FIRST AMENDMENT TO TAX MATTERS AGREEMENT
Exhibit 10.1
FIRST AMENDMENT TO TAX MATTERS AGREEMENT
This First Amendment to Tax Matters Agreement (this “Amendment”) is dated as of
September 14, 2009, by and between Belo Corp., a Delaware corporation (“Belo”), and A. H.
Belo Corporation, a Delaware corporation (“A. H. Belo” and, together with Belo, each, a
“Party” and collectively, the “Parties”). Any capitalized terms used herein for
which definitions are not provided in this Amendment shall have the same meanings assigned to such
terms in the Tax Matters Agreement between the Parties dated as of February 8, 2008 (the
“Original Agreement”).
RECITALS
WHEREAS, A. H. Belo and its subsidiaries were members of the Belo Consolidated Group;
WHEREAS, Belo distributed all of the shares of stock of A. H. Belo to the shareholders of Belo
(the “Distribution”) on February 8, 2008;
WHEREAS, as a result of the Distribution, A. H. Belo Group ceased to be included in the Belo
Consolidated Group;
WHEREAS, the Parties entered into the Original Agreement in connection with the Distribution
to allocate the Tax responsibilities, liabilities and benefits of transactions that occurred on,
prior to and after the date of the Distribution and to address other Tax matters; and
WHEREAS, the Parties desire to make certain amendments to the Original Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements herein,
the Parties (each on behalf of itself and each of its Affiliates) hereby agree as follows:
1. Section 2.07 is deleted in its entirety and the following inserted in lieu thereof:
Section 2.07 Carrybacks.
(a) Except as otherwise provided in Sections 2.07(b) and 2.07(c), A. H. Belo
shall file (or cause to be filed) on a timely basis any available election
to waive the carryback of net operating losses, Tax credits or other Tax
Items by A. H. Belo or any Affiliate from a Post-Distribution Tax Period to
a Straddle Period or Pre-Distribution Tax Period.
(b) A. H. Belo Group shall carryback its net operating loss determined for
federal, state and local Income Tax purposes for its Post-Distribution Tax
Period ending December 31, 2008 into the Pre-Distribution Tax Period of the
Belo Consolidated Group ending December 31, 2007 by not making the election
pursuant to Treasury Regulation Section 1.1502-21(b)(3)(ii)(B) (or any equivalent state or local Income Tax authority) and
not making the election pursuant to Treasury Regulation 1.1502-
21(b)(3)(i)
(or any equivalent state or local Income Tax authority) for such
Post-Distribution Tax Period and by not otherwise relinquishing the
carryback period for which the A. H. Belo Group was a member of the Belo
Consolidated Group. A. H. Belo shall provide to Belo a copy of its Income
Tax Returns for its Post-Distribution Tax Period ending December 31, 2008
and any other materials and information required by Belo to file the
necessary Returns in order to obtain any available Refunds (for federal,
state or local Income Tax purposes) for the Pre-Distribution Tax Period of
the Belo Consolidated Group ending December 31, 2007. Belo shall file such
Returns and any Refunds resulting from such carrybacks shall be allocated to
the Parties on such basis as the Parties shall agree in writing. Belo shall
pay to A. H. Belo the portion of any Refund to which it is entitled within
ten (10) days of receiving the Refund from the applicable Taxing Authority
or if agreed to by the Parties in writing, Belo shall hold such portion on
behalf of A. H. Belo to satisfy other obligations of A. H. Belo to Belo.
(c) If A. H. Belo and Belo agree in writing for the A. H. Belo Group to
carryback any net operating loss determined for federal, state or local
Income Tax purposes for its Post-Distribution Tax Period ending December 31,
2009 into the Income Tax period of the Belo Consolidated Group ending
December 31, 2008, A. H. Belo shall provide to Belo a copy of its Income Tax
Returns for its Post-Distribution Tax Period ending December 31, 2009 and
any other materials and information required by Belo to file the necessary
Returns in order to obtain any available Refunds (for federal, state or
local Income Tax purposes) for the Income Tax period of the Belo
Consolidated Group ending December 31, 2008. In such case, Belo shall file
such Returns, and any Refunds resulting from such carrybacks shall be
divided between the Parties as the Parties shall agree in writing. Belo
shall pay to A. H. Belo the portion of any Refund to which it is entitled
within ten (10) days of receiving the Refund from the applicable Taxing
Authority or if agreed to by the Parties in writing, Belo shall hold such
portion on behalf of A. H. Belo to satisfy other obligations of A. H. Belo
to Belo. If the Parties fail to agree on the carryback of such net
operating losses, A. H. Belo shall make an election pursuant to Treasury
Regulation Section 1.1502-21(b)(3)(i) (and any equivalent state or local
Income Tax authority) not to carryback such net operating loss on its Income
Tax Returns for its Post-Distribution Tax Period ending December 31, 2009.
