SCRIPPS TAX MATTERS AGREEMENT Dated as of July 30, 2014 by and among THE E. W. SCRIPPS COMPANY, on the one hand, and DESK SPINCO, INC. and BOAT NP NEWCO, INC., on the other hand

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Exhibit 10.2

 

SCRIPPS TAX MATTERS AGREEMENT

Dated as of July 30, 2014

by and among

THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY,

on the one hand,

and

DESK SPINCO, INC. and BOAT NP NEWCO, INC.,

on the other hand

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TABLE OF CONTENTS

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TABLE OF CONTENTS

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THIS SCRIPPS TAX MATTERS AGREEMENT (this “Agreement”) is dated as of the 30th day of July, 2014, by and among (i) The ▇. ▇. ▇▇▇▇▇▇▇ Company, an Ohio corporation (“Scripps”), on the one hand, and (ii) Desk Spinco, Inc., a Wisconsin corporation and an indirect subsidiary of Scripps (“Scripps Spinco”), and Boat NP Newco, Inc., a Wisconsin corporation (“Newco”), on the other hand.  Capitalized terms used in this Agreement are defined as set forth in Section 1.01.

WHEREAS, the Board of Directors of Scripps has determined that it is in the best interests of Scripps to separate the newspaper business of Scripps and the broadcast business of Scripps (the “Distribution”), on the terms and subject to the conditions set forth in the Master Transaction Agreement, in order (i) facilitate the acquisitions described in the Master Transaction Agreement, consistent with regulatory requirements, (ii) allow for more tailored management incentives, (iii) increase the per-share combined value of the separated companies, (iv) separate businesses with differing strategic directions, (v) eliminate existing constraints regarding capital allocation, (vi) concentrate management focus, (vii) accommodate differing shareholder bases, and (vii) achieve other corporate business purposes including “fit-and-focus” benefits;

WHEREAS, in order to effectuate the foregoing, Scripps, Scripps Media, Inc., a Delaware corporation and wholly owned subsidiary of Scripps (“SMI”), Scripps Spinco, Desk NP Operating, LLC, a Wisconsin limited liability company and wholly owned subsidiary of SMI (“SNOC”), Desk BC Merger LLC, a Wisconsin limited liability company and wholly owned subsidiary of Scripps (“Scripps LLC”), Journal Communications, Inc., a Wisconsin corporation (“Journal”), Boat Spinco Inc., a Wisconsin corporation and wholly owned subsidiary of Journal (“Journal Spinco”), Newco, Desk NP Merger Co., a Wisconsin corporation and wholly owned subsidiary of Newco (“Scripps Newspaper Merger Co.”) and Boat NP Merger Co., a Wisconsin corporation and wholly owned subsidiary of Newco (“Journal Newspaper Merger Co.”) have entered into a Master Transaction Agreement, dated as of July 30, 2014 (the “Master Transaction Agreement”), pursuant to which and subject to the terms and conditions set forth therein, the Scripps Spinco  Business shall be separated from the Scripps Business and pursuant to the Distribution, the Scripps Spinco Common Voting Shares shall be distributed on a pro rata basis to the holders of Scripps Class A Common Shares and Scripps Common Voting Shares;

WHEREAS, on the Distribution Date, Scripps Spinco and Journal Spinco will each be acquired directly or indirectly by Newco pursuant to the terms of the Master Transaction Agreement and Newco will be responsible for all obligations of Scripps Spinco pursuant to this Agreement;

WHEREAS, for U.S. federal income Tax purposes, through the Distribution Date, income of certain present and former members of the Scripps Spinco Group has been or will be included in Scripps Consolidated Returns;

WHEREAS, certain Scripps Spinco Combined Group members have filed or will file Combined Returns covering U.S. state and local income Taxes including as part of the Scripps Combined Return;

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WHEREAS, Scripps Spinco and other members of the Scripps Spinco Group will cease to be members of the Scripps Group for U.S. federal income Tax purposes after the Distribution Date, and Scripps Spinco and other members of Scripps Spinco Combined Groups will cease to be members of the Scripps Combined Group for U.S. state and local income Tax purposes after the Distribution Date;

WHEREAS, the failure of the Distribution to have a Tax-Free Status or certain actions taken with respect to Scripps Spinco Capital Stock and Scripps Capital Stock could subject one or more of Scripps, SMI, Scripps Spinco and their shareholders to additional Tax costs in connection with the Distribution; and

