Document:

Exhibit 10.1

 

EXECUTION COPY

 

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”).

 

 

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.

 

2

 

“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 Riley Stoker 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.

 

4

 

“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.

 

5

 

“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

 

6

 

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.

 

7

 

“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

 

8

 

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 & Moore LLP and Miller
& Chevalier 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.

 

9

 

“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.

 

10

 

(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.  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:

 

11

 

(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)

 

12

 

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 the

 

13

 

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

 

14

 

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

 

15

 

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

 

16

 

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

 

17

 

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. Paul 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.

 

18

 

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

 

19

 

Inc. 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.

 

20

 

(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.

 

21

 

(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 & Moore 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

 

22

 

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

 

23

 

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

 

24

 

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.

 

25

 

(B) If New
Ashland Inc. has a credit rating provided by Moody’s 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 Moody’s or Standard & Poor (or successors thereto), New
Ashland Inc. will obtain, at its own cost, from Moody’s 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

 

26

 

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.

 

27

 

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.

 

28

 

(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 receivables except for sales of 

 

29

 

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

 

30

 

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

 

31

 

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

 

32

 

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

 

33

 

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.

 

34

 

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.

 

35

 

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.

  
	
  50 E.
  RiverCenter Boulevard

  
	
  Covington,
  KY 41012-0391

  
	
   

  	
   

  
	
   

  	
  Attention:  J.
  Marvin Quin

  
	
   

  	
   

  	
  David L.
  Hausrath, Esq.

  
	
   

  	
   

  
	
   

  	
  Facsimile:  (859)
  815-5053

  
	
   

  	
   

  
	
   

  	
  with a copy
  to:

  
	
   

  	
   

  
	
   

  	
  Cravath,
  Swaine & Moore LLP

  
	
   

  	
  Worldwide
  Plaza

  
	
   

  	
  825 Eighth
  Avenue

  
	
   

  	
  New York, NY
  10019-7474

  
	
   

  	
  Attention:  Stephen
  L. Gordon, Esq.

  
	
   

  
	
  if to the
  Marathon Parties, to:

  
	
   

  
	
  Marathon Oil
  Corporation

  
	
  5555 San
  Felipe Road

  
	
  Houston, TX
  77056

  
	
   

  
	
   

  	
  Attention:  Raja
  Sahni

  
	
   

  	
   

  	
  Richard L.
  Horstman, Esq.

  
	
   

  	
   

  
	
   

  	
  Facsimile:  (713)
  513-4172

  
	
   

  	
   

  
	
   

  	
  with copies
  to:

  
	
   

  	
   

  
	
   

  	
  Baker Botts
  L.L.P.

  
	
   

  	
  One Shell
  Plaza

  
	
   

  	
  Houston, TX
  77002-4995

  
	
   

  	
  Attention:  Theodore
  W. Paris, Esq.

  

 

36

 

	
   

  	
  Miller &
  Chevalier Chartered

  
	
   

  	
  655
  Fifteenth Street, N.W.

  
	
   

  	
  Washington,
  DC 20005-5701

  
	
   

  	
  Attention:  Daniel
  W. Luchsinger, 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.

 

37

 

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

 

38

 

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.

 

39

 

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/
  James J. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
    James
  J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
    Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ATB HOLDINGS
  INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  James J. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
    James
  J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
    President

  
	
   

  	
   

  	
   

  
	
   

  	
  EXM LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
    ATB
  HOLDINGS INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  James J. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
    James
  J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
    President

  
	
   

  	
   

  	
   

  
	
   

  	
    NEW
  EXM INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  James J. O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
    James
  J. O’Brien

  
	
   

  	
   

  	
  Title:

  	
    President

  
					

 

40

 

	
   

  	
  MARATHON OIL
  CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  Clarence P. Cazalot, Jr.

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Clarence
  P. Cazalot, Jr.

  
	
   

  	
   

  	
  Title:

  	
    President
  & Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  MARATHON OIL
  COMPANY,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  Clarence P. Cazalot, Jr.

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Clarence
  P. Cazalot, Jr.

  
	
   

  	
   

  	
  Title:

  	
    President

  
	
   

  	
   

  	
   

  
	
   

  	
  MARATHON
  DOMESTIC LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MARATHON OIL
  CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  Clarence P. Cazalot, Jr.

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Clarence
  P. Cazalot, Jr.

  
	
   

  	
   

  	
  Title:

  	
    President
  & Chief Executive

    Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MARATHON
  ASHLAND PETROLEUM

  LLC,

  
	
   

  	
   

  	
   

  
	
   

  	
    by

  	
   /s/
  Gary R. Heminger

  	
   

  
	
   

  	
   

  	
  Name:

  	
    Gary
  R. Heminger

  
	
   

  	
   

  	
  Title:

  	
    President

  
							

 

41Exhibit 10.2

 

EXECUTION COPY

 

 

ASSIGNMENT AND
ASSUMPTION AGREEMENT

(VIOC CENTERS)

 

 

Dated as of March 18,
2004,

 

 

Between

 

 

ASHLAND INC.

 

 

And

 

 

ATB HOLDINGS INC.

 

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  VIOC Assignment and Assumption

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01.

  	
  VIOC Assignment and Assumption

  	
   

  
	
  SECTION 1.02.

  	
  Transferred Assets and Excluded Assets

  	
   

  
	
  SECTION 1.03.

  	
  Assumption of Certain Liabilities

  	
   

  
	
  SECTION 1.04.

  	
  Consents of Third Parties

  	
   

  
	
  SECTION 1.05.

  	
  Tax Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
  The
  Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Closing Date

  	
   

  
	
  SECTION 2.02.

  	
  Transactions To Be Effected at the Closing

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  Representations and Warranties of Ashland

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Financial Statements

  	
   

  
	
  SECTION 3.02.

  	
  Assets Other than Real Property Interests

  	
   

  
	
  SECTION 3.03.

  	
  Real Property

  	
   

  
	
  SECTION 3.04.

  	
  [Intentionally Omitted].

  	
   

  
	
  SECTION 3.05.

  	
  Contracts

  	
   

  
	
  SECTION 3.06.

  	
  Permits

  	
   

  
	
  SECTION 3.07.

