Exhibit 10.3

TRANSITION SERVICES AGREEMENT

THIS TRANSITION SERVICES AGREEMENT is made as of May 25, 2011 by and between
Marathon Oil Corporation, a Delaware corporation (“Marathon Oil”), and Marathon
Petroleum Corporation, a Delaware corporation (“Marathon Petroleum”).

WHEREAS, Marathon Oil, through its Subsidiaries (other than Marathon Petroleum
and its Subsidiaries), is engaged in the businesses of crude oil and natural gas
exploration and production, integrated natural gas, and oil sands mining
(collectively, the “Marathon Oil Business”);

WHEREAS, Marathon Petroleum, through its Subsidiaries, is engaged in the
business of petroleum refining, marketing and transportation (the “Marathon
Petroleum Business”);

WHEREAS, the Board of Directors of Marathon Oil has determined that it would be
advisable and in the best interests of Marathon Oil and its stockholders for
Marathon Oil to distribute on a pro rata basis to the holders of Marathon Oil’s
common stock all of the outstanding shares of Marathon Petroleum common stock
owned by Marathon Oil (the “Distribution”);

WHEREAS, Marathon Oil and Marathon Petroleum have entered into a Separation and
Distribution Agreement dated as of the date hereof (the “Distribution
Agreement”) in order to carry out, effect and consummate the foregoing
transactions;

WHEREAS, to facilitate the transactions described above, Marathon Oil and
Marathon Petroleum deem it to be appropriate and in the best interests of
Marathon Oil and Marathon Petroleum that Marathon Oil provide certain Services
to Marathon Petroleum and Marathon Petroleum provide certain Services to
Marathon Oil, on the terms and conditions set forth herein; and

WHEREAS, it is the intent of the Parties that the Services be provided at cost,
and therefore the Fees set forth on Annex B and Annex C were calculated to
reflect costs.

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

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. Unless otherwise defined herein, each capitalized term
shall have the meaning specified for such term in the Distribution Agreement. As
used in this Agreement:

 

  (a) “Additional Services” means the Additional Marathon Oil Services (as
defined in Section 3.2(a)) or the Additional Marathon Petroleum Services (as
defined in Section 3.2(b)), individually, or the Additional Marathon Oil
Services and the Additional Marathon Petroleum Services, collectively, as the
context may indicate. Any Additional Services provided pursuant to this
Agreement shall be deemed to be “Services” under this Agreement.

 

  (b) “Agreement” means this Transition Services Agreement together with those
portions of the Distribution Agreement referenced herein and all Annexes
attached hereto and incorporated herein by this reference and all amendments,
modifications and changes hereto and thereto.

 

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  (c) “Authorized Representative” means, for each Party, any of the individuals
listed on Annex A under the name of such Party.

 

  (d) “Availed Party” has the meaning set forth in Section 8.2(a) of this
Agreement.

 

  (e) “Fees” for a particular Service shall be as set forth on Annex B or Annex
C, as the case may be.

 

  (f) “Marathon Oil Services” means the Services generally described on Annex B
and any other Service provided by Marathon Oil or any of its Subsidiaries
pursuant to this Agreement.

 

  (g) “Marathon Petroleum Services” means the Services generally described on
Annex C and any other Service provided by Marathon Petroleum or any of its
Subsidiaries pursuant to this Agreement.

 

  (h) “Partial Termination” has the meaning set forth in Section 3.3(a) of this
Agreement.

 

  (i) “Party” means Marathon Oil or Marathon Petroleum, as applicable. “Parties”
means Marathon Oil and Marathon Petroleum.

 

  (j) “Security Regulations” has the meaning set forth in Section 8.2(a) of this
Agreement.

 

  (k) “Services” means the Marathon Oil Services or the Marathon Petroleum
Services, individually, or the Marathon Oil Services and the Marathon Petroleum
Services, collectively, as the context may indicate.

 

  (l) “Systems” has the meaning set forth in Section 8.2(a) of this Agreement.

Section 1.2 Interpretation. (a) In this Agreement, unless the context clearly
indicates otherwise:

(i) words used in the singular include the plural and words used in the plural
include the singular;

(ii) references to any Person include such Person’s successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement, and a reference to such Person’s “Subsidiaries” shall be deemed to
mean such Person’s Subsidiaries following the Distribution;

(iii) any reference to any gender includes the other gender and the neuter;

(iv) the words “include,” “includes” and “including” shall be deemed to be
followed by the words “without limitation”;

(v) the words “shall” and “will” are used interchangeably and have the same
meaning;

(vi) the word “or” shall have the inclusive meaning represented by the phrase
“and/or”;

 

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(vii) any reference to any Article, Section or Annex means such Article or
Section of, or such Annex to, this Agreement, as the case may be, and references
in any Section or definition to any clause means such clause of such Section or
definition;

(viii) the words “herein,” “hereunder,” “hereof,” “hereto” and words of similar
import shall be deemed references to this Agreement as a whole and not to any
particular Section or other provision of this Agreement;

(ix) any reference to any agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from time to time to the extent permitted by the provisions thereof and by this
Agreement;

(x) any reference to any law (including statutes and ordinances) means such law
(including all rules and regulations promulgated thereunder) as amended,
modified, codified or reenacted, in whole or in part, and in effect at the time
of determining compliance or applicability;

(xi) relative to the determination of any period of time, “from” means “from and
including,” “to” means “to but excluding” and “through” means “through and
including”;

