Tax Allocation & Indemnification Agreement

TAX ALLOCATION AND
INDEMNIFICATION AGREEMENT


This Tax Allocation and Indemnification Agreement (the "Agreement"), effective as of the 30th day of September, 1996, by and between COX ENTERPRISES, INC., a Delaware corporation ("CEI"), and COX RADIO, INC. (formerly WIOD, Inc.), a Delaware corporation ("CRI"), each with its principal office located at 1400 Lake Hearn Drive, Atlanta, Georgia 30319.


RECITALS


WHEREAS, CRI has effected a public offering of its shares (the "Public Offering") on the date hereof, with the result that members of the public acquired shares of the stock of CRI, and effective as of this date CRI is no longer an indirect wholly-owned subsidiary of CEI; and


WHEREAS, the parties have determined that subsequent to the Public Offering CRI will no longer be a member of the Consolidated Group (as defined below); and


WHEREAS, CEI and CRI desire to set forth their agreement with respect to the allocation of taxes for taxable periods prior to the Public Offering Date for which CRI files its Tax Returns as a member of the Consolidated Group;


NOW THEREFORE, in consideration of the mutual promises, covenants and agreements contained herein, the parties agree as follows:


ARTICLE I
DEFINITIONS


As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and the plural forms of the terms defined):


"Affiliate" means any corporation which is a member of the Consolidated Group.


"CEI Affiliate" means any corporation which is a member of the Consolidated Group (including CEI) and which is not a member of the CRI Group.


"CEI Group" means CEI and the other CEI Affiliates.


"Code" means the Internal Revenue Code of 1986, as amended, or any successor thereto, as in effect for the taxable period in question.


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"Consolidated Group" means the affiliated group of corporations of which CEI is the common parent (within the meaning of Section 1504 of the Code), and any other corporations which may become members of such affiliated group.


"CRI Affiliate" means any corporation which is a member of the CRI Group (including CRI).


"CRI Group" means the group of corporations (including CRI) of which CRI is the common parent (within the meaning of section 1504 of the Code) immediately after the Public Offering, and any other corporations which may become members of such affiliated group.


"Final Determination" means the final resolution of liability for any Tax for a taxable period, including any related interest or penalties, (i) by Internal Revenue Service Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the Internal Revenue Service, 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 Tax 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 jurisdiction imposing such Tax; or (v) by any other final disposition, including by reason of the expiration of the applicable statute of limitations.


"Public Offering Date" means __________, 1996, the date of the Public Offering.


"Tax" means any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad valorem, franchise, profits, license, withholding on amounts paid, payroll, employment, excise, severance, stamp, occupation, property, or other like assessment or charge of any kind whatsoever imposed by any Tax Authority, together with any interest, penalties, or other additions to tax with respect thereto.


"Tax Authority" means the Internal Revenue Service or any other domestic (including state or local) or foreign governmental authority responsible for the administration of any Tax.


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"Tax Return" means any return, filing, questionnaire or other document required to be filed, including requests for extensions of time, filings made with estimated Tax payments, claims for refund and amended returns that may be filed, for any taxable period with any Tax Authority (whether domestic or foreign) in connection with any Tax or Taxes (whether or not a payment is required to be made with respect to such filing).


ARTICLE II
PREPARATION AND FILING OF TAX RETURNS


2.01. Applicability of Provisions of Agreement. For all Tax periods ending on or prior to the Public Offering Date, CRI is a member of the Consolidated Group, and the federal income Tax Returns of the CRI Group shall be filed accordingly for all such Tax periods. This Agreement is effective as of the Public Offering Date for CEI and all members of the CRI Group and supersedes any previous tax allocation or tax sharing agreement between the parties. This Agreement does not constitute a change in the method of allocating the federal regular income tax liability of the Consolidated Group requiring the consent of the Commissioner under Treasury Regulation Section 1.1552-1(c).


2.02. Federal Income Tax Returns. CEI shall timely prepare and file, or cause to be timely prepared and filed, all federal income Tax Returns for the Consolidated Group. For all Tax periods ending on or prior to the Public Offering Date: (i) each CRI Affiliate shall provide CEI with its Tax Returns, supporting schedules and additional information on a timely basis, as requested by CEI, in order for CEI to timely file the Tax Returns for the Consolidated Group, and (ii) CEI shall file the Tax Returns for the CRI Group consistent with the Tax Returns, supporting schedules and additional information provided by the CRI Affiliates. Upon request, CEI shall deliver to CRI copies of the Tax Returns of the CRI Affiliates within 30 days after filing.


2.03. Other Tax Returns. For so long as any member of the CRI Group files any Tax Return as a member of, or its items of income, gain, deduction or loss are reported in, any other consolidated or combined Tax Return with CEI or any CEI Affiliate, CEI shall be responsible for the preparation and filing of such Tax Returns (including returns for Tax periods ending after the Public Offering Date). Such Tax Returns shall be prepared and filed in accordance with the principles set forth in this Article II and in Article III.


ARTICLE III
ALLOCATION AND PAYMENT OF TAXES


3.01. Acknowledgement of Elections. Any and all elections previously made in accordance with past practice and in


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effect as of the Public Offering Date shall continue to govern the allocation of the federal income tax liability of the Consolidated Group among the members of the Consolidated Group.


3.02. Federal Regular Income Tax. CEI and CRI agree to allocate the federal regular income tax liability of the Consolidated Group for periods ending on or prior to the Public Offering Date in the following manner:


(a) The consolidated federal regular income tax liability to be allocated to and paid by each Affiliate shall be that percentage of the consolidated federal regular income tax liability which is equal to the percentage that the federal taxable income of such Affiliate, computed on a separate return basis, would be of the total federal taxable income of all Affiliates so computed. Allocations pursuant to this Section 3.02(a) shall be made in accordance with the principles set forth in Treasury Regulation Section 1.1552-1(a)(1).


(b) An additional liability shall be allocated to each Affiliate which, as a result of net operating losses, excess charitable contributions, foreign tax credits, investment tax credits or similar items arising from or generated by the activities of another Affiliate or Affiliates in either a separate return year or a consolidated return year, has a smaller allocated tax liability determined under Section 3.02(a) above than it would have on a separate return basis. The additional liability allocated to each Affiliate shall be equal to the excess of the amount that the Affiliate would have paid on a separate return basis over the allocated tax liability determined under Section 3.02(a) above. An amount equal to the total additional liabilities allocated to all such Affiliates for the consolidated return year shall be paid to the Affiliates which generated such losses, credits or deductions, in the proportion which the tax benefit derived by the Consolidated Group from the losses, credits and deductions of such Affiliate bears to the tax benefit derived by the Consolidated Group from the losses, credits and deductions of all Affiliates. Allocations pursuant to this Section 3.02(b) shall be made in accordance with the principles set forth in Treasury Regulation Section 1.1502- 33(d)(3).


(c) For purposes of this Agreement, the CRI Group's allocable share of the consolidated Federal regular income tax liability is the aggregate amount of liability allocated to the CRI Affiliates. The CEI Group's allocable share of the consolidated federal regular income tax liability is the aggregate amount of liability allocated to the CEI Affiliates.


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3.03. Alternative Minimum Tax.


(a) Any con ...