  	
  Condition of Transferred Assets

  	
   

  
	
  SECTION 3.08.

  	
  Claims

  	
   

  
	
  SECTION 3.09.

  	
  Benefit Plans

  	
   

  
	
  SECTION 3.10.

  	
  Absence of Changes or Events

  	
   

  
	
  SECTION 3.11.

  	
  Compliance with Laws

  	
   

  
	
  SECTION 3.12.

  	
  Employee and Labor Matters

  	
   

  
	
  SECTION 3.13.

  	
  Sufficiency of Transferred Assets

  	
   

  
	
  SECTION 3.14.

  	
  Inventory

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Covenants of Ashland Relating to Conduct of
  VIOC Centers

  	
   

  
	
  SECTION 4.02.

  	
  Refunds and Remittances

  	
   

  

 

 

	
  SECTION 4.03.

  	
  Employee Matters

  	
   

  
	
  SECTION 4.04.

  	
  Post-Closing Information

  	
   

  
	
  SECTION 4.05.

  	
  Records

  	
   

  
	
  SECTION 4.06.

  	
  [Intentionally Omitted].

  	
   

  
	
  SECTION 4.07.

  	
  Bulk Transfer Laws

  	
   

  
	
  SECTION 4.08.

  	
  Supplies

  	
   

  
	
  SECTION 4.09.

  	
  Mail

  	
   

  
	
  SECTION 4.10.

  	
  Further Assurances

  	
   

  
	
  SECTION 4.11.

  	
  Review of Contracts

  	
   

  
	
  SECTION 4.12.

  	
  List of Permits

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Termination

  	
   

  
	
  SECTION 5.02.

  	
  Effect of Termination

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
  General Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Interpretation; VIOC Centers Disclosure
  Letter; Certain Definitions

  	
   

  
	
  SECTION 6.02.

  	
  Counterparts

  	
   

  
	
  SECTION 6.03.

  	
  Severability

  	
   

  
	
  SECTION 6.04.

  	
  Governing Law

  	
   

  
	
  SECTION 6.05.

  	
  No Third-Party Beneficiaries

  	
   

  
	
  SECTION 6.06.

  	
  Amendment

  	
   

  
	
   

  	
   

  
	
  Exhibit A-1

  	
  Form of Deed (VIOC Centers) (Ohio)

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A-2

  	
  Form of Deed (VIOC Centers) (Michigan)

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
  Form of Assignment and Assumption (VIOC
  Centers)

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
  Form of Blanket License Agreement

  	
   

  
				

 

ii

 

INDEX OF DEFINED TERMS

 

	
  Term

  	
   

  	
  Section

  
	
  Active VIOC Centers
  Employee

  	
   

  	
  4.03(a)

  
	
  Agreement

  	
   

  	
  Preamble

  
	
  Ashland

  	
   

  	
  Preamble

  
	
  Ashland Insurance
  Policies

  	
   

  	
  4.01(c)

  
	
  Ashland Joint
  Contracts

  	
   

  	
  4.11

  
	
  Assigned Contracts

  	
   

  	
  1.02(a)(v)

  
	
  Assigned Permits

  	
   

  	
  1.02(a)(iv)

  
	
  Assumed Liabilities

  	
   

  	
  1.03(a)

  
	
  Balance Sheet

  	
   

  	
  3.01

  
	
  Blanket License
  Agreement

  	
   

  	
  6.01(b)

  
	
  Claim

  	
   

  	
  1.03(b)(iv)

  
	
  COBRA

  	
   

  	
  4.03(b)(ii)

  
	
  Contracts

  	
   

  	
  1.02(a)(v)

  
	
  Employee Benefits
  Liability

  	
   

  	
  3.09(b)

  
	
  Environmental Claim

  	
   

  	
  3.11(b)

  
	
  Environmental Laws

  	
   

  	
  3.11(b)

  
	
  Environmental
  Liability

  	
   

  	
  6.01(b)

  
	
  Environmental Tests

  	
   

  	
  1.03(b)(ix)

  
	
  ERISA

  	
   

  	
  3.09(a)

  
	
  Excluded Assets

  	
   

  	
  1.02(b)

  
	
  Financial Statements

  	
   

  	
  3.01

  
	
  Hazardous Materials

  	
   

  	
  3.11(b)

  
	
  HoldCo

  	
   

  	
  Preamble

  
	
  HoldCo Retirement Plan

  	
   

  	
  4.03(d)

  
	
  HoldCo VIOC Welfare
  Plans

  	
   

  	
  4.03(b)(i)

  
	
  Intellectual Property

  	
   

  	
  6.01(b)

  
	
  Inventory

  	
   

  	
  1.02(a)(ii)

  
	
  Leased Property

  	
   

  	
  3.03(a)

  
	
  Master Agreement

  	
   

  	
  Recitals

  
	
  Owned Property

  	
   

  	
  3.03(a)

  
	
  Permits

  	
   

  	
  4.12

  
	
  Permitted Liens

  	
   

  	
  6.01(b)

  
	
  Premises

  	
   

  	
  1.02(a)(i)

  
	
  Receivables

  	
   

  	
  1.02(b)(xvi)

  
	
  Records

  	
   

  	
  1.02(a)(vii)

  
	
  Release

  	
   

  	
  3.11(b)

  
	
  Retained Liabilities

  	
   

  	
  1.03(b)

  
	
  Rev. Proc. 96-60

  	
   

  	
  4.03(f)

  
	
  Technology

  	
   

  	
  1.02(b)(xii)

  
	
  Transferred Assets

  	
   

  	
  1.02(a)

  
	
  Transferred VIOC
  Centers Employee

  	
   

  	
  4.03(a)

  
	
  VIOC Assignment and
  Assumption

  	
   

  	
  1.01

  
	
  VIOC Benefit Plans

  	
   

  	
  3.09(a)

  
	
  VIOC Centers

  	
   

  	
  6.01(b)

  

 

 

	
  Term

  	
   

  	
  Section

  
	
  VIOC Centers
  Disclosure Letter

  	
   

  	
  Article III

  
	
  VIOC Centers Employee

  	
   

  	
  3.09(a)

  
	
  VIOC Centers Material
  Adverse Effect

  	
   

