Document:

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Exhibit 4.5
			
	 
	 

REGISTRATION RIGHTS AGREEMENT
BY AND AMONG
MADISON SQUARE GARDEN, INC.
AND
THE DOLAN FAMILY AFFILIATES
			
	 
	 

   

 

REGISTRATION RIGHTS AGREEMENT

          Registration Rights Agreement (this “Agreement”) dated as of January 13, 2010 (but effective as provided in Section 9(k)), by and among Madison Square Garden, Inc., a Delaware corporation (the “Company”), the parties set forth on Annex A to this Agreement (the “Dolan Family Affiliates”) and the Qualifying Creditors, if any, who have agreed in writing to become bound by this Agreement. Certain capitalized terms used in this Agreement are defined in Annex B hereto.

WITNESSETH :
          WHEREAS, as of the date of this Agreement, the Dolan Family Affiliates own shares of Cablevision NY Group Class B Common Stock, par value $.01 per share (“Cablevision Class B Common Stock”), and shares of Cablevision NY Group Class A Common Stock, par value $.01 per share (“Cablevision Class A Common Stock”);
          WHEREAS, CSC Holdings Company was party to a Registration Rights Agreement (the “Cablevision Registration Rights Agreement”), dated as of January 27, 1986, with CSC Holdings Inc., a Delaware corporation (“CSC Holdings”), as amended on December 31, 1986, and the Dolan Family Affiliates have certain registration rights under that agreement with respect to shares of Cablevision Class A Common Stock as provided in the Cablevision Registration Rights Agreement;
          WHEREAS, Cablevision intends to distribute (the “Distribution”) to the holders of Cablevision Class A Common Stock all of the outstanding shares of the Company’s Class A Common Stock, $.01 par value (the “Class A Common Stock”), and
   

 