WHEREAS, Scripps and Scripps Spinco desire in this Agreement to (i) set forth Tax allocation principles for Affiliation Years for U.S. federal income Tax purposes and Combined Years for U.S. state and local income Tax purposes, which, except to the extent provided herein, will supersede all prior policies and procedures governing the allocation of Taxes, (ii) define the effects upon the settlement and allocation of certain Tax liabilities and Tax benefits of transactions or developments that occur during taxable years commencing after the Distribution Date, (iii) set forth the responsibility for their respective stand-alone income and other Tax liabilities, and (iv) allocate liability for certain Tax costs that may be incurred in connection with the Distribution.

NOW, THEREFORE, in consideration of the foregoing, the promises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Scripps, Scripps Spinco and Newco hereby agree as follows:

ARTICLE I

DEFINITIONS AND STANDARDS

“2014 Excess Scripps Group Benefits” shall have the meaning assigned to it in Section 2.01.

“2014 Tax Liability” shall have the meaning assigned to it in Section 2.01

“2014 Taxable Year” shall have the meaning assigned to it in Section 2.01.

“2015 Excess Scripps Group Benefits” shall have the meaning assigned to it in Section 2.02.

“2015 Tax Liability” shall have the meaning assigned to it in Section 2.02.

“2015 Taxable Year” shall have the meaning assigned to it in Section 2.02.

“Adjusted Separate Scripps Group Federal Tax Liability” shall mean, with respect to an Affiliation Year, the aggregate Adjusted Separate Scripps Member Federal Tax Liability for that Affiliation Year of all members of the Scripps Group.

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“Adjusted Separate Scripps Spinco Group Federal Tax Liability” shall mean, with respect to a member of the Scripps Spinco Group and with respect to an Affiliation Year, the U.S. federal income Tax liability of such member for the portion of the Affiliation Year during which such member also is a member of the Scripps Group, such liability being computed applying the Highest Federal Tax Rate, computed as if such member has always filed a U.S. federal income Tax Return separately from the other members of the Scripps Group (a “Scripps Spinco Member Return”), and applying such U.S. Tax laws and regulations as would have been applicable to the member of the Scripps Spinco Group if it had so filed separately, but not taking into account any items that are predicated on base amounts determined on a consolidated basis such as research Credits, subject to the following:

“Adjustment” shall mean, with respect to any Affiliation Year or Combined Year, any change in actual Tax liability from the Tax liability reported on a Scripps Consolidated Return or Scripps Combined Return (as the case may be), including changes attributable to amended Tax Returns, deficiencies asserted by a Taxing authority, overpayments, and claims for refund, and changes required by application of the Code and Treasury Regulations and Taxing authority audits, examinations, proceedings or litigation resulting from any of the foregoing events (collectively, “Adjustment Events”).

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“Adjustment Events” shall have the meaning assigned to it in the definition of “Adjustment.”

“Affiliate” shall mean any entity that is directly or indirectly controlled by the person in question; provided, however, that for purposes of this Agreement, immediately after the Effective Time no member of the Scripps Spinco Group shall be deemed to be an Affiliate of any member of the Scripps Group, and not member of the Journal Group shall be deemed to be an Affiliate of any member of the Scripps Spinco Group.  For this purpose, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and the policies of a person, whether through ownership of voting securities, by contract or otherwise.

“Affiliation Year” shall mean each taxable year of Scripps with respect to any portion of which any member of the Scripps Spinco Group joins Scripps in the filing of a Scripps Consolidated Return.

“AMT” shall have the meaning assigned to it in Section 2.03.

“Article VIII Taxes” shall have the meaning assigned to it in Section 8.03.

“Code” shall mean the Internal Revenue Code of 1986, as amended.  Any references herein to sections of the Code or Treasury Regulations promulgated thereunder shall include any successor provisions thereto.

“Combined Return” shall mean a combined, consolidated, or unitary U.S. state or local income, franchise, business activities or gross receipts Tax Return.

“Combined State” shall mean a U.S. state or locality requiring or permitting the filing of a Combined Return.

“Combined State Total Tax Liability” shall have the meaning assigned to it in Section 3.02.

“Combined Year” shall mean each taxable year of Scripps with respect to any portion of which any member of a Scripps Spinco Combined Group joins Scripps in the filing of a Scripps Combined Return.