  	
  6.01(b)

  
	
  VIOC Pension Plans

  	
   

  	
  3.09(a)

  

 

ii

 

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

 

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

 

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

 

NOW, THEREFORE, the parties hereto agree as
follows:

 

ARTICLE I

 

VIOC Assignment and Assumption

 

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

 

SECTION 1.02. Transferred
Assets and Excluded Assets. 
(a)  The term “Transferred Assets”
means all of 

 

 

Ashland’s
right, title and interest in, to and under the following assets, other than the
Excluded Assets (as defined in Section 1.02(b)):

 

(i) all real property, leaseholds and other interests (including
interests in surface rights and mineral interests) in the real property listed
in Section 3.03 of the VIOC Centers Disclosure Letter (as defined in
Article III), in each case together with Ashland’s right, title and
interest in all buildings, structures, improvements, paved parking lots and
fixtures thereon and all other appurtenances thereto (collectively, the “Premises”);

 

(ii) all salable lube oils, greases, automotive fluids, automotive
accessories (including filters), supplies, parts, spare parts and other
inventories of Ashland that on the Closing Date are located on or are in
transit to the Premises (collectively, the “Inventory”);

 

(iii) all other tangible personal property and interests therein,
including all machinery, equipment, tools, appliances, telephones,
telecommunications equipment, copy machines, fax machines, computers, hardware
that accesses point-of-sale systems, cash registers, implements, furniture,
furnishings and fixtures, of Ashland that on the Closing Date are located on or
are in transit to the Premises (other than signs and other identification items
and materials, including all exterior pylon, monument, ground and building
signs and all interior signs, banners and reading boards, in each case that
customarily are owned by Ashland (and not by the franchisee) at its franchised
Valvoline Instant Oil Change (VIOC) quick-lube service centers), in each case
together with any rights or claims of Ashland arising out of the breach of any
express or implied warranty by the manufacturers or sellers of such assets;

 

(iv) to the extent that such Permits (as defined in Section 4.12)
are transferable, all Permits of Ashland that are used, held for use or
intended to be used exclusively in the operation or conduct of the VIOC Centers
(the “Assigned Permits”);

 

2

 

(v) (A) all contracts, leases, subleases, licenses, indentures,
agreements, commitments and all other legally binding arrangements (“Contracts”),
whether oral or written, to which Ashland is a party or by which Ashland is
bound as of the date of this Agreement that are (1) listed in
Sections 3.03 or 3.05 of the VIOC Centers Disclosure Letter or (2) of the
type specified in any of clauses (i) through (xi) of Section 3.05 but, as
a result of the application of any applicable thresholds set forth therein, are
not required to be listed in Section 3.05 of the VIOC Centers Disclosure
Letter, (B) all other written Contracts (including purchase orders and sales
orders) to which Ashland is a party or by which Ashland is bound, in the case
of this clause (B) that are entered into after the date of this Agreement, but
not in violation or breach of any provision of this Agreement, and that
exclusively relate to, or that arise exclusively out of, the operation or
conduct of the VIOC Centers in the ordinary course of business and (C) all
Contracts to which Ashland is a party or by which Ashland is bound, in the case
of this clause (C) that are entered into after the date of this Agreement and
that are to be treated as Assigned Contracts pursuant to Section 4.11 (the
“Assigned Contracts”);

 

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

 

(vii) all books of account, ledgers, general, financial, accounting and
personnel records, files, invoices, suppliers’ lists, billing records, sales
and promotional literature, supplier correspondence, sales records, credit data
and other information relating to present or past customers, cost and pricing
information, equipment maintenance data, purchasing records and information,
business plans, payroll and personnel records, purchase orders, sales forms,
artwork, photography, log books, environmental, health and safety schedules,
reports, protocols and findings pertaining to the VIOC Centers or the
Transferred Assets (including records of spills or other releases

 

3

 

or discharges into the atmosphere, records of environmental, safety or
health reports to or from Governmental Entities regarding the VIOC Centers or
the Transferred Assets (including notices of violation), and correspondence,
notices and orders of an environmental, safety or health nature regarding the
VIOC Centers or the Transferred Assets) and other similar property, rights and
information of Ashland, in each case that are used, held for use or intended to
be used exclusively in, or that arise exclusively out of, the operation or
conduct of the VIOC Centers (the “Records”); provided, however,
that the Records shall not include any property, rights or information of
Ashland that will be licensed to Merger Sub pursuant to the Blanket License
Agreement (as defined in Section 6.01(b));

 

(viii) all goodwill and going concern value of Ashland generated
exclusively by, or associated exclusively with, the VIOC Centers; and

 

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

 

(b)  The term “Excluded Assets” means:

 

(i) all assets identified in Section 1.02(b) of the VIOC Centers
Disclosure Letter;

 

(ii) all cash and cash equivalents of Ashland;

 

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

 

(iv) all collective bargaining agreements and other Contracts with any
labor union that cover one or more Active VIOC Centers Employees (as defined in

 

4

 

Section 4.03(a)) and all Contracts relating to compensation, bonus
or severance to which any Active VIOC Centers Employee or any person hired to
become a VIOC Centers Employee (as defined in Section 3.09(a)) is a party;

 

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

 

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

 

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

 

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

 

(ix) the names and marks “Ashland”, “V Valvoline Instant Oil Change®
and design”, “Valvoline®”, “V®”, “Valvoline Instant Oil Change®”, “Instant
Oil®”, “MVP® and Design” and “MVP Maximum Vehicle Performance® and Design” (in
any style or design), and any other name or mark either derived from or
including any portion of the foregoing or otherwise used in the operation or
conduct of the VIOC Centers;

 

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

 

(xi) all financial and tax records relating to the VIOC Centers to the
extent they form part of Ashland’s general ledger;

 

(xii) all trade secrets, confidential information and inventions, and
all proprietary formulae, processes, procedures, research records, records of
inventions, test information, operating systems, operating manuals, market
surveys and marketing know-how of Ashland that are used, held for use or
intended to be used in the operation or conduct of the VIOC Centers, including
the System (as defined in the form of License Agreement attached to the Blanket
License Agreement and incorporated by reference therein) (the “Technology”);

 

5

 

(xiii) all Intellectual Property (as defined in Section 6.01(b))
of Ashland that is used, held for use or intended to be used in the operation
or conduct of the VIOC Centers;

 

(xiv) all signs and other identification items and materials, including
exterior pylon, monument, ground and building signs and all interior signs,
banners and reading boards, in each case that customarily are owned by Ashland
(and not by the franchisee) at its franchised Valvoline Instant Oil Change
(VIOC) quick-lube service centers;

 

(xv) prepaid insurance premiums; and

 

(xvi) all accounts receivable of Ashland as of the close of business on
the Closing Date that arise out of the operation or conduct of the VIOC Centers
(the “Receivables”).