to the holders of Cablevision Class B Common Stock all of the outstanding shares of the Company’s Class B Common Stock, $.01 par value (the “Class B Common Stock”); and
          WHEREAS, the Company and the Dolan Family Affiliates wish to provide for benefits and restrictions applicable to the Shares owned by the Dolan Family Holders following the Distribution, all as provided herein.
          NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein, the parties hereby agree as follows:
          1. Demand Registration by the Dolan Family Parties of the Shares .
          (a) Demand Registration . One or more of the Dolan Family Parties may request in writing that the Company file a registration statement on an appropriate form for the general registration of securities under the Securities Act, and include therein such number of the Shares owned by such Dolan Family Party as such person may specify in its written request; provided , however , that (i) the Company shall not be required to file a registration statement pursuant to this Section 1 if (x) the Shares requested to be so registered do not, in the case of a Dolan Family Holder, together with any Shares timely requested to be registered by other Dolan Family Holders and Other Holders pursuant to the third-to-last sentence of this Section 1(a), have an aggregate Market Price exceeding the Rule 144 Threshold as of the Trading Day immediately preceding the expiration of the applicable Notice Period under such sentence or, in the case of a Qualifying Creditor, do not have an aggregate Market Price exceeding the Rule 144 Threshold as of the Trading Day immediately preceding the date on which the request for registration is received by the Company, or (y) the Company delivers to each Dolan Family Party requesting registration under this Section 1 an opinion of counsel to
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the Company (such opinion and such counsel to be reasonably acceptable to each such Dolan Family Party, it being agreed that the Company’s regular outside securities counsel shall be deemed to be reasonably acceptable counsel for this purpose) to the effect that the Shares proposed to be registered by such person may be offered and sold by such person to the public in the United States together with the Shares requested to be registered by all other Dolan Family Parties and Other Holders (I) without registration pursuant to an effective registration statement under the Securities Act and (II) within the volume limitations under Rule 144(e) promulgated under the Securities Act (or any successor rule or regulation) whether or not such volume limitations are then applicable, (ii) subject to the next sentence, after the death of both Dolan and his spouse, the Dolan Family Holders shall in the aggregate have the right on only four occasions to require the Company to file a registration statement pursuant to this Section 1, and (iii) subject to the next sentence, a Qualifying Creditor may require registration only following the exercise of its remedies under a security agreement with a Dolan Family Holder and for the purpose of Transferring Shares pursuant thereto and each Qualifying Creditor may only require one registration hereunder. The total number of demand registrations under clauses (ii) and (iii) of the immediately preceding sentence and under the corresponding provisions of the Dolan Children Trusts Registration Rights Agreement shall not exceed four. All requests made pursuant to this paragraph shall specify the aggregate number of Shares to be registered and the intended methods of disposition thereof, which methods may include an underwritten public offering. Upon receipt of a written request for registration from a Dolan Family Holder pursuant to the preceding sentences, the Company shall promptly give written notice of the proposed registration to each such
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other Dolan Family Holder and each Other Holder and provide each such other holder with the opportunity to join in such request by written notice to the Company specifying the aggregate number of Shares to be registered by such holder within 20 days from the date of the Company’s written notice (such period is referred to as the “Notice Period”). Subject to Section 1(c) of this Agreement, the Company will use its reasonable best efforts to ensure that each registration statement required to be filed pursuant to this Section 1 shall be filed with the Securities and Exchange Commission (the “Commission”) as promptly as reasonably practicable, but no later than 45 days after receipt of such request by the Company, and the Company shall use its reasonable best efforts to cause such registration statement to be declared effective by the Commission as promptly thereafter as practicable; provided , however , that the Company shall not be required to maintain such effectiveness for more than 90 days. Notwithstanding the Company’s rights to effect a Suspension of Filing or Suspension of Effectiveness in Section 1(c), the Dolan Family Parties that made the registration request under this Section 1(a) shall have the right to withdraw any such request, and such withdrawn request shall not count as a demand registration under clause (ii) or (iii) of this Section 1(a) or the corresponding provisions under the Dolan Children Trusts Registration Rights Agreement, if (1) the registration statement required to be filed pursuant to this Section 1 is not filed with the Commission by the date that is 45 days after such request is received by the Company and has not at the time of such withdrawal been filed with the Commission, or is not declared effective by the date that is 90 days after the date such registration statement is filed with the Commission and has not at the time of such withdrawal been declared effective, and (2) in either case, such Dolan Family Parties
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notify the Company of the withdrawal of such request no later than 10 days after such 45 th or 90 th day, as the case may be.
          (b) Concurrent Primary Offering . Anything in this Section 1 to the contrary notwithstanding, if the Company at the time of receipt of a request for registration pursuant to this Section 1 has a bona fide intent and plan to file a registration statement (other than on Form S-4 or S-8 or any successor forms) covering a primary offering by the Company of its Common Equity Securities, the Company, by notice to the applicable Dolan Family Parties, may delay the filing (but not the preparation) of the requested registration statement for a period ending on the earlier of (i) 60 days after the closing of such offering or (ii) 120 days after receipt of the request for registration; and, provided , further , if the Company either abandons its plan to file such registration statement or does not file the same within 75 days after receipt of such request, the Company shall promptly thereafter file the requested registration statement. The Company may not, pursuant to the immediately preceding sentence, delay the filing of a requested registration statement more than once during any two-year period.
          (c) Suspension of Offering . Upon notice by the Company to any Dolan Family Party which has requested registration under this Section 1 that a negotiation or consummation of a transaction by the Company or any of its subsidiaries is pending or an event has occurred , which negotiation, consummation or event would require disclosure in the registration statement for the requested registration and such disclosure would, in the good faith judgment of the board of directors of the Company, be materially adverse to the business interests of the Company, and the nondisclosure of which in the registration statement would reasonably be expected to cause the registration
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statement to fail to comply with applicable disclosure requirements (a “Materiality Notice”), the Company may delay the filing (but not the preparation) of such registration statement (a “Suspension of Filing”). Upon the delivery of a Materiality Notice by the Company pursuant to the preceding sentence at any time when a registration statement has been filed but not declared effective, the Company may delay seeking the effectiveness of such registration statement (a “Suspension of Effectiveness”), and each Dolan Family Party named therein shall immediately discontinue any offers of Shares under such registration statement until such Dolan Family Party receives copies of a supplemented or amended prospectus that corrects such misstatement or omission, or until it is advised in writing by the Company that offers under such registration statement may be resumed and has received copies of any additional or supplemental filings which are incorporated by reference in such registration statement. Upon the delivery of a Materiality Notice by the Company pursuant to the first sentence of this Section 1(c) at any time when a registration statement has been filed and declared effective, each Dolan Family Party named therein shall immediately discontinue offers and sales of Shares under such registration statement until such Dolan Family Party receives copies of a supplemented or amended prospectus that corrects such misstatement or omission and notice that any post-effective amendment has become effective, or until it is advised in writing by the Company that offers under such registration statement may be resumed and has received copies of any additional or supplemental filings which are incorporated by reference in the registration statement (a “Suspension of Offering;” a Suspension of Filing, a Suspension of Effectiveness and a Suspension of Offering are collectively referred to herein as, “Suspensions”). If so directed by the Company, each Dolan Family
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Party will deliver to the Company all copies (other than permanent file copies then in such Dolan Family Party’s possession) of any prospectus covering Shares in the possession of such Dolan Family Party or its agents current at the time of receipt of any Materiality Notice. In any 12-month period, the aggregate time of all Suspensions shall not, without the consent of a majority of the Dolan Family Holders (by number of Shares held), which consent shall not be unreasonably withheld, exceed 180 days. If interrupted by a Suspension of Offering, any 90-day period in respect of which the Company is required to maintain the effectiveness of a registration statement pursuant to Section 1(a) of this Agreement shall be extended by the number of days during which the Suspension of Offering was in effect. In the event of any Suspension of Offering of more than 30 days in duration prior to which the Dolan Family Parties have sold less than 75% of the Shares to be sold in such offering, the Dolan Family Parties shall be entitled to withdraw such registration prior to the later of (i) the end of the Suspension of Offering and (ii) three business days after the Company has provided the Dolan Family Parties written notice of the anticipated date on which the Suspension of Offering will end, and, if such registration is withdrawn, the related demand for registration shall not count for the purposes of the limitations set forth under clauses (y) and (z) of Section 1(a) or the comparable provisions under the Dolan Trusts Registration Rights Agreement.
          (d) Market Price; Trading Day . For purposes of this Section 1:
          (i) “Market Price” of a share of Class A Common Stock shall mean the weighted average of the closing prices for the Class A Common Stock on each Trading Day (as defined below) in the 30-day period ending on the day prior to the date of determination as reported in the consolidated transaction
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reporting system of the NASDAQ Global Market or on the comparable reporting system of such other exchange or trading system that is at the time the principal market for the Class A Common Stock.
          (ii) “Trading Day” shall mean any day on which trading takes place on the NASDAQ Global Market or such other exchange or trading system that is at the time the principal market for the Class A Common Stock.
          2. Coordination of PiggyBack Registration Rights .
          Each of the Dolan Family Parties hereby acknowledges and consents to the grant by the Company to the Children Trust Holders (as defined in the Dolan Children Trusts Registration Rights Agreement and hereinafter referred to in this Agreement as the “Other Holders”), in the Dolan Children Trusts Registration Rights Agreement, of the right of the Other Holders to include certain of their respective shares of Class A Common Stock in certain registration statements filed pursuant hereto. Each of the Dolan Family Parties further acknowledges and agrees that if any offering hereunder is to be underwritten and if the managing underwriter or underwriters of such offering informs such person in writing that the number of shares of Class A Common Stock which the Dolan Family Parties, and the Other Holders, as the case may be, intend to include in such offering is sufficiently large so as to affect the offering price of such offering materially and adversely, then the respective number of shares of Class A Common Stock to be offered for the account of each Dolan Family Party and each Other Holder, as the case may be, who is participating in such offering shall be reduced pro rata to the extent necessary to reduce the total number of shares of Class A Common Stock to be included in such offering to the number recommended by such managing underwriter.
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Except for such piggyback registration rights granted to Other Holders, and to any transferee of the shares of Class A Common Stock owned by an Other Holder which may be registered pursuant to the Dolan Children Trusts Registration Rights Agreement, neither the Company nor any of its security holders shall have the right to include any of the Company’s securities in any registration statement filed pursuant hereto.
          3. Piggyback Registration of the Shares .
          If the Company proposes to file a registration statement under the Securities Act with respect to an offering (a) by an Other Holder of its holdings of Class A Common Stock pursuant to the Dolan Children Trusts Registration Rights Agreement, (b) by any other holder of any Common Equity Securities or (c) by the Company for its own account of any Common Equity Securities (other than a registration statement on Form S-4 or S-8, or any successor form or a form filed in connection with an exchange offer or an offering of securities solely to the existing stockholders of the Company), the Company shall give written notice of such proposed filing to each of the Dolan Family Holders at least 20 days before the anticipated filing date which shall state whether such registration will be in connection with an underwritten offering and offer such Dolan Family Holders the opportunity to include in such registration statement such number of the Shares as such Dolan Family Holder may request within three days prior to the anticipated filing date. The Company shall use its reasonable best efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit such Dolan Family Holders to be included in the registration for such offering and to include such Shares in such offering on the same terms and conditions as the Common Equity Securities included in such offering. If such proposed offering is to be underwritten, then
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upon request by the managing underwriter or underwriters given to such Dolan Family Holders prior to the effective date of the offering, any Dolan Family Holder electing to have Shares included in the registration statement shall either enter into underwriting agreements with customary terms and conditions for a secondary offering with such underwriter or underwriters providing for the inclusion of such number of the Shares owned by such Dolan Family Holder in such offering on such terms and conditions or, if such Dolan Family Holder shall refuse to enter into any such agreement, the Company shall have the right to exclude from such registration all (but not less than all) of the Shares of such Dolan Family Holder. Notwithstanding the foregoing, (x) in no event will any Dolan Family Holder be required in such underwriting agreement (or in any other agreement in connection with such offering) to (i) make any representations or warranties to or agreements with the underwriters other than representations, warranties or agreements customarily made by selling securityholders in underwritten secondary offerings, (ii) make any representations or warranties to or agreements with the Company other than representations, warranties or agreements regarding such Dolan Family Holder, the ownership of such Dolan Family Holder’s Common Equity Securities, the authorization, validity and binding effect of transaction documents executed by such Dolan Family Holder in connection with such registration and such Dolan Family Holder’s intended method or methods of distribution and any other representation required by law; provided that no Dolan Family Holder shall be required to make any representation or warranty to any person covered by the indemnity in Section 7(b) other than on a several (and not joint) basis, or (iii) furnish any indemnity to any person which is broader than the indemnity customarily furnished by selling security holders in
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underwritten offerings; provided that no Dolan Family Holder shall be required to furnish any indemnity broader than the indemnity furnished by such Dolan Family Holder in Section 7(b) to any person covered by the indemnity in Section 7(b), and (y) if the managing underwriter or underwriters of such offering informs the Dolan Family Holders in writing that the number of Shares which the Dolan Family Holders and the number of Shares which the Other Holders intend to include in such offering is sufficiently large so as to affect materially and adversely the success of such offering, the Shares to be offered for the account of the Dolan Family Holders and the Other Holders shall first be reduced pro rata to the extent necessary to reduce the total number of shares of Class A Common Stock to be included in such offering to the number recommended by such managing underwriter. In giving effect to the foregoing reduction, the respective number of the Shares to be offered for the account of Dolan Family Holders shall be reduced pro rata.
          4. Holdback Agreements .
          (a) Restrictions on Public Sale by Dolan Family Parties . To the extent not inconsistent with applicable law, each Dolan Family Party agrees not to offer publicly or effect any public sale or distribution of Common Equity Securities, including a sale pursuant to Rule 144 under the Securities Act (or any successor rule or regulation), during the seven days prior to, and during the 90-day period beginning on, the effective date of any registration statement filed by the Company pursuant to which any such shares or securities are being registered (except as part of such registration), if and to the extent requested by the Company in the case of a non-underwritten public offering or if and to the extent requested by the managing underwriter or underwriters in the case of an underwritten public offering.
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          (b) Restrictions on Public Sale by the Company and Others . The Company agrees (i) that during the seven days prior to, and during the 90-day period beginning on, the effective date of any registration statement filed at the request of a Dolan Family Party pursuant hereto, the Company will not offer publicly or effect any public sale or distribution of Common Equity Securities (other than any such sale or distribution of such securities in connection with any merger or consolidation of the Company or any subsidiary with, or the acquisition by the Company or a subsidiary of the capital stock or substantially all of the assets of, any other person or any offer or sale of such securities pursuant to a registration statement on Form S-8), and (ii) that any agreement entered into after the date of this Agreement pursuant to which the Company issues or agrees to issue any privately placed Common Equity Securities shall contain a provision under which holders of such securities agree not to effect any public sale or distribution of any such securities during the periods described in (i) above, in each case including a sale pursuant to Rule 144 (or any successor rule or regulation) under the Securities Act (except as part of any such registration, if permitted).
          5. Registration Procedures .
          In connection with any registration of the Shares owned by a Dolan Family Party contemplated hereby, the Company will as expeditiously as possible:
          (a) Furnish to such Dolan Family Party, prior to filing a registration statement, copies of such registration statement as proposed to be filed, and thereafter such number of copies of such registration statement, each amendment and supplement thereto (in each case including all exhibits thereto), the prospectus included in such registration statement (including each preliminary prospectus) and such other documents
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in such quantities as such Dolan Family Party may reasonably request from time to time in order to facilitate the disposition of the Shares.
          (b) Use its reasonable best efforts to register or qualify the Shares being registered as contemplated hereby (the “Registered Class A”) under such other securities or blue sky laws of such jurisdictions as such Dolan Family Party reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such Dolan Family Party to consummate the disposition in such jurisdictions of the Registered Class A; provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (b), (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction.
          (c) Use its reasonable best efforts to cause the Registered Class A to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Company to enable such Dolan Family Party to consummate the disposition of such Registered Class A.
          (d) Notify such Dolan Family Party at any time, (i) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a registration statement or related prospectus or for additional information, (ii) of the issuance by the Commission of any stop order suspending the effectiveness of a registration statement or the initiation of any proceedings for that purpose, (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registered Class A for sale in any jurisdiction, or the initiation or threatening of any proceeding for
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such purpose, and (iv) when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, except as otherwise provided in Section 1(c) hereof, the Company will, as expeditiously as practicable, prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registered Class A, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.
          (e) Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registered Class A for sale in any jurisdiction at the earliest date reasonably practical.
          (f) Cause all such Registered Class A to be listed on the NASDAQ Global Market or on any other securities exchange on which the Class A Common Stock is then listed, provided that the applicable listing requirements are satisfied.
          (g) Enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably requested by the relevant Dolan Family Party in order to expedite or facilitate the disposition of the Registered Class A.
          (h) Make available for inspection by such Dolan Family Party, any underwriter participating in any disposition pursuant to such registration statement, and
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any attorney, accountant or other agent retained by such Dolan Family Party or such underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the officers, directors and employees of the Company to supply all information reasonably requested by any such Inspector in connection with such registration statement. Records which the Company determines, in good faith, to be confidential and which it notifies the Inspectors are confidential shall not be disclosed by the Inspectors unless (i) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction. Any Dolan Family Party shall use reasonable best efforts, prior to any disclosure by any such Inspector under clause (i) of the preceding sentence, to inform the Company that such disclosure is necessary to avoid or correct a misstatement or omission in the registration statement. Each Dolan Family Party further agrees that it will, upon learning that disclosure of Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at the expense of the Company, to undertake appropriate action to prevent disclosure of the Records deemed confidential.
          (i) In the event such sale is pursuant to an underwritten offering, use its reasonable best efforts to (i) obtain a comfort letter from the independent public accountants for the Company in customary form and covering such matters of the type customarily covered by such letters as any Dolan Family Party reasonably requests and (ii) ensure that (A) the representations, warranties and covenants contained in the
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applicable underwriting agreement shall expressly be for the benefit of any Dolan Family Party participating in such sale, (B) the conditions to closing in said underwriting agreement shall be reasonably satisfactory to such Dolan Family Party and (C) to the extent customary, all comfort letters and opinions of counsel contemplated by said underwriting agreements are delivered to such Dolan Family Party on the closing date of the offering.
          (j) Otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission and have the registration statement declared effective as soon as practicable after filing.
          The Company may require any Dolan Family Party to furnish to the Company such information regarding such Dolan Family Party as the Company may from time to time reasonably request in writing, in each case only as required by the Securities Act or the rules and regulations thereunder.
          Each Dolan Family Party agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5(d) hereof, such Dolan Family Party will forthwith discontinue disposition of the Registered Class A pursuant to the registration statement covering such Registered Class A until such Dolan Family Party receives the copies of the supplemented or amended prospectus contemplated by Section 5(d) hereof, and, if so directed by the Company, such Dolan Family Party will deliver to the Company (at the expense of the Company) all copies, other than permanent file copies then in such Dolan Family Party’s possession, of the prospectus covering such Registered Class A current at the time of receipt of such notice. If interrupted by receipt of any such notice pursuant to Section 5(d), any 90 day period in
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respect of which the Company is required to maintain the effectiveness of a registration statement pursuant to Section 1(a) shall be extended by the number of days during which the interruption was in effect.
          6. Registration Expenses .
          Other than in the case of (a) a registration at the request of a Qualifying Creditor or (b) a demand registration under Section 1(a)(ii) after the second such registration (each registration referred to in clause (a) or (b), a “Designated Registration”), all expenses incident to the performance of or compliance with this Agreement by the Company, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws (including reasonable fees and disbursements of counsel in connection with blue sky qualifications of the Registered Class A), printing expenses, messenger and delivery expenses, internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the fees and expenses incurred in connection with the listing of the Registered Class A on the NASDAQ Global Market or any other securities exchange on which such Class A Common Stock is then listed, fees and disbursements of counsel for the Company and its independent certified public accountants (including the expenses of any special audit or comfort letters required by or incident to such performance), securities acts liability insurance (if the Company elects to obtain such insurance), the fees and expenses of any special experts retained by the Company in connection with such registration, the fees and expenses of other persons retained by the Company, including transfer agents, trustees, depositories and registrars (all such expenses being herein called “Registration Expenses”), will be borne by the
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Company. In the case of a Designated Registration, all Registration Expenses other than internal expenses of the Company and securities acts liability insurance obtained by the Company at its election, shall be borne by the Qualifying Creditor or the Dolan Family Holders participating in the offering, as the case may be. The Company will not have any responsibility for any of the expenses of any Dolan Family Party incurred in connection with any registration statement hereunder, including, without limitation, underwriting discounts or commissions attributable to the sale of Registered Class A and fees and expenses of counsel for such Dolan Family Party.
          7. Indemnification; Contribution .
          (a) Indemnification by the Company . The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, (i) each Dolan Family Party, (ii) the directors, officers, partners, employees, agents, beneficiaries, trustees, members and affiliates of each Dolan Family Party, and the directors, officers, partners, employees and agents of each such affiliate, and (iii) each person who controls any of the foregoing (within the meaning of the Securities Act and the Exchange Act), and any investment adviser thereof, against any and all losses, claims, damages, liabilities, expenses (or actions or proceedings in respect thereof) or costs (including, without limitation, costs of investigation and reasonable attorneys’ fees and disbursements incurred by any such indemnified person in connection with enforcing its rights hereunder preparing, pursuing or defending any such loss, claim, damage, liability, expense, action or proceeding), including any of the foregoing incurred in settlement of any litigation commenced or threatened (collectively, “Losses”), joint or several, based upon or arising out of (x) any untrue or alleged untrue statement of material fact
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contained in any registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto, (y) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, or (z) any violation by the Company of any federal, state or common law rule or regulation applicable to the Company in connection with such registration, and the Company will reimburse each such indemnified party for any such Loss, except in each case insofar as any such Loss arises out of or is based upon an untrue statement or omission made in any such registration statement, prospectus, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement, or a violation of law or regulation in reliance upon and in conformity with written information furnished to the Company by such indemnified party expressly for use in the preparation thereof, it being understood that the information to be furnished to the Company for use in the preparation of any such document shall be limited only to the information specifically referenced in the penultimate sentence of Section 7(b). Such indemnity shall remain in full force and effect regardless of any investigation made by such indemnified person and shall survive the Transfer of any Shares by any such indemnified person. The indemnity in this Section 7(a) shall not apply to Losses incurred by a person other than in his or her capacity as a selling security holder. In connection with an underwritten offering, the Company will indemnify the underwriters thereof, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act or the Exchange Act) to the same extent as provided above with respect to the indemnification of each Dolan Family Party.
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          (b) Indemnification by Dolan Family Parties . In connection with any registration statement contemplated hereby, each Dolan Family Party participating in any offer or sale pursuant to such registration statement will furnish to the Company in writing such information with respect to such Dolan Family Party as the Company reasonably requests for use in connection with any such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto and agrees to indemnify and hold harmless, severally, and not jointly, to the fullest extent permitted by law, the Company, its directors, officers, employees, agents and affiliates and the directors, officers, partners, employees and agents of each such affiliate and each person who controls the Company (within the meaning of the Securities Act or the Exchange Act) against any Losses insofar as such Losses arise out of or are based upon (i) an untrue or alleged untrue statement of a material fact contained in any such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a prospectus, in the light of the circumstances under which they were made) not misleading, to the extent, that such untrue statement or omission is contained in or omitted from any information with respect to such Dolan Family Party so furnished in writing by such Dolan Family Party expressly for use in the preparation of such registration statement, prospectus, preliminary prospectus, summary prospectus or amendment or supplement thereto, as the case may be, or (ii) any violation by such Dolan Family Party of any federal, state or common law rule or regulation applicable to such Dolan Family Party in connection with such registration. It is understood that the
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information to be furnished by a Dolan Family Party to the Company for use in the preparation of any such document shall be limited only to information regarding such Dolan Family Party, the ownership of such Dolan Family Party’s Common Equity Securities, such Dolan Family Party’s intended method or methods of distribution and any other information required by law. The liability of a Dolan Family Party under this Section 7(b) shall not exceed the amount of net proceeds received by such Dolan Family Party (net of underwriting discounts borne by such Dolan Family Party) from the sale of the Shares in the offering that is the subject of an indemnity claim under this Section 7(b).
          (c) Conduct of Indemnification Proceedings . Any person entitled to indemnification hereunder agrees to give prompt written notice to the indemnifying party after the receipt by such person of any written notice of the commencement of any action, suit, proceeding or investigation or threat thereof made in writing for which such person will claim indemnification or contribution pursuant to this Agreement, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnified party of its obligations under this Section 7, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice. Unless in the reasonable judgment of such indemnified party, a conflict of interest may exist between such indemnified party and the indemnifying party with respect to such claim, the indemnified party shall permit the indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to such indemnified party. If the indemnifying party is not entitled to, or elects not to, assume the defense of a claim, it will not be obligated to pay the fees and expenses of more than one counsel with respect
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to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim, in which event the indemnifying party shall be obligated to pay the fees and expenses of such additional counsel or counsels. No indemnifying party will be subject to any liability for any settlement made without its consent. No indemnifying party, in the defense of any such claim or litigation shall, except with the consent of the applicable indemnified party, which consent shall not be unreasonably withheld, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.
          (d) Indemnification Payments . Any indemnification required to be made by an indemnifying party pursuant to this Section 7 shall be made by periodic payments to the indemnified party during the course of the action or proceeding, as and when bills are received by such indemnifying party with respect to indemnifiable Losses incurred by such indemnified party.
          (e) Contribution . If the indemnification provided for in this Section 7 from the indemnifying party is unavailable to an indemnified party hereunder in respect of any Losses or is insufficient to hold harmless an indemnified party from all Losses covered thereby, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified parties in connection with the actions which resulted
 -22- 

