to discuss
the foregoing items and shall make available for inspection relevant documents
relating to such audits.
SECTION 7.06. Pre-Filing Agreement. Marathon and New Ashland Inc.
agree that they will pursue a pre-filing agreement in accordance with Rev.
Proc. 2001-22 (or any successor pronouncement), with respect to (i) the amount
of gain, if any, realized by Marathon or the Ashland Group under Code Sections
751(b) and 355(e) as a result of the Transactions described in the Master
Agreement and (ii) to the extent relevant in light of the Tax Ruling, whether
HoldCo shall be deemed to have a "net unrealized built-in loss" within the
meaning of Code Section 382(h)(3). Marathon and New Ashland Inc. shall (and
shall cause their respective affiliates to) provide their reasonable
cooperation and assistance in obtaining any such pre-filing agreement.
SECTION 7.07. Ownership of Tax Records; Retention of Information.
New Ashland Inc. shall own, and have all rights, title and interest in, all
books, records, documentation and other information in existence as of the
Closing Date related to any Tax or Tax Item of Ashland or any of its
subsidiaries. New Ashland Inc. agrees to retain all Tax Returns, related
schedules and workpapers, and all other material records and other documents
as required under Code Section 6001 and the regulations promulgated thereunder
relating thereto existing on the date hereof or created through the Closing
Date, until the expiration of the statute of limitations (including
extensions) of the taxable years to which such Tax Returns and other documents
relate and until the Final Determination of any payments which may be required
in respect of such years under this TMA. New Ashland Inc. shall provide to
Marathon copies of any such documentation or information in existence as of
the Closing Date related to any Marathon Tax Matter or with respect to items
that could result in a Tax Detriment to Marathon and, as reasonably requested
by Marathon, in connection with any Tax Claim. New Ashland Inc. agrees that,
if it intends to dispose of any such documentation or other information, it
shall provide written notice to Marathon describing the documentation or other
information to be disposed of 60 days prior to taking such action. Marathon
shall be entitled to arrange
32
to take delivery of the documentation or other information described in the
notice at its expense during the succeeding 60-day period.
ARTICLE VIII
Tax Claims
SECTION 8.01. Calculation of Losses. The amount of any
indemnification provided under this TMA, other then pursuant to Article V and
VI, shall be (i) increased to take account of any net Tax Loss incurred by the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net Tax
Savings realized by the indemnified party arising from the incurrence or
payment of any such indemnified loss. In computing the amount of any such Tax
Loss or Tax Savings, the indemnified party shall be deemed to recognize all
other Tax Items before recognizing any Tax Item arising from the receipt of
any indemnity payment hereunder or the incurrence or payment of any
indemnified loss.
SECTION 8.02. Procedures. (a) Tax Claims. (i) If a party (the
"indemnified party") receives any written notice of deficiency, claim or
adjustment or other written notice from a Tax Authority that may result in the
indemnified party being entitled to any indemnification provided for under
this Agreement in respect of, arising out of or involving an audit proceeding,
audit inquiry, information request, suit, action, contest or similar claim
made by any Tax Authority (a "Tax Claim") such indemnified party shall notify
the indemnifying party in writing (and in reasonable detail) of the Tax Claim
within 10 business days after such indemnified party receives notice or
otherwise becomes aware of the existence of the Tax Claim; provided, however,
that failure to give such notification shall not affect the indemnification
provided under this Agreement, except to the extent the indemnifying party
shall have been materially and adversely prejudiced as a result of such
failure. Thereafter, the indemnified party shall keep the indemnifying party
apprised of the status of any investigation or audit and deliver to the
indemnifying party, within five business days' time after the indemnified
party's receipt thereof, copies of all notices and documents received by the
indemnified party related to the Tax Claim. New Ashland Inc. undertakes and
agrees that it will keep Marathon reasonably informed of the existence and
progress of any audit or other proceeding that relates to a Pre-Closing Period
with respect to which Marathon could be liable as a successor, under Treasury
Regulation Section 1.1502-6, or otherwise.
