CHANCELLOR BROADCASTING CO /DE/, 8-K, 1997-02-06

CHANCELLOR BROADCASTING CO /DE/
8-K, 1997-02-06
RADIO BROADCASTING STATIONS

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

-------------------

FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

-------------

Date of Report (Date of Earliest Event Reported): January 23, 1997

CHANCELLOR BROADCASTING COMPANY
- ---------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)

Delaware
- ---------------------------------------------------------------------------
(State or Other Jurisdiction of Incorporation)

0-27726 75-2538487
- ------------------------------ ------------------------------
(Commission File Number) (I.R.S. Employer
Identification No.)

12655 North Central Expressway
Suite 405
Dallas, Texas 75243
- --------------------------------------------- --------------------
(Address of Principal Executive Offices) (Zip Code)

(972) 239-6220
- ---------------------------------------------------------------------------
(Registrant's Telephone Number, Including Area Code)

- ---------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>

<PAGE>

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

As announced on January 23, 1997 in the press release filed
herewith as Exhibit 99, Chancellor Radio Broadcasting Company, a
Delaware corporation and the wholly-owned subsidiary of Chancellor
Broadcasting Company, a Delaware corporation (together with its
subsidiaries, the "Company"), consummated the acquisition (the "Colfax
Acquisition") of twelve radio stations (the "Colfax Stations") from
Colfax Communications, Inc. and its affiliates ("Colfax") pursuant to
an asset purchase agreement. The aggregate purchase price for the
Colfax Stations, based upon an appraisal of the assets purchased, was
$365 million, subject to adjustment within 90 days of the closing to
take into account the amount of net working capital as of the closing,
the apportionment of certain costs and the amount of any Colfax
Stations' net trade balance as of the closing in excess of $25,000.
The Colfax Acquisition has been funded with the proceeds from (i) the
sale of Chancellor Radio Broadcasting Company's $200 million
liquidation preference 12% Exchangeable Preferred Stock due 2009 and
Chancellor Broadcasting Company's $100 million liquidation preference
7% Convertible Preferred Stock and (ii) Chancellor Radio Broadcasting
Company's new $345 million credit facility, all of which closed
concurrently with the Colfax Acquisition and were announced in the
press release filed herewith as Exhibit 99. The Company plans to
operate ten of the twelve Colfax Stations and to divest the two Colfax
Stations located in Milwaukee, subject to the negotiation of a
definitive agreement. The financial statements of Colfax
Communications, Inc. are set forth herein under Item 7(a). Unaudited
pro forma financial information giving effect to the consummation of
the Colfax Acquisition is set forth herein under Item 7(b). Such
unaudited pro forma financial information differs from the unaudited
pro forma financial information presented under Item 5 hereof only in
that the unaudited pro forma financial information presented under
Item 5 hereof includes the Company's disposition of WWWW-FM and WDFN-
AM in Detroit (which was consummated on January 30, 1997) and the Omni
Transaction (as defined in Item 5 hereof) and the unaudited pro forma
financial information presented under Item 7(b) does not.

ITEM 5. OTHER EVENTS

In connection with the offering of 2,000,000 shares of its $100
million liquidation preference 7% Convertible Preferred Stock, par
value $0.01 per share, referred to in Item 2 above and in the attached
press release, the Company prepared a final offering memorandum that
contained certain pro forma financial statements of operations for the
year ended December 31, 1995 and for the nine months ended September
30, 1995 and 1996, and a pro forma balance sheet as of September 30,
1996. These pro forma financial statements are set forth below.

<PAGE>

The following unaudited pro forma financial information (referred
to for purposes of Item 5 as the "Pro Forma Financial Information") is
based on the historical financial statements of (i) the Company, (ii)
KDWB-FM (acquired by the Company in August 1995), (iii) Trefoil
Communications, Inc. and its wholly-owned subsidiary, Shamrock
Broadcasting, Inc., and its respective subsidiaries (collectively,
"Shamrock Broadcasting") (acquired by the Company in February 1996),
(iv) KOOL-FM (acquired by Colfax in April 1996), (v) KIMN-FM and KALC-
FM (acquired by the Company in July 1996), (vi) the stations acquired
by Colfax from Sundance Broadcasting, Inc. ("Sundance") in September
1996, (vii) WKYN-AM (acquired by the Company in November 1996), (viii)
the Colfax Stations (acquired by the Company in January 1997, two of
which will be divested), (ix) the stations (the "Omni Stations") in
Orlando, Florida to be acquired from OmniAmerica Group, (x) KSTE-AM in
Sacramento, California, which will be acquired from American Radio
System Corporation, and (xi) the three FM and one AM stations (the
"SFX Stations") in Nassau-Suffolk (Long Island) to be acquired from
SFX Communications, Inc. Financial information for the SFX Stations,
KSTE-AM and WKYN-AM is shown in the Pro Forma Financial Information
under the caption "All Other".