“Credits” shall mean all of the credits against U.S. federal income Tax or, as applicable, against U.S. state or local Tax.  Credits shall include, but not be limited to, foreign Tax credits, research credits, low-income housing credits, investment Tax credits and targeted job credits.

“Designated Participant” shall have the meaning assigned to it in the Employee Matters Agreement.

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“Distribution” shall mean the distribution on a pro rata basis to holders of issued and outstanding Scripps Class A Common Shares and Scripps Common Voting Shares, of all of the issued and outstanding Scripps Spinco Common Voting Shares (“Scripps Spinco Common Shares”), by means of a dividend of such Scripps Spinco Common Voting Shares to such shareholders.

“Distribution Date” shall mean the date on which the Distribution shall be effected, such date to be determined by, or under the authority of, the Board of Directors of Scripps in its sole and absolute discretion.

“Distribution Taxes” shall mean (i) any Taxes imposed on, or increase in Taxes incurred by, Scripps or any Scripps Affiliate, and any Taxes of a Scripps shareholder (or former Scripps shareholder) that are required to be paid or reimbursed by Scripps or any Scripps Affiliate, or by Scripps Spinco or any Scripps Spinco Affiliate, pursuant to a Final Determination; (ii) all professional fees and court costs incurred in connection with such Taxes; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies, including but not limited to, any amount paid by Scripps, any Scripps Affiliate, Scripps Spinco, or any Scripps Spinco Affiliate, as the case may be, in respect of the liability of shareholders, whether paid to shareholders, the IRS, any other Taxing authority, or any other Person, in each case, arising from the Distribution and related transactions failing to have Tax-Free Status in any manner, provided that Scripps shall have vigorously defended itself in any legal proceeding involving Taxes of a Scripps shareholder, without regard to whether such Taxes are offset or reduced by any Tax asset, Tax Item, or otherwise resulting from, or arising in connection with, the failure of the Internal Distribution or the Distribution to qualify as transactions in which no income, gain or loss is recognized pursuant to sections 355 and 368(a)(1)(D) of the Code (including any Tax resulting from the application of section 355(d) or section 355(e) of the Code to the Internal Distribution or the Distribution) or corresponding provisions of the laws of any other jurisdictions.  Any income Tax referred to in the immediately preceding sentence shall be determined using the highest applicable statutory corporate income Tax rate (or rates, in the case of an item that affects more than one Tax) for the relevant taxable period (or portion thereof) taking into account deductions for interest paid or accrued and other related Taxes, such as state and local Taxes.

“Effective Time” shall mean the time at which the Distribution occurs on the Distribution Date.

“Employee Matters Agreement” shall mean the Employee Matters Agreement of even date herewith by and among Scripps, Scripps Spinco, SNOC, Journal, Journal Spinco and Newco.

“Estimated State Taxes” shall have the meaning assigned to it in Section 3.06.

“Excess Items” shall have the meaning assigned to it in the definition of “Adjusted Separate Scripps Spinco Member Federal Tax Liability.”

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“Excess Scripps Group Benefits^” shall mean the amount by which the Parties agree that the Scripps Group was able to reduce its U.S. federal income Tax liability in the Scripps Consolidated Return for an Affiliation Year by use of any Excess Items that do not serve to reduce the Adjusted Separate Scripps Spinco Group Federal Tax Liability for such Affiliation Year, if zero, below zero (“Scripps Additional Excess Items”).  Use of Scripps Additional Excess Items shall otherwise be subject to the same limitations and other provisions applicable to the use of Excess Items, as determined by the Parties in good faith.

“Fifty-Percent or Greater Interest” shall mean a “50-percent or greater interest” for purposes of Sections 355(d) and (e) of the Code and the Treasury Regulations promulgated thereunder.

“Final Determination” shall mean 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 settlement with the IRS, a closing agreement or accepted offer in compromise under section 7121 or section 7122 of the Code, or a comparable agreement under the laws of other jurisdictions, which resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered by the jurisdiction imposing the Tax; or (iv) any other final disposition, including by reason of the expiration of the applicable statute of limitations.

“Foreign Attribute” shall mean any item of income, gain, loss or deduction or any asset or liability relevant to the computation of taxable income from sources without the United States and any item of Credit described in Section 901 or 902 of the Code (without regard to the limitation of Section 904 of the Code).