(ii) If any party receives a written notice from a Tax Authority
that may result in an adjustment in the amount of the Specified Liability
Deductions for a taxable year as a result of an audit of the New Ashland
Inc. Affiliated Group or the Marathon Affiliated Group, then for purposes
of this TMA, such audit and related proceeding, to the extent they
concern the amount of the Specified Liability Deductions claimed or
capable of being claimed by Marathon or the Marathon Group as successor
to HoldCo, shall be treated as a Tax Claim with respect to which Marathon
is the indemnified party and New Ashland Inc. is the indemnifying party,
provided, however, that the resolution of such issues shall not
33
preclude Marathon from compromising or settling any other issues in its
Tax Returns administratively with any Tax Authority and Marathon shall
have the right to determine in its sole reasonable discretion the
appropriate forum and location of any judicial proceeding with respect to
Specified Liability Deductions.
(b) Assumption. Except as provided in Section 8.02(c) of this TMA,
if a Tax Claim is made against an indemnified party, the indemnifying party
shall be entitled to participate in the defense thereof and, if it so chooses,
to assume the defense thereof with professional advisors and counsel selected
by the indemnifying party; provided, however, that such professional advisors
or counsel are not reasonably objected to by the indemnified party. Should the
indemnifying party so elect to assume the defense of a Tax Claim, the
indemnifying party shall not be liable to the indemnified party for any fees
or expenses relating to such professional advisors or counsel subsequently
incurred by the indemnified party in connection with the defense thereof. If
the indemnifying party assumes such defense, the indemnified party shall have
the right to participate in the defense thereof and to employ professional
advisors and counsel (not reasonably objected to by the indemnifying party),
at its own expense, separate from the professional advisors and counsel
employed by the indemnifying party, it being understood that the indemnifying
party shall control such defense. The indemnifying party shall be liable for
the fees and expenses of professional advisors and counsel employed by the
indemnified party for any period during which the indemnifying party has not
assumed the defense thereof. If the indemnifying party chooses to defend or
prosecute a Tax Claim, all the indemnified parties shall cooperate in the
defense or prosecution thereof. Such cooperation shall include the retention
and (upon the indemnifying party's request) the provision to the indemnifying
party of records and information that are reasonably relevant to such Tax
Claim, making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder,
cooperating and assisting in the investigation, defense and resolution of such
matters and providing legal and business assistance with respect to such
matters. Whether or not the indemnifying party assumes the defense of a Tax
Claim, the indemnified party shall not admit any liability with respect to, or
settle, compromise or discharge, such Tax Claim without the indemnifying
party's prior written consent. If the indemnifying party assumes the defense
of a Tax Claim, the indemnified party shall agree to any settlement,
compromise, or discharge of a Tax Claim that the indemnifying party may
recommend and that by its terms obligates the indemnifying party to pay the
full amount of the liability in connection with such Tax Claim; provided that
if such settlement, compromise or discharge imposes conditions, costs or other
detriments (in addition to the liability in connection with such Tax Claim)
upon the indemnified party, such indemnified party may use its reasonable
judgment in determining whether to so agree, such agreement not to be
unreasonably withheld.
(c) Joint rights and assumption of control. If a party to this TMA
suffers a Bankruptcy Event, then the party suffering the Bankruptcy Event (the
"Bankruptcy Party") shall vigorously pursue the assertion, or defense (as the
case may be) of all Tax Claims for which any other party to this TMA (the
"Non-Bankruptcy Party") might be jointly and severally, directly or indirectly
liable ("Bankruptcy Tax Claims") and the Non-Bankruptcy Party shall have the
right to participate in the defense of any Bankruptcy
34
Tax Claims and to employ professional advisors and counsel (not reasonably
objected to by the Bankruptcy Party), at its own expense, separate from the
professional advisors and counsel employed by the Bankruptcy Party, it being
understood that the Bankruptcy Party shall control the defense of such claims.