(xii) accounting terms used herein shall have the meanings historically ascribed
to them by Marathon Oil and its Subsidiaries, including Marathon Petroleum and
its Subsidiaries, in its and their internal accounting and financial policies
and procedures in effect as of the date of this Agreement;

(xiii) if there is any conflict between the provisions of the Distribution
Agreement and this Agreement, the provisions of this Agreement shall control
with respect to the subject matter hereof; if there is any conflict between the
provisions of the main body of this Agreement and the Annexes hereto, the
provisions of the main body of this Agreement shall control unless explicitly
stated otherwise in such Annex;

(xiv) the titles to Articles and headings of Sections contained in this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of or to affect the meaning or interpretation of this
Agreement;

(xv) any portion of this Agreement obligating a Party to take any action or
refrain from taking any action, as the case may be, shall mean that such Party
shall also be obligated to cause its relevant Subsidiaries to take such action
or refrain from taking such action, as the case may be (and, accordingly, if
Services are provided by Subsidiaries of Marathon Oil, references to “Marathon
Oil” shall be deemed to be references to such Subsidiaries which provide the
Services under this Agreement; if Services are provided by Subsidiaries of
Marathon Petroleum, references to “Marathon Petroleum” shall be deemed to be
references to such Subsidiaries which provide the Services under this
Agreement);

(xvi) unless otherwise specified in this Agreement, all references to dollar
amounts herein shall be in respect of lawful currency of the United States; and

(xvii) the language of this Agreement shall be deemed to be the language the
Parties hereto have chosen to express their mutual intent, and no rule of strict
construction shall be applied against either Party.

 

 

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ARTICLE II

TERM

Section 2.1 Term. The term of this Agreement shall commence on the Distribution
Date and end on the first anniversary of the Distribution Date (the “Term”).

ARTICLE III PERFORMANCE OF SERVICES

Section 3.1 General. (a) During the Term, and subject to the terms and
conditions of this Agreement, Marathon Oil will use commercially reasonable
efforts to provide, or cause to be provided, the Marathon Oil Services to
Marathon Petroleum and its Subsidiaries. Unless specifically provided to the
contrary on Annex B (including any performance standards set forth therein), all
Marathon Oil Services provided pursuant to this Agreement shall be performed or
provided, as applicable: (i) with the use of reasonable care; (ii) consistent
with this Agreement and in substantially the same manner (including as to level,
quality and timeliness) as such Services have been provided to the Marathon
Petroleum Business by the Marathon Oil Parties on or prior to the Distribution
Date (except to the extent that such level of care and diligence will be reduced
by reason of the fact that Marathon Oil is not providing executive management
services to Marathon Petroleum and its Subsidiaries from and after the
Distribution Date); (iii) in material compliance with applicable laws, rules and
regulations; and (iv) with substantially the same priority under comparable
circumstances as it provides such services to itself and its Subsidiaries.

(b) During the Term, and subject to the terms and conditions of this Agreement,
Marathon Petroleum will use commercially reasonable efforts to provide, or cause
to be provided, the Marathon Petroleum Services to Marathon Oil and its
Subsidiaries. Unless specifically provided to the contrary on Annex C (including
any performance standards set forth therein), all Marathon Petroleum Services
provided pursuant to this Agreement shall be performed or provided, as
applicable: (i) with the use of reasonable care; (ii) consistent with this
Agreement and in substantially the same manner (including as to level, quality
and timeliness) as such Services have been provided to the Marathon Oil Business
by the Marathon Petroleum Parties on or prior to the Distribution Date; (iii) in
material compliance with applicable laws, rules and regulations; and (iv) with
substantially the same priority under comparable circumstances as it provides
such services to itself and its Subsidiaries.

(c) Notwithstanding anything to the contrary in this Agreement, neither Marathon
Oil nor Marathon Petroleum (nor any of their respective Subsidiaries) shall be
required to perform Services hereunder or take any actions relating thereto that
conflict with or violate any applicable law, contract, license, sublicense,
authorization, certification or permit.

Section 3.2 Additional Services. (a) If Marathon Petroleum reasonably determines
that additional transition services (not listed on Annex B) of the type
previously provided by the Marathon Oil Parties to the Marathon Petroleum
Business are necessary to conduct the Marathon Petroleum Business and Marathon
Petroleum or its Subsidiaries are not able to provide such services to the
Marathon Petroleum Business, then Marathon Petroleum may provide written notice
thereof to Marathon Oil. Upon receipt of such notice by Marathon Oil, if
Marathon Oil is willing, in its sole discretion, to provide such additional
service during the Term, the Parties will negotiate in good faith an amendment
to Annex B setting forth the additional service (each such service an
“Additional Marathon Oil Service”), the terms and conditions for the provision
of such Additional Marathon Oil Service and the Fees payable by Marathon
Petroleum for such Additional Marathon

 

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Oil Service, such Fees to be determined on an arm’s-length basis with the intent
that they reflect costs.

(b) If Marathon Oil reasonably determines that additional transition Services
(not listed on Annex C) of the type previously provided by the Marathon
Petroleum Parties to the Marathon Oil Business are necessary to conduct the
Marathon Oil Business and Marathon Oil or its Subsidiaries are not able to
provide such services to the Marathon Oil Business, then Marathon Oil may
provide written notice thereof to Marathon Petroleum. Upon receipt of such
notice by Marathon Petroleum, if Marathon Petroleum is willing, in its sole
discretion, to provide such additional service during the Term, the Parties will
negotiate in good faith an amendment to Annex C setting forth the additional
service (each such service an “Additional Marathon Petroleum Service”), the
terms and conditions for the provision of such Additional Marathon Petroleum
Service and the Fees payable by Marathon Oil for such Additional Marathon
Petroleum Service, such Fees to be determined on an arm’s-length basis with the
intent that they reflect costs.