“Fraction” shall have the meaning assigned to it in Section 2.03(a).

“Group” shall mean the Scripps Group or the Scripps Spinco Group.

“Highest Combined Tax Rate” for the taxable year in question shall mean the sum of (i) the Highest Federal Tax Rate, and (ii) in the case of a corporation, the average, weighted by jurisdiction, of the highest U.S. state and local income, franchise, and gross receipts Tax rates that would be applicable to such a corporation (net of any U.S. federal income Tax benefit), or in the case of a Person other than a corporation, the highest U.S. state and local income Tax rates (net of any U.S. federal income Tax benefit) that would be applicable to such Person or the beneficial owner(s) of such Person.

“Highest Federal Tax Rate” for the taxable year in question shall mean (i) in the case of a corporation, the highest U.S. federal income Tax rate applicable to a corporation, or (ii) in the case of a Person other than a corporation, the highest U.S. federal income Tax rate that would be applicable to such Person or the beneficial owner(s) of such Person.

“Income Tax Benefit” shall mean the amount of the Tax savings realized by the applicable group, as determined by the Parties.  Such amount shall be determined by comparing (i) the actual U.S. federal income Tax liability and the corresponding U.S. state and local income Tax liability (net of any federal Tax benefit) of the applicable group for the taxable year in question without giving effect to the items in question with (ii) the actual U.S. federal income Tax liability and the corresponding U.S. state and local Tax liability (net of any federal Tax benefit) of the applicable group for such year after giving full effect to such items.  An Income Tax Benefit shall be deemed to be realized at the time that the applicable group receives a refund or credit for refund from the relevant Taxing authority.

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“Income Tax Detriment” shall mean the amount of additional Tax incurred by the applicable group, as determined by the Parties.  Such amount shall be determined by comparing (i) the actual U.S. federal income Tax and the corresponding U.S. state and local Tax liability (net of any U.S. federal income Tax benefit) of the applicable group for the taxable year in question after giving full effect to the items in question with (ii) the actual U.S. federal income Tax and the corresponding U.S. state and local Tax liability (net of any U.S. federal income Tax benefit) of the applicable group without giving effect to such items.  Unless otherwise provided herein, an Income Tax Detriment shall be deemed to be incurred at such time as payment is made to the relevant Taxing authority upon a Final Determination of items in questions.  In computing the Tax liability of the Scripps Group for purposes of clause (i) of the second sentence of this definition or clause (ii) of the second sentence of the definition of “Income Tax Benefit” above, increases or decreases in the U.S. federal, state or local income Tax liability of the Scripps Group attributable to the effect on Scripps’ (or any Scripps subsidiary’s) basis in the stock of any member of the Scripps Spinco Group will not be taken into account.

“Internal Distribution” shall mean the distribution by SMI of all of the common stock of Scripps Spinco to Scripps.

“IRS” shall mean the U.S. Internal Revenue Service.

“Master Transaction Agreement” shall have the meaning assigned to it in the recitals to this Agreement.

“Minimum Tax Credit” shall have the meaning assigned to it in Section 2.03.

“Newco Common Stock” means the Common Stock, par value $0.01 per share, of Newco.

“Newco Director” shall have the meaning assigned to it in the Employee Matters Agreement.

“Newco Participant” shall have the meaning assigned to it in the Employee Matters Agreement.

 “Newspaper Businesses” shall mean the business conducted directly or indirectly by Scripps Spinco or its Affiliates.

“NOLs” shall have the meaning assigned to it in Section 3.03.

“Parties” shall mean, collectively, Scripps, Scripps Spinco and Newco.

“Party” shall mean, individually, Scripps, Scripps Spinco or Newco.

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“Person” shall mean an individual or a partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, or other entity, without regard to whether such entity is treated as disregarded for U.S. federal income Tax purposes.

“Post-Affiliation Year” shall mean a taxable year of a member of the Scripps Spinco Group with respect to which such member does not join in the filing of a Scripps Consolidated Return.

“Post-Combined Year” shall mean a taxable year of a member of the Scripps Spinco Group with respect to which such member does not join in the filing of a Scripps Combined Return.

“Proportionate Basis” shall mean, with respect to an item or items attributable to a particular member or members of the Scripps Spinco Group, the determination of the portion of such items based on the total value of such items over the total value of all items in the same category for the entire Scripps Group for the same Affiliation Year of the Scripps Group, subject to any appropriate Adjustments thereto, as determined by the Parties.