 

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

 

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

 

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

 

(iii) all Environmental Liabilities (as defined in
Section 6.01(b)) of Ashland to the extent they arise out of both (A) the
operation of any of the Transferred Assets or the operation or conduct of the
VIOC Centers and (B) either (x) events occurring or

 

6

 

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

 

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

  	
   

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

  
	
   

  	
   

  	
   

  
	
  First through Fifth

  	
   

  	
  0%

  
	
   

  	
   

  	
   

  
	
  Sixth

  	
   

  	
  20%

  
	
   

  	
   

  	
   

  
	
  Seventh

  	
   

  	
  40%

  

 

7

 

	
  Eighth

  	
   

  	
  60%

  
	
   

  	
   

  	
   

  
	
  Ninth

  	
   

  	
  80%

  
	
   

  	
   

  	
   

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

  	
   

  	
  100%

  

 

; and

 

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

 

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

 

(i) any liability, obligation or commitment of Ashland to the extent
arising out of the operation or conduct by Ashland or any of its affiliates of
any business other than the VIOC Centers;

 

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

 

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

 

8

 

obligation or commitment relates to the period prior to the Closing;

 

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

 

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

 

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

 

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

 

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

 

(ix) any Environmental Liability arising out of events occurring or circumstances
or conditions arising prior to the Closing except for Environmental Liabilities
that are Assumed Liabilities pursuant to Section 1.03(a)(iii); provided,
however, an Environmental Liability that otherwise would be considered a
Retained Liability under this Section 1.03(b)(ix) shall be an Assumed
Liability and shall not be a Retained Liability if the event, circumstance or
condition that gave rise to such Environmental Liability (A) is the result of a
change in use after the Closing Date of any of the Premises to a use other than
a commercial use of such Premises similar to its current use, or (B) was
discovered as a result of a Phase II or other intrusive sampling, testing or
investigation conducted after the Closing Date (collectively, “Environmental
Tests”) except for

 

9

 

Environmental Tests undertaken (x) to respond to, investigate, or
otherwise remediate environmental conditions or contamination that are on the
Closing Date in violation of the standards imposed by applicable Environmental
Laws (as defined in Section 3.11(b)), (y) as required by Environmental
Laws, pursuant to the terms of any lease with respect to any of the Premises or
in response to an inquiry, request, claim or demand by a Governmental Entity or
as a reasonable response to any claim or demand by any other person that is not
an affiliate of HoldCo or (z) in connection with a condition first discovered
as a result of construction activities, excluding construction activities relating
to the installation of underground storage tanks, commencing after the Closing
Date at, on or beneath any of the Premises, so long as such construction
activities are undertaken in connection with a commercial use of such Premises
similar to its current use.

 

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

 

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

 

10

 

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

 

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

 

11

 

SECTION 1.05. Tax
Matters.  Notwithstanding anything
to the contrary in this Agreement, the rights, responsibilities and obligations
of the parties with respect to any Taxes or Tax Items (in each case as defined
in the Tax Matters Agreement) related to or arising from the ownership or
operation of the VIOC Centers shall be determined pursuant to the Tax Matters
Agreement.

 

ARTICLE II

 

The Closing

 

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

 

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

 

(a) Ashland shall deliver to HoldCo an executed deed (in recordable
form) with respect to each of the Owned Properties (as defined in
Section 3.03(a)) located in Ohio, substantially in the form attached
hereto as Exhibit A-1, and an executed deed (in recordable form) with respect
to each of the Owned Properties located in Michigan, substantially in the form
attached hereto as Exhibit A-2;

 

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

 

(c) The parties thereto shall enter into the Blanket License Agreement.

 

ARTICLE III

 

Representations and Warranties of Ashland

 

Ashland hereby represents and warrants to
HoldCo that, as of the date of this Agreement and as of the Closing Date as if
made on the Closing Date (except to the extent any such representations and
warranties expressly

 

12

 

relate to an earlier
date, in which case as of such earlier date), except as set forth in
the letter referencing
this Agreement, dated as of the date of this Agreement, from Ashland to HoldCo
(the “VIOC Centers Disclosure Letter”):

 

SECTION 3.01. Financial
Statements.  Section 3.01 of
the VIOC Centers Disclosure Letter sets forth the unaudited combined statement
of tangible assets to be sold as of September 30, 2003 (the “Balance
Sheet”), the unaudited combined statement of tangible assets to be sold as
of December 31, 2003, the unaudited combined statement of income
before taxes for the year ended September 30, 2003 and the unaudited
combined statement of income before taxes for the three months ended
December 31, 2003, together with the notes to such financial statements,
in each case of the VIOC Centers (such financial statements and the notes
thereto, the “Financial Statements”). 
The Financial Statements present fairly, in all material respects, the
tangible assets to be sold and income before taxes of the VIOC Centers as of
the dates and for the periods indicated, in conformity with GAAP (subject, in
the case of the interim financial statements as of and for the period ended
December 31, 2003, to normal, recurring year-end adjustments).

 

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

 

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

 

13

 

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

 

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

 

SECTION 3.04. [Intentionally
Omitted].