(d) If A. H. Belo has a Tax Item that must be carried back to any
Pre-Distribution Tax Period other than pursuant to Section 2.07(b) or
Section 2.07(c), A. H. Belo shall notify Belo in writing that such Tax Item
must be carried back. Such notification shall include a description in a
reasonable detail of the grounds for the Refund and the amount thereof, and a
certification by an appropriate officer of A. H. Belo setting forth
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A. H.
Belo’s belief (together with supporting analysis) that the Tax treatment of
such Tax Item is more likely than not correct, and is not a Tax Item arising
from a Reportable Transaction.
(e) If Belo receives a Refund pursuant to the provisions of Section 2.07(b)
or Section 2.07(c) and pays all or a portion of the Refund to A. H. Belo (or
holds all or such portion on behalf of A. H. Belo to satisfy other
obligations of A. H. Belo to Belo) pursuant to either such Section and a Tax
Contest occurs with respect to the carryback of the net operating loss, Belo
and A. H. Belo shall jointly control such Tax Contest. Neither Party shall
have the right to settle any such Tax Contest without the consent of the
other Party. All out-of-pocket costs incurred by the Parties in obtaining
the Refund, shall be borne by the Parties on such basis as the Parties shall
agree in writing. Any amount of Refund received pursuant to Section 2.07(b)
or Section 2.07(c) which is required to be repaid pursuant to a Final
Determination, together with any interest, fines, additions to tax or
additional amounts imposed by a Taxing Authority relating to such Refund and
any out-of-pocket costs incurred in handling or contesting the Tax Contest
shall be borne by the Parties on such basis as the Parties shall agree in
writing.
(f) If, notwithstanding the provisions of Section 2.07(a), A. H. Belo is
required to carryback losses or credits other than the net operating losses
described in Section 2.07(b) or Section 2.07(c), A. H. Belo shall be
entitled to any Refund of any Tax obtained by Belo or a Belo Affiliate as a
result of the carryback of losses or credits of A. H. Belo or its Affiliate
from any Post-Distribution Tax Period to any Pre-Distribution Tax Period.
Such Refund is limited to the net amount received by Belo or a Belo
Affiliate, net of any Tax cost incurred by Belo or such Affiliate resulting
from such Refund. Upon request by A. H. Belo, Belo shall advise A. H. Belo
of an estimate of any Tax cost Belo projects will be associated with any
carryback of losses or credits of A. H. Belo or its Affiliates as provided
in this Section 2.07(f).
(g) If Belo pays any amount to A. H. Belo under Section 2.07(f) and, as a
result of a subsequent Final Determination, A. H. Belo is not entitled to
some or all of such amount, Belo shall notify A. H. Belo of the amount to be
repaid to Belo, and A. H. Belo shall then repay such amount to Belo,
together with any interest, fines, additions to Tax, penalties or additional
amounts imposed by a Taxing Authority relating thereto.
2. This instrument may be executed by the Parties hereto individually or in combination, in
one or more counterparts, each of which shall be an original and all of which shall together
constitute one and the same instrument.
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3. To the extent that any provision herein shall directly conflict with any provision of the
Original Agreement, such provision contained herein shall control. Any provisions of the Original
Agreement which do not directly conflict with the provisions herein are hereby ratified and
confirmed in all respects, shall continue to be of full force and effect and shall bind each of the
Parties hereto.
[Signature page to follow.]
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IN WITNESS WHEREOF, the Parties have caused this Amendment to be duly executed as of the date
first above written.
| BELO CORP. |
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| By: | /s/ Xxxxxx X. Xxxxxxxxxx | |||
| Xxxxxx X. Xxxxxxxxxx | ||||
| Executive Vice President/Chief Financial Officer | ||||
| A. H. BELO CORPORATION |
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| By: | /s/ Xxxxxx X. Xxxxx | |||
| Xxxxxx X. Xxxxx | ||||
| Senior Vice President/Chief Financial Officer and Treasurer | ||||
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