“Proposed Scripps Group Acquisition Transaction” shall mean a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, to enter into a transaction or series of transactions), as a result of which Scripps would merge or consolidate with any other Person or as a result of which any Person or any group of Persons would (directly or indirectly) acquire, or have the right to acquire through the acquisition of an option or otherwise, from Scripps and/or one or more holders of Scripps Capital Stock, an amount of Scripps Capital Stock that would, when combined with any other changes in ownership of Scripps Capital Stock pertinent for purposes of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, comprise 14% or more of (A) the value of all outstanding Scripps Capital Stock as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (B) the total combined voting power of all outstanding Scripps Capital Stock as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series.  For purposes of determining whether a transaction constitutes an indirect acquisition for purposes of the first sentence of this definition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders.  This definition and the application thereof are intended to monitor compliance with Section 355(e) of the Code and the Treasury Regulations promulgated thereunder.

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“Proposed Scripps Spinco Acquisition Transaction” shall mean a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, to enter into a transaction or series of transactions), as a result of which Newco or Scripps Spinco would merge or consolidate with any other Person or as a result of which any Person or any group of Persons would (directly or indirectly) acquire, or have the right to acquire through the acquisition of an option or otherwise, from Scripps Spinco and/or one or more holders of Scripps Spinco Capital Stock, an amount of Scripps Spinco Capital Stock that would, when combined with any other changes in ownership of Scripps Spinco Capital Stock pertinent for purposes of Section 355(e) of the Code and the Treasury Regulations promulgated thereunder, comprise 4% or more of (A) the value of all outstanding Scripps Spinco Capital Stock as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (B) the total combined voting power of all outstanding Scripps Spinco Capital Stock as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series.  For purposes of determining whether a transaction constitutes an indirect acquisition for purposes of the first sentence of this definition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders.  This definition and the application thereof are intended to monitor compliance with Section 355(e) of the Code and the Treasury Regulations promulgated thereunder.

“RAR” shall have the meaning assigned to it in Section 8.03.

“Representation Letters” shall have the meaning assigned to it in Section 5.01.

“Scripps Additional Excess Items” shall have the meaning assigned to it in the definition of “Excess Scripps Group Benefits.”

“Scripps Affiliate” shall mean an Affiliate of Scripps other than Scripps Spinco and Scripps Spinco Affiliates.

“Scripps AMT Liability” shall have the meaning assigned to it in Section 2.03.

“Scripps Business” shall mean all businesses and operations of the Scripps Group, other than the Scripps Spinco Business.

“Scripps Capital Stock” shall mean all classes or series of stock of Scripps and all options, warrants, derivatives, rights to acquire stock, and other interests and instruments taken into account for purposes of determining a Fifty-Percent or Greater Interest in Scripps.

“Scripps Class A Common Shares” shall mean the Class A Common Shares, par value $0.01 per share, of Scripps.

“Scripps Combined Group” shall mean an affiliated group of corporations (as constituted from time to time) consisting of Scripps and one or more Affiliates of Scripps that files a Scripps Combined Return.

“Scripps Combined Return”  shall mean a Combined Return that is filed by Scripps on behalf of at least two of the following: (i) Scripps, (ii) one or more Affiliates of Scripps, (iii) Scripps Spinco, and (iv) one or more Affiliates of Scripps Spinco

“Scripps Common Voting Shares” shall mean the Shares, par value $0.01 per share, of Scripps.

“Scripps Consolidated Return” shall mean a consolidated U.S. federal income Tax Return filed by Scripps on behalf of the Scripps Group.

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“Scripps Director” shall have the meaning assigned to it in the Employee Matters Agreement.

“Scripps Group” shall mean the affiliated group of corporations (as constituted from time to time), of which Scripps is the common parent, which Scripps determines will join in filing a Scripps Consolidated Return.

“Scripps Group State Tax Liability” shall have the meaning assigned to it in Section 3.02.

“Scripps Issues” shall have the meaning assigned to it in Section 8.02.

“Scripps Options” shall have the meaning assigned to it in the Employee Matters Agreement.

“Scripps Participant” shall have the meaning assigned to it in the Employee Matters Agreement.

“Scripps Restricted Share Units” shall have the meaning assigned to it in the Employee Matters Agreement.