Section 3.3 Procedure. (a) Any requests by a Party to the other Party regarding
(i) the Services or (ii) any modification or alteration to the provision of the
Services must be made by an Authorized Representative (it being understood that
the receiving Party shall not be obligated to agree to any modification or
alteration requested thereby). A Party receiving Services shall provide no less
than 30 days written notice (unless a shorter time is mutually agreed upon by
the Parties) to the other Party of any Services that, prior to the expiration of
the Term, are no longer needed from the other Party, in which case this
Agreement shall terminate as to such Services, provided that the Party providing
such Services must consent to such early termination, such consent not to be
unreasonably withheld, conditioned or delayed (a “Partial Termination”). The
Parties shall mutually agree as to the effective date of any Partial
Termination. In the event of any termination prior to the scheduled expiration
of the Term or of any Partial Termination hereunder, (x) with respect to any
terminated Services in which the Fee for such terminated Services is charged as
a flat monthly rate, if termination occurs other than the end of the month, the
Fee for that month shall be pro rated to reflect a partial month, and (y) with
respect to any other terminated Services, all amounts due pursuant to the terms
hereof with respect to the terminated Services shall be appropriately pro rated
and reduced to reflect such shortened period during which such Services are
actually provided hereunder, and each Party shall refund to the other Party an
appropriate pro rated amount for any such Services that have been paid for by
such other Party in advance. Notwithstanding the immediately preceding sentence,
to the extent any amounts due or advances made hereunder related to costs or
expenses that have been or will be incurred and that cannot be recovered by a
Party providing Services, such amounts due or advances made shall not be pro
rated or reduced and such Party shall not be required to refund to the other
Party any pro rated amount for such costs or expenses; and the terminating Party
shall reimburse the Party providing such Service for any Third-Party
cancellation or similar charges incurred as a result of such early termination.
Notwithstanding anything to the contrary hereunder, each Party may avail itself
of the remedies set forth in Sections 3.4(b) and 10.2 without fulfilling the
notice requirements of this Section 3.3(a).

(b) In the event of a Partial Termination, this Agreement shall remain in full
force and effect with respect to the Services which have not been terminated by
the Parties as provided herein.

(c) Each Party acknowledges and agrees that certain of the Services to be
provided under this Agreement have been, and will continue to be provided (in
accordance with this Agreement) to the Marathon Oil Business or the Marathon
Petroleum Business, as applicable, by Third Parties designated by the Party
responsible for providing such Services hereunder. To the

 

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extent so provided, the Party responsible for providing such Services shall use
commercially reasonable efforts to (a) cause such Third Parties to provide such
Services under this Agreement and/or (b) enable the Party seeking the benefit of
such Services and its Subsidiaries to avail itself of such Services; provided,
however, that if any such Third Party is unable or unwilling to provide any such
Services, the Parties agree to use their commercially reasonable efforts to
determine the manner, if any, in which such Services can best be provided (it
being acknowledged and agreed that any costs or expenses to be incurred in
connection with obtaining a Third Party to provide any such Services shall be
paid by the Party to which such Services are provided; provided that the Party
responsible for providing such Services shall use commercially reasonable
efforts to communicate the costs or expenses expected to be incurred in advance
of incurring such costs or expenses).

Section 3.4 Disclaimer of Warranties: Force Majeure.

(a) Except as expressly set forth in this Agreement: (i) each Party acknowledges
and agrees that the other Party makes no warranties of any kind with respect to
the Services to be provided hereunder; and (ii) each Party hereby expressly
disclaims all warranties, expressed or implied, of any kind with respect to the
Services to be provided hereunder, including any warranty of non-infringement,
merchantability, fitness for a particular purpose or conformity to any
representation or description as to the Services provided hereunder. EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, THE SERVICES TO BE PROVIDED UNDER THIS
AGREEMENT WILL BE PROVIDED AS IS, WHERE IS, WITH ALL FAULTS, AND WITHOUT
WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
NON-INFRINGEMENT, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY
TO ANY REPRESENTATION OR DESCRIPTION, TITLE OR ANY OTHER WARRANTY WHATSOEVER.

(b) If either Party, any of its Subsidiaries or any Third-Party service provider
is prevented from or delayed in complying, either totally or in part, with any
of the terms or provisions of this Agreement by reason of fire, flood, storm,
strike, walkout, lockout or other labor trouble or shortage, delays by
unaffiliated suppliers or carriers, shortages of fuel, power, raw materials or
components, equipment failure, any law, order, proclamation, regulation,
ordinance, demand, seizure or requirement of any Governmental Authority, riot,
civil commotion, war, rebellion, act of terrorism, nuclear or other accident,
explosion, casualty, pandemic, or act of God, or act, omission or delay in
acting by any governmental or military authority or the other Party or any of
its Subsidiaries or any other cause, whether or not of a class or kind listed in
this sentence, beyond the reasonable control and without the fault of the
otherwise defaulting Party, then upon notice to the other Party, the affected
provisions and/or other requirements of this Agreement shall be suspended during
the period of such disability and, unless otherwise set forth herein to the
contrary, the otherwise defaulting Party shall have no liability to the other
Party, its Subsidiaries or any other Person in connection therewith. Each Party
shall use commercially reasonable efforts to promptly remove such disability as
soon as possible; provided, however, that nothing in this Section 3.4(b) will be
construed to require the settlement of any strike, walkout, lockout or other
labor dispute on terms which, in the reasonable judgment of the affected Party,
are contrary to its interest. It is understood that the settlement of a strike,
walkout, lockout or other labor dispute will be entirely within the discretion
of the affected Party. If a Party is unable to provide any of the Services due
to a disability described in the first sentence of this Section 3.4(b), each
Party shall use commercially reasonable efforts to cooperatively seek a solution
that is mutually satisfactory to the Parties. In addition, upon becoming aware
of a disability causing a delay in performance or preventing performance of any
obligations of a Party under this Agreement, the otherwise defaulting Party
shall promptly notify the other Party in writing of the existence of such
disability and the anticipated