 

in such Losses, as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or indemnified parties, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statements or omissions. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 7(c), any legal or other fees or expenses reasonably incurred by such party in connection with any investigation or proceeding.
          The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7(e) were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
          Notwithstanding anything else contained herein, (i) no party shall be liable for contribution under this Section 7(e) except to the extent and under such circumstances as such party would have been liable to indemnify under this Section 7 if such indemnification were enforceable under applicable law and (ii) no Dolan Family Party (or related indemnified party) shall be required to contribute any amount in excess of the amount by which net the proceeds received by such Dolan Family Party (net of
 -23- 

 

underwriting discounts borne by such Dolan Family Party) from the sale of Shares in the offering that is the subject of the claim for contribution exceeds the amount of any damages which such Dolan Family Party (or related indemnified party) would have been required to pay by reason of the indemnity under this Section 7 if such indemnification was enforceable under applicable law.
          If indemnification is available under this Section 7, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 7(a) and (b) without regard to the relative fault of said indemnifying party or indemnified party or any other equitable consideration provided for in this Section 7(e).
          8. Participation in Underwritten Registrations . A Dolan Family Party may not participate in any underwritten registration hereunder or under the Dolan Children Trusts Registration Rights Agreement or otherwise unless such Dolan Family Party (a) agrees to sell the Shares on the basis provided in any underwriting arrangements with customary terms and conditions for a secondary offering approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, provided that none of the foregoing shall in any way limit the obligations of the Company under Section 7.
          9. Miscellaneous .
          (a) No Inconsistent Agreements . The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Dolan Family Parties in this Agreement.
 -24- 

 

          (b) Amendments . This Agreement may not be amended, modified or altered except by a writing duly signed by the party against which such amendment or modification is sought to be enforced.
          (c) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the Company, the Dolan Family Parties and the respective successors and permitted assigns of the Company and the Dolan Family Parties. This Agreement may not be assigned by either the Company or a Dolan Family Party without the prior written consent of the other party hereto; provided that the Company agrees that all transferees of all or substantially all of the Shares held by Dolan shall be accorded all of the registration rights of Dolan hereunder. The Company shall assign its rights and obligations hereunder to any entity that succeeds to all or substantially all of its assets, by merger or otherwise, including to any holding company that may be formed to be the parent of the Company, if such entity becomes the issuer of the securities then owned by the Dolan Family Holders.
          (d) Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.
          (e) Headings . The headings in this Agreement are for reference purposes only and shall not constitute a part hereof.
          (f) Construction . This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York without giving any effect to principles of conflicts of laws.
 -25- 

 

          (g) Notices . Any notice required or desired to be delivered hereunder shall be ( i ) in writing, ( ii ) delivered by personal delivery, sent by commercial delivery service or certified mail, return receipt requested, or by facsimile or electronic mail, ( iii ) deemed to have been given on the date of personal delivery, the date set forth in the records of the delivery service or return receipt, or in the case of facsimile or electronic mail, upon dispatch, and ( iv ) addressed as designated on Schedule 1 hereto (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof), with copies as designated on Schedule 1 hereto.
          (h) Severability . If any provision of this Agreement or the application of any provision hereof to any person or circumstance is held invalid, the remainder of this Agreement and the application of such provision to other persons or circumstances shall not be affected unless the provision held invalid shall substantially impair the benefits of the remaining portions of this Agreement.
          (i) Entire Agreement . This Agreement is intended by the parties as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.
          (j) Attorneys’ Fees . In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a
 -26- 

 

defense, the successful party shall be entitled to recover reasonable attorneys’ fees in addition to any other available remedy.
          (k) Effectiveness . This Agreement shall become effective on February 9, 2010, or if the Distribution is not consummated on that date, then it shall become effective on the date on which the Distribution is consummated, in each case without any further action of any of the parties hereto.
 -27- 

 

          IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
															
	 	 	 	 	 
	 	 	MADISON SQUARE GARDEN, INC.
	 	 	 	 	 
	 	 	By:	 	/s/ Robert M. Pollichino
	 	 	 	 	 
	 	 	 	 	Name: Robert M. Pollichino
	 	 	 	 	Title: Executive Vice President and Chief Financial Officer
		
	 	 	 	 	 
	 	 	CHARLES F. DOLAN
	 	 	 	 	 
	 	 	/s/ Charles F. Dolan
	 	 	 
	 	 	Individually and as Trustee of the Charles F. Dolan 2009 Revocable Trust, the Charles F. Dolan 2008 Grantor Retained Annuity Trust #2, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #1, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #2, the Charles F. Dolan 2009 Grantor Retained Annuity Trust #3 and the Charles F. Dolan 2010 Grantor Retained Annuity Trust #1
	 	 	 	 	 
	 	 	HELEN A. DOLAN
	 	 	 	 	 
	 	 	/s/ Helen A. Dolan
	 	 	 
	 	 	Individually and as Trustee of the Helen A. Dolan 2009 Revocable Trust, the Helen A. Dolan 2009 Grantor Retained Annuity Trust #1, the Helen A. Dolan 2009 Grantor Retained Annuity Trust #2 and the Helen A. Dolan 2010 Grantor Retained Annuity Trust #1
	 	 	 	 	 
	 	 	LAWRENCE J. DOLAN
	 	 	 	 	 
	 	 	/s/ Lawrence J. Dolan
	 	 	 
	 	 	As Trustee of the Charles F. Dolan 2009 Family Trusts
	 	 	 	 	 
	 	 	DAVID M. DOLAN
	 	 	 	 	 
	 	 	/s/ David M. Dolan
	 	 	 
	 	 	As Trustee of the Charles F. Dolan 2009 Family Trusts
		

[Signature Page to Holdings Registration Rights Agreement (MSG)]
   

 

															
	 	 	 	 	 
		
	 	 	KATHLEEN M. DOLAN
	 	 	 	 	 
	 	 	/s/ Kathleen M. Dolan
	 	 	 
	 	 	As Trustee of the Tara Dolan 1989 Trust, the Charles Dolan 1989 Trust and the Ryan Dolan 1989 Trust
	 	 	 	 	 
	 	 	DOLAN FAMILY FOUNDATION
	 	 	 	 	 
	 	 	By:	 	/s/ Marianne Dolan Weber
	 	 	 	 	 
	 	 	 	 	Name: Marianne Dolan Weber
	 	 	 	 	Title:
Chairwoman

	 	 	 	 	 
	 	 	DOLAN CHILDREN’S FOUNDATION
	 	 	 	 	 
	 	 	By:	 	/s/ Marianne Dolan Weber
	 	 	 	 	 
	 	 	 	 	Name: Marianne Dolan Weber
	 	 	 	 	Title:
Chairwoman

		

[Signature Page to Holdings Registration Rights Agreement (MSG)]
   

 

ANNEX A
DOLAN FAMILY AFFILIATES
Charles F. Dolan
Helen A. Dolan
Charles F. Dolan 2009 Revocable Trust
Helen A. Dolan 2009 Revocable Trust
Charles F. Dolan 2008 Grantor Retained Annuity Trust #2
Charles F. Dolan 2009 Grantor Retained Annuity Trust #1
Charles F. Dolan 2009 Grantor Retained Annuity Trust #2
Charles F. Dolan 2009 Grantor Retained Annuity Trust #3
Charles F. Dolan 2010 Grantor Retained Annuity Trust #1
Helen A. Dolan 2009 Grantor Retained Annuity Trust #1
Helen A. Dolan 2009 Grantor Retained Annuity Trust #2
Helen A. Dolan 2010 Grantor Retained Annuity Trust #1
Charles F. Dolan 2009 Family Trusts
Tara Dolan 1989 Trust
Charles Dolan 1989 Trust
Ryan Dolan 1989 Trust
Dolan Family Foundation
Dolan Children’s Foundation
 A-1 

 

Annex B
Definitions
          “ Acceptable Marital Trust ” means a marital trust the income of which is for the benefit of any spouse of any descendant of Dolan and the principal of which (including all shares of Class B Common Stock held by such trust) is for the sole benefit of any descendant of Dolan.
          “Cablevision” means Cablevision Systems Corporation, a Delaware corporation.
          “Cablevision Class A Common Stock” has the meaning ascribed thereto in the Recitals.
          “Cablevision Class B Common Stock” has the meaning ascribed thereto in the Recitals.
          “Cablevision Registration Rights Agreement” has the meaning ascribed thereto in the Recitals.
          “Class A Common Stock” has the meaning ascribed thereto in the Recitals.
          “Class B Common Stock” has the meaning ascribed thereto in the Recitals.
          “Collateral Stock” means shares of Class B Common Stock that are the subject of a bona fide pledge or similar perfected security interest.
          “Commission” has the meaning ascribed thereto in Section 1(a) hereof.
          “Common Equity Securities” means shares of any class of common stock, or any securities convertible into or exchangeable or exercisable for shares of any class of common stock of the Company.
          “Company” has the meaning ascribed thereto in the Recitals.
          “Creditor” means any financial institution approved by the Company, such approval not to be unreasonably withheld.
          “CSC Holdings” has the meaning ascribed thereto in the Recitals.
          “Designated Registration” shall have the meaning ascribed thereto in Section 6 hereof.
          “Distribution” has the meaning ascribed thereto in the Recitals.
 B-1 

 

          “Dolan” means Charles F. Dolan; such term does not include Mr. Dolan’s legal representatives or his estate.
          “Dolan Children Trusts Registration Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, between the Company and the Charles F. Dolan Children Trusts.
          “Dolan Family Affiliates” has the meaning ascribed thereto in the Preamble hereof.
          “Dolan Family Holders” means the Dolan Family Affiliates and any other Dolan Family Member who or that is a transferee of shares of Class B Common Stock from a Dolan Family Affiliate or other Dolan Family Member.
          “Dolan Family Member” means Dolan, his spouse, any person related to Dolan by reason of being his ancestor or descendent (natural or adopted), any Acceptable Marital Trust, any entity (whether a corporation, partnership, limited liability company, trust or other entity of any kind) all of the equity or beneficial interests in which are owned or held by any of the foregoing persons, or any person (whether or not such person is one of the foregoing persons) who is a trustee for, or is acting on behalf of, any of such foregoing persons.
          “Dolan Family Parties” means all Dolan Family Holders and any Qualifying Creditor.
          “Exchange Act” means the Securities Exchange Act of 1934, as amended.
          “Inspectors” has the meaning ascribed thereto in Section 5(g) hereof.
          “Losses” has the meaning ascribed thereto in Section 7(a) hereof.
          “Market Price” has the meaning ascribed thereto in Section 1(d) hereof.
          “Materiality Notice” has the meaning ascribed thereto in Section 1(c) hereof.
          “Other Holders” has the meaning ascribed thereto in Section 2 hereof.
          “Public Offering” has the meaning ascribed thereto in the Recitals.
          “Qualifying Creditor” means a Creditor who has, at the written request of a Dolan Family Holder, signed an instrument in form reasonably acceptable to the Company agreeing to be bound by the provisions of this Agreement. Any affiliate of a Qualifying Creditor who owns Collateral Stock shall be deemed to be the same person as the Qualifying Creditor for purposes of Section 1.
 B-2 

 

          “Records” has the meaning ascribed thereto in Section 5(g) hereof.
          “Registered Class A” has the meaning ascribed thereto in Section 5(b).
          “Registration Expenses” has the meaning ascribed thereto in Section 6 hereof.
          “Rule 144 Threshold” means the product of (a) the maximum number of shares of Class A Common Stock of the Company that could be sold under Rule 144(e)(1) under the Securities Act (or any successor rule or regulation) and (b) the applicable Market Price provided for in this Agreement.
          “Securities Act” means the Securities Act of 1933, as amended.
          “Shares” means (i) shares of Class A Common Stock and Class B Common Stock acquired by a Dolan Family Holder in the Distribution, (ii) any shares of Class A Common Stock or Class B Common Stock acquired by any Dolan Family Holder as a result of any stock split, stock dividend or other recapitalization with respect to any shares of Class A Common Stock and Class B Common Stock acquired by any Dolan Family Holder in the Distribution or acquired as provided in this clause (ii) and (iii) shares of Class A Common Stock acquired upon conversion of Class B Common Stock acquired in the Distribution or acquired as provided in clause (ii).
          “Suspension of Effectiveness” has the meaning ascribed thereto in Section 2(c) hereof.
          “Suspension of Filing” has the meaning ascribed thereto in Section 1(c) hereof.
          “Suspension of Offering” has the meaning ascribed thereto in Section 1(c) hereof.
          “Trading Day” has the meaning ascribed thereto in Section 1(d) hereof.
          “Transfer” means a sale, transfer or other disposition.
 B-3Document

