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EXHIBIT 10.2
TAX SHARING AGREEMENT
This Tax Sharing
Agreement (this "Agreement") is entered into as of August
2, 2005, by and between Gray Television,
Inc., a Georgia corporation ("Gray"),
and Triple Crown Media, Inc., a Delaware
corporation ("TCM"). Capitalized terms
used in this Agreement and not otherwise
defined in Article I or otherwise
herein shall have the meanings ascribed to
such terms in the Separation and
Distribution Agreement, dated as of August
2, 2005, by and between Gray and TCM
(the "Separation and Distribution
Agreement").
RECITALS
A. Gray is the
common parent of an "affiliated group" of corporations
within the meaning of Section 1504(a) of
the Internal Revenue Code of 1986, as
amended (the "Code"), that has filed
consolidated federal income tax returns.
B. TCM is a
wholly owned subsidiary of Gray.
C. Pursuant to
the Separation and Distribution Agreement, among other
things, (i) Gray agreed to convey, assign
and transfer to TCM the sole
membership interest in Gray Publishing and
(ii) TCM agreed to distribute $40
million to Gray on the Separation Date
(collectively, the "Separation").
D. Immediately
after the Separation, Gray shall make a pro rata
distribution of all of the TCM Common Stock
to the holders of the Gray Common
Stock (the "Distribution" and, together
with the Separation, the
"Reorganization").
E. Gray and TCM
intend that the Reorganization will qualify as a divisive
reorganization described in Sections
368(a)(1)(D) and that the Distribution will
qualify for nonrecognition treatment under
Section 355 of the Code.
F. Gray and TCM
desire to set forth their rights and obligations with
respect to Taxes (as defined herein) due
for periods before and after the
Distribution Date.
NOW, THEREFORE,
for good and valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
ARTICLE I.
Definitions
1.01
"Affiliate" shall mean
any Person that directly or indirectly through
one or more intermediaries Controls, is
Controlled by, or is under common
Control with a specified Person.
1.02
"Agreement" shall mean
this Tax Sharing Agreement between Gray and
TCM, as the same may be amended from time
to time.
1.03
"Applicable Federal
Rate" shall have the meaning set forth in Section
1274(d) of the Code, compounded
quarterly.
1.04
"Code" shall have the
meaning set forth in the Recitals.
1.05
"Control" or
"Controlled" shall mean, with respect to any Person, the
presence of one of the following: (i) the
legal, beneficial or equitable
ownership, directly or indirectly, of more
than 50% (by vote or value) of the
capital or voting stock (or other ownership
or voting interest, if not a
corporation) of such Person or (ii) the
ability, directly or indirectly, to
direct the voting of a majority of the
directors of such
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Person's board of directors or, if the
Person does not have a board of
directors, a majority of the positions on
any similar body, whether through
appointment, voting agreement or
otherwise.
1.06
"Controlling Party"
shall have the meaning set forth in Section 5.01.
1.07
"Distribution" shall
have the meaning set forth in the Recitals.
1.08
"Final Determination"
shall mean with respect to any issue (a) a
decision, judgment, decree or other order
by any court of competent
jurisdiction, which decision, judgment,
decree or other order has become final
and not subject to further appeal, (b) a
closing agreement whether or not
entered into under Section 7121 of the Code
or any other binding settlement
agreement (whether or not with the Internal
Revenue Service) entered into in
connection with or in contemplation of an
administrative or judicial proceeding,
or (c) the completion of the highest level
of administrative proceedings if a
judicial contest is not or is no longer
possible.
1.09
"Gray" shall have the
meaning set forth in the preamble to this
Agreement.
1.10
"Gray Group" shall
mean Gray and all Subsidiaries of Gray at any time
following the Separation but shall not
include any member of the TCM Group.
1.11
"Gray Publishing"
shall mean Gray Publishing LLC, a Delaware limited
liability company, which is a member of the
TCM Group.
1.12
"Gray Tainting Act"
shall mean (a) any breach of any written
representation relating to the
qualification of the Reorganization as a
reorganization described in Section
368(a)(1)(D) of the Code, relating to the
qualification of the Distribution as a
transaction described in Section 355 of
the Code, or relating to the treatment of
the stock of TCM as "qualified
property" within the meaning of Sections
355(c)(2) and 361(c)(2) of the Code,
which representation is made by Gray in
that certain officer's certificate of
even date herewith that was provided to
King & Spalding LLP in connection with
the tax opinion of King & Spalding LLP
described in Section 3.3(g) of the
Separation and Distribution Agreement, or
(b) any action, failure to act or
omission by or involving any Person (other
than TCM or any other Person that is
an Affiliate of TCM immediately before or
immediately after such action, failure
to act, or omission) after the Distribution
Date, if such breach, action,
failure to act, or omission contributes to
a Final Determination that (i) the
Reorganization failed to qualify as a
reorganization under Section 368(a)(1)(D)
of the Code, (ii) the Distribution failed
to qualify as a transaction described
in Section 355 of the Code or (iii) the
stock of TCM distributed to Gray's
shareholders failed to qualify as
"qualified property" within the meaning of
Sections 355(c)(2) and 361(c)(2) of the
Code, including by reason of the
application of Section 355(e) of the
Code.
1.13
"Indemnitor" shall
have the meaning set forth in Section 5.02.
1.14
"Person" shall mean
any individual, partnership, joint venture,
corporation, limited liability company,
trust, unincorporated organization,
government or department or agency of a
government.