 

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duration of the disability. The Party entitled to the benefit of the Services
shall have the right, but not the obligation, to engage subcontractors to
perform such obligations for the duration of the period during which such
disability delays or prevents the performance of such obligation by the
otherwise defaulting Party, it being agreed that the Fees paid or payable under
this Agreement with respect to the Service affected by the disability shall be
reduced (or refunded, if applicable) on a dollar-for-dollar basis for all
amounts paid by the Party entitled to the benefit of the Services to such
subcontractors, provided that the otherwise defaulting Party shall not be
responsible for the amount of fees charged by any such subcontractors to perform
such Services to the extent they exceed the Fees for the applicable period of
disability. Notwithstanding anything to the contrary hereunder, each Party shall
make the mitigation and resolution of any disability affecting its ability to
perform hereunder a high priority and shall use efforts of a type, intensity and
duration which, taking into account the type of Services and the significance of
such Services to the other Party’s business, represent a reasonably appropriate
response to such disability, but in any event no less than commercially
reasonable efforts. In addition and notwithstanding anything hereunder to the
contrary, the Parties agree that this Section 3.4(b) shall not be construed so
as to excuse a Party from complying with any of its obligations under Article
VIII.

Section 3.5 Transition of Responsibilities. Each Party agrees to use
commercially reasonable efforts to reduce or eliminate its and its Subsidiaries’
dependency on each Service as soon as is reasonably practicable. Each Party
agrees to cooperate with the other Party to facilitate the smooth transition of
the Services being provided to such Party by the other Party.

Section 3.5 Employee Status. During the Term of this Agreement:

(i) No employee of a Party shall be deemed an employee of the other Party by
reason of such employee’s involvement in providing Services provided hereunder.
The employing Party shall bear the sole responsibility for payment of each such
employee’s wages, benefits, all withholding obligations to federal, state and
local taxation and insurance authorities and all other costs and expenses
associated with such employees.

(ii) No workers’ compensation insurance shall be obtained by either Party for
the employees of the other Party in connection with the Services provided
hereunder.

(iii) Each Party shall retain control over the time, manner and method of the
employment of its employees. This retained control shall include the right to
review employees’ performance, determine employees’ compensation and benefits,
discipline employees and determine whether or not to continue employees’
employment.

(iv) This Agreement shall not be construed as an agreement granting employees
any employment rights for a specific duration, and shall not constrain a Party’s
right to terminate the employment relationship with any of its employees.

(v) A Party’s employees may be considered for transfers or bids by employees for
positions listed on such Party’s job posting system.

(vi) Each employee shall be entitled to take vacation and other time off in
accordance with the policies of his or her employer, including sick leave and
military leave.

ARTICLE IV

COOPERATION

Section 4.1 Cooperation. Each Party shall, and shall cause its Subsidiaries to,
use good faith efforts

 

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to provide reasonable cooperation to the other Party in all matters relating to
the provision and receipt of the Services, including providing information and
documentation reasonably requested by the other Party, other than information
and documentation protected by attorney-client privilege, sufficient for the
other Party to provide the Services and making available, as reasonably
requested by the other Party, timely decisions, approvals and acceptances in
order that the other Party and its Subsidiaries may perform their respective
obligations under this Agreement in a timely manner.

Section 4.2 Consents. (a) Each Party shall, and shall cause its Subsidiaries to,
provide reasonable cooperation to obtain all Third-Party Consents for any
Third-Party software or other Third-Party intellectual property related to the
provision of the Services sufficient to enable the Parties to perform the
Services in accordance with this Agreement; provided, however, that neither
Party shall be obligated under this Agreement to pay any consideration, grant
any concession or incur any Liability to any Third Party to obtain any such
Third-Party Consent.

(b) In the event that any Third-Party Consent or any Governmental Approval and
Consent required for the provision of Services hereunder is not obtained, then,
unless and until such Third-Party Consent or Governmental Approval and Consent
is obtained, the Parties shall, to the extent practicable, provide reasonable
cooperation to each other in achieving a reasonable alternative arrangement for
the Party entitled to the benefit of the Services to continue to process its
work and for the Party providing the Services to perform such Services.

ARTICLE V

FEES

Section 5.1 Fees. Each Party shall pay the other Party the Fees for the Services
provided by such other Party under this Agreement. The Fees for the Marathon Oil
Services are set forth on Annex B and the Fees for the Marathon Petroleum
Services are set forth on Annex C.