Both parties shall in good faith cooperate with one another and the Bankruptcy
Party shall not unreasonably reject any suggestions made by the Non-Bankruptcy
Party. Such cooperation shall include the retention and (upon the
Non-Bankruptcy Party's request) the provision to the Non-Bankruptcy Party of
records and information that are reasonably relevant to such Bankruptcy Tax
Claims (including copies of all protests, pleadings, briefs, filings,
correspondence and similar materials relative to such claims), making
employees available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder, cooperating
and assisting in the investigation, defense and resolution of such matters,
and providing legal and business assistance with respect to such matters. The
preceding sentences of this Section 8.02(c) notwithstanding, if the Bankruptcy
Party fails to vigorously pursue such Bankruptcy Tax Claims, or such
Bankruptcy Party is discharged, or otherwise effectively barred from liability
for such Bankruptcy Tax Claims, the Non-Bankruptcy Party shall have the right
to assume full control over the defense of such Bankruptcy Tax Claims and, if
such control is assumed, the Bankruptcy Party shall irrevocably designate, and
agree to cause each of its affiliates to designate irrevocably, the
Non-Bankruptcy Party as the sole and exclusive agent and attorney-in-fact to
take any action as such Non-Bankruptcy Party may deem appropriate, necessary,
or incidental in any and all matters relating to Pre-Closing Period Tax Claims
of the Ashland Group and the Bankruptcy Party shall continue to cooperate
fully in the defense or prosecution thereof, but it shall not have the right
to participate in the proceedings.
(d) Mitigation. New Ashland Inc. and Marathon shall cooperate with
each other with respect to resolving any claim or liability with respect to
which one party is obligated to indemnify the other party hereunder, including
by making reasonable efforts to mitigate or resolve any such claim or
liability, which shall include claiming any indemnified loss as a deduction or
offset on any relevant Tax Return (including any amended Tax Return). In the
event that New Ashland Inc. or Marathon shall fail to make such reasonable
efforts to mitigate or resolve any claim or liability, then notwithstanding
anything else to the contrary contained herein, the other party shall not be
required to indemnify any person for any indemnified loss that could
reasonably be expected to have been avoided if New Ashland Inc. or Marathon,
as the case may be, had made such efforts.
SECTION 8.03. Treatment of Indemnification Payments. The parties
agree that any indemnity payments made pursuant to this Agreement or pursuant
to Article XIII of the Master Agreement shall be treated for all Tax purposes
as distributions or capital contributions, as the case may be, between HoldCo
and New Ashland Inc. made immediately prior to the Spinoff and, accordingly,
not as taxable income to the recipient or as a deductible expense to the
payor, unless otherwise required by a Final Determination.
35
ARTICLE IX
Dispute Resolution; Interest
SECTION 9.01. Dispute Resolution. In the event that Marathon or any
member of the Marathon Group, as the case may be, on the one hand, and New
Ashland Inc. or any member of the New Ashland Inc. Group, as the case may be,
on the other hand, disagree as to the amount or calculation of any payment to
be made under this TMA, or the interpretation or application of any provision
under this TMA, the parties shall attempt in good faith to resolve such
dispute. If such dispute is not resolved within sixty (60) business days
following the commencement of the dispute, Marathon and New Ashland Inc. shall
jointly retain a tax attorney who has retired from active practice in a
nationally recognized law firm or independent public accounting firm, which
firm is independent of both parties, or a retired Federal judge experienced in
Tax Matters (the "Independent Entity"), to resolve the dispute. If the parties
are unable to agree on an Independent Entity, then each party shall appoint a
person who would qualify as an Independent Entity (but for the approval of the
other party), and such persons shall then appoint a person who meets the above
description as the Independent Entity and who shall serve as the Independent
Entity. The Independent Entity shall act as an arbitrator to resolve all
points of disagreement and its decision shall be final and binding upon all
parties involved. Following the decision of the Independent Entity, Marathon,
and members of the Marathon Group, and New Ashland Inc. and members of the New
Ashland Inc. Group shall each take or cause to be taken any action necessary
to implement the decision of the Independent Entity. The fees and expenses
relating to the Independent Entity shall be borne equally by Marathon and New
Ashland Inc.
SECTION 9.02. Interest. Any payment required to be made under this
TMA that is not made on or before the date on which such payment is due shall
bear interest computed at the rate specified from time to time pursuant to
Code Section 6621(a)(2).
