EX-10.6 5 g97004a1exv10w6.txt EX-10.6 GUARANTY DATED OCTOBER 18, 2005 EXHIBIT 10.6 GUARANTY THIS GUARANTY (as may be amended, supplemented or otherwise modified from time to time, the "GUARANTY") is made as of this 18th day of October, 2005 in favor of the Covered Persons (as defined herein) by Gray Television, Inc., a Georgia corporation ("GRAY"). RECITALS A. Triple Crown Media, Inc., a Delaware corporation ("TCM"), is a newly formed, wholly-owned subsidiary of Gray. B. TCM was capitalized with $.10, and has no other assets. C. Gray is considering spinning off all of the shares of capital stock of TCM to its shareholders (the "SPIN-OFF"). D. Immediately prior to the Spin-Off, Gray would contribute substantially all of the assets of its newspaper publishing business and GrayLink Wireless business to TCM, and TCM would assume certain liabilities. E. TCM and Gray, as the sole shareholder of TCM, are considering the merger of Bull Run Corporation, a Georgia corporation ("BULL RUN"), with and into a wholly-owned subsidiary of TCM immediately following the Spin-Off (the "MERGER"). F. TCM has entered into a letter agreement in favor of the Covered Persons (as defined herein) dated as of the date hereof pursuant to which it has agreed to indemnify each of the Covered Person for any liabilities (including expenses) that any of the Covered Persons may incur by reason of their status as a proposed director of TCM (the "INDEMNITY LETTER"). NOW, THEREFORE, to induce the Covered Persons to serve and act for TCM and agree to be named in the Registration Statement on Form S-1/S-4 of TCM in connection with the Spin-Off and the Merger, and in consideration of the substantial benefit Gray will derive from the acts and service of such Covered Persons, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, Gray hereby agrees as follows: 1.01 "COVERED PERSON" means each person who has been selected as a proposed director of TCM upon the consummation of the Merger. 1.02 Gray irrevocably and unconditionally guarantees to the Covered Persons the prompt, punctual and full performance of all of TCM's indemnification and contribution obligations (including the advancement of expenses) arising under, in accordance with and subject to, the Delaware General Corporation Law, TCM's amended and restated certificate of incorporation, TCM's bylaws, any resolutions of TCM's board of directors or any committee thereof, or otherwise, as they may exist from time to time, and the Indemnity Letter, in respect of actions or omissions by the Covered Persons occurring between September 13, 2005 and the date on which each of the Covered Persons becomes a director of TCM ("GUARANTEED OBLIGATIONS"). 1.03 It shall not be necessary or required that any Covered Person exercise any right, assert any claim or demand or enforce any remedy whatsoever against TCM before or as a condition to the obligations of the Gray under this Guaranty. 1.04 Notwithstanding paragraph 1.03, Gray shall have the right to recover from TCM for any payments made by Gray to the Covered Persons in satisfaction of any claims against Gray under this Guaranty. 1.05 Gray hereby acknowledges and agrees that the terms, covenants and provisions contained in TCM's certificate of incorporation and bylaws may be altered, modified and amended without any agreement or consent of Gray, and Gray agrees that this Guaranty and its liabilities hereunder shall be in no way affected, diminished or released by any such alteration, modification or amendment. 1.06 This Guaranty is a continuing guaranty and will remain in full force and effect. 1.07 Gray represents and warrants to the Covered Persons that (i) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia, (ii) it has all requisite corporate power and authority to enter into this Guaranty, (iii) the execution and delivery of this Guaranty and the performance by Gray of its obligations hereunder have been duly authorized by all necessary corporate action on the part of Gray, (iv) this Guaranty has been duly executed and delivered by Gray and (v) this Guaranty constitutes a valid and binding obligation of Gray, in accordance with its terms. 1.08 No invalidity, irregularity or unenforceability of this Guaranty shall affect, impair or be a defense to this Guaranty. 1.09 The obligations of Gray are subject to any defenses available to TCM (other than defenses of bankruptcy, reorganization, insolvency, moratorium or other laws affecting the enforcement of creditors' rights generally) and Gray is entitled to all rights of set off, counterclaims, claims for indemnity or any other rights that may be exercised by TCM. 1.10 No delay or failure on the part of a Covered Person to exercise any power or right given under TCM's certificate of incorporation or bylaws or under this Guaranty shall be a waiver and no right or remedy of a Covered Person shall be considered abridged or modified by any course of conduct. 1.11 This Guaranty and all claims arising hereunder shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the principals of conflicts of laws thereof. 1.12 This Guaranty is binding upon Gray and its successors or assigns. [SIGNATURE PAGE FOLLOWS.] 2 IN WITNESS WHEREOF, the undersigned hereby sign, seal and deliver this Guaranty. GRAY TELEVISION, INC. By: /s/ Robert S. Prather, Jr. ---------------------------- Name: Robert S. Prather, Jr. Title: President and Chief Operating Officer Address for Notice: Gray Television, Inc. 4370 Peachtree Road, NE Atlanta, GA 30319 Attn: James C. Ryan Fax: (404) 261-9607 FOR PURPOSES OF SECTION 1.04 ONLY: TRIPLE CROWN MEDIA, INC. By: /s/ James C. Ryan ---------------------------- Name: James C. Ryan Title: Chief Financial Officer and Secretary Address for Notice: Triple Crown Media, Inc. 546 East Main Street Lexington, KY 40508 Attn: James C. Ryan Fax: (859) 226-4356