Section 5.2 Taxes. To the extent required or permitted by applicable law, there
shall be added to any Fees due under this Agreement, and each Party agrees to
pay to the other, amounts equal to any taxes, however designated or levied,
based upon such Fees, or upon this Agreement or the Services provided under the
Agreement, or their use, including state and local privilege or excise taxes
based on gross revenue and any taxes or amounts in lieu thereof paid or payable
by the Party providing Services hereunder. In the event taxes are not added to
an invoice from the Party providing Services hereunder, the Party being provided
such Services is responsible to remit to the appropriate tax jurisdiction any
additional amounts due including tax, interest and penalty. The Parties shall
cooperate with each other to minimize any of these taxes to the extent
reasonable. If additional amounts are determined to be due on the Services
provided hereunder as a result of an audit by a tax jurisdiction, the Party
provided the Services hereunder agrees to reimburse the Party who provided the
Services for the additional amounts due including tax, interest and penalty. The
Party obligated to make such reimbursement shall have the right to contest the
assessment with the tax jurisdiction at its own expense. The Party providing
Services hereunder will be responsible for penalty or interest associated with
its failure to remit invoiced taxes. The Parties further agree that,
notwithstanding the foregoing, neither Party shall be required to pay any
franchise taxes, taxes based on the net income of the other Party or personal
property taxes on property owned or leased by a Party and used by such Party to
provide Services. Notwithstanding anything else in this Agreement to the
contrary, the obligations of this Section 5.2 shall remain in effect until the
expiration of the relevant statutes of limitation.

ARTICLE VI

INVOICE AND PAYMENT; AUDIT

 

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Section 6.1 Invoices and Payment. Within 20 days following the end of each month
during the Term (or within 20 days after receipt of a Third Party supplier’s
invoice in the case of Services that are provided by a Third-Party supplier),
each Party will submit to the other Party for payment a written statement of
amounts due under this Agreement for such month. The statement will set forth
the Fees, in the aggregate and itemized, based on the descriptions set forth on
Annex B or Annex C, as the case may be. Each statement will specify the nature
of any amounts due for any Fees as set forth on Annex B or Annex C and will
contain reasonably satisfactory documentation in support of such amounts as
specified therein and such other supporting detail as the other Party may
reasonably require to validate such amounts due.

Section 6.2 Timing of Payment; No Offsets. Each Party will pay all amounts due
pursuant to this Agreement within 10 days after the date upon which each such
statement that is required to be provided hereunder is received by such Party.
Neither Party shall offset any amounts owing to it by the other Party or any of
its Subsidiaries against amounts payable by such Party hereunder or any other
agreement or arrangement. All timely payments under this Agreement shall be made
without early payment discount.

Section 6.3 Non-Payment. If either Party fails to pay the full amount of any
invoice within 30 days after its receipt of the invoice, such failure shall be
considered a material default under this Agreement. The remedies provided to
each Party by this Section 6.3 and by Section 10.2 shall be without limitation
of any other applicable provisions of this Agreement. Payments made after the
date they are due shall bear interest at a rate per annum equal to the Prime
Rate plus 2.0% (compounded monthly).

Section 6.4 Payment Disputes. Either Party may object to any amounts for any
Service invoiced to it at any time before, at the time of, or after payment is
made, provided such objection is made in writing to the other Party within 150
days following the termination of such Service. The disputing Party shall timely
pay the disputed items in full while resolution of the dispute is pending;
provided, however, that the other Party shall pay interest at a rate per annum
equal to the Prime Rate plus 2.0% (compounded monthly) on any amounts it is
required to return to the disputing Party upon resolution of the dispute.
Payment of any amount shall not constitute approval thereof. Any dispute under
this Section 6.4 shall be resolved in accordance with the provisions set forth
in Article XII of the Distribution Agreement.

Section 6.5 Audit Rights. (a) Each Party may, at its own cost and expense, audit
(or cause an independent Third Party auditor to audit) the books, records and
facilities of the other Party to the extent necessary to determine the other
Party’s compliance with this Agreement with respect to Fees paid or payable
pursuant to this Article VI or the performance of its other obligations set
forth in this Agreement. For any given Service, each Party shall have the right
to audit the books, records and facilities of the other Party pertaining to such
Service once for each twelve-month period during which payment obligations are
due (and at such other times as may be required by applicable law); provided,
however, that any such audit shall not be commenced later than 90 days after the
termination of such Service.

(b) Any audit shall be conducted during regular business hours and in a manner
that complies with the building and security requirements of, and does not
unreasonably interfere with the operations of, the Party being audited. Such
audits shall not interfere unreasonably with the operations of the Party being
audited. The Party desiring to conduct an audit shall provide notice to the
Party to be audited not less than 30 days prior to the commencement of the audit
and shall

 

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specify the date on which the audit will commence. If the audit concludes that
an overpayment or underpayment has occurred during the audited period, then the
Party that conducted the audit may raise an objection pursuant to the provisions
of Section 6.4.

ARTICLE VII

INDEPENDENCE; OWNERSHIP OF ASSETS

Section 7.1 Independence. The Parties are independent contractors. All employees
and representatives of a Party and any of its Subsidiaries involved in providing
services shall be under the exclusive direction, control and supervision of the
Party or its Subsidiaries (or their subcontractors) providing such Services, and
not of the Party receiving such Services. In accordance with Section 3.5, the
Party or its Subsidiaries (or their subcontractors) providing the Services will
have the sole right to exercise all authority with respect to the employment
(including termination of employment), assignment and compensation of such
employees and representatives.

Section 7.2 Assets. All procedures, methods, systems, strategies, tools,
equipment, facilities and other resources used by a Party, any of its
Subsidiaries or any Third-Party service provider in connection with the
provision of the Services hereunder shall remain the property of such Party, its
Subsidiaries or such service providers and, except as otherwise provided herein,
shall at all times be under the sole direction and control of such Party, its
Subsidiaries or such Third-Party service provider. No license under any patents,
know-how, trade secrets, copyrights or other rights is granted by this Agreement
or any disclosure in connection with this Agreement by either Party.