ARTICLE X
General Provisions
SECTION 10.01. Termination. This Agreement shall terminate
simultaneous with any termination of the Master Agreement pursuant to Article
XI thereof. In the event of termination of this Agreement, this Agreement
shall forthwith become void and have no effect, without any liability or
obligation on the part of any party hereto.
SECTION 10.02. Survival. Notwithstanding anything in this TMA to the
contrary apart from Section 10.01, the provisions of this TMA shall survive
for 30 days after the full period of all applicable statutes of limitations
(giving effect to any waiver, mitigation or extension thereof) unless by their
term they expire at an earlier date.
36
SECTION 10.03. Right of Set-off. Either party may set-off any amount
to which it is entitled under this TMA against amounts otherwise payable
hereunder by such party. Neither the exercise of nor the failure to exercise
such right of set-off will constitute an election of remedies or limit such
party in any manner in the enforcement of any other remedies that may be
available to it.
SECTION 10.04. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be
deemed given upon receipt by the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
if to the Ashland Parties, to:
Ashland Inc.
00 X. XxxxxXxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: J. Xxxxxx Xxxx
Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx LLP
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
if to the Marathon Parties, to:
Marathon Oil Corporation
0000 Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxx
Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
with copies to:
Xxxxx Xxxxx L.L.P.
Xxx Xxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxx X. Paris, Esq.
37
Xxxxxx & Xxxxxxxxx Chartered
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esq.
SECTION 10.05. Interpretation. When a reference is made in this
Agreement to a Section, such reference shall be to a Section of this Agreement
unless otherwise indicated. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". This Agreement is intended to calculate,
allocate and assign certain Tax responsibilities, liabilities and benefits
among the parties to this Agreement, and any situation or circumstance
concerning such calculation, allocation and assignment that is not
specifically contemplated hereby or provided for herein shall be determined in
a manner consistent with the underlying principles of calculation, allocation
and assignment in this Agreement.
SECTION 10.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the end
that the transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 10.07. Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
SECTION 10.08. No Third-Party Beneficiaries. This Agreement is not
intended to confer upon any person other than the parties hereto any rights or
remedies.
SECTION 10.09. Existing MAP Agreements. To the extent any provision
of this TMA conflicts with the determination of the Tax Liability (as defined
in the MAP LLC Agreement) of Ashland or its successors for any Straddle Period
of MAP as determined under Section 10.03 of the MAP LLC Agreement, such Tax
Liability shall be determined in accordance with this Agreement. In all other
respects, except as expressly modified herein, the terms and conditions of the
MAP LLC Agreement, the ATCA, and the Put/Call Agreement shall continue to
apply to the extent provided in Article XII of the Master Agreement. For the
avoidance of doubt, the term Tax Distribution Amount (as defined in the MAP
LLC Agreement) shall not include the Tax Liability (as defined in the MAP LLC
Agreement) of the Ashland Affiliated Group that is attributable to the MAP
Partial Redemption.
38
SECTION 10.10. Continuing Ashland Participation Rights With Respect
To Pre-Closing Pass-Through Items. Notwithstanding anything to the contrary in
the Master Agreement, this Agreement or the other Transaction Agreements and
Ancillary Agreements (as defined in the Master Agreement), New Ashland Inc.
and its successors shall retain the right (to the extent provided for in
Section 6.08 of the MAP LLC Agreement or any other provision of the MAP LLC
Agreement) to participate in the preparation and filing of all Tax Returns,
and in the defense of any Tax Claim, with respect to all Pass-Through Items
relating to any Pre-Closing Period of MAP or any other JV Entity as if it were
a member of MAP or such JV Entity. Any Tax Claim with respect to any issue
concerning MAP's income, gain, losses, deductions or credits that could result
in additional Taxes for the Pre-Closing Period for Ashland and additional
basis (other than additional basis that is subject to Section 4.03 of the TMA)
or deductions in the Post-Closing Period for Marathon or any member of the
Marathon Group shall be treated under Section 6.08(e)(ii) of the MAP LLC
Agreement as an issue the tax effect of which, if resolved adversely would be,
and the tax effect of settling the issue is, not proportionately the same for
both Members. If an issue is treated as not proportionately the same for both
Members under the preceding sentence, then in applying Section 6.08(e)(iv) of
the MAP LLC Agreement, nationally recognized tax counsel (whose selection
shall be based on the principles of Section 9.01 of the TMA) shall determine
if the settlement is fair to both Members based on the merits of the issue.
