Common use of Litigation in the Event of Alternative IRS Ruling Clause in Contracts

Litigation in the Event of Alternative IRS Ruling. (i) If the IRS issues the Alternative Ruling, the parties will use their commercially reasonable best efforts to initiate a judicial proceeding (and any necessary administrative proceedings) to obtain a Final Determination that New Ashland Inc. is entitled to claim the Specified Liability Deductions; provided, however, that the parties shall not initiate such a judicial proceeding unless and until they have entered into the agreement described in Section 5.01(c)(ii) below; and provided further that the parties shall not initiate such a judicial proceeding if either New Ashland Inc. or Marathon determines, in its good faith judgment, that it is reasonably possible that such a proceeding may result in adverse consequences to New Ashland Inc. or Marathon, respectively. Possible adverse consequences include but are not limited to causing the Tax Ruling not to be binding on the IRS; credit risk; possible impairment of the reputation of either party; and possible impairment of the relationship between either party and the IRS. The parties expect that any such proceeding shall be initiated by an amended return filed by New Ashland Inc. claiming the Specified Liability Deductions and requesting a Refund of Tax based on that claim and, if the IRS does not timely grant that Refund, a lawsuit filed by New Ashland Inc. 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.