 

SECTION 3.05. Contracts.  (a) 
Except for Contracts that will not be binding on the Transferred Assets
or any of the VIOC Centers after the Closing, Ashland is not a party to or
bound by any Contract that is used, held for use or intended to be used
exclusively in, or that arises exclusively out of, the operation or conduct of
the VIOC Centers (other than (x) the Transaction Agreements and the
Ancillary Agreements and (y) Assigned Contracts entered into after the
date of this Agreement in the ordinary course of business and not otherwise in
violation of this Agreement) that is:

 

(i) a covenant not to compete (other than pursuant to the radius
restrictions contained in the agreements listed in Section 3.05(a)(i) of
the VIOC Centers Disclosure Letter) that limits the conduct of business at any
of the VIOC Centers as presently conducted;

 

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

 

14

 

(iii) a lease, sublease or similar Contract with any person under which
Ashland is a lessor or sublessor of, or makes available for use to any person,
all or any portion of the Premises in any such case that has an aggregate
future receivable in excess of $50,000 and is not terminable by Ashland by
notice of not more than 30 days without payment or penalty of any kind;

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

(b)  All Contracts listed in the VIOC Centers
Disclosure Letter are valid, binding and in full force and effect and are
enforceable by Ashland in accordance with their terms subject, as to
enforcement, to applicable bankruptcy, insolvency, moratorium, reorganization or
similar laws affecting creditors’ rights generally and to equitable principles
of general applicability, except for such failures to be valid, binding, in
full force and effect or enforceable that have not had and would not reasonably
be expected to have a VIOC Centers Material Adverse Effect (as defined in
Section 6.01(b)).  Ashland has performed
all obligations required to be performed by

 

16

 

it to date
under the Assigned Contracts, and it is not in breach or default thereunder
and, to the knowledge of Ashland, no other party to any Assigned Contract is in
breach or default thereunder, in each case except for such noncompliance,
breaches and defaults that have not had and would not reasonably be expected to
have a VIOC Centers Material Adverse Effect. 
Ashland has not received any notice of the intention of any party to
terminate any Assigned Contract listed in any section of the VIOC Centers
Disclosure Letter.

 

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

 

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

 

SECTION 3.07. Condition
of Transferred Assets.  The
Transferred Assets are in good operating condition and repair (ordinary wear
and tear excepted) and are suitable for their current uses, except where the
failure of the Transferred Assets to be in good operating condition or

 

17

 

repair or to
be suitable for such uses would not reasonably be expected to have a VIOC
Centers Material Adverse Effect.

 

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

 

SECTION 3.09. Benefit
Plans.  (a)  Section 3.09 of the VIOC Centers
Disclosure Letter contains a list of all “employee pension benefit plans” (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”)), maintained or contributed to by Ashland for
the benefit of any officers or employees of the VIOC Centers (“VIOC Pension
Plans”) and all “employee welfare benefit plans” (as defined in Section 3(1)
of ERISA), bonus, stock option, stock purchase, deferred compensation plans or
arrangements and other employee fringe benefit plans maintained, or contributed
to, by Ashland or any of its affiliates for the benefit of one or more current
or former employees of the VIOC Centers (other than any former employee of the
VIOC Centers who became employed by MAP or any of its subsidiaries following
termination of employment with Ashland or any of its affiliates) (each, a “VIOC
Centers Employee”) (all the foregoing, including VIOC Pension Plans, being
herein called “VIOC Benefit Plans”). 
Ashland has provided to Marathon true, complete and correct copies of
(i) each VIOC Benefit Plan (or, in the case of any unwritten VIOC Benefit
Plans, fair and accurate summary descriptions thereof), (ii) the two most
recent annual reports on Form 5500 filed with the Internal Revenue Service with
respect to each VIOC Benefit Plan (if any such report was required), (iii) the
most recent summary plan description for each VIOC Benefit Plan for which such
a summary plan description is required and (iv) each trust agreement, group
annuity contract or other funding and financing arrangement relating to any
VIOC Benefit Plan.

 

(b)  There does not exist as of the date of this
Agreement, nor do any circumstances exist as of the date of

 

18

 

this Agreement
that would reasonably be expected to result in, any Employee Benefits Liability
(as defined below), whether under any VIOC Benefit Plan or otherwise, that
would reasonably be expected to become a liability of HoldCo or any of its
affiliates at or after the Closing.  “Employee
Benefits Liability” means any liability of Ashland or any entity required
to be treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code with Ashland prior to the Closing under (i) Sections 302, 405, 409
or Title IV of ERISA, (ii) Section 412, 4971 or 4975 of the Code or (iii)
Sections 601 et. seq. and 701 et seq. of ERISA and Section 4980B and Sections
9801 et seq. of the Code.

 

SECTION 3.10. Absence
of Changes or Events.  From the date
of the Balance Sheet to the date of this Agreement, there has not been any
event, change, effect or development (i) that, individually or in the
aggregate, has had or would reasonably be expected to have a VIOC Centers
Material Adverse Effect or (ii) that would have been prohibited by
Section 4.01 if the terms of such section had been in effect as of
and after the date of the Balance Sheet.

 

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

 

(b)  There are no underground storage tanks for
the storage of Hazardous Materials (as defined below) in use at any of the VIOC
Centers, and to Ashland’s knowledge there are no such tanks located under the
Premises.  Except for such matters that
would not reasonably be expected to have a VIOC Centers Material Adverse
Effect, (i) to the knowledge of Ashland, Ashland has not received any written
communication from a Governmental Entity that alleges that the VIOC Centers are
in violation of any Environmental Law

 

19

 