Such fees of the nationally recognized tax counsel shall be shared, 62% by
Marathon and 38% by New Ashland Inc.
SECTION 10.11. Prior Tax Sharing Agreements. Except as specifically
provided in Section 10.09, as of the Closing Date, this Agreement supersedes
and terminates all prior agreements as to the allocation of tax liabilities
among the members of the Ashland Group, and after the Closing Date neither
HoldCo nor any member of the Marathon Group, as successor, transferee or
otherwise, shall be bound thereby or have any liability thereunder.
SECTION 10.12. Entire Agreement; Amendments. This Agreement embodies
the entire understanding among the parties relating to its subject matter. Any
and all prior correspondence, conversations, and memoranda are merged herein
and shall be without effect hereon. No promises, covenants, or representations
of any kind, other than those expressly stated herein, have been made to
induce either party to enter into this Agreement. This Agreement shall not be
amended, supplemented, modified, or terminated except by a writing duly signed
by each of the parties hereto, and no waiver of any provisions of this
Agreement shall be effective unless in a writing duly signed by the party
sought to be bound.
SECTION 10.13. Amendments Resulting From Pre-Closing Change In Tax
Structure. If, prior to the Closing, the Tax Structure of the Transactions is
modified, revised or changed in any manner, for any reason (including, but not
limited to, modifications, revisions or changes resulting from changes in law
or in response to communications (written or otherwise) with the IRS or any
other Tax Authority), the parties will negotiate in good faith to amend this
Agreement, to the extent necessary, to
39
reflect the underlying principles of calculation, allocation and assignment in
this Agreement.
SECTION 10.14. Successors. This Agreement shall be binding upon and
inure to the benefit of any successor to any of the parties, by merger,
acquisition of assets or otherwise, to the same extent as if the successor had
been an original party to the Agreement, and in such event, all references
herein to a party shall refer instead to the successor of such party.
SECTION 10.15. Confidentiality. Each party to this Agreement shall
hold, and cause its officers, employees, agents, consultants, and advisors to
hold, in strict confidence, unless compelled to disclose by judicial or
administrative process or, in the opinion of its counsel, by other
requirements of law, all information that it or any of its officers,
employees, agents, consultants, and advisors may acquire pursuant to, or in
the course of performing its obligations under, any provision of this
Agreement.
SECTION 10.16. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed by its respective duly authorized officer as of the date first set
forth above.
ASHLAND INC.,
by /s/ Xxxxx X. X'Xxxxx
--------------------------------
Name: Xxxxx X. X'Xxxxx
Title: Chief Executive Officer
ATB HOLDINGS INC.,
by /s/ Xxxxx X. X'Xxxxx
--------------------------------
Name: Xxxxx X. X'Xxxxx
Title: President
EXM LLC,
by
ATB HOLDINGS INC.,
by /s/ Xxxxx X. X'Xxxxx
--------------------------------
Name: Xxxxx X. X'Xxxxx
Title: President
NEW EXM INC.,
by /s/ Xxxxx X. X'Xxxxx
--------------------------------
Name: Xxxxx X. X'Xxxxx
Title: President
MARATHON OIL CORPORATION,
by /s/ Xxxxxxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxxxxxx X. Xxxxxxx, Xx.
Title: President & Chief Executive
Officer
MARATHON OIL COMPANY,
by /s/ Xxxxxxxx X. Xxxxxxx, Xx.
--------------------------------
Name: Xxxxxxxx X. Xxxxxxx, Xx.
Title: President
MARATHON DOMESTIC LLC,
by
MARATHON OIL CORPORATION,
by /s/ Xxxxxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx, Xx.
Title: President & Chief Executive
Officer
MARATHON ASHLAND PETROLEUM LLC,
by /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: President