Exhibit 10.3
 
			
	 
 

TAX DISAFFILIATION AGREEMENT
BETWEEN
THE MADISON SQUARE GARDEN COMPANY
( TO BE RENAMED MSG NETWORKS INC. )
AND
MSG SPINCO, INC.
(TO BE RENAMED THE MADISON SQUARE GARDEN COMPANY)
dated as of September 11, 2015
 
			
	 
 

			
	

TABLE OF CONTENTS
 
																											
									
	SECTION 1.	  	Definition of Terms	  	 	2	  
			
	SECTION 2.	  	Allocation of Taxes and Tax-Related Losses	  	 	11	  
				
		  	2.1	  	Allocation of Taxes	  	 	11	  
				
		  	2.2	  	Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes	  	 	12	  
				
		  	2.3	  	Tax Payments	  	 	12	  
			
	SECTION 3.	  	Preparation and Filing of Tax Returns	  	 	13	  
				
		  	3.1	  	Combined Returns	  	 	13	  
				
		  	3.2	  	Separate Returns	  	 	13	  
				
		  	3.3	  	Agent	  	 	13	  
				
		  	3.4	  	Provision of Information	  	 	13	  
				
		  	3.5	  	Special Rules Relating to the Preparation of Tax Returns	  	 	14	  
				
		  	3.6	  	Refunds, Credits, Offsets, Tax Benefits	  	 	14	  
				
		  	3.7	  	Carrybacks	  	 	15	  
				
		  	3.8	  	Amended Returns	  	 	15	  
				
		  	3.9	  	Compensatory Equity Interests	  	 	15	  
			
	SECTION 4.	  	Tax Payments	  	 	16	  
				
		  	4.1	  	Payment of Taxes to Tax Authority	  	 	16	  
				
		  	4.2	  	Indemnification Payments	  	 	16	  
				
		  	4.3	  	Interest on Late Payments	  	 	16	  
				
		  	4.4	  	Tax Consequences of Payments	  	 	16	  
				
		  	4.5	  	Adjustments to Payments	  	 	16	  
				
		  	4.6	  	Section 336(e) Election	  	 	17	  
				
		  	4.7	  	Certain Final Determinations	  	 	18	  
			
	SECTION 5.	  	Cooperation and Tax Contests	  	 	18	  
				
		  	5.1	  	Cooperation	  	 	18	  
				
		  	5.2	  	Notices of Tax Contests	  	 	18	  
				
		  	5.3	  	Control of Tax Contests	  	 	18	  
				
		  	5.4	  	Cooperation Regarding Tax Contests	  	 	19	  
			
	SECTION 6.	  	Tax Records	  	 	19	  
				
		  	6.1	  	Retention of Tax Records	  	 	19	  
				
		  	6.2	  	Access to Tax Records	  	 	19	  
				
		  	6.3	  	Confidentiality	  	 	20	  

 
i

			
	

																											
									
	SECTION 7.	  	Representations and Covenants	  	 	20	  
				
		  	7.1	  	Covenants of Networks and Spinco	  	 	20	  
				
		  	7.2	  	Private Letter Ruling	  	 	20	  
				
		  	7.3	  	Covenants of Spinco	  	 	21	  
				
		  	7.4	  	Covenants of Networks	  	 	21	  
				
		  	7.5	  	Exceptions	  	 	22	  
				
		  	7.6	  	Injunctive Relief	  	 	23	  
				
		  	7.7	  	Further Assurances	  	 	23	  
			
	SECTION 8.	  	General Provisions	  	 	23	  
				
		  	8.1	  	Construction	  	 	23	  
				
		  	8.2	  	Ancillary Agreements	  	 	23	  
				
		  	8.3	  	Counterparts	  	 	23	  
				
		  	8.4	  	Notices	  	 	23	  
				
		  	8.5	  	Amendments	  	 	24	  
				
		  	8.6	  	Assignment	  	 	24	  
				
		  	8.7	  	Successors and Assigns	  	 	24	  
				
		  	8.8	  	Change in Law	  	 	24	  
				
		  	8.9	  	Authorization, Etc.	  	 	24	  
				
		  	8.10	  	Termination	  	 	24	  
				
		  	8.11	  	Subsidiaries	  	 	25	  
				
		  	8.12	  	Third-Party Beneficiaries	  	 	25	  
				
		  	8.13	  	Double Recovery	  	 	25	  
				
		  	8.14	  	Titles and Headings	  	 	25	  
				
		  	8.15	  	Governing Law	  	 	25	  
				
		  	8.16	  	Waiver of Jury Trial	  	 	25	  
				
		  	8.17	  	Severability	  	 	25	  
				
		  	8.18	  	No Strict Construction; Interpretation	  	 	25	  

 
ii

			
	

TAX DISAFFILIATION AGREEMENT
THIS TAX DISAFFILIATION AGREEMENT (the “ Agreement ”) is dated as of September 11, 2015, by and between The Madison Square Garden Company (to be renamed MSG Networks Inc. after the Effective Time (as defined below)), a Delaware corporation (“ Networks ”), and MSG Spinco, Inc. (to be renamed The Madison Square Garden Company after the Effective Time), a Delaware corporation and an indirect wholly-owned subsidiary of Networks (“ Spinco ” and, together with Networks, the “ Parties ”, and each, a “ Party ”). Unless otherwise indicated, all “Section” references in this Agreement are to sections of the Agreement.
RECITALS
WHEREAS, the Board of Directors of Networks determined that, based on the Corporate Business Purposes (as defined below), it is in the best interests of Networks and its stockholders to separate the businesses of Spinco, all as more fully described in Spinco’s registration statement on Form 10, from Networks’ other businesses on the terms and conditions set forth in the Distribution Agreement between Networks and Spinco dated on or about the date hereof (the “ Distribution Agreement ”);
WHEREAS, the Board of Directors of Regional MSG Holdings LLC (“ RMH ”) authorized the distribution to Networks, as the sole member of RMH, of all the Spinco Pre-Recapitalization Shares (as defined below) (the “ RMH Distribution ”) and has determined that, based on the Corporate Business Purposes, the RMH Distribution is in the best interests of RMH and its stockholder and has approved the Distribution Agreement;
WHEREAS, the Board of Directors of Networks has authorized the distribution to the holders of the issued and outstanding shares of Class A Common Stock, par value $0.01 per share, of Networks (“ Networks Class A Common Stock ”) and Class B Common Stock, par value $0.01 per share, of Networks (“ Networks Class B Common Stock ” and, together with the Networks Class A Common Stock, the “ Networks Common Stock ”) as of the record date for the distribution of all the issued and outstanding shares of Class A Common Stock, par value $0.01 per share, of Spinco (the “ Spinco Class A Common Shares ”) and Class B Common Stock, par value $0.01 per share, of Spinco (the “ Spinco Class B Common Shares ”) (each such Spinco Class A Common Share and Spinco Class B Common Share is individually referred to as a “ Spinco Share ” and collectively referred to as the “ Spinco Shares ”), respectively, on the basis of one Spinco Share for every one share of Networks Common Stock (the “ Distribution ”);
WHEREAS, Networks and Spinco intend the MSGH Contribution (as defined below) to qualify as a transaction to which sections 351(a) and 1032(a) of the Code (as defined below) apply;
WHEREAS, Networks and Spinco intend the MSGH Distribution (as defined below) to qualify, with respect to Networks, as a distribution to which section 731(a) of the Code applies;
WHEREAS, Networks and Spinco intend the Recapitalization (as defined below) to qualify as a tax-free transaction under section 368(a)(1)(E) of the Code;

			
	

WHEREAS, Networks and Spinco intend the Eden Insurance Contribution (as defined below) and Distribution to qualify for the Tax-Free Status (as defined below);
WHEREAS, the Boards of Directors of Networks and Spinco have each determined that the Distribution and the other transactions contemplated by the Distribution Agreement, and the Ancillary Agreements (as defined below) are in furtherance of and consistent with the Corporate Business Purposes and, as such, are in the best interests of their respective companies and stockholders or sole stockholder, as applicable, and have approved the Distribution Agreement, and each of the Ancillary Agreements;
WHEREAS, the Parties set forth in the Distribution Agreement the principal arrangements between them regarding the separation of the Spinco Group (as defined below) from the Networks Group (as defined below); and
WHEREAS, the Parties desire to provide for and agree upon the allocation between the Parties of liabilities for Taxes (as defined below) arising prior to, as a result of, and subsequent to the Distribution, and to provide for and agree upon other matters relating to Taxes;
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties hereby agree as follows:
SECTION 1. Definition of Terms . For purposes of this Agreement (including the recitals hereof), the following terms have the following meanings:
“Affiliate” has the meaning set forth in the Distribution Agreement. For the avoidance of doubt, the term “Affiliate” as it applies to Spinco shall include the Spinco Company Entities.
“Agreed Treatment” means the treatment of (i) the MSGH Contribution as a transaction to which sections 351(a) and 1032(a) of the Code apply, (ii) the MSGH Distribution with respect to Networks as a distribution to which section 731(a) of the Code applies, (iii) the Recapitalization as a tax-free transaction to which section 368(a)(1)(E) of the Code applies, and (iv) the Eden Insurance Contribution and the Distribution in accordance with the Tax-Free Status.
“Agreement” has the meaning set forth in the preamble hereof.
“Ancillary Agreements” means the agreements encompassed by such term in the Distribution Agreement.
“Assignment Agreement” means the Assignment Agreement and Stock Power between Networks and Spinco dated on or about the date hereof.
“Business Day” has the meaning set forth in the Distribution Agreement.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
 
2

			
	

“Combined Return” means a consolidated, combined or unitary Tax Return that includes, by election or otherwise, one or more members of the Networks Group and one or more members of the Spinco Group.
“Companies” means Networks and Spinco.
“Company” means Networks or Spinco, as the context requires.
“Compensatory Equity Interests” means options, stock appreciation rights, restricted stock, restricted stock units or other rights with respect to Networks Common Stock or Spinco Shares that are granted by Networks, Spinco or any of their respective Subsidiaries in connection with employee or director compensation or other employee benefits.
“Compensatory Equity Net Share Settlements” means “net share settlement” transactions with respect to Compensatory Equity Interests between either Party (or any of their respective Subsidiaries) on the one hand and the employee (or director, as the case may be) of such Party or the other Party (or any of their respective Subsidiaries) on the other hand, in each case pursuant to the terms of the relevant agreement with respect to such Compensatory Equity Interests.
“Contribution Agreement” means the Contribution Agreement between Networks, MSGH, and Spinco dated on or about the date hereof.
“Controlling Party” means, with respect to a Tax Contest, the Person that has responsibility, control and discretion in handling, defending, settling or contesting such Tax Contest.
“Corporate Business Purposes” means the Corporate Business Purposes as set forth in the Tax Opinion Representations (including any appendices thereto) and the “Reasons for the Distribution” in Spinco’s registration statement on Form 10.
“Deconsolidation Taxes” means any Taxes imposed on any member of the Networks Group or the Spinco Group as a result of or in connection with the MSGH Contribution, the MSGH Distribution, the Eden Insurance Contribution and the Distribution (or any portion thereof), including, but not limited to, (i) MSGH Contribution Taxes, (ii) MSGH Distribution Taxes, and (iii) any Taxes imposed pursuant to or as a result of section 311 or 1502 of the Code or the Treasury Regulations thereunder (and under any applicable similar state, local or foreign law), but excluding any Transfer Taxes and Distribution Taxes.
“Disclosing Party” has the meaning set forth in Section 6.3.
“Distribution” has the meaning set forth in the recitals hereof.
“Distribution Agreement” has the meaning set forth in the recitals hereof.
“Distribution Date” has the meaning set forth in the Distribution Agreement.
 