The pro forma condensed statements of operations for the year
ended December 31, 1995 and for the nine months ended September 30,
1995 and 1996 give effect to the consummation of the acquisition of
KDWB-FM, Shamrock Broadcasting, KOOL-FM, KIMN-FM and KALC-FM (for
which a Houston station was exchanged), the stations acquired by
Colfax from Sundance, WKYN-AM and the Colfax Stations (two of which
will be divested), the disposition of WWWW-FM and WDFN-AM in Detroit
and the pending acquisition of the Omni Stations (five of which will
be divested in exchange for the SFX Stations and KSTE-AM)
(collectively, the "Omni Transaction") and, in each case, the
financing thereof, as if each such transaction had occurred on January
1, 1995. The pro forma balance sheet as of September 30, 1996 has
been prepared as if the acquisition of WKYN-AM, the acquisition of the
Colfax Stations, the disposition of WWWW-FM and WDFN-AM and the Omni
Transaction and, in each case, the financing thereof, had occurred on
that date. The Pro Forma Financial Information is not necessarily
indicative of either future results of operations or the results that
might have occurred if the foregoing transactions had been consummated
on the indicated dates.

The purchases of KDWB-FM, Shamrock Broadcasting, KOOL-FM, the
stations acquired by Colfax from Sundance, WKYN-AM and the Colfax
Stations and the disposition of WWWW-FM and WDFN-AM were accounted for
using the purchase method of accounting. The acquisition of KIMN-FM
and KALC-FM in exchange for a Houston station was accounted for using
the fair value of the Houston station and the additional cash
consideration paid. The Omni Transaction will be accounted for using
the purchase method of

<PAGE>

accounting. The total purchase costs of the acquisitions and
exchanges will be allocated to the tangible and intangible assets and
liabilities acquired based upon their respective fair values. The
allocation of the aggregate purchase price reflected in the Pro Forma
Financial Information is preliminary. The final allocation of the
purchase price is contingent upon the receipt of final appraisals of
the acquired assets; however, such allocation is not expected to
differ materially from the preliminary allocation.

<PAGE>

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
YEAR ENDED DECEMBER 31, 1995

Historical
-------------------------------------------------------------------------------

Shamrock KIMN-FM
Chancellor Broadcasting KDWB-FM KALC-FM Colfax Sundance KOOL-FM
------------- ------------- -------- -------- --------- --------- ----------

Net revenues . . . . . . . . . . . . . . $ 64,322 $94,605 $ 893 $7,205 $30,143 $14,840 $4,914
--------- ------- ----- ------ ------- ------- ------

Station operating expenses . . . . . . . 37,464 73,720 473 6,193 22,169 9,774 3,573
Depreciation and amortization . . . . . . 9,047 8,751 518 875 6,505 2,145 899
Corporate expenses . . . . . . . . . . . 1,816 3,139 - - - - -
Stock option compensation expense . . . . 6,360 - - - - - -
--------- ------- ----- ------ ------- ------- ------

Operating income (loss) . . . . . . . . 9,635 8,995 (98) 137 1,469 2,921 442
Interest expense . . . . . . . . . . . . 17,324 14,703 - - 656 - 1,162
Other (income) expense . . . . . . . . . 42 (78) 23 2 771 21 -
--------- ------- ----- ------ ------- ------- ------

Income (loss) before provision
for income taxes . . . . . . . . . . . (7,731) (5,630) (121) 135 42 2,900 (720)
Provision for income taxes . . . . . . . 3,800 (1,287) (93) - - - -
Dividends and accretion on
preferred stock of subsidiary . . . . . - - - - - - -
--------- ------- ----- ------ ------- ------- ------

Net income (loss) . . . . . . . . . . . (11,531) $(4,343) $ (28) $ 135 $ 42 $ 2,900 $ (720)
======= ===== ====== ======= ======= ======

Dividends on preferred stock . . . . . . -
---------

Loss applicable to common shares . . . . $ (11,531)
=========

Deficiency of earnings to fixed charges
and preferred stock dividends and
accretion . . . . . . . . . . . . . . . . $ 7,731
Loss per common share(R) . . . . . . . . $ (1.30)
Weighted average number of shares
outstanding(R) . . . . . . . . . . . . 8,850,075