that has not
been finally resolved with such Governmental Entity, (ii) Ashland holds
all Permits required to conduct the VIOC Centers under any applicable
Environmental Law, and is and at all times has been in compliance with all
Environmental Laws and the terms and conditions of such Permits, (iii) there
are no Environmental Claims (as defined below) pending, or to the knowledge of
Ashland, threatened against Ashland and (iv) there have been no Releases (as
defined below) of any Hazardous Material at or originating from the Premises,
and no Hazardous Materials have been handled, generated, stored, transported or
disposed of by the VIOC Centers, in each case that would reasonably be expected
to form the basis of an Environmental Claim against Ashland.  The term “Environmental Claim” means
any and all administrative, regulatory or judicial actions, suits, orders,
demands, directives, claims, liens, investigations, proceedings or written
notices of noncompliance or violation by or from any person alleging liability
of whatever kind or nature arising out of, based on or resulting from (x) the
presence or Release of, or exposure to, any Hazardous Materials; or (y) the
failure to comply with any Environmental Law. 
The term “Environmental Laws” means all applicable federal,
state, local and foreign laws, rules, regulations, orders, decrees, judgments,
legally binding agreements or environmental Permits issued, promulgated or
entered into by or with any Governmental Entity, relating to the protection of
the environment, the protection of the public welfare from actual or potential
exposure, or the effects from exposure, to any actual or potential release,
discharge, disposal or emission (whether past or present) of any Hazardous
Materials or the manufacture, processing, distribution, use, treatment,
labeling, storage, disposal, transport or handling of any Hazardous
Materials.  The term “Hazardous
Materials” means all explosive or regulated radioactive materials or
substances, hazardous or toxic substances, wastes or chemicals, petroleum
(including crude oil or any fraction thereof) or petroleum distillates,
asbestos or asbestos containing materials, and any other material, chemical
substance or waste that in relevant form or concentration is prohibited,
limited or regulated (or the cleanup of which can be required) pursuant to any
Environmental Law and all substances that require special handling, storage or
disposal procedures or whose handling, storage or disposal procedures is in any
way regulated, in any case under any applicable Law for the protection of the
health, safety and environment.  The
term “Release” means

 

20

 

any spill,
emission, leaking, dumping, injection, deposit, disposal, discharge, dispersal,
leaching, emanation or migration of any Hazardous Materials into or through the
environment (including ambient air, surface water, ground water, soils, land
surface, subsurface strata or workplace).

 

SECTION 3.12. Employee
and Labor Matters.  Except as would
not reasonably be expected to have a VIOC Centers Material Adverse Effect
(i) there is not any, and during the past three years there has not been
any, labor strike, dispute, work stoppage or lockout pending against the VIOC
Centers; (ii) to the knowledge of Ashland, no union organizational
campaign is in progress with respect to the VIOC Centers Employees and no
question concerning representation of such employees exists; (iii) Ashland
is not engaged in any unfair labor practice in connection with the conduct of
the VIOC Centers; (iv) there are not any unfair labor practice charges or
complaints against Ashland pending before the National Labor Relations Board in
connection with the conduct of the VIOC Centers; (v) there are not any pending
union grievances against Ashland in connection with the conduct of the VIOC
Centers as to which there is a reasonable possibility of adverse determination;
(vi) there are not any pending charges in connection with the conduct of
the VIOC Centers against Ashland or any VIOC Centers Employee before the Equal
Employment Opportunity Commission or any state or local agency responsible for
the prevention of unlawful employment practices; and (vii) Ashland has not
received written notice during the past three years of the intent of any
Governmental Entity responsible for the enforcement of labor or employment laws
to conduct an investigation of the VIOC Centers.

 

SECTION 3.13. Sufficiency
of Transferred Assets.  Except for
the exclusion of the Excluded Assets and assuming that HoldCo has the ability
to provide to the VIOC Centers all corporate-level services of the type that
are currently provided to the VIOC Centers by Ashland or any of its affiliates,
the Transferred Assets, together with the Blanket License Agreement, are
sufficient for the operation and conduct of the business of the VIOC Centers
immediately following the Closing in substantially the same manner as currently
operated and conducted, other than any insufficiency that would not reasonably
be expected to have a VIOC Centers Material Adverse Effect.

 

21

 

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

 

ARTICLE IV

 

Covenants

 

SECTION 4.01. Covenants
of Ashland Relating to Conduct of VIOC Centers.  (a)  Except for matters
set forth in Section 4.01 of the VIOC Centers Disclosure Letter or
otherwise contemplated by the Transaction Agreements, from the date of this
Agreement to the Closing, Ashland shall conduct the business of the VIOC
Centers in the usual, regular and ordinary course in substantially the same
manner as previously conducted.  Without
limiting the generality of the foregoing, Ashland shall use its reasonable best
efforts to (i) preserve the material business relationships of the VIOC Centers
with customers, suppliers, distributors and others with whom Ashland deals in
connection with the conduct of the VIOC Centers in the ordinary course of
business and retain its present employees who are involved in the operation of
the VIOC Centers, (ii) maintain the Transferred Assets, including those held
under leases, in as good operating condition and repair (ordinary wear and tear
excepted) as at present, and maintain all Permits set forth in
Section 3.06 of the VIOC Centers Disclosure Letter, (iii) perform in all
material respects its obligations under Assigned Contracts and (iv) comply in
all material respects with all applicable Laws relating to the VIOC Centers or
any of the Transferred Assets.  In
addition, except as set forth in Section 4.01 of the VIOC Centers
Disclosure Letter or otherwise contemplated by the Transaction Agreements,
Ashland shall not do any of the following in connection with the VIOC Centers
without the prior written consent of Marathon (which consent shall not be
unreasonably withheld or delayed):

 

(i) adopt, establish or amend in any material respect any VIOC Benefit
Plan (or any plan that would be a VIOC Benefit Plan if adopted or established)
in a manner affecting any VIOC Centers Employee, except as required by
applicable Law or as would relate to a substantial number of other similarly
situated employees of Ashland and its subsidiaries;

 

22

 

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

 

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

 

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

 

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

 

(vi) sell, lease, license or otherwise dispose of any Transferred
Assets, except (A) inventory, supplies and obsolete or excess equipment sold or
disposed of in the ordinary course of business and (B) leases entered into in
the ordinary course of business with aggregate annual lease payments not in
excess of $50,000;

 

23

 

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

 

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

 

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

 

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

 

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

 

(d)  Reimbursement of Media Expenditures.  After the date of this Agreement, if Ashland
enters into a Contract that is a media placement agreement that would be an
Assigned Contract pursuant to Section 1.02(a)(v)(B), and if Marathon agrees in
writing to cause HoldCo to reimburse Ashland for expenditures made or incurred
under such Assigned Contract prior to the Closing, then HoldCo shall, promptly
after the Closing, reimburse Ashland for such expenditures.