“Scripps Spinco Affiliate” shall mean an Affiliate of Scripps Spinco.

“Scripps Spinco AMT Liability” shall have the meaning assigned to it in Section 2.03.

“Scripps Spinco Business” shall mean the business and operations conducted by the Scripps Spinco Group from time to time, whether prior to, at or after the Effective Time, including the business and operations conducted by the Scripps Spinco Group.

“Scripps Spinco Capital Stock” shall mean all classes or series of stock of Scripps Spinco and all options, warrants, derivatives, rights to acquire stock, and other interests and instruments taken into account for purposes of determining a Fifty-Percent or Greater Interest in Scripps Spinco.

“Scripps Spinco Combined Group” shall mean a group of corporations (as constituted from time to time) that join in the filing of a Scripps Combined Return and that consist of (i) Scripps Spinco (if Scripps Spinco is in existence at the time as of which the determination of such group is made), and (ii) the corporations that, immediately after the Distribution, are Affiliates of Scripps Spinco.  For the avoidance of doubt, the corporations described in clause (ii) of the immediately preceding sentence are members of the Scripps Spinco Combined Group even prior to the formation of Scripps Spinco.

“Scripps Spinco Common Voting Shares” shall mean the Common Voting Shares, par value $0.01 per share, of Scripps Spinco.

“Scripps Spinco Consolidated Return” shall have the meaning assigned to it in the definition of “Adjusted Separate Scripps Spinco Group Federal Tax Liability.^”

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“Scripps Spinco Group” shall mean the group of corporations (as constituted from time to time) that join in the filing of a Scripps Consolidated Return and that consist of (i) Scripps Spinco (if Scripps Spinco is in existence at the time as of which the determination of such group is made), and (ii) the corporations that, immediately after the Distribution, are Affiliates of Scripps Spinco.  For the avoidance of doubt, the corporations described in clause (ii) of the immediately preceding sentence are members of the Scripps Spinco Group even prior to the formation of Scripps Spinco.

“Scripps Spinco Group State Tax Liability” shall have the meaning assigned to it in Section 3.02.

“Scripps Spinco Issues” shall have the meaning assigned to it in Section 8.02.

“Scripps Spinco Member Return” shall have the meaning assigned to it in the definition of “Adjusted Separate Journal Spinco Member Federal Tax Liability”.

“Scripps Spinco Separate AMT” shall have the meaning assigned to it in 2.03.

“Scripps Spinco Unsettled Issues” shall have the meaning assigned to it in Section 8.03.

“Section 336(e) Election” shall have the meaning assigned to it in Section 15.01.

“Section 6.02 Claims” shall mean claims for refund attributable to items described in and filed pursuant to Section 6.02 of this Agreement.

 “Tax” or “Taxes” shall mean any tax, assessment, duty, fee or other charge imposed or collected by any government or political subdivision thereof or any Taxing authority thereunder, including but not limited to, any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, premium, guarantee fund, workers compensation, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, minimum, alternative minimum, estimated or other tax (including any assessment, duty, fee or other charge in the nature of or in lieu of any such tax), and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing.

“Tax Advisor” shall mean a United States law or accounting firm of national standing in the field of taxation selected by the Parties.

“Tax Contest” shall mean an audit, review, examination, contest or any other administrative or judicial proceeding with the purpose or effect of redetermining Taxes of any Party (including any administrative or judicial review of any claim for refund) for any Tax period.

“Tax-Free Status” shall mean the qualification of the Distribution and related transactions as a distribution in which no gain or loss is recognized, and no amount is includible in income, for U.S. federal income Tax purposes (other than intercompany items, excess loss accounts or other items required to be taken into account pursuant to the Treasury Regulations promulgated under Section 1502 of the Code).

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“Tax-Related Losses” shall mean (i) all U.S. federal, state and local Taxes payable pursuant to any Final Determination or otherwise; (ii) all professional fees, and court costs incurred in connection with such Taxes; and (iii) all costs, expenses and damages associated with stockholder litigation or controversies, including but not limited to, any amount paid by Scripps, any Scripps Affiliate, Scripps Spinco, or any Scripps Spinco Affiliate, as the case may be, in respect of the liability of shareholders, whether paid to shareholders, the IRS, any other Taxing authority, or any other person or entity, in each case, arising from the Distribution and related transactions failing to have Tax-Free Status in any manner.