</TABLE>

<PAGE>

Historical
----------------------

Omni All
Stations Other Adjustments Pro Forma
----------- ---------- ----------- -------------

Net revenues . . . . . . . . . . . . . $13,468 $13,508 $ (540)(A) $223,429
(19,929)(B)
------- ------ -------- --------

Station operating expenses . . . . . . 9,128 9,343 (540)(A) 143,965
(15,891)(B)
(11,441)(C)
Depreciation and amortization . . . . . 1,576 2,927 4,757 (D) 38,000
Corporate expenses . . . . . . . . . . - 1,460 (2,015)(E) 4,400
Stock option compensation expense . . . - - - 6,360
------- ------ ------- --------

Operating income (loss) . . . . . . . 2,764 (222) 4,661 30,704
Interest expense . . . . . . . . . . . - 25 11,771 (F) 45,641
Other (income) expense . . . . . . . . (264) (12) - 505
------- ------ ------- --------

Income (loss) before provision
for income taxes . . . . . . . . . 3,028 (235) (7,110) (15,442)
Provision for income taxes . . . . . . - - 8,505 (G) 10,925
Dividends and accretion on
preferred stock of subsidiary . . . . - - 38,503 (H) 38,503
------- ------ -------- --------

Net income (loss) . . . . . . . . . . $ 3,028 $ (235) $(54,118) (64,870)
======= ====== ========

Dividends on preferred stock . . . . . $ 7,000 (H) 7,000
Loss applicable to common shares . . . $(71,870)
========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 91,280
Loss per common share(R) . . . . . . . $ (3.76)
Weighted average number of
shares outstanding(R) . . . . . . . . 19,110,230

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1995

Historical
-----------------------------------------------------------------------------

Shamrock KTMN-FM
Chancellor Broadcasting KDWB-FM KALC-FM Colfax Sundance KOOL-FM
------------- ------------- -------- -------- -------- --------- ---------

Net revenues . . . . . . . . . . . . $47,921 $69,630 $ 893 $5,210 $21,692 $10,718 $3,497
------- ------- ----- ------ ------- ------- ------

Station operating expenses . . . . . 28,120 55,413 473 4,519 15,678 7,389 2,838
Depreciation and amortization . . . . 6,708 6,549 518 699 5,084 1,761 657
Corporate expenses . . . . . . . . . 1,292 2,515 - - - - -
Stock option compensation expense . . 5,410 - - - - - -
------- ------- ----- ------ ------- ------- ------

Operating income (loss) . . . . . . 6,391 5,153 (98) (8) 930 1,568 2
Interest expense . . . . . . . . . . 12,780 11,067 - - 476 - 876
Other (income) expense . . . . . . . 82 (169) 23 - 939 17 -
------- ------- ----- ------ ------- ------- ------

Income (loss) before provision
for income taxes . . . . . . . . (6,471) (5,745) (121) (8) (485) 1,551 (874)
Provision for income taxes . . . . . 2,829 (1,798) (93) - - - -
Dividends and accretion on
preferred stock of subsidiary . . . - - - - - - -
------- ------- ----- ------ ------- ------- ------

Net income (loss) . . . . . . . . . (9,300) $(3,947) $ (28) $ (8) $ (485) $ 1,551 $ (874)
======= ===== ====== ======= ======= ======

Dividends on preferred stock . . . . -
-------

Loss applicable to common shares . . $(9,300)
=======

Deficiency of earnings to
fixed charges and preferred
stock dividends and accretion . . . $ 6,471
Loss per common share(R) . . . . . . $ (1.05)
Weighted average number of
shares outstanding(R) . . . . . . . 8,849,851

</TABLE>

<PAGE>

Historical
----------------------

Omni All
Stations Other Adjustments Pro Forma
----------- ---------- ----------- -------------

Net revenues . . . . . . . . . . . . . $11,134 $10,169 $ (540)(A) $165,504
(14,820)(B)
------- ------ -------- --------

Station operating expenses . . . . . . 7,370 7,084 (540)(A) 107,906
(12,192)(B)
(8,246)(C)
Depreciation and amortization . . . . . 1,331 1,868 3,325 (D) 28,500
Corporate expenses . . . . . . . . . . - 987 (1,494)(E) 3,300
Stock option compensation expense . . . - - - 5,410
------- ------ ------- --------

Operating income (loss) . . . . . . . 2,433 230 3,787 20,388
Interest expense . . . . . . . . . . . - 22 9,178 (F) 34,399
Other (income) expense . . . . . . . . (84) - - 808
------- ------ ------- --------

Income (loss) before provision
for income taxes . . . . . . . . . 2,517 208 (5,391) (14,819)
Provision for income taxes . . . . . . - 40 7,216 (G) 8,194
Dividends and accretion on
preferred stock of subsidiary . . . . - - 28,550 (H) 28,550
------- ------ -------- --------

Net income (loss) . . . . . . . . . . $ 2,517 $ 168 $(41,157) (51,563)
======= ====== ========

Dividends on preferred stock . . . . . 5,250 (H) $ 5,250
--------

Loss applicable to common shares . . . $(56,813)
========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 71,153
Loss per common share(R) . . . . . . . $ (2.97)
Weighted average number of 19,110,230
shares outstanding(R) . . . . . . . .