3

			
	

“Distribution Taxes” means any Taxes arising from a Final Determination that the Eden Insurance Contribution and the Distribution failed to be tax-free to Networks in accordance with the requirements of section 355 or section 368(a)(1)(D) of the Code (including any Taxes resulting from the application of section 355(d) or (e) to the Distribution), or that any stock of Spinco failed to qualify as “qualified property” within the meaning of section 355(c)(2) of the Code (including as a result of the application of section 355(d) or 355(e) of the Code to the Distribution) or where applicable, failed to be stock permitted to be received without recognition of gain or loss under section 361(a) of the Code, and shall include any Taxes resulting from an election under section 336(e) of the Code in the circumstances set forth in Section 4.6 hereof.
“Due Date” has the meaning set forth in Section 4.3.
“Eden Insurance Contribution” means the contribution by Networks to Spinco of all of the outstanding common stock of Eden Insurance Company, Inc., a New York corporation, as effected pursuant to the Assignment Agreement.
“Effective Time” means 11:59 p.m., New York City time, on the Distribution Date.
“Employee Matters Agreement” means the Employee Matters Agreement by and between Networks and Spinco entered into on or about the date hereof.
“Escheat Liability” means any unclaimed property or escheat liability, including any interest, penalty, administrative charge, or addition thereto and further including all costs of responding to or defending against an audit, examination, or controversy with respect to such liability, imposed by or on behalf of a governmental entity with respect to any property or obligation (including, without limitation, uncashed checks to vendors, customers, or employees and non-refunded overpayments).
“Excess Taxes” means the excess of (x) the Taxes for which Networks Group is liable if an election is made pursuant to section 336(e) of the Code under Section 4.6 of this Agreement, over (y) the Taxes for which Networks Group is liable if such an election is not made, in each case taking into account the allocation of Taxes that is otherwise applicable in this Agreement but without regard to Section 4.6 hereof.
“Expert Law Firm” means a law firm nationally recognized for its expertise in the matter for which its opinion is sought.
“Fifty-Percent Equity Interest” means, in respect of any corporation (within the meaning of the Code), stock or other equity interests of such corporation possessing (i) at least fifty percent (50%) of the total combined voting power of all classes of stock or equity interests entitled to vote, or (ii) at least fifty percent (50%) of the total value of shares of all classes of stock or of the total value of all equity interests.
“Filer” means the Company that is responsible for filing the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Final Determination” means a determination within the meaning of section 1313 of the Code or any similar provision of state or local Tax Law.
 
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“Group” means the Networks Group or the Spinco Group, as the context requires.
“Indemnified Party” has the meaning set forth in Section 4.5.
“Indemnifying Party” has the meaning set forth in Section 4.5.
“Interest Rate” means (x) the “Applicable Rate” as set forth in the Distribution Agreement, or (y) if higher and if with respect to a payment to indemnify for a Tax to which the “large corporate underpayment” provision within the meaning of section 6621(c) of the Code applies, such interest rate that would be applicable at such time to such “large corporate underpayment.”
“IRS” means the Internal Revenue Service.
“MSGH” means MSG Holdings, L.P., a Delaware limited partnership.
“MSGH Contribution” means the contribution by MSGH to Spinco of (i) all of MSGH’s interests in the Spinco Company Entities and (ii) approximately $1.459 billion in cash, in exchange for the Spinco Pre-Recapitalization Shares.
“MSGH Contribution Gain” means any income or gain (including in respect of Schedule C) recognized upon the MSGH Contribution.
“MSGH Contribution Taxes” means any Taxes imposed on the MSGH Contribution Gain.
“MSGH Distribution” means the distribution by MSGH to RMH of all Spinco Pre-Recapitalization Shares received by MSGH pursuant to the MSGH Contribution.
“MSGH Distribution Gain” means any gain recognized by Networks upon the MSGH Distribution from the deemed sale or exchange of unrealized receivables or inventory items (as defined in section 751(c) and (d) of the Code, respectively) of MSGH.
“MSGH Distribution Taxes” means any Taxes imposed on the Networks Distribution Gain.
“Networks” has the meaning set forth in the preamble hereof.
“Networks Business” has the meaning ascribed to the term “Networks Business” in the Tax Opinion Representations that constitutes an active trade or business (within the meaning of section 355(b) of the Code) of the separate affiliated group of Networks.
“Networks Class A Common Stock” has the meaning set forth in the recitals to this Agreement.
“Networks Class B Common Stock” has the meaning set forth in the recitals to this Agreement.
 
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“Networks Common Stock” has the meaning set forth in the recitals to this Agreement.
“Networks Group” has the meaning ascribed to the term “MSG Networks Group” in the Distribution Agreement.
“Networks Indemnified Party” includes each member of the Networks Group, each of their representatives and Affiliates, each of their respective directors, officers, managers and employees, and each of their heirs, executors, trustees, administrators, successors and assigns.
“Networks Restricted Action” means any action by Networks or any of its Subsidiaries inconsistent with the covenants set forth in Section 7.4(a); and, for the avoidance of doubt, an action shall be and remain a Networks Restricted Action even if Networks or any of its Subsidiaries is permitted to take such an action pursuant to Section 7.5(b).
“Networks Tainting Act” means any breach of a representation or covenant made by Networks in Section 7.1 of this Agreement or the taking of a Networks Restricted Action, if as a result of such breach or taking of a Networks Restricted Action a Final Determination is made that the Eden Insurance Contribution and the Distribution failed to be tax-free by reason of (i) failing to qualify as a distribution described in section 355 and section 368(a)(1)(D) of the Code, or (ii) any stock of Spinco failing to qualify as “qualified property” within the meaning of section 355(c)(2) of the Code (including as a result of the application of section 355(d) or 355(e) of the Code to the Distribution) or where applicable, failing to be stock permitted to be received without recognition of gain or loss under section 361(a) of the Code.
“Non-Controlling Party” has the meaning set forth in Section 5.3(a).
“Non-Filer” means any Company that is not responsible for filing the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Other Party” has the meaning set forth in Section 4.6(b).
“Party” has the meaning set forth in the preamble hereof.
“Parties” has the meaning set forth in the preamble hereof.
“Payment Date” means (x) with respect to any U.S. federal income tax return, the date on which any required installment of estimated taxes determined under section 6655 of the Code is due, the date on which (determined without regard to extensions) filing the return determined under section 6072 of the Code is required, and the date the return is filed, and (y) with respect to any other Tax Return, the corresponding dates determined under the applicable Tax Law.
“Periodic Taxes” means Taxes imposed on a periodic basis that are not based upon or related to income or receipts. Periodic Taxes include property Taxes and similar Taxes.
“Permitted Acquisition” means any acquisition (as a result of the Distribution) of Spinco Shares solely by reason of holding Networks Common Stock, but does not include such an acquisition if such Networks Common Stock, before such acquisition, was itself acquired in a manner to which the flush language of section 355(e)(3)(A) of the Code applies (thus causing, for the avoidance of doubt, section 355(e)(3)(A)(i), (ii), (iii) or (iv) of the Code not to apply).
 
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“Person” means any individual, corporation, company, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind.
“Post-Distribution Period” means any Tax Year or other taxable period beginning after the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period that begins at the beginning of the day after the Distribution Date.
“Pre-Distribution Period” means any Tax Year or other taxable period that ends on or before the Distribution Date and, in the case of any Straddle Period, that part of the Tax Year or other taxable period through the end of the day on the Distribution Date.
“Preparer” means the Company that is responsible for the preparation and filing of the applicable Tax Return pursuant to Sections 3.1 or 3.2.
“Recapitalization” means the issuance of all Spinco Shares to Networks in exchange for all of Networks’ Spinco Pre-Recapitalization Shares.
“Receiving Party” has the meaning set forth in Section 6.3.
“Responsible Party” has the meaning set forth in Section 4.6(b).
“Restriction Period” means the period beginning on the Distribution Date and ending twenty-four (24) months after the Distribution Date.
“Ruling” means the private letter ruling that was issued to Networks in response to the Ruling Request.
“Ruling Request” means the request for ruling in connection with the Distribution filed by Networks with the IRS, as amended or supplemented, including any appendices and exhibits attached thereto or included therewith and including so much of the pre-submission materials submitted by Networks to the IRS, as related to the Distribution.
“Satisfactory Guidance” means either a ruling from the IRS or an Unqualified Opinion, in either case reasonably satisfactory to Networks or Spinco (as the context dictates) in both form and substance.
“Separate Return” means (a) in the case of any Tax Return required under relevant Tax Law to be filed by any member of the Networks Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the Spinco Group, and (b) in the case of any Tax Return required under relevant Tax Law to be filed by any member of the Spinco Group (including any consolidated, combined or unitary Tax Return), any such Tax Return that does not include any member of the Networks Group.
 
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“Spinco” has the meaning set forth in the preamble hereof.
“Spinco Business” has the meaning ascribed to the term “Spinco Business” in the Tax Opinion Representations that constitutes an active trade or business (within the meaning of section 355(b) of the Code) of the separate affiliated group of Spinco.
“Spinco Class A Common Shares” has the meaning set forth in the recitals to this Agreement.
“Spinco Class B Common Shares” has the meaning set forth in the recitals to this Agreement.
“Spinco Company Entities” means, collectively, the entities listed on Schedule A of the Distribution Agreement.
“Spinco Group” has the meaning ascribed to the term “Spinco Group” in the Distribution Agreement.
“Spinco Indemnified Party” includes each member of the Spinco Group, each of their representatives and Affiliates, each of their respective directors, officers, managers and employees, and each of their heirs, executors, trustees, administrators, successors and assigns.
“Spinco Pre-Recapitalization Shares” means the single class of issued and outstanding common stock, par value $0.01 per share, of Spinco.
“Spinco Restricted Action” means any action by Spinco or any of its Subsidiaries inconsistent with the covenants set forth in Section 7.3; and, for the avoidance of doubt, an action shall be and remain a Spinco Restricted Action even if Spinco or any of its Subsidiaries is permitted to take such an action pursuant to Section 7.5(a).
“Spinco Shares” has the meaning set forth in the recitals to this Agreement.
“Spinco Tainting Act” means a breach of the covenant made by Spinco in Section 7.1 of this Agreement or the taking of a Spinco Restricted Action, if as a result of such breach or taking of a Spinco Restricted Action a Final Determination is made that the MSGH Contribution failed to be tax-free by reason of the application of section 351(e) of the Code to the MSGH Contribution, or that the Eden Insurance Contribution and the Distribution failed to be tax-free by reason of (i) failing to qualify as a distribution described in section 355 and section 368(a)(1)(D) of the Code, or (ii) any stock of Spinco failing to qualify as “qualified property” within the meaning of section 355(c)(2) of the Code (including as a result of the application of section 355(d) or 355(e) of the Code to the Distribution) or where applicable, failing to be stock permitted to be received without recognition of gain or loss under section 361(a) of the Code.
“Straddle Period” means any taxable period beginning on or prior to, and ending after, the Distribution Date.
 
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“Subsidiary” when used with respect to any Person, means (i)(A) a corporation a majority in voting power of whose share capital or capital stock with voting power, under ordinary circumstances, to elect directors is at the time, directly or indirectly, owned by such Person, by one or more Subsidiaries of such Person, or by such Person and one or more Subsidiaries of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, (B) a partnership or limited liability company in which such Person or a Subsidiary of such Person is, at the date of determination, (1) in the case of a partnership, a general partner of such partnership with the power affirmatively to direct the policies and management of such partnership or (2) in the case of a limited liability company, the managing member or, in the absence of a managing member, a member with the power affirmatively to direct the policies and management of such limited liability company, or (C) any other Person (other than a corporation) in which such Person, one or more Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, at the date of determination thereof, has or have (1) the power to elect or direct the election of a majority of the members of the governing body of such Person, whether or not such power is subject to a voting agreement or similar encumbrance, or (2) in the absence of such a governing body, at least a majority ownership interest or (ii) any other Person of which an aggregate of 50% or more of the equity interests are, at the time, directly or indirectly, owned by such Person and/or one or more Subsidiaries of such Person. For the avoidance of doubt, the term “Subsidiary” as it applies to Spinco shall include the Spinco Company Entities.
“Tax” or “Taxes” means any income, gross income, gross receipts, profits, capital stock, franchise, withholding, payroll, social security, workers’ compensation, employment, unemployment, disability, property, ad valorem, stamp, excise, severance, occupation, service, sales, use, license, lease, transfer, import, export, value added, alternative minimum, estimated or other similar tax (including any fee, assessment, or other charge in the nature of or in lieu of any tax) imposed by any Tax Authority, any Escheat Liability, abandoned, or unclaimed property law, and any interest, penalties, additions to tax, or additional amounts in respect of the foregoing, together with any reasonable expenses, including attorneys’ fees, incurred in defending against any such tax.
“Tax Adjustment” has the meaning set forth in Section 4.7.
“Tax Authority” means, with respect to any Tax, the governmental entity or political subdivision, agency, commission or authority thereof that imposes such Tax, and the agency, commission or authority (if any) charged with the assessment, determination or collection of such Tax for such entity or subdivision.
“Tax Benefit” means a reduction in the Tax liability of a taxpayer (or of the Group of which it is a member) for any taxable period. Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer (or of the Group of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been if such Tax liability were determined without regard to such Tax Item.
“Tax Contest” means an audit, review, examination, or any other administrative or judicial proceeding with the purpose, potential or effect of redetermining Taxes of any member of either Group (including any administrative or judicial review of any claim for refund).
 