1.15
"Post-Distribution
Period" shall mean any taxable year or other
taxable period beginning on or after the
Distribution Date and, in the case of
any taxable year or other taxable period
that begins before and ends after the
Distribution Date, that part of the taxable
year or other taxable period that
begins after the close of the Distribution
Date.
1.16
"Pre-Distribution
Period" shall mean any taxable year or other
taxable period that ends on or before the
Distribution Date and, in the case of
any taxable year or other taxable period
that begins before and ends after the
Distribution Date, that part of the taxable
year or other taxable period through
the close of the Distribution Date.
1.17
"Reorganization" shall
have the meaning set forth in the Recitals.
1.18
"Restructuring Taxes"
shall mean any Taxes resulting from or caused
by the Reorganization including, but not
limited to, any income Taxes imposed
pursuant to or as a result of Sections 311,
355(c)(2), 357(c), 361(b)(1)(B),
361(b)(3), 361(c)(2), or 455(b)(1) of the
Code, Sections 1.1502-13
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or 1.1502-19 of the Treasury Regulations,
or Section 5.02(5) of Revenue
Procedure 2004-23, 2004-22 I.R.B. 991 (or
any corresponding or similar
provisions of state, local or non-U.S.
income Tax law) and any sales or other
transfer Taxes or similar charges imposed
with respect to or as a result of the
Reorganization.
1.19
"Separation" shall
have the meaning set forth in the Recitals.
1.20
"Separation and
Distribution Agreement" shall have the meaning set
forth in the preamble to this
Agreement.
1.21
"Subsidiary" shall
mean a corporation, limited liability company,
partnership, joint venture or other
business entity if 50% or more of the
outstanding equity or voting power of such
entity is owned directly or
indirectly by the corporation with respect
to which such term is used.
1.22
"Tax" or "Taxes",
whether used in the form of a noun or adjective,
shall mean all forms of taxation, whenever
created or imposed, including, but
not limited to, taxes on or measured by
income, franchise, gross receipts,
sales, use, excise, payroll, personal
property (tangible or intangible), real
property, ad valorem, value-added, leasing,
leasing use or other taxes, levies,
imposts, duties, charges or withholdings of
any nature whether imposed by a
nation, locality, municipality, government,
state, federation, or other
governmental body (a "Taxing Authority").
Whenever the term "tax" or "taxes" is
used (including, without limitation, in the
context of any duty to reimburse
another party or indemnify for taxes or
refunds or credits of taxes) it shall
include penalties, fines, additions to tax
and interest thereon.
1.23
"Taxing Authority"
shall have the meaning set forth in the foregoing
definition of the term "Tax."
1.24
"Tax Returns" shall
mean all reports, returns, information
statements, questionnaires or other
documents required to be filed or that may
be filed for any period with any Taxing
Authority (whether domestic or foreign)
in connection with any Tax or Taxes
(whether domestic or foreign).
1.25
"TCM" shall have the
meaning set forth in the preamble to this
Agreement.
1.26
"TCM Business" shall
mean the Newspaper Publishing Business, or the
Graylink Wireless Business, or both
businesses.
1.27
"TCM Group" shall mean
TCM and all entities that are Subsidiaries of
TCM at any time following the Separation,
including without limitation Gray
Publishing, Graylink LLC, and Porta-Phone
Paging Licensee Corp.
1.28
"TCM Tainting Act"
shall mean (a) any breach of any written
representation relating to the
qualification of the Reorganization as a
reorganization described in Section
368(a)(1)(D) of the Code, relating to the
qualification of the Distribution as a
transaction described in Section 355 of
the Code, or relating to the treatment of
the stock of TCM as "qualified
property" within the meaning of Sections
355(c)(2) and 361(c)(2) of the Code,
which representation is made by TCM in that
certain officer's certificate of
even date herewith that was provided to
King & Spalding LLP in connection with
the tax opinion of King & Spalding LLP
described in Section 3.3(g) of the
Separation and Distribution Agreement, or
(b) any action, failure to act or
omission by or involving any Person (other
than Gray or any other Person that is
an Affiliate of Gray immediately before or
immediately after such action,
failure to act, or omission) after the
Distribution Date, if such breach,
action, failure to act, or omission
contributes to a Final Determination that
(i) the Reorganization failed to qualify as
a reorganization under Section
368(a)(1)(D) of the Code, (ii) the
Distribution failed to qualify as a
transaction described in Section 355 of the
Code or (iii) the stock of TCM
distributed to Gray's shareholders failed
to qualify as "qualified property"
within the meaning of Sections 355(c)(2)
and 361(c)(2) of the Code, including by
reason of the application of Section 355(e)
of the Code.
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ARTICLE II.
Tax Returns, Tax Payments and Tax Sharing Obligation
2.01
OBLIGATIONS TO FILE
TAX RETURNS. Gray
shall timely file or cause to
be filed all Tax Returns that are required
to be filed after the Distribution
Date by or with respect to the TCM Group
that (a) are filed on a consolidated,
combined or unitary basis, (b) include both
one or more members of the Gray
Group and one or more members of the TCM
Group, and (c) are for a taxable period
that includes the Pre-Distribution Period.
Gray also shall timely file or cause
to be filed all other Tax Returns required
to be filed by one or more members of
the TCM Group for any taxable period that
includes the Pre-Distribution Period,
other than any such Tax Returns relating to
sales, use, personal property
(tangible or intangible), real property,
and ad valorem Taxes arising in the
Pre-Distribution Period and attributable to
a member of the TCM Group or to the
assets, employees, or transactions of the
TCM Business. TCM shal