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, 1996

Historical
-------------------------------------------------------------------------

Shamrock KIMN-FM
Chancellor Broadcasting KALC-FM Colfax Sundance KOOL-FM
-------------- -------------- --------- --------- ---------- ---------

Net revenues . . . . . . . . . . . . . . . . . . $122,838 $ 8,464 $1,796 $28,146 $12,104 $1,431
-------- ------- ------ ------- ------- ------

Station operating expenses . . . . . . . . . . . 74,922 7,762 1,617 18,684 7,678 852
Depreciation and amortization . . . . . . . . . . 17,704 595 511 3,933 1,242 229
Corporate expenses . . . . . . . . . . . . . . . 3,377 2,515 - - - -
Stock option compensation expense . . . . . . . . 2,850 - - - - -
-------- ------- ------ ------- ------- ------

Operating income (loss) . . . . . . . . . . . . 23,985 (2,108) (332) 5,529 3,184 350
Interest expense . . . . . . . . . . . . . . . . 24,469 1,380 - 3,227 - 299
Other (income) expense . . . . . . . . . . . . . 130 49 (2,847) (120) 25 -
-------- ------- ------ ------- ------- ------

Income (loss) before provision
for income taxes . . . . . . . . . . . . . . (614) (3,537) 2,515 2,422 3,159 51
Provision for income taxes . . . . . . . . . . . 2,201 - - - - -
Dividends and accretion on preferred stock
of subsidiary . . . . . . . . . . . . . . . . . 8,187 - - - - -
-------- ------- ------ ------- ------- ------

Net income (loss) before extraordinary loss . . (11,002) (3,537) 2,515 2,422 3,159 51
Extraordinary loss on early extinguishment
of debt . . . . . . . . . . . . . . . . . . . . 5,609 - - - - -
-------- ------- ------ ------- ------- ------

Net income (loss) . . . . . . . . . . . . . . . (16,611) $(3,537) $2,515 $ 2,422 $ 3,159 $ 51
======= ====== ======= ======= ======

Dividends on preferred stock . . . . . . . . . . -
Loss on repurchase of preferred stock . . . . . . 16,570
--------

Loss applicable to common shares . . . . . . . . $(33,181)
========

Deficiency of earnings to fixed charges and
preferred stock dividends and accretion . . . . $ 8,801
Loss per common share(R) . . . . . . . . . . . . $ (2.06)
Weighted average number of shares
outstanding(R) . . . . . . . . . . . . . . . . 16,125,754

</TABLE>

<PAGE>

Historical
----------------------

Omni All
Stations Other Adjustments Pro Forma
----------- ---------- ----------- -------------

Net revenues . . . . . . . . . . . . . $7,445 $ 6,933 $(10,754)(B) $176,670
(1,733)(K)
------- ------ -------- --------

Station operating expenses . . . . . . 5,325 5,348 (5,934)(B) 110,581
(1,900)(C)
(3,773)(K)
Depreciation and amortization . . . . . 1,458 2,307 806 (D) 28,785
Corporate expenses . . . . . . . . . . - 1,024 (2,491)(E) 4,125
Stock option compensation expense . . . - - - 2,850
------- ------ ------- --------

Operating income (loss) . . . . . . . 662 (1,746) 805 30,329
Interest expense . . . . . . . . . . . - 27 4,089 (F) 33,491
Other (income) expense . . . . . . . . (404) (5,100) - (8,267)
------- ------ ------- --------

Income (loss) before provision
for income taxes . . . . . . . . . 1,066 3,327 (3,284) 5,105
Provision for income taxes . . . . . . - - 5,993 (G) 8,194
------- ------ -------- --------

Dividends and accretion on
preferred stock of subsidiary . . . . - - 23,847 (H) 32,034
------- ------ -------- --------

Net income (loss) before
extraordinary loss . . . . . . . . 1,066 3,327 (33,124) (35,123)
Extraordinary loss on early
extinguishment of debt . . . . . . . - - (5,609)(I) -
------- ------- -------- --------