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“Tax Counsel” means the advisors listed in Schedule A.
“Tax-Free Status” means the qualification of the Eden Insurance Contribution and the Distribution (a) as a transaction described in section 355 and section 368(a)(1)(D) of the Code, (b) as a transaction in which the stock of Spinco distributed by Networks is “qualified property” for purposes of sections 355(c)(2), 355(d), 355(e) and 361(c) of the Code, and (c) a transaction in which shareholders of Networks will not recognize income, gain or loss upon the Distribution under section 355(a) of the Code (except with respect to cash received in lieu of fractional shares).
“Tax Item” means, with respect to any Tax, any item of income, gain, loss, deduction, credit, adjustment in basis, or other attribute that may have the effect of increasing or decreasing any Tax.
“Tax Law” means the law of any governmental entity or political subdivision thereof, and any controlling judicial or administrative interpretations of such law, relating to any Tax.
“Tax Opinion” means the opinion (or opinions) to be delivered by Tax Counsel to Networks in connection with the Distribution to the effect that (i) Networks will not recognize gain or loss upon the Distribution under section 355(c) or section 361(c) of the Code, and (ii) shareholders of Networks will not recognize gain or loss upon the Distribution under section 355(a) of the Code, and no amount will be included in such shareholders’ income, except in respect of cash received in lieu of fractional shares of Spinco.
“Tax Opinion Representations” means the written and signed representations delivered to Tax Counsel in connection with the Tax Opinion.
“Tax Records” means Tax Returns, Tax Return work papers, documentation relating to any Tax Contests, and any other books of account or records required to be maintained under applicable Tax Laws (including but not limited to section 6001 of the Code) or under any record retention agreement with any Tax Authority.
“Tax Return” means any report of Taxes due, any claims for refund of Taxes paid, any information return with respect to Taxes, or any other similar report, statement, declaration, or document filed or required to be filed (by paper, electronically or otherwise) under any applicable Tax Law, including any attachments, exhibits, or other materials submitted with any of the foregoing, and including any amendments or supplements to any of the foregoing.
“Tax Year” means, with respect to any Tax, the year, or shorter period, if applicable, for which the Tax is reported as provided under applicable Tax Law.
“Transactions” means the transactions contemplated by the Assignment Agreement, the Contribution Agreement and the Distribution Agreement and includes, for the avoidance of doubt, (i) the MSGH Contribution, (ii) the MSGH Distribution, (iii) the Recapitalization, (iv) the Eden Insurance Contribution and (v) the Distribution.
“Transfer Taxes” means all U.S. federal, state, local or foreign sales, use, privilege, transfer, documentary, gains, stamp, duties, recording, and similar Taxes and fees (including any penalties, interest or additions thereto) imposed upon any Party hereto or any of its Affiliates in connection with the Distribution.
 
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“Transition Services Agreement” means the transition services agreement between Networks and Spinco dated on or about the date hereof.
“Treasury Regulations” means the regulations promulgated from time to time under the Code as in effect for the relevant Tax Year.
“Unqualified Opinion” means an unqualified “will” opinion of an Expert Law Firm that permits reliance by Networks or Spinco (as the context dictates). For the avoidance of doubt, an Unqualified Opinion must be based on factual representations and assumptions that are reasonably satisfactory to Networks or Spinco (as the context dictates).
SECTION 2. Allocation of Taxes and Tax-Related Losses .
2.1 Allocation of Taxes . Except as provided in Section 2.2 (Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes), Taxes shall be allocated as follows:
(a) Networks shall be liable for and shall be allocated (i) any Taxes attributable to members of the Networks Group for all periods, (ii) any Taxes attributable to members of the Spinco Group for any Pre-Distribution Period, other than the Taxes listed on Schedule D, and (iii) any Taxes listed on Schedule D to the extent that the amount of such Taxes is less than or equal to the amount listed on Schedule D.
(b) Spinco shall be liable for and shall be allocated (i) any Taxes attributable to members of the Spinco Group for any Post-Distribution Period, and (ii) any Taxes listed on Schedule D to the extent that the amount of such Taxes is in excess of the amount listed on Schedule D.
(c) In applying the provisions of Sections 2.1(a) and 2.1(b) (but subject to the provisions of Section 2.2):
(i) Any Taxes, other than Periodic Taxes, in respect of a Straddle Period shall be allocated between the Pre-Distribution Period and the Post-Distribution Period on a “closing of the books” basis by assuming that the books of the members of the Networks Group and the members of the Spinco Group were closed on the Distribution Date. Any Periodic Taxes in respect of a Straddle Period shall be allocated to the Pre-Distribution Period in an amount equal to such Periodic Taxes for the entire Straddle Period multiplied by a fraction the numerator of which is the number of calendar days in the period ending on the Distribution Date and the denominator of which is the number of calendar days in the entire period. The portion of any Periodic Taxes in respect of a Straddle Period not allocated to the Pre-Distribution Period shall be allocated to the Post-Distribution Period. For the avoidance of doubt, if a Party has prepaid Periodic Taxes that are allocated to the other Party under any provisions of this Agreement, the second Party shall reimburse the first Party to the extent so allocated.
 
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(ii) Taxes attributable to any transaction or action taken by or with respect to any member of the Spinco Group before the Effective Time on the Distribution Date shall be allocated to the Pre-Distribution Period, and Taxes attributable to any transaction or action taken by or with respect to any member of the Spinco Group after the Effective Time on the Distribution Date shall be allocated to the Post-Distribution Period.
(iii) In determining the allocation of any Escheat Liability, the liability shall be allocated to the Party whose Group members actually hold (or are required to hold) the property subject to the Escheat Liability at the time a payment or remittance in respect of such liability is required to be made to the applicable governmental entity.
2.2 Allocation of Deconsolidation Taxes, Distribution Taxes and Transfer Taxes . Notwithstanding any other provision of this Agreement:
(a) Any and all Deconsolidation Taxes shall be borne by Networks.
(b) Spinco shall indemnify and hold harmless each Networks Indemnified Party from and against any liability of Networks for Distribution Taxes to the extent such Distribution Taxes are attributable to a Spinco Tainting Act, provided , however , that Spinco shall have no obligation to indemnify any Networks Indemnified Party hereunder if there has occurred, prior to such Spinco Tainting Act, a Networks Tainting Act and such Distribution Taxes are attributable to such Networks Tainting Act. It is understood and agreed that, in determining the amounts payable under this Section 2.2(b), there shall be included all costs, expenses and damages associated with shareholders litigation or controversies and any amount paid by Networks in respect of the liability of its shareholders, whether paid to its shareholders or to any Tax Authority, in connection with liability that may arise to shareholders as a result of receiving or accruing an amount payable under this Section 2.2(b), and all reasonable costs and expenses associated with such payments.
(c) Networks shall indemnify and hold harmless each Spinco Indemnified Party from and against any liability of Spinco for Distribution Taxes to the extent that Spinco is not liable for such Taxes pursuant to Section 2.2(b).
(d) The Companies shall cooperate with each other and use their commercially reasonable efforts to reduce and/or eliminate any Transfer Taxes. If any Transfer Tax remains payable after application of the first sentence of this Section 2.2(d) and notwithstanding any other provision in this Section 2, all Transfer Taxes shall be allocated to Networks.
2.3 Tax Payments . Each Company shall be liable for and shall pay the Taxes allocated to it by this Section 2 either to the applicable Tax Authority or to the other Company in accordance with Section 4 and the other applicable provisions of this Agreement.
 
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SECTION 3. Preparation and Filing of Tax Returns .
3.1 Combined Returns .
(a) Networks shall be responsible for preparing and filing (or causing to be prepared or filed) all Combined Returns for any Tax Year. For any such return, Spinco shall furnish any relevant information, including pro forma returns, disclosures, apportionment data and supporting schedules, relating to any member of the Spinco Group necessary for completing any such return in a format suitable for inclusion in such return, provided that Spinco shall have the right to review and approve items on such returns if and to the extent such items directly relate to Taxes for which Spinco would be liable under Section 2, such approval not to be unreasonably delayed, conditioned or withheld by Spinco.
(b) For the period in which the Transition Services Agreement is in effect, Spinco shall assist in the preparation of any Tax Returns which may be requested by Networks in accordance with the terms of the Transition Services Agreement (even if, for the avoidance of doubt, the responsibility for preparation such Tax Return may be allocated to Networks under other provisions of this Agreement). Nothing in this Section 3.1(b) shall be construed to affect Networks’ right or responsibility to file the Tax Returns whose filing is allocated to Networks under other provisions of this Agreement.
3.2 Separate Returns .
(a) Tax Returns to be Prepared by Networks . Networks shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the Networks Group and for which Spinco is not responsible under Section 3.2(b).
(b) Tax Returns to be Prepared by Spinco. Spinco shall be responsible for preparing and filing (or causing to be prepared and filed) all Separate Returns which relate to one or more members of the Spinco Group for any Tax Year, provided , however , that in the case of such returns in respect of any Pre-Distribution Period or Straddle Period, Networks shall have the right to review and approve such returns, such approval not to be unreasonably delayed, conditioned or withheld by Networks.
3.3 Agent . Subject to the other applicable provisions of this Agreement (including, without limitation, Section 5), Networks and Spinco (and their respective Affiliates) shall designate the other Party as its agent and attorney-in-fact to take such action (including execution of documents) as such other Party may deem reasonably appropriate in matters relating to the preparation or filing of any Tax Return described in Sections 3.1 and 3.2.
3.4 Provision of Information .
(a) Networks shall provide to Spinco, and Spinco shall provide to Networks, any information about members of the Networks Group or the Spinco Group, respectively, that the Preparer reasonably requires to determine the amount of Taxes due on any Payment Date with respect to a Tax Return for which the Preparer is responsible pursuant to Section 3.1 or 3.2 and to properly and timely file all such Tax Returns.
(b) If a member of the Spinco Group supplies information to a member of the Networks Group, or a member of the Networks Group supplies information to a member of the Spinco Group, and an officer of the requesting member intends to sign a statement or other document under penalties of perjury in reliance upon the accuracy of such information, then a duly authorized officer of the member supplying such information shall certify, to the best of such officer’s knowledge, the accuracy of the information so supplied.
 
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3.5 Special Rules Relating to the Preparation of Tax Returns .
(a) In General . All Tax Returns that include any members of the Networks Group or Spinco Group, or any of their respective Affiliates, shall be prepared in a manner that is consistent with the Ruling Request, the Ruling, and the Tax Opinion (including, for the avoidance doubt, the Tax Opinion Representations). Except as otherwise set forth in this Agreement, all Tax Returns for which Networks has the right to prepare, review, approve or file under Sections 3.1 and 3.2 shall be prepared (x) in accordance with elections, Tax accounting methods and other practices used with respect to such Tax Returns filed prior to the Distribution Date (unless such past practices are not permissible under applicable law), or (y) to the extent any items are not covered by past practices (or in the event such past practices are not permissible under applicable Tax Law), in any reasonable manner, in accordance with the preparation, review, approval and filing responsibilities of Sections 3.1 and 3.2; provided , however , that (i) each Party agrees that the Tax Returns listed in Schedule B shall not be prepared in a manner inconsistent with the requirements set forth in this Section 3.5(a) provided that such Tax Returns are prepared in the manner described in Schedule B, and (ii) in each case of (x) and (y) to the extent that a change in such elections, methods or practices could not reasonably be expected to result in any adverse impact on Networks and would not be inconsistent with applicable law, such Tax Returns shall be prepared in accordance with reasonable practices selected by Spinco.
(b) Election to File Consolidated, Combined or Unitary Tax Returns . Subject to Spinco’s reasonable approval, Networks shall elect to file any Tax Return on a consolidated, combined or unitary basis, if such Tax Return would include at least one member of each Group and the filing of such Tax Return is elective under the relevant Tax Law.
3.6 Refunds, Credits, Offsets, Tax Benefits
(a) Any refunds, credits, or offsets with respect to Taxes allocated to Networks pursuant to this Agreement shall be for the account of Networks. Any refunds, credits or offsets with respect to Taxes allocated to Spinco pursuant to this Agreement shall be for the account of Spinco.
(b) Networks shall forward to Spinco, or reimburse Spinco for, any such refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of Spinco within fifteen (15) Business Days from receipt thereof by Networks or any of its Affiliates. Spinco shall forward to Networks, or reimburse Networks for, any refunds, credits or offsets, plus any interest received thereon, net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith, that are for the account of Networks within fifteen (15) Business Days from receipt thereof by Spinco or any of its Affiliates. Any refunds, credits or offsets, plus any interest received thereon, or reimbursements not forwarded or made within the fifteen (15) Business Day period specified above shall bear interest from the date received by the refunding or reimbursing party (or its Affiliates) through and including the date of payment at the Interest Rate (treating the date received as the Due Date for purposes of determining such interest). If, subsequent to a Tax Authority’s allowance of a refund, credit or offset, such Tax Authority reduces or eliminates such allowance, any refund, credit or offset, plus any interest received thereon, forwarded or reimbursed under this Section 3.6 shall be returned to the party who had forwarded or reimbursed such refund, credit or offset and interest upon the request of such forwarding party in an amount equal to the applicable reduction, including any interest received thereon.
 