ARTICLE VIII

CONFIDENTIALITY

Section 8.1 Confidentiality. Each Party agrees that the specific terms and
conditions of this Agreement and any information conveyed or otherwise received
by or on behalf of a Party in conjunction herewith are confidential and are
subject to the terms of the confidentiality provisions set forth in Section 13.8
of the Distribution Agreement.

Section 8.2 System Security.

(a) If any Party is given access to the other Party’s computer systems or
software (collectively, “Systems”) in connection with the Transition Services,
the Party given access (the “Availed Party”) shall comply with all of the other
Party’s system security policies, procedures and requirements that have been
provided to the Availed Party in advance and in writing (collectively, “Security
Regulations”), and shall not tamper with, compromise or circumvent any security
or audit measures employed by such other Party. The Availed Party shall access
and use only those Systems of the other Party for which it has been granted the
right to access and use.

(b) Each Party shall use commercially reasonable efforts to ensure that only
those of its personnel who are specifically authorized to have access to the
Systems of the other Party gain such access, and use commercially reasonable
efforts to prevent unauthorized access, use, destruction, alteration or loss of
information contained therein, including notifying its personnel of the
restrictions set forth in this Agreement and of the Security Regulations.

(c) If, at any time, the Availed Party determines that any of its personnel has
sought to circumvent, or has circumvented, the Security Regulations, that any
unauthorized Availed Party personnel has accessed the Systems, or that any of
its personnel has engaged in activities that may lead to the unauthorized
access, use, destruction, alteration or loss of data, information or software of
the other Party, the Availed Party shall

 

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promptly terminate any such person’s access to the Systems and promptly notify
the other Party. In addition, such other Party shall have the right to deny
personnel of the Availed Party access to its Systems upon notice to the Availed
Party in the event that the other Party reasonably believes that such personnel
have engaged in any of the activities set forth above in this Section 8.2(c) or
otherwise pose a security concern. The Availed Party shall use commercially
reasonable efforts to cooperate with the other Party in investigating any
apparent unauthorized access to such other Party’s Systems.

ARTICLE IX

NO PARTNERSHIP OR AGENCY RELATIONSHIP

Section 9.1 No Partnership or Agency Relationship. Nothing in this Agreement is
intended or shall be deemed to constitute a partnership, agency, franchise or
joint venture relationship between the Parties or any of their Subsidiaries.
Neither Party shall have power to control the activities and operations of the
other Party or its Subsidiaries, nor to bind or commit the other Party or its
Subsidiaries.

ARTICLE X

TERMINATION

Section 10.1 General. Subject to the provisions of Section 10.4, this Agreement
shall terminate, and the obligation of each Party to provide all Services shall
cease, on the earliest to occur of (i) the date on which the provision of all
Services has been terminated by the Parties pursuant to Section 3.3, subject to
the terms of Section 3.3, or (ii) the date on which the Term of this Agreement
has ended pursuant to Section 2.1 or 10.2.

Section 10.2 Termination of Entire Agreement. Subject to the provisions of
Section 10.4, a Party shall have the right to terminate this Agreement or effect
a Partial Termination effective upon delivery of written notice to the other
Party if the other Party: (a) makes an assignment for the benefit of creditors,
or becomes bankrupt or insolvent, or is petitioned into bankruptcy, or takes
advantage of any state, federal or foreign bankruptcy or insolvency act, or if a
receiver or receiver/manager is appointed for all or any substantial part of its
property and business and such receiver or receiver/manager remains undischarged
for a period of 30 days; or (b) materially defaults in the performance of any of
its covenants or obligations contained in this Agreement (or, in the case of a
Partial Termination, with respect to the Services being terminated) and such
default is not remedied to the nondefaulting Party’s reasonable satisfaction
within 45 days after receipt of written notice by the defaulting Party informing
such Party of such default, or if such default is not capable of being cured
within 45 days, if the defaulting Party has not promptly begun to cure the
default within such 45-day period and thereafter proceeded with all diligence to
cure the same.

Section 10.3 Procedures on Termination. Following any termination of this
Agreement or Partial Termination, each Party will cooperate with the other Party
as reasonably necessary to avoid disruption of the ordinary course of the other
Party’s and its Subsidiaries’ businesses. Termination shall not affect any right
to payment for Services provided prior to termination.

Section 10.4 Effect of Termination. Article V (with respect to Fees and Taxes
attributable to periods prior to termination), Sections 6.1, 6.2, 6.4, 6.5 and
10.3, this Section 10.4 and Articles I, VII, VIII, XI and XII shall survive any
termination of this Agreement. For the avoidance of doubt, neither
(a) termination of a particular Service hereunder nor (b) termination of this
Agreement with respect to the Services provided under one Annex, but not the
other Annex, shall be a termination of this Agreement.