Net income (loss) . . . . . . . . . . $ 1,066 $3,327 $(27,515) (35,123)
======= ====== ========

Dividends on preferred stock . . . . . $ 5,250 (H) 5,250
Loss on repurchase of preferred stock . (16,570)(J) -
--------

Loss applicable to common shares . . . $(40,373)
========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 57,036
Loss per common share(R) . . . . . . . $ (2.11)
Weighted average number of shares
outstanding(R) . . . . . . . . . . . 19,110,230

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

UNAUDITED PRO FORMA BALANCE SHEET
SEPTEMBER 30, 1996
(DOLLARS IN THOUSANDS)

ASSETS

Historical
--------------------------------------------------

Omni All
Chancellor Colfax Stations Other Adjustments Pro Forma
------------ ----------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>

Current assets:
Cash . . . . . . . . . . . . . . . . . . $ 5,112 $ 2,504 $ 1,823 $ 2,755 $ (4,579)(L) $ 7,615
Accounts receivable, net . . . . . . . . 42,172 9,848 718 470 (1,188)(L) 52,020
Prepaid expenses and other . . . . . . . 1,955 646 19 83 2,703
-------- -------- ------- ------- --------- ----------

Total current assets . . . . . . . 49,239 12,998 2,560 3,308 (5,767) 62,338
Restricted cash . . . . . . . . . . . . . . 20,000 - - - (20,000)(M) -
Property and equipment, net . . . . . . . . 49,082 10,218 23,432 4,908 15 (N) 87,655
Intangible and other assets, net . . . . . 586,863 147,520 14,636 33,249 (4,870)(M) 1,007,658
230,260 (N)
-------- -------- ------- -------- --------- ----------

Total assets . . . . . . . . . . . . . $705,184 $170,736 $40,628 $ 41,465 $ 199,638 $1,157,651
======== ======== ======= ======== ========= ==========

LIABILITIES AND COMMON STOCKHOLDER'S EQUITY
Current liabilities:
Current portion of long-term debt . . . . 400 - - - 8,975 (M) 9,375
Accounts payable and other
accrued expenses . . . . . . . . . . . 14,487 4,186 55 363 (185)(O) 18,906
-------- -------- ------- -------- -------- ----------

Total current liabilities . . . . . . 14,887 4,186 55 363 8,790 28,281
-------- -------- ------- -------- -------- ----------

Long-term debt . . . . . . . . . . . . . . 364,708 57,950 - - (57,950)(M) 505,074
140,366 (M)
Deferred tax liability . . . . . . . . . . 19,037 - - - - 19,037
Other . . . . . . . . . . . . . . . . . . . 821 - - 77 - 898
-------- -------- ------- -------- -------- ----------

Total liabilities . . . . . . . . . . 399,453 62,136 55 440 91,206 553,290
Senior exchangeable preferred stock . . . . 103,853 - - - - 103,853
Exchangeable preferred stock . . . . . . . - - - - 192,500 (P) 192,500
Stockholder's equity . . . . . . . . . . . 201,878 108,600 40,573 41,025 (4,870)(M) 308,008
(190,198)(Q)
96,000 (P
15,000 (P)
-------- -------- ------- ------- --------- ----------

Total liabilities and stockholder's
equity . . . . . . . . . . . . . . . $705,184 $170,736 $40,628 $ 41,465 $ 199,638 $1,157,651
======== ======== ======= ======== ========= ==========

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

NOTES TO PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)

(A) The adjustment represents the elimination of time brokerage fees
paid by the Company in 1995 to Midcontinent Radio of Minnesota,
Inc. from February 1, 1995 to July 31, 1995 pursuant to an LMA
relating to KDWB-FM.

(B) The adjustment represents the elimination of net revenues and
station operating expenses of the Houston station, which was
exchanged for two Denver stations (KIMN and KALC) in July 1996,
and the Detroit and Milwaukee stations, which are pending
disposition:

Houston Detroit Milwaukee Total
------- ------- --------- -----
<S> <C> <C> <C>

Year Ended December 31, 1995
----------------------------

Net revenues . . . . . . . . . . . $4,125 $7,757 $8,047 $19,929
Station operating expenses . . . . 4,032 7,082 4,777 15,891
Nine Months Ended September 30, 1995
------------------------------------

Net revenues . . . . . . . . . . . 3,229 5,619 5,972 14,820
Station operating expenses . . . . 3,312 5,275 3,605 12,192
Nine Months ended September 30, 1996
------------------------------------

Net revenues . . . . . . . . . . . 1,464 2,980 6,310 10,754
Station operating expenses . . . . 726 1,361 3,847 5,934

