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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
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