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Tax Sharing Agreement

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Sectors: Telecommunications
Governing Law: Maryland, View Maryland State Laws
Effective Date: December 18, 1995
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TAX SHARING AGREEMENT


THIS TAX SHARING AGREEMENT dated as of December 18, 1995 is made and entered into by and between COMSAT Corporation, a District of Columbia corporation ("COMSAT"), and Ascent Entertainment Group, Inc., a Delaware corporation ("Ascent").


RECITALS


WHEREAS, COMSAT is the common parent corporation of an affiliated group of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended, and Ascent is a member of such affiliated group; and


WHEREAS, the affiliated group of which COMSAT is the common parent and Ascent is a member files a consolidated Federal income tax return as defined in Code Section 1501; and


WHEREAS, COMSAT and Ascent desire to provide for the allocation of liabilities, procedures to be followed, and other matters with respect to certain taxes for tax years beginning after December 31, 1995, in which Ascent and its subsidiaries are included in a consolidated Federal income tax return filed for the Combined Consolidated Group.


AGREEMENT


NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


ARTICLE I


DEFINITIONS


1. "Ascent Consolidated Group" shall mean for any taxable year the affiliated group of corporations of which Ascent would be the common parent for consolidated Federal income tax return filing purposes if it were not a subsidiary of COMSAT, and any other corporations which are or may become members of the affiliated group.


2. "Code" shall mean the Internal Revenue Code of 1986, as amended.


3. "Combined Consolidated Group" shall mean for any taxable year the COMSAT Consolidated Group together with the Ascent Consolidated Group, and any other corporations which may become members of either.


4. "Combined Consolidated Return" shall mean a consolidated Federal income tax return filed for the Combined Consolidated Group.


5. "COMSAT Consolidated Group" shall mean for any taxable year the affiliated group of corporations of which COMSAT is the common parent, and any other corporations which may become members of the affiliated group, but excluding members of the Ascent Consolidated Group.


6. "Federal Income Taxes" and "Federal Income Tax Liability" shall mean the taxes imposed by sections 11, 55, 59A, and 1201(a) of the Code, or any successor provisions to such sections and any other income based U.S. Federal taxes which are hereinafter imposed upon corporations.


7. "Final Determination" shall mean the final resolution of liability for any tax for a taxable period, (i) by IRS Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the taxing authority, or by a comparable form under the laws of other jurisdictions; except that a Form 870 or 870-AD or comparable form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the taxing authority to assert a further deficiency shall not constitute a Final Determination; (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or comparable agreements under the laws of other jurisdictions; (iv) by any allowance of a refund or credit in respect of an overpayment of tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the tax-imposing jurisdiction; or (v) by any other final disposition, including by reason of the expiration of the applicable statute of limitations or by mutual agreement of the parties.


8. "IRS" shall mean the Internal Revenue Service.


9. "Regulations" shall mean the U.S. Treasury regulations in effect from time to time.


ARTICLE II


PROCEDURAL MATTERS


1. COMSAT shall have the sole and exclusive responsibility for the preparation and filing of the consolidated U.S. Federal income tax return of the Combined Consolidated Group, including any amended returns and any other returns, documents, or statements required to be filed with the IRS with respect to the determination of the Federal Income Tax Liability of the Combined Consolidated Group. All returns shall be filed by COMSAT on a timely basis, taking into account extensions of the due date for the filings of such returns.


2. The Ascent Consolidated Group shall continue to join in filing a consolidated Federal income tax return with the COMSAT Consolidated Group for all such taxable years for which the Ascent Consolidated Group is eligible to do so under the Code and the Regulation, unless COMSAT shall request and be granted permission to discontinue filing on a consolidated basis or shall otherwise properly elect not to file on a consolidated basis in any particular case.


3. COMSAT shall make all Federal income tax payments, including estimated payments, with respect to consolidated tax returns of the Combined Consolidated Group, and COMSAT shall have the right to exercise all powers of a common parent with respect to filing the consolidated Federal income tax returns as are conferred on it by the Regulations.


2
4. COMSAT shall be the sole and exclusive agent of the Ascent Consolidated Group and any member of such group in any and all matters relating to the U.S. Federal Income Tax Liability of the Combined Consolidated Group for all consolidated return years. In its sole discretion, COMSAT shall have the right with respect to any Federal consolidated returns which it files (a) to determine (i) the manner in which such returns shall be prepared and filed, including, without limitation, the manner in which any item of income, gain, loss, deduction or credit shall be reported, (ii) whether any extensions of the due dates for filing of such returns or of the applicable statutes of limitations may be requested and (iii) the elections that will be made by any member of the Combined Consolidated Group, (b) to contest, compromise or settle any adjustment or deficiency proposed, asserted or assessed as a result of any audit of such returns by the IRS, (c) to file, prosecute, compromise or settle any claim for refund and (d) to determine whether any refunds, to which the Combined Consolidated Group may be entitled, shall be paid by way of refund or credited against the tax liability of the Combined Consolidated Group. Ascent hereby irrevocably appoints COMSAT as its agent and attorney-in-fact to take such action (including the execution of documents) as COMSAT may deem appropriate to effect the foregoing. COMSAT shall consult with Ascent regarding any material issue relating to the Ascent Consolidated Group which arises pursuant to an audit by the IRS of a Combined Consolidated Return.


5. Ascent shall reimburse COMSAT for any legal and accounting expenses incurred by COMSAT in the course of the conduct of any audit o
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