</TABLE>

(C) The adjustment reflects cost savings resulting from the
elimination of redundant operating expenses arising from the
combination of the Company and Shamrock Broadcasting, including
the elimination of certain station management positions, the
standardization of employee benefits and compensation practices
and the implementation of operating strategies currently utilized
by the Company's management. The pro forma cost savings are
summarized as follows:

Year Ended Nine Months Ended
December 31, September 30,
----------------------------

1995 1995 1996
------------- ------------- -------------
<S> <C> <C> <C>

Shamrock Broadcasting
Selling expenses . . . . . . . $ 3,135 $2,422 $ 523
Programming and technical . . . 2,297 1,610 383
Advertising and promotions . . 2,554 1,484 422
General and administrative . . 3,455 2,730 572
------- ------ ------

Total . . . . . . . . . . . $11,441 $8,246 $1,900
======= ====== ======

</TABLE>

<PAGE>

(D) The adjustment reflects (i) a change in depreciation and
amortization resulting from conforming the estimated useful lives
of the acquired stations and (ii) the additional depreciation and
amortization expense resulting from the allocation of the
purchase price of the acquired stations, net of stations
exchanged and sold, including an increase in property and
equipment and intangible assets to their estimated fair market
value and the recording of goodwill associated with the
acquisitions. Goodwill is amortized over 40 years.

<PAGE>

(E) The adjustment reflects cost savings anticipated to be achieved
by operating all of the stations under the Company's
decentralized management strategy and from the elimination of
redundant management costs.

(F) The adjustment reflects the effect on interest expense of the
change in debt structure resulting from each pro forma event. Pro
forma interest reflects $200,000 of 9 3/8% Senior Subordinated
Notes due 2004 and $60,000 of 12 1/2% Senior Subordinated Notes
due 2004, and $254,449 of bank financing with an annual interest
rate of approximately 7.7%.

(G) The adjustment reflects the increase in the provision for income
taxes resulting from the deferred tax liabilities generated
during each period from the respective acquisitions, offset by
the reversal of book/tax basis differences of Shamrock
Broadcasting during each period had the acquisition occurred on
January 1, 1995.

(H) The adjustment reflects the dividends and accretion on the 12
1/4% Series A Senior Cumulative Exchangeable Preferred Stock due
2008, where not already included, and the Exchangeable Preferred
Stock and the Convertible Preferred Stock.

(I) The adjustment reflects the elimination of a non-recurring
extraordinary loss on early extinguishment of debt in connection
with the refinancing of the Company's term and revolving loan
facilities in conjunction with the acquisition of Shamrock
Broadcasting and a partial prepayment of the Company's existing
credit agreement in August 1996.

(J) The adjustment reflects the elimination of a non-recurring loss
on repurchase of preferred stock which was recognized in March
1996 in connection with the acquisition of Shamrock Broadcasting.

(K) The adjustment reflects the elimination of the LMA and related
facility fee payments for the Omni Transaction.

(L) The adjustment represents the elimination of the historical cash
and receivables balances, net of the allowance for bad debts, for
the Omni Transaction, as the respective acquisition and exchange
agreements exclude these items.

(M) The adjustment reflects (i) the application of the restricted
cash ($20,000) and borrowings under the Company's new $345
million credit agreement ($254,449) to finance the acquisition of
the Colfax Stations and the Omni Stations, net of the proceeds of
the pending station swaps and dispositions, (ii) the repayment of
the existing credit

<PAGE>

agreement ($105,108) and (iii) the elimination of $4,870 of the
Company's deferred financing costs associated with the existing
credit agreement, which will be recognized as an extraordinary
loss in the period the refinancing occurs.

(N) The adjustment reflects the allocation of the purchase price of
the pending acquisitions, net of the pending dispositions and
exchanges, to the assets being acquired and liabilities being
assumed resulting in an increase in property and equipment and
intangible assets to their estimated fair values and the
recording of goodwill associated with the transactions as
follows:

Omni All
Colfax Transaction Other Corporate Total
---------- ------------ --------- --------- ---------

Cash . . . . . . . . . . . . $ 2,504 $ 2,504
Accounts receivable, net . . 9,848 9,848
Prepaid expenses and other . 646 102 748
Property and equipment . . . 27,735 13,313 (2,475) 38,573
Goodwill . . . . . . . . . . 303,572 146,143 (27,051) 422,664
Deferred financing . . . . . - - - 3,000 3,000
Accounts payable and other
accrued expenses . . . . . (4,186) (418) 91 (4,513)
-------- -------- -------- ------ --------

Total . . . . . . . . . $340,119 $159,140 $(29,435) $3,000 $472,824
======== ======== ======== ====== ========

</TABLE>

(O) The adjustment represents the elimination of the accounts payable
and other accrued expenses for the Detroit and Milwaukee
stations, which are being sold.