 

SECTION 4.02. Refunds
and Remittances.  After the Closing,
if Ashland or any of its affiliates receive any refund or other amount which is
a Transferred Asset or is otherwise properly due and owing to HoldCo or any of
its affiliates in accordance with the terms of this Agreement, Ashland promptly
shall remit, or shall cause to be remitted, such amount to HoldCo.  After the Closing, if

 

24

 

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

 

SECTION 4.03. Employee
Matters.  (a)  Continuation of Employment.  Effective as of the Closing, HoldCo or one
or more of its affiliates shall offer employment (which shall include HoldCo’s
compliance with its covenants set forth in this Section 4.03) to all VIOC
Centers Employees who on the Closing Date are actively at work (each, an “Active
VIOC Centers Employee”).  For
purposes of this Agreement, any VIOC Centers Employee who is not actively at
work on the Closing Date due solely to a leave of absence (including due to
vacation, holiday, sick leave, maternity or paternity leave, military leave,
jury duty, bereavement leave, injury or short-term disability), other than
long-term disability, in compliance with applicable policies of Ashland or its
affiliates shall be deemed an Active VIOC Centers Employee.  Each VIOC Centers Employee who accepts such
an offer of employment is referred to herein as a “Transferred VIOC Centers
Employee”.  Immediately following
the Closing, HoldCo shall, or shall cause one or more of its affiliates to,
provide each Transferred VIOC Centers Employee (i) with overall compensation
that is at least equivalent to such Transferred VIOC Centers Employee’s overall
compensation in

 

25

 

effect
immediately prior to the Closing and (ii) subject to the provisions of this
Section 4.03, with appropriate employee benefits as determined by HoldCo
or such affiliate.  Without limiting the
generality of the foregoing, HoldCo shall maintain employee benefit plans and
programs for the Transferred VIOC Centers Employees, which shall be competitive
in the retail industry.

 

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

 

26

 

(ii) Ashland shall be responsible in accordance with its applicable
welfare plans (and the applicable welfare plans of its affiliates) in effect
prior to the Closing for all reimbursement claims (such as medical and dental
claims) for expenses incurred, and for all non-reimbursement claims (such as
life insurance claims) incurred, under such plans prior to the Closing by
Transferred VIOC Centers Employees and their dependents, except that HoldCo
shall be responsible for such claims to the extent such claims are reflected on
the Balance Sheet or to the extent insured under an insurance policy of which
HoldCo or its affiliates becomes the beneficiary and for which Ashland or its
affiliates have paid the premium. 
HoldCo shall be responsible in accordance with the applicable welfare
plans of HoldCo and its affiliates for all reimbursement claims (such as
medical and dental claims) for expenses incurred, and for all non-reimbursement
claims (such as life insurance claims) incurred, from and after the Closing by
Transferred VIOC Centers Employees and their dependents.  For purposes of this
Section 4.03(b)(ii), a claim shall be deemed to have been incurred on
(A) the date of death or dismemberment in the case of claims under life
insurance and accidental death and dismemberment policies or (B) the date on
which the charge or expense giving rise to such claim is incurred (without
regard to the date of inception of the related illness or injury or the date of
submission of a claim related thereto) in the case of all other claims; provided,
however, that in the event of a hospital stay that commences prior to
the close of business on the Closing Date and ends after the close of business
on the Closing Date, the cost thereof shall be apportioned between HoldCo and
Ashland with Ashland responsible for that portion of the cost incurred prior to
the close of business on the Closing Date and HoldCo responsible for the
balance of such cost.  Effective as of
the Closing, HoldCo shall assume all liabilities, obligations and commitments
of Ashland and its affiliates to Transferred VIOC Centers Employees and their
eligible dependents in respect of health insurance under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the
Health Insurance Portability and Accountability Act of 1996 and applicable
state Law; provided, however, that Ashland and its affiliates
shall remain obligated to

 

27

 

provide any applicable COBRA notices in respect of events occurring on
or prior to the Closing Date.

 

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

 

(d)  Retirement Plan.  Immediately following the Closing, HoldCo or
one or more of its affiliates shall have in effect a retirement benefit plan or
plans (as applicable, the “HoldCo Retirement Plan”) that shall provide
benefits to the Transferred VIOC Centers Employees.  HoldCo or such affiliate shall have sole discretion in
establishing the provisions of the HoldCo Retirement Plan.

 

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

 

(f)  Employment Tax Reporting Responsibility.  HoldCo and Ashland hereby agree to follow
the alternate procedure for employment tax withholding as provided in Section 5
of Rev. Proc. 96-60, 1996-53 I.R.B. 24 (“Rev. Proc. 96-60”).  Ashland shall provide HoldCo with all
necessary and accurate payroll records and such other information relating to
the Transferred VIOC Centers Employees as HoldCo may reasonably request with
respect to Transferred VIOC Centers Employees in order to comply with the
provisions of Rev. Proc. 96-60 with respect to the calendar year that includes
the Closing Date.  HoldCo shall perform
all employment tax reporting responsibilities for such employees from the
Closing Date forward and shall furnish a Form W-2 for such calendar year to
each Transferred VIOC Centers Employee that will include all

 

28

 

remuneration
earned by such Transferred VIOC Centers Employee from Ashland or HoldCo during
such calendar year.

 

(g)  Intent.  It is HoldCo’s intent that the HoldCo Retirement Plan shall
provide retirement benefits that are competitive within the retail industry.

 

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

 

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

 

SECTION 4.06. [Intentionally
Omitted].

 

SECTION 4.07. Bulk
Transfer Laws.  HoldCo hereby waives
compliance by Ashland with the provisions of any so-called “bulk transfer law”
of any jurisdiction in connection with the VIOC Assignment and Assumption.

 

SECTION 4.08. Supplies.  At any time after 20 days after the Closing
Date, HoldCo shall not use stationery, purchase order forms, labels, material
safety data sheets or other similar paper goods or supplies that

 

29

 

state or
otherwise indicate thereon that the VIOC Centers are a division or unit of
Ashland.