 

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ARTICLE XI

INDEMNIFICATION

Section 11.1 Indemnification by Marathon Petroleum. Marathon Petroleum shall
indemnify, defend and hold harmless each of the Marathon Oil Indemnified Parties
for any Losses and Expenses incurred by them in connection with or arising out
of any: (i) material breach of this Agreement by Marathon Petroleum;
(ii) Marathon Petroleum’s, its Subsidiaries’, employees’, suppliers’ or
contractors’ gross negligence, willful misconduct or bad faith in the provision
of the Marathon Petroleum Services by Marathon Petroleum, its Subsidiaries,
employees, suppliers or contractors pursuant to this Agreement; (iii) any Action
that determines that the provision by any Marathon Petroleum Party and/or the
receipt by any of the Marathon Oil Indemnified Parties of any Marathon Petroleum
Services infringes upon or misappropriates the intellectual property of any
Third Party, to the extent that any such Losses and Expenses are determined to
have resulted from Marathon Petroleum’s, its Subsidiaries’, employees’,
suppliers’ or contractors’ gross negligence, willful misconduct or bad faith;
and (iv) Third-Party claims arising out of the provision of the Marathon Oil
Services, except to the extent that such Third-Party claims for Losses and
Expenses are finally determined by a final non-appealable decision of a court
having jurisdiction over Marathon Petroleum and Marathon Oil or pursuant to
Article XII of the Distribution Agreement to have arisen out of the material
breach of this Agreement, gross negligence willful misconduct or bad faith of
Marathon Oil, its Subsidiaries, employees, suppliers or contractors in providing
the Marathon Oil Services.

Section 11.2 Indemnification by Marathon Oil. Marathon Oil shall indemnify,
defend and hold harmless the Marathon Petroleum Indemnified Parties for any
Losses and Expenses incurred by them in connection with or arising out of:
(i) any material breach of this Agreement by Marathon Oil; (ii) Marathon Oil’s,
its Subsidiaries’, employees’, suppliers’ or contractors’ gross negligence,
willful misconduct or bad faith in the provision of the Marathon Oil Services by
Marathon Oil, its Subsidiaries, employees, suppliers or contractors pursuant to
this Agreement; (iii) any Action that determines that the provision by any
Marathon Oil Party and/or the receipt by any of the Marathon Petroleum
Indemnified Parties of any Marathon Oil Services infringes upon or
misappropriates the intellectual property of any Third Party, to the extent that
any such Losses and Expenses are determined to have resulted from Marathon
Oil’s, its Subsidiaries’, employees’, suppliers’ or contractors’ gross
negligence, willful misconduct or bad faith; and (iv) Third-Party claims arising
out of the provision of the Marathon Petroleum Services, except to the extent
that such Losses and Expenses are finally determined by a final non-appealable
decision of a court having jurisdiction over Marathon Oil and Marathon Petroleum
or pursuant to Article XII of the Distribution Agreement to have arisen out of
the material breach of this Agreement, gross negligence, willful misconduct or
bad faith of Marathon Petroleum, its Subsidiaries, employees, suppliers or
contractors in providing the Marathon Petroleum Services.

Section 11.3 Limitations and Liability. (a) Each Party shall have a duty to
mitigate the Losses and Expenses for which the other is responsible hereunder.
Except for Losses or Expenses arising out of or related to the gross negligence,
willful misconduct or bad faith of the defaulting Party or in respect of Article
VIII, in no event shall a Party’s (including its Subsidiaries’, employees’,
contractors’ or suppliers’) cumulative aggregate liability arising under or in
connection with this Agreement (or the provision of Services hereunder) exceed
the greater of $10,000,000 and the amount of payments due to such Party from the
other Party pursuant to this Agreement. IN NO EVENT SHALL EITHER PARTY OR ANY OF
THEIR RESPECTIVE SUBSIDIARIES BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT,
CONSEQUENTIAL (INCLUDING LOSS OF REVENUES OR PROFITS, LOSS OF DATA, LOSS OF
GOODWILL AND LOSS OF CAPITAL, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY

 

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OF SUCH DAMAGES), EXEMPLARY OR PUNITIVE DAMAGES OR THE LIKE ARISING UNDER ANY
LEGAL OR EQUITABLE THEORY OR ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT
(OR THE PROVISION OF SERVICES HEREUNDER), ALL OF WHICH ARE HEREBY EXCLUDED BY
AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER OR NOT ANY PARTY TO THIS
AGREEMENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS
SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY.

(b) It is not the intent of either Party to receive from the other Party, or any
of its officers, employees, Subsidiaries or representatives, professional
opinions, whether with regard to tax, legal, treasury, finance, employment or
other business and financial matters, or technical advice, whether with regard
to information technology or other matters; neither Party shall rely on, or
construe, any Service provided to it as such professional advice or opinions or
technical advice; and each Party shall seek all third-party professional advice
and opinions or technical advice as it may desire or need in connection with its
business and operations.

Section 11.4 Indemnification Is Exclusive Remedy. Except for equitable relief
and rights pursuant to Section 5.2, Section 6.3 or Article VIII, the
indemnification provisions of this Article XI shall be the exclusive remedy for
breach of this Agreement.

Section 11.5 Risk Allocation. Each Party agrees that the Fees charged under this
Agreement reflect the allocation of risk between the Parties, including the
disclaimer of warranties in Section 3.4(a) and the limitations on liability in
Section 11.3. Modifying the allocation of risk from what is stated here would
affect the Fees that each Party charges, and in consideration of those Fees,
each Party agrees to the stated allocation of risk.

Section 11.6 Indemnification Procedures. All claims for indemnification pursuant
to this Article XI shall be made in accordance with the provisions set forth in
Sections 11.2 and 11.3 of the Distribution Agreement. Notwithstanding anything
to the contrary hereunder, no cause of action, dispute or claim for
indemnification may be asserted against either Party or submitted to arbitration
or legal proceedings which accrued more than two years after the later of
(a) the occurrence of the act or event giving rise to the underlying cause of
action, dispute or claim and (b) the date on which such act or event was, or
should have been, in the exercise of reasonable due diligence, discovered by the
Party asserting the cause of action, dispute or claim.