(P) The adjustment reflects (i) the sale of the 12% Exchangeable
Preferred Stock due 2009, net of related transaction costs
($192,500), (ii) the sale of the 7% Convertible Preferred Stock,
net of related transaction costs ($96,000) and (iii) the sale of
the Class A Common Stock ($15,000) pursuant to the agreement
relating to the acquisition of the Omni Stations.

(Q) The adjustment reflects the elimination of the historical equity
balances of the stations being acquired.

(R) Reflects the effect of the recapitalization of the number of
shares outstanding and the additional shares issued in 1996 in
conjunction with the Company's initial public offering of its
Class A Common Stock, the investment of HM2/HMW, L.P. and the
additional Class A Common Stock to be issued in conjunction with
the acquisition of the Omni Stations.

<PAGE>

ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS

(a) Financial Statements of Business Acquired

The following are the combined financial statements of Colfax
Communications, Inc. Radio Group as of December 31, 1993, 1994 and
1995 and for the years ended December 31, 1993, 1994 and 1995.

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Partners of
Colfax Communications, Inc. Radio Group:

We have audited the accompanying combined balance sheets of the
Colfax Communications, Inc. Radio Group (the "Company") as of December
31, 1995, 1994, and 1993, and the related combined statements of
income (loss), changes in partners' equity and cash flows for each of
the three years in the period ended December 31, 1995. These combined
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
combined financial statements based on our audit.

We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
an audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the combined financial statements referred to
above present fairly, in all material respects, the financial position
of the Colfax Communications, Inc. Radio Group as of December 31,
1995, 1994, and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Washington, D.C.,
September 24, 1996

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 1995, 1994, AND 1993

CURRENT ASSETS

1995 1994 1993
------------- ------------- -------------

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . $ 682,672 $ 216,414 $ 194,905
Accounts receivable, net of allowance for doubtful
accounts of $203,088, $238,801 and $0, respectively . . 7,626,579 8,978,881 7,314,558
Prepaid expenses and other current assets . . . . . . . . 286,774 343,441 514,060
----------- ----------- ----------

Total current assets . . . . . . . . . . . . . . 8,596,025 9,538,736 8,023,523
Property and equipment at cost, net of depreciation . . . 8,675,724 9,608,603 10,087,042
Intangibles and other noncurrent assets at cost, net
of amortization . . . . . . . . . . . . . . . . . . . . 32,383,587 37,653,803 44,234,705
----------- ----------- -----------

Total assets . . . . . . . . . . . . . . . . . . $49,655,336 $56,801,142 $62,345,270
=========== =========== ===========

Liabilities
Accounts payable and accrued expenses . . . . . . . . . . $ 3,224,139 $ 3,883,242 $ 3,174,794
Current maturities of long-term debt . . . . . . . . . . - 900,000 800,000
----------- ----------- -----------

Total current liabilities . . . . . . . . . . . 3,224,139 4,783,242 3,974,794
Long-term debt . . . . . . . . . . . . . . . . . . . . . 39,225,000 7,100,000 8,000,000
----------- ----------- -----------

Total liabilities . . . . . . . . . . . . . . . 42,449,139 11,883,242 11,974,794
----------- ----------- -----------

Commitments (Note 8):
Partners' equity:
Radio Acquisition Associates . . . . . . . . . . . . . (2,783,226) (3,121,671) (2,464,398)
Equity Group Holdings . . . . . . . . . . . . . . . . . 9,888,902 47,558,478 52,305,936
Colfax Communications, Inc. . . . . . . . . . . . . . . 100,521 481,093 528,938
Class B Limited Partners . . . . . . . . . . . . . . . - - -
----------- ----------- -----------

Total partners' equity . . . . . . . . . . . . . 7,206,197 44,917,900 50,370,476
----------- ----------- -----------

Total liabilities and partners' equity . . . . . $49,655,336 $56,801,142 $62,345,270
=========== =========== ===========

</TABLE>

The accompanying notes are an integral
part of these balance sheets.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

COMBINED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993

1995 1994 1993
------------- ------------ -------------

<S> <C> <C> <C>
Advertising revenues:
Local sponsors . . . . . . . . . . . . . . . . . . . . $23,425,588 $24,147,363 $17,070,501
National sponsors . . . . . . . . . . . . . . . . . . . 9,151,724 8,221,228 5,075,658
Other . . . . . . . . . . . . . . . . . . . . . . . . . 1,910,483 2,090,737 1,507,337
----------- ----------- -----------