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(c) For the avoidance of doubt, no Party shall be required to reimburse the other Party under this Section 3.6 for the use of a refund, credit or offset or other Tax Benefit, calculated by reference to the Tax allocated to the other Party, including but not limited to a “dividends received deduction” set forth under section 243 of the Code and an unincorporated business tax credit as currently provided by Section 11-604 of the New York City Administrative Code or any successor thereto, if such deduction, credit or offset is not available to reduce the Tax liability of such other Party for any Tax Year.
3.7 Carrybacks . To the extent permitted under applicable Tax Laws, the Spinco Group shall make the appropriate elections in respect of any Tax Returns to waive any option to carry back any net operating loss, any credits or any similar item from a Post-Distribution Period to any Pre-Distribution Period or to any Straddle Period. Any refund of or credit for Taxes resulting from any such carryback by a member of the Spinco Group that cannot be waived shall be payable to Spinco net of any Taxes incurred with respect to the receipt or accrual thereof and any expenses incurred in connection therewith.
3.8 Amended Returns . Any amended Tax Return or claim for Tax refund, credit or offset with respect to any member of the Networks Group or Spinco Group may be made only by the Company (or its Affiliates) responsible for filing the original Tax Return with respect to such member pursuant to Sections 3.1 or 3.2 (and, for the avoidance of doubt, subject to the same preparation, review, approval and filing rights set forth in Sections 3.1 or 3.2, to the extent applicable). Such Company (or its Affiliates) shall not, without the prior written consent of the other Company (which consent shall not be unreasonably withheld or delayed), file, or cause to be filed, any such amended Tax Return or claim for Tax refund, credit or offset to the extent that such filing, if accepted, is likely to increase the Taxes allocated to, or the Tax indemnity obligations under this Agreement of, such other Company for any Tax Year (or portion thereof); provided , however , that such consent need not be obtained if (i) the Company filing the amended Tax Return by written notice to the other Company agrees to indemnify the other Company for the incremental Taxes allocated to, or the incremental Tax indemnity obligation resulting under this Agreement to, such other Company as a result of the filing of such amended Tax Return, or (ii) such amended Tax Return is a Tax Return listed in Schedule B and prepared in the manner as described in Schedule B.
3.9 Compensatory Equity Interests . Matters relating to Taxes and/or Tax Items with respect to Compensatory Equity Interests shall be governed by the Employee Matters Agreement.
 
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SECTION 4. Tax Payments .
4.1 Payment of Taxes to Tax Authority . Networks shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for filing pursuant to Section 3.1 or Section 3.2, and Spinco shall be responsible for remitting to the proper Tax Authority the Tax shown on any Tax Return for which it is responsible for filing pursuant to Section 3.2.
4.2 Indemnification Payments .
(a) Tax Payments Made by the Networks Group . If any member of the Networks Group is required to make a payment to a Tax Authority for Taxes allocated to Spinco under this Agreement, Spinco will pay the amount of Taxes allocated to it to Networks not later than the later of (i) five (5) Business Days after receiving notification requesting such amount, and (ii) five (5) Business Days prior to the date such payment is required to be made to such Tax Authority. Notwithstanding the preceding sentence, if any member of the Networks Group has made a prepayment of Periodic Taxes that are allocated to Spinco under this Agreement, Spinco will pay the amount of such Taxes allocated to it to Networks not later than thirty (30) Business Days after the Distribution Date.
(b) Tax Payments Made by the Spinco Group. If any member of the Spinco Group is required to make a payment to a Tax Authority for Taxes allocated to Networks under this Agreement, Networks will pay the amount of Taxes allocated to it to Spinco not later than the later of (i) five (5) Business Days after receiving notification requesting such amount, and (ii) five (5) Business Days prior to the date such payment is required to be made to such Tax Authority. Notwithstanding the preceding sentence, if any member of the Spinco Group has made a prepayment of Periodic Taxes that are allocated to Networks under this Agreement, Networks will pay the amount of such Taxes allocated to it to Spinco not later than thirty (30) Business Days after the Distribution Date.
4.3 Interest on Late Payments . Payments pursuant to this Agreement that are not made by the date prescribed in this Agreement or, if no such date is prescribed, not later than five (5) Business Days after demand for payment is made (the “ Due Date ”) shall bear interest for the period from and including the date immediately following the Due Date through and including the date of payment at the Interest Rate. Such interest will be payable at the same time as the payment to which it relates. Interest will be calculated on the basis of a year of 365 days and the actual number of days for which due.
4.4 Tax Consequences of Payments . For all Tax purposes and to the extent permitted by applicable Tax Law, the parties hereto shall treat any payment made pursuant to this Agreement as a capital contribution or a distribution, as the case may be, immediately prior to the Distribution.
4.5 Adjustments to Payments . The amount of any payment made pursuant to this Agreement shall be adjusted as follows:
(a) If the receipt or accrual of any indemnity amounts for which any Party hereto (the “ Indemnifying Party ”) is required to pay another Party (the “ Indemnified Party ”) under this Agreement causes, directly or indirectly, an increase in the taxable income of the Indemnified Party under one or more applicable Tax Laws, such payment shall be increased so that, after the payment of any Taxes with respect to the payment, the Indemnified Party shall have realized the same net amount it would have realized had the payment not resulted in taxable income. For the avoidance of doubt, any liability for Taxes due to an increase in taxable income described in the immediately preceding sentence shall be governed by this Section 4.5(a) and not by Section 2.2.
 
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(b) To the extent that Taxes for which the Indemnifying Party is required to pay to the Indemnified Party pursuant to this Agreement gives rise to a deduction, credit or other Tax Benefit (including as a result of any election set forth in Section 4.6) to the Indemnified Party or any of its Affiliates, the amount of any payment made to the Indemnified Party by the Indemnifying Party shall be decreased by taking into account any resulting reduction in Taxes actually realized by the Indemnified Party or any of its Affiliates resulting from such Tax Benefit (including as a result of any election set forth in Section 4.6). If such a reduction in Taxes of the Indemnified Party occurs following the payment made to the Indemnified Party with respect to the relevant indemnified Taxes, the Indemnified Party shall promptly repay the Indemnifying Party the amount of such reduction when actually realized. If the Tax Benefit arising from the foregoing reduction of Taxes described in this Section 4.5(b) is subsequently decreased or eliminated, then the Indemnifying Party shall promptly pay the Indemnified Party the amount of the decrease in such Tax Benefit. This Section 4.5(b) shall not apply to the extent that Section 3.6(d) would also apply to cause recovery of the same amounts to the Indemnifying Party.
4.6 Section 336(e) Election .
(a) Networks and Spinco shall make a protective election under section 336(e) of the Code (and any similar election under state or local law) with respect to the Distribution in accordance with Treasury Regulations section 1.336-2(h) and (j) (and any applicable provisions under state and local law), provided that Spinco shall indemnify Networks for any cost to the Networks Group of making such an election (but it being understood that any such cost arising from Taxes shall be limited to Excess Taxes). Networks and Spinco shall cooperate in the timely completion and/or filings of such elections and any related filings or procedures (including filing or amending any Tax Returns to implement an election that becomes effective). This Section 4.6 is intended to constitute a binding, written agreement to make an election under section 336(e) of the Code with respect to the Distribution.
(b) If Taxes are allocated to a Party (the “ Responsible Party ”) as a result of any election set forth in Section 4.6, then to the extent that such Taxes give rise to a Tax Benefit, other than a refund, credit or offset as described in Section 3.6(b), to the other Party (the “ Other Party ”) or any of its Affiliates, and such Tax Benefit results in an actual reduction in Taxes (determined on a with and without basis) of the Other Party or any of its Affiliates in any Tax Year, the Other Party shall pay to the Responsible Party in the relevant Tax Year an amount equal to such reduction in Taxes (determined on a with and without basis); provided , however , that this provision shall not apply to the extent that the actual reduction in Taxes for the relevant Tax Year and any unpaid reduction in Taxes for all prior Tax Years is less than $50,000.
 
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4.7 Certain Final Determinations . If an adjustment (a “ Tax Adjustment ”) pursuant to a Final Determination in a Tax Contest initiated by a Tax Authority results in a Tax greater than the Tax shown on the relevant Tax Return for any Pre-Distribution Period, the Indemnified Party shall pay to the Indemnifying Party an amount equal to any Tax Benefit as and when actually realized by such Indemnified Party as a result of such Tax Adjustment. The Parties agree that if an Indemnified Party is required to make a payment to an Indemnifying Party pursuant to this Section 4.7, the Parties shall negotiate in good faith to set off the amount of such payment against any indemnity payments owed by the Indemnifying Party to the Indemnified Party, taking into account time value and similar concepts as appropriate.
SECTION 5. Cooperation and Tax Contests .
5.1 Cooperation . In addition to the obligations enumerated in Sections 3.4 and 5.4, Networks and Spinco will cooperate (and cause their respective Subsidiaries and Affiliates to cooperate) with each other and with each other’s agents, including accounting firms and legal counsel, in connection with Tax matters, including provision of relevant documents and information in their possession and making available to each other, as reasonably requested and available, personnel (including officers, directors, employees and agents of the Parties or their respective Subsidiaries or Affiliates) responsible for preparing, maintaining, and interpreting information and documents relevant to Taxes, and personnel reasonably required as witnesses or for purposes of providing information or documents in connection with any administrative or judicial proceedings relating to Taxes.
5.2 Notices of Tax Contests . Each Company shall provide prompt notice to the other Company of any pending or threatened Tax audit, assessment or proceeding or other Tax Contest of which it becomes aware relating to (i) Taxes for which it is or may be indemnified by such other Company hereunder or (ii) Tax Items that may affect the amount or treatment of Tax Items of such other Company. Such notice shall contain factual information (to the extent known) describing any asserted Tax liability in reasonable detail and shall be accompanied by copies of any notice and other documents received from any Tax Authority in respect of any such matters; provided , however , that failure to give such notification shall not affect the indemnification provided hereunder except, and only to the extent that, the indemnifying Company shall have been actually prejudiced as a result of such failure. Thereafter, the indemnified Company shall deliver to the indemnifying Company such additional information with respect to such Tax Contest in its possession that the indemnifying Company may reasonably request.
5.3 Control of Tax Contests .
(a) Controlling Party. Subject to the limitations set forth in Section 5.3(b), each Filer (or the appropriate member of its Group) shall, at its own cost and expense, be the Controlling Party with respect to any Tax Contest involving a Tax reported (or that, it is asserted, should have been reported) on a Tax Return for which such Company is responsible for filing (or causing to be filed) pursuant to Section 3 of this Agreement (it being understood, for the avoidance of doubt but subject to the other provisions of this Section 5.3(a), that Networks shall be the Controlling Party with respect to any Tax Contest involving Distribution Taxes), in which case any Non-Filer that could have liability under this Agreement for a Tax to which such Tax Contest relates shall be treated as the “ Non-Controlling Party .” Notwithstanding the immediately preceding sentence, if a Non-Filer (x) acknowledges to the Filer in writing its full liability under this Agreement to indemnify for any Tax, and (y) provides to the Filer evidence (that is satisfactory to the Filer as determined in the Filer’s reasonable discretion) of the Non-Filer’s financial readiness and capacity to make such indemnity payment, then thereafter with respect to the Tax Contest relating solely to such Tax the Non-Filer shall be the Controlling Party (subject to Section 5.3(b)) and the Filer shall be treated as the Non-Controlling Party.
 
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(b) Non-Controlling Party Participation Rights . With respect to a Tax Contest of any Tax Return that could result in a Tax liability that is allocated under this Agreement, (i) the Non-Controlling Party shall, at its own cost and expense, be entitled to participate in such Tax Contest and to provide comments and suggestions to the Controlling Party, such comments and suggestions not to be unreasonably rejected, (ii) the Controlling Party shall keep the Non-Controlling Party updated and informed, and shall consult with the Non-Controlling Party, (iii) the Controlling Party shall act in good faith with a view to the merits in connection with the Tax Contest, and (iv) the Controlling Party shall not settle or compromise such Tax Contest without the prior written consent of the Non-Controlling Party (which consent shall not be unreasonably withheld).
5.4 Cooperation Regarding Tax Contests . The Parties shall provide each other with all information relating to a Tax Contest which is needed by the other Party or Parties to handle, participate in, defend, settle or contest the Tax Contest. At the request of any party, the other Parties shall take any action (e.g., executing a power of attorney) that is reasonably necessary in order for the requesting Party to exercise its rights under this Agreement in respect of a Tax Contest. Spinco shall assist Networks, and Networks shall assist Spinco, in taking any remedial actions that are necessary or desirable to minimize the effects of any adjustment made by a Tax Authority. The Indemnifying Party or Parties shall reimburse the Indemnified Party or Parties for any reasonable out-of-pocket costs and expenses incurred in complying with this Section 5.4.
SECTION 6. Tax Records .
6.1 Retention of Tax Records . Each of Networks and Spinco shall preserve, and shall cause their respective Subsidiaries to preserve, all Tax Records that are in their possession, and that could affect the liability of any member of the other Group for Taxes, for as long as the contents thereof may become material in the administration of any matter under applicable Tax Law, but in any event until the later of (x) the expiration of any applicable statute of limitations, as extended, and (y) seven years after the Distribution Date.
6.2 Access to Tax Records . Spinco shall make available, and cause its Subsidiaries to make available, to members of the Networks Group for inspection and copying the portion of any Tax Record in their possession that relates to a Pre-Distribution Period or Post-Distribution Period and which is reasonably necessary for the preparation, review, approval or filing of a Tax Return by a member of the Networks Group or any of their Affiliates or with respect to any Tax Contest with respect to such return. Networks shall make available, and cause its Subsidiaries to make available, to members of the Spinco Group for inspection and copying the portion of any Tax Record in their possession that relates to a Pre-Distribution Period and which is reasonably necessary for the preparation, review, approval or filing of a Tax Return by a member of the Spinco Group or any of their Affiliates or with respect to any Tax Contest with respect to such return.
 