Section 11.7 Express Negligence. THE INDEMNITY, RELEASES AND LIMITATIONS OF
LIABILITY IN THIS AGREEMENT (INCLUDING ARTICLES III AND THIS ARTICLE XI) ARE
INTENDED TO BE ENFORCEABLE AGAINST THE PARTIES IN ACCORDANCE WITH THE EXPRESS
TERMS AND SCOPE THEREOF NOTWITHSTANDING ANY EXPRESS NEGLIGENCE RULE OR ANY
SIMILAR DIRECTIVE THAT WOULD PROHIBIT OR OTHERWISE LIMIT INDEMNITIES BECAUSE OF
THE NEGLIGENCE OR GROSS NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT OR ACTIVE
OR PASSIVE) OR OTHER FAULT OR STRICT LIABILITY OF ANY OF THE INDEMNIFIED
PARTIES.

ARTICLE XII

MISCELLANEOUS

Section 12.1 Entire Agreement. This Agreement, including the Annexes hereto and
the sections of the Distribution Agreement referenced herein, constitutes the
entire agreement between the Parties with respect to the subject matter of this
Agreement, and supersedes all prior

 

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agreements, negotiations, discussions, understandings and commitments, written
or oral, between the Parties with respect to such subject matter.

Section 12.2 Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISION OR RULE THEREOF THAT WOULD
RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.

Section 12.3 Amendment. This Agreement shall not be amended, modified or
supplemented except by a written instrument signed by an authorized
representative of each of Marathon Oil and Marathon Petroleum.

Section 12.4 Waiver. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the Party or Parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently given
for the purposes of this Agreement if, as to either Party, it is in writing
signed by an authorized representative of such Party. The failure of either
Party to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision, or in any way to affect the validity
of this Agreement or any part hereof or the right of either Party thereafter to
enforce each and every such provision. No waiver of any breach of this Agreement
shall be held to constitute a waiver of any other or subsequent breach.

Section 12.5 Partial Invalidity. Wherever possible, each provision hereof shall
be interpreted in such a manner as to be effective and valid under applicable
law, but in case any one or more of the provisions contained herein shall, for
any reason, be held to be invalid, illegal or unenforceable in any respect, such
provision or provisions shall be ineffective to the extent, but only to the
extent, of such invalidity, illegality or unenforceability without invalidating
the remainder of such provision or provisions or any other provisions hereof,
unless such a construction would be unreasonable.

Section 12.6 Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original instrument, but all
of which shall be considered one and the same agreement, and shall become
binding when one or more counterparts have been signed by and delivered to each
of the Parties.

Section 12.7 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties and their successors and permitted assigns;
provided, however, that the rights and obligations of either Party under this
Agreement shall not be assignable by such Party without the prior written
consent of the other Party. The successors and permitted assigns hereunder shall
include any permitted assignee as well as the successors in interest to such
permitted assignee (whether by merger, liquidation (including successive mergers
or liquidations) or otherwise).

Section 12.8 Third-Party Beneficiaries. Except to the extent otherwise provided
in Article XI and Section 12.12, the provisions of this Agreement are solely for
the benefit of the Parties and their respective Subsidiaries, successors and
permitted assigns and shall not confer upon any Third Party any remedy, claim,
liability, reimbursement or other right in excess of those existing without
reference to this Agreement.

Section 12.9 Notices. All notices or other communications under this Agreement
shall be in writing and shall be deemed to be duly given when delivered or
mailed in accordance with the provisions of Section 14.9 of the Distribution
Agreement.

 

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Section 12.10 Performance. Each Party shall cause to be performed, and hereby
guarantees the performance of, all actions, agreements and obligations set forth
herein to be performed by any Subsidiary of such Party.

Section 12.11 No Public Announcement. Neither Marathon Oil nor Marathon
Petroleum shall, without the approval of the other, make any press release or
other public announcement concerning the transactions contemplated by this
Agreement, except as and to the extent that either Party shall be so obligated
by law or the rules of any regulatory body, stock exchange or quotation system,
in which case the other Party shall be advised and the Parties shall use
commercially reasonable efforts to cause a mutually agreeable release or
announcement to be issued; provided, however, that the foregoing shall not
preclude communications or disclosures necessary to implement the provisions of
this Agreement or to comply with applicable law, accounting and SEC disclosure
obligations or the rules of any stock exchange.

Section 12.12 Limited Liability. Notwithstanding any other provision of this
Agreement, no individual who is a stockholder, director, employee, officer,
agent or representative of Marathon Petroleum or Marathon Oil, in such
individual’s capacity as such, shall have any liability in respect of or
relating to the covenants or obligations of such Party under this Agreement and,
to the fullest extent legally permissible, each of Marathon Petroleum and
Marathon Oil, for itself and its respective stockholders, directors, employees,
officers and Subsidiaries, waives and agrees not to seek to assert or enforce
any such liability that any such Person otherwise might have pursuant to
applicable law.

Section 12.13 Dispute Resolution. The Parties agree that any dispute,
controversy or claim between them with respect to the matters covered hereby
shall be governed by and resolved in accordance with the procedures set forth in
Article XII of the Distribution Agreement.

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
authorized representatives as of the date first above written.

 

MARATHON OIL CORPORATION By:  

/s/ Clarence P. Cazalot, Jr.

  Name: Clarence P. Cazalot, Jr.   Title: President and Chief Executive Officer
MARATHON PETROLEUM CORPORATION By:  

/s/ G. R. Heminger

  Name: G. R. Heminger   Title: President

 

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