“Tax Return” shall mean any Tax return (including any amended return), report, information return, election, notice or other document filed or to be filed with a Taxing authority, including any schedules or related or supporting information.

“TPIs” shall have the meaning assigned to it in Section 2.03.

“Transferring Scripps Employee” shall have the meaning assigned to it in the Employee Matters Agreement.

“Treasury Regulations shall mean U.S. Treasury regulations issued under the Code.

“Unqualified Tax Opinion” shall mean an unqualified “will” opinion of a law firm of nationally recognized standing in the field of taxation.  Any such opinion shall assume that the Distribution and related transactions would have qualified for Tax-Free Status had the transaction in question not occurred.

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ARTICLE II

U.S. CONSOLIDATED FEDERAL INCOME TAX LIABILITIES

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ARTICLE III

U.S. COMBINED STATE AND LOCAL INCOME TAX LIABILITIES

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ARTICLE IV

SEPARATE TAX RETURN OBLIGATIONS

ARTICLE V

TAX-FREE STATUS OF DISTRIBUTION

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ARTICLE VI

CARRYOVER AND CARRYBACK ITEMS

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ARTICLE VII

U.S. FEDERAL INCOME TAX ADJUSTMENTS

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ARTICLE VIII

INCOME TAX PROCEEDINGS

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ARTICLE IX

PAYMENTS

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SECTION 9.02. Interest on Late Payments.  If any payments hereunder are not made when due, interest shall accrue on the unpaid amount at the underpayment rate for large corporate underpayments, in effect from time to time under Section 6621 of the Code, while such amount is outstanding.

ARTICLE X

TAX RETURNS

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ARTICLE XI

POST AFFILIATION YEARS AND POST COMBINED YEARS

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ARTICLE XII

BOOKS AND RECORDS

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SECTION 12.04. Apportionment of Earnings and Profits and Tax Attributes.  The Parties shall determine the portion, if any, of any earnings and profits, overall foreign loss, capitalized research and development expenditures or other consolidated, combined or unitary Tax attribute which shall be allocated or apportioned to the Scripps Spinco Group under applicable law.  In the event of a subsequent Adjustment to such allocations and apportionments, Scripps shall promptly notify Scripps Spinco in writing of such Adjustment.  For the absence of doubt, Scripps shall not be liable to Scripps Spinco or any member of the Scripps Spinco Group for any failure of any determination under this Section 12.04 to be accurate.

ARTICLE XIII

COMPENSATION AND EMPLOYEE BENEFITS

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ARTICLE XIV

NEWCO’S  OBLIGATIONS

SECTION 14.01. Newco’s Obligations.  On and after the Distribution Date, Newco shall be jointly and severally liable for all obligations of Scripps Spinco pursuant to this Agreement.

ARTICLE XV

PROTECTIVE SECTION 336(e) ELECTION

 

ARTICLE XVI

MISCELLANEOUS

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If to Scripps or any member of the Scripps Group, to:

The ▇.▇. ▇▇▇▇▇▇▇ Company

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

Attention:

Tax Department

▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President and General Counsel

with a copy to:

▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP

▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇

Attention:

▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

If to Scripps Spinco or any member of the Scripps Spinco Group, to:

Desk Spinco, Inc.

▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

Attention:

▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Senior Vice President and General Counsel

with a copy to:

▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP

▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇, ▇▇▇▇▇ ▇▇▇▇

▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇

Attention:

▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

If to Newco, to:

Boat NP Newco, Inc.

▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇

Attention:

▇▇▇▇▇▇ ▇. ▇▇▇▇▇

Chief Executive Officer

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

with a copy to:

▇▇▇▇▇ & Lardner LLP

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇

Attention:

▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III

▇▇▇▇▇▇▇ ▇. ▇▇▇▇

Facsimile:

(▇▇▇) ▇▇▇-▇▇▇▇

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All such notices, requests and other communications will (i) if delivered personally to the address as provided in this section, be deemed given upon delivery, (ii) if delivered by facsimile transmission to the facsimile number as provided in this section, be deemed given upon receipt and (iii) if delivered by mail in the manner described above to the address as provided in this section, be deemed given upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice, request or other communication is to be delivered pursuant to this section).  Any Party from time to time may change its address, facsimile number or other information for the purpose of notices to that Party by giving notice specifying such change to the other Party.

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IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the date first above written.

 

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