 

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

 

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

 

SECTION 4.11. Review
of Contracts.  Prior to the Closing
Date, Ashland shall review the terms of each material Contract that relates in
part to the VIOC Centers and in part to any other business of Ashland or any of
its subsidiaries other than those Contracts identified in Section 4.11 of
the VIOC Centers Disclosure Letter (collectively, “Ashland Joint Contracts”)
in order to determine whether such Contract should be terminated and replaced
on or prior to the Closing Date by a separate Contract relating to the VIOC
Centers on the one hand (any such separate Contract being an Assigned Contract,
so long

 

30

 

as (i)
entering into such Contract would not otherwise be in violation of this
Agreement and (ii) such Contract does not contain terms that, in the aggregate,
are materially less advantageous to the VIOC Centers than the terms under the
Contract being terminated and replaced), and a separate Contract relating to
such other business of Ashland or any of its subsidiaries on the other hand
(any such separate Contract not being an Assigned Contract).  If requested by HoldCo or Marathon within 90
days after Ashland notifies HoldCo and Marathon in writing of the specific
terms of the Ashland Joint Contracts, Ashland shall continue in effect any
Ashland Joint Contract not terminated and replaced in accordance with the
immediately preceding sentence, if not prohibited by the terms of such Ashland
Joint Contract, until the stated expiration thereof (without regard to any
available renewal options); provided, however, that Ashland shall
not be prohibited from terminating any such Ashland Joint Contract that relates
to a substantial number of Valvoline Instant Oil Change (VIOC) quick-lube
service centers owned or operated by Ashland. 
Each of Ashland and HoldCo shall perform its respective obligations
under all such Ashland Joint Contracts so as not to create a default
thereunder, and Ashland shall provide HoldCo with rights thereunder consistent
with historical practice between the parties with respect thereto, subject to
obtaining any necessary Consents from third parties (which Ashland and HoldCo
mutually agree to use their reasonable best efforts to obtain) and subject to
HoldCo bearing the proportionate expense attributable to such rights consistent
with historical practice between the parties with respect thereto; provided,
however, that neither Ashland nor HoldCo shall be obligated to extend
credit to the other party.

 

SECTION 4.12. List
of Permits.  Within 90 days after
the date of this Agreement, Ashland shall provide to HoldCo and Marathon a list
setting forth all material certificates, licenses, permits, authorizations,
Consents and approvals issued or granted to Ashland by, and all material
exemptions of, or registrations or filings with, Governmental Entities (“Permits”),
that are used, held for use or intended to be used in the operation or conduct
of the VIOC Centers.

 

31

 

ARTICLE V

 

Termination

 

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

 

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

 

ARTICLE VI

 

General Provisions

 

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

 

32

 

(b)  For all purposes hereof:

 

“Blanket License Agreement” means the Blanket License Agreement
among the parties thereto in the form attached hereto as Exhibit C, together
with the forms of License Agreement, Licensee Sign and Equipment Lease
Agreement and Licensee Supply Agreement which are attached thereto and
incorporated by reference therein.

 

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

 

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

 

“Permitted Liens” means (i) Liens for
current Taxes, assessments, governmental charges or levies not yet due, (ii)
workers’ or unemployment compensation Liens arising in the ordinary course of
business, (iii) mechanic’s, materialman’s, supplier’s, vendor’s, garnishment or
similar Liens arising in the ordinary course of business for amounts not yet
due, (iv) Liens or other charges or encumbrances as may have arisen in the
ordinary course of business, none of which individually or in the

 

33

 

aggregate are material to the ownership, use
or operation of the Transferred Assets, (v) any state of facts which an
accurate survey would show which does not materially detract from the value of
or materially interfere with the use and operation of the Transferred Assets,
(vi) any Liens, easements, rights-of-way, restrictions, rights, leases and
other encumbrances affecting title thereto, whether or not of record, which do
not materially detract from the value of or materially interfere with the use
and operation of the Transferred Assets, (vii) legal highways, zoning and
building Laws, ordinances or regulations, (viii) any Liens for real estate
Taxes which are not yet due and payable, (ix) Liens set forth in Section 3.02
of the VIOC Centers Disclosure Letter and (x) Liens set forth in Section 3.03
of the VIOC Centers Disclosure Letter.

 

“VIOC Centers” means the Valvoline
Instant Oil Change (VIOC) service center business operations (including the
marketing and selling of quick service engine oil change services, lubrication
services, certain routine maintenance check services, preventive automotive
maintenance services, and related products and services) conducted at the
locations listed in Section 6.01(b) of the VIOC Centers Disclosure Letter
by Ashland, and the supporting office operations conducted at the locations
listed in Section 6.01(b) of the VIOC Centers Disclosure Letter by
Ashland, in each case directly or indirectly through certain of its
subsidiaries, as of the date of this Agreement.

 

“VIOC Centers Material Adverse Effect”
means a material adverse effect (i) on the business, properties, assets,
condition (financial or otherwise), operations or results of operation of the
VIOC Centers, taken as a whole, (ii) on the ability of Ashland to perform its
obligations under this Agreement and the other agreements and instruments to be
executed and delivered in connection with this Agreement or (iii) on the
ability of Ashland to consummate the VIOC Assignment and Assumption.  For purposes of this Agreement, “VIOC
Centers Material Adverse Effect” shall exclude any events, changes, effects and
developments to the extent relating to (A) the economy of the United States or
foreign economies in general, (B) industries in which the VIOC Centers operate
and not specifically relating to the VIOC Centers, (C) any announcement by
Ashland of the Transactions or of its intention to transfer the VIOC Centers or
(D) the execution

 

34

 

of the Transaction
Agreements and the Ancillary Agreements and the consummation of the
Transactions.

 

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

 

SECTION 6.03. Severability.  If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or
Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the Transactions contemplated hereby is not affected in any
manner materially adverse to any party hereto. 
Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement (in accordance with the terms of
Section 6.06) so as to effect the original intent of the parties hereto as
closely as possible to the end that the Transactions contemplated hereby are
fulfilled to the greatest extent possible.

 

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

 

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

 

SECTION 6.06. Amendment.  This Agreement may not be amended by the
parties except pursuant to an instrument 

 

35

 

in writing
signed on behalf of Ashland and HoldCo with the written consent of Marathon.

 

36

 

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

 

	
   

  	
  ASHLAND INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/ James J.
  O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James J.
  O’Brien

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ATB HOLDINGS INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
  /s/ James J.
  O’Brien

  	
   

  
	
   

  	
   

  	
  Name:

  	
  James J.
  O’Brien

  
	
   

  	
   

  	
  Title:

  	
  President

  
					

 

37

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