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6.3 Confidentiality . Each party hereby agrees that it will hold, and shall use its reasonable best efforts to cause its officers, directors, employees, accountants, counsel, consultants, advisors and agents to hold, in confidence all records and information prepared and shared by and among the Parties in carrying out the intent of this Agreement, except as may otherwise be necessary in connection with the filing of Tax Returns or any administrative or judicial proceedings relating to Taxes or unless disclosure is compelled by a governmental authority. Information and documents of one Party (the “ Disclosing Party ”) shall not be deemed to be confidential for purposes of this Section 6.3 to the extent that such information or document (i) is previously known to or in the possession of the other Party or Parties (the “ Receiving Party ”) and is not otherwise subject to a requirement to be kept confidential, (ii) becomes publicly available by means other than unauthorized disclosure under this Agreement by the Receiving Party or (iii) is received from a third party without, to the knowledge of the Receiving Party after reasonable diligence, a duty of confidentiality owed to the Disclosing Party.
SECTION 7. Representations and Covenants .
7.1 Covenants of Networks and Spinco .
(a) Networks hereby covenants that, to the fullest extent permissible under U.S. federal income and state Tax Laws, it will, and will cause the members of the Networks Group to, treat the applicable Transactions in accordance with the Agreed Treatment. Spinco hereby covenants that, to the fullest extent permissible under U.S. federal income and state Tax Laws, it will, and will cause each Subsidiary of Spinco to, treat the applicable Transactions in accordance with the Agreed Treatment.
(b) Networks further covenants that, as of and following the date hereof, Networks shall not and shall cause the members of the Networks Group not to take any action that (or fail to take any action the omission of which) would be inconsistent with the applicable Transactions qualifying for the Agreed Treatment or that would preclude the applicable Transactions from qualifying for the Agreed Treatment.
(c) Spinco further covenants that, as of and following the date hereof, Spinco shall not and shall cause its Subsidiaries not to take any action that (or fail to take any action the omission of which) would be inconsistent with the applicable Transactions qualifying for the Agreed Treatment or that would preclude the applicable Transactions from qualifying for the Agreed Treatment.
7.2 Private Letter Ruling . Networks represents that it has provided Spinco with a copy of the Ruling and the Ruling Request submitted on or prior to the Distribution Date, and agrees to provide Spinco with copies of any additional documents submitted to the IRS relating to the Ruling Request and prepared after the Distribution Date prior to the submission of such documents to the IRS in connection with the Distribution.
 
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7.3 Covenants of Spinco .
(a) Without limiting the generality of the provisions of Section 7.1, Spinco, on behalf of itself and its Subsidiaries, agrees and covenants that Spinco and each of its Subsidiaries will not, directly or indirectly, during the Restriction Period, (i) take any action that would result in Spinco’s ceasing to be engaged in the active conduct of the Spinco Business with the result that Spinco is not engaged in the active conduct of a trade or business within the meaning of section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through an Affiliate of Spinco) any of Spinco’s outstanding stock, other than through stock purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696 (but it being understood, for the avoidance of doubt, that no agreement or covenant under this Section 7.3(a)(ii) is being entered with respect to Compensatory Equity Net Share Settlements), (iii) amend the certificate of incorporation (or other organizational documents) of Spinco that would affect the relative voting rights of separate classes of Spinco’s stock or would convert one class of Spinco’s stock into another class of its stock, (iv) liquidate (within the meaning of section 331 of the Code and the Treasury Regulations promulgated thereunder) or partially liquidate Spinco, (v) merge Spinco with any other corporation (other than in a transaction that does not affect the relative shareholding of Spinco shareholders), sell or otherwise dispose of (other than in the ordinary course of business) the assets of Spinco and its Subsidiaries, or take any other action or actions if such merger, sale, other disposition or other action or actions in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, assets representing one-half or more of the asset value of the Spinco Group, or (vi) take any other action or actions that in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, stock of Spinco representing a Fifty-Percent Equity Interest in Spinco (as determined for purposes of section 355(e) of the Code), other than a Permitted Acquisition.
7.4 Covenants of Networks .
(a) Without limiting the generality of the provisions of Section 7.1, Networks, on behalf of itself and each member of the Networks Group, agrees and covenants that Networks and each member of the Networks Group will not, directly or indirectly, during the Restriction Period, (i) take any action that would result in Networks’ ceasing to be engaged in the active conduct of the Networks Business with the result that Networks is not engaged in the active conduct of a trade or business within the meaning of section 355(b)(2) of the Code, (ii) redeem or otherwise repurchase (directly or through an Affiliate of Networks) any of Networks’ outstanding stock, other than through stock purchases meeting the requirements of section 4.05(1)(b) of Revenue Procedure 96-30, 1996-1 C.B. 696 (but it being understood, for the avoidance of doubt, that no agreement or covenant under this Section 7.4(a)(ii) is being entered with respect to Compensatory Equity Net Share Settlements), (iii) amend the certificate of incorporation (or other organizational documents) of Networks that would affect the relative voting rights of separate classes of Networks’ stock or would convert one class of Networks’ stock into another class of its stock, (iv) liquidate (within the meaning of section 331 of the Code and the Treasury Regulations promulgated thereunder) or partially liquidate Networks, (v) merge Networks with any other corporation (other than in a transaction that does not affect the relative shareholding of Networks shareholders), sell or otherwise dispose of (other than in the ordinary course of business) the assets of Networks and its Subsidiaries, or take any other action or actions if such merger, sale, other disposition or other action or actions in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, assets representing one-half or more of the asset value of the Networks Group, or (vi) take any other action or actions that in the aggregate would have the effect that one or more Persons acquire (or have the right to acquire), directly or indirectly, as part of a plan or series of related transactions, stock of Networks representing a Fifty-Percent Equity Interest in Networks (as determined for purposes of section 355(e) of the Code).
 
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(b) Nothing in this Section 7 shall be construed to give Spinco or any Affiliates of Spinco any right to remedies other than indemnification for any increase in the actual Tax liability (and/or decrease in Tax Benefit) of Spinco or any Affiliate of Spinco that results from Networks Group’s failure to comply with the covenants and representations in this Section 7.
7.5 Exceptions .
(a) Exceptions with Respect to Spinco.
(i) Notwithstanding Section 7.3 above, Spinco or any of its Subsidiaries may take a Spinco Restricted Action if Networks consents in writing to such Spinco Restricted Action, or if Spinco provides Networks with Satisfactory Guidance concluding that such Spinco Restricted Action will not alter the Tax-Free Status of the Distribution in respect of Networks and Networks’ shareholders.
(ii) Spinco and each of its Subsidiaries agree that Networks and each Networks Affiliate are to have no liability for any Tax resulting from any Spinco Restricted Actions permitted pursuant to this Section 7.5(a) and, subject to Section 2.2, agree to indemnify and hold harmless each Networks Indemnified Party against any such Tax. Spinco shall bear all costs incurred by it, and all reasonable costs incurred by Networks, in connection with requesting and/or obtaining any Satisfactory Guidance.
(b) Exceptions with Respect to Networks.
(i) Notwithstanding Section 7.4(a) above, Networks or any of its Subsidiaries may take a Networks Restricted Action if Spinco consents in writing to such Networks Restricted Action, or if Networks provides Spinco with Satisfactory Guidance concluding that such Networks Restricted Action will not alter the Tax-Free Status of the Distribution in respect of Spinco and Spinco’s shareholders.
(ii) Networks and each of its Subsidiaries agree that Spinco and each Spinco Affiliate are to have no liability for any Tax resulting from any Networks Restricted Actions permitted pursuant to this Section 7.5(b) and, subject to Section 2.2, agree to indemnify and hold harmless each Spinco Indemnified Party against any such Tax. Networks shall bear all costs incurred by it, and all reasonable costs incurred by Spinco, in connection with requesting and/or obtaining any Satisfactory Guidance.
 
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7.6 Injunctive Relief . For the avoidance of doubt, Networks shall have the right to seek injunctive relief to prevent Spinco or any of its Subsidiaries from taking any action that is not consistent with the covenants of the Spinco or any of its Subsidiaries under Section 7.1 or 7.3.
7.7 Further Assurances . For the avoidance of doubt, (i) neither Networks nor a member of the Networks Group shall take any action on the Distribution Date that would result in an increase of the actual Tax liability (and/or decrease of any Tax Benefit) of Spinco or any of its Subsidiaries, other than in the ordinary course of business, except for actions undertaken in connection with the Distribution, which actions are described in the Ruling Request or the Ruling, and (ii) neither Spinco nor any of its Subsidiaries shall take any action on the Distribution Date that would result in an increase of the actual Tax liability (and/or decrease of any Tax Benefit) of Networks or a member of the Networks Group, other than in the ordinary course of business, except for actions undertaken in connection with the Distribution, which actions are described in the Ruling Request or the Ruling.
SECTION 8. General Provisions .
8.1 Construction . This Agreement shall constitute the entire agreement (except insofar and to the extent that it specifically and expressly references the Distribution Agreement and any other Ancillary Agreement) between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.
8.2 Ancillary Agreements . This Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Distribution Agreement or any other Ancillary Agreement.
8.3 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 such counterparts have been signed by each of the Parties and delivered to the other Party.
8.4 Notices . All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:
To Networks:
The Madison Square Garden Company (or, after the applicable name change, MSG Networks, Inc.)
11 Penn Plaza
New York, New York 10001
Attention: President
 
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with copy to:
MSG Spinco, Inc. (or, after the applicable name change, The Madison Square Garden Company)
Two Penn Plaza
New York, New York 10121
Attention: General Counsel
To Spinco:
MSG Spinco, Inc. (or, after the applicable name change, The Madison Square Garden Company)
Two Penn Plaza
New York, New York 10121
Attention: General Counsel
8.5 Amendments . This Agreement may not be modified or amended except by an agreement in writing signed by each of the Parties.
8.6 Assignment . This Agreement shall not be assignable, in whole or in part, directly or indirectly, by any Party without the prior written consent of the other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be void; provided that, subject to compliance with Section 7, if applicable, either Party may assign this Agreement to a purchaser of all or substantially all of the properties and assets of such Party so long as such purchaser expressly assumes, in a written instrument in form reasonably satisfactory to the non-assigning Party, the due and punctual performance or observance of every agreement and covenant of this Agreement on the part of the assigning Party to be performed or observed.
8.7 Successors and Assigns . The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns.
8.8 Change in Law . Any reference to a provision of the Code or any other Tax Law shall include a reference to any applicable successor provision or law.
8.9 Authorization, Etc . Each of the Parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such Party, that this Agreement constitutes a legal, valid and binding obligation of such Party and that the execution, delivery and performance of this Agreement by such Party does not contravene or conflict with any provision of law or the Party’s charter or bylaws or any agreement, instrument or order binding such Party.
8.10 Termination . This Agreement may be terminated at any time prior to the Distribution by and in the sole discretion of Networks without the approval of Spinco or the stockholders of Networks. In the event of such termination, no Party shall have any liability of any kind to any other Party or any other Person. After the Distribution, this Agreement may not be terminated except by an agreement in writing signed by the Parties.
 
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8.11 Subsidiaries . Each of the Parties shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any entity that is contemplated to be a Subsidiary of such Party after the Distribution Date.
8.12 Third-Party Beneficiaries . Except with respect to Networks Indemnified Parties and Spinco Indemnified Parties, and in each case, only where and as indicated herein, this Agreement is solely for the benefit of the Parties and their respective Subsidiaries and Affiliates and should not be deemed to confer upon any other Person any remedy, claim, liability, reimbursement, cause of action or other right in excess of those existing without reference to this Agreement. Notwithstanding anything in this Agreement to the contrary, this Agreement is not intended to confer upon any Spinco Indemnified Parties any rights or remedies against Spinco hereunder, and this Agreement is not intended to confer upon any Networks Indemnified Parties any rights or remedies against Networks hereunder.
8.13 Double Recovery . Nothing in this Agreement is intended to confer to or impose upon any Party a duplicative right, entitlement, obligation or recovery with respect to any matter arising out of the same facts and circumstances.
8.14 Titles and Headings . Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
8.15 Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York.
8.16 Waiver of Jury Trial . The Parties hereby irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or related to this Agreement or the transactions contemplated hereby.
8.17 Severability . In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein shall not in any way be affected or impaired thereby. The Parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
8.18 No Strict Construction; Interpretation .
(a) Each of Networks and Spinco acknowledges that this Agreement has been prepared jointly by the Parties hereto and shall not be strictly construed against any Party hereto.
 
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(b) 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”. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. References to a Person are also to its permitted successors and assigns.
 
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by the respective officers as of the date set forth above.
 
															
					
	THE MADISON SQUARE GARDEN COMPANY
(To be renamed MSG Networks Inc.)

		
	By:	 	/s/ James L. Dolan
		 	Name:	 	James L. Dolan
		 	Title:	 	Executive Chairman

 
															
					
	MSG SPINCO, INC.
(To be renamed The Madison Square Garden Company)

		
	By:	 	/s/ David O’Connor
		 	Name:	 	David O’Connor
		 	Title:	 	President & Chief Executive Officer

[Signature Page to Tax Disaffiliation Agreement]

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