Gross advertising revenues . . . . . . . . . . . 34,487,795 34,459,328 23,653,496
Less -- Commissions . . . . . . . . . . . . . . . . . . . (4,345,062) (4,283,386) (2,788,198)
----------- ----------- -----------

Net advertising revenues . . . . . . . . . . . . 30,142,733 30,175,942 20,865,298
----------- ----------- -----------

Operating expenses:
Programming . . . . . . . . . . . . . . . . . . . . . . 5,461,691 9,604,067 8,348,699
Sales and advertising . . . . . . . . . . . . . . . . . 11,360,597 10,885,717 9,141,312
General and administrative . . . . . . . . . . . . . . 4,332,286 3,651,832 1,931,197
Engineering . . . . . . . . . . . . . . . . . . . . . . 1,014,375 1,084,282 812,347
Depreciation and amortization . . . . . . . . . . . . . 6,505,492 7,599,901 7,197,017
----------- ----------- -----------

Total operating expenses . . . . . . . . . . . . 28,674,441 32,825,799 27,430,572
----------- ----------- -----------

Income (loss) from operations . . . . . . . . . 1,468,292 (2,649,857) (6,565,274)
Interest expense . . . . . . . . . . . . . . . . . . . . 655,795 531,387 524,368
Loss on dissolution of GRAD-H (Note 6) . . . . . . . . . - - 499,540
Loss on sale of fixed assets . . . . . . . . . . . . . . 770,689 - -
Other expense . . . . . . . . . . . . . . . . . . . . . . - 75,364 299,179
----------- ----------- -----------

Net income (loss) . . . . . . . . . . . . . . . $ 41,808 $(3,256,608) $(7,888,361)
=========== =========== ===========

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

COMBINED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993

Radio Colfax Equity Class B
Acquisition Comm., Group Limited
Associates Inc. Holdings Partners Total
----------- ----------- ----------- ----------- ------------

Balance, December 31, 1992 . . $(1,618,492) $ 93,136 $ 9,178,480 $ - $ 7,653,124
Capital contributions
from partners . . . . . . . - 527,767 52,248,758 - 52,776,525
Capital distributions
to partners . . . . . . . . (484,890) (16,763) (1,669,159) - (2,170,812)
Net income (loss) . . . . . . (361,016) (75,202) (7,452,143) - (7,888,361)
----------- --------- ------------ ------ ------------

Balance, December 31, 1993 . . (2,464,398) 528,938 52,305,936 - 50,370,476
Capital contributions
from partners . . . . . . . 368,281 60,023 5,949,744 - 6,378,048
Capital distributions
to partners . . . . . . . . (1,678,638) (68,618) (6,826,760) - (8,574,016)
Net income (loss) . . . . . . 653,084 (39,250) (3,870,442) - (3,256,608)
----------- --------- ----------- ------ ------------

Balance, December 31, 1994 . . (3,121,671) 481,093 47,558,478 - 44,917,900
Capital contributions
from partners . . . . . . . - 5,735 567,746 - 573,481
Capital distributions
to partners . . . . . . . . (1,031,464) (372,709) (36,922,819) - (38,326,992)
Net income (loss) . . . . . . 1,369,909 (13,598) (1,314,503) - 41,808
----------- --------- ------------ ------ ------------

Balance, December 31, 1995 . . $(2,783,226) $ 100,521 $ 9,888,902 $ - $ 7,206,197
=========== ========= ============ ====== ============

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

COMBINED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993

1995 1994 1993
-------------- --------------- ---------------
<S> <C> <C> <C>

Cash flows from operating activities:
Net income (loss) . . . . . . . . . . . . . . . . . $ 41,808 $(3,256,608) $ (7,888,361)
Adjustment to reconcile net loss to net cash
used in operating activities --
Depreciation and amortization . . . . . . . . . . 6,505,492 7,599,901 7,197,017
Loss on dissolution of GRAD-H . . . . . . . . . . - - 499,540
Loss on asset disposal . . . . . . . . . . . . . 770,689 57,398 -
Restructuring charge . . . . . . . . . . . . . . 737,729 - -
Change in assets and liabilities:
Decrease (increase) in accounts
receivable . . . . . . . . . . . . . . . . . 1,352,302 (1,664,323) (3,071,525)
Decrease (increase) in prepaid expenses
and other current assets . . . . . . . . . . 56,667 170,619 (279,592)
(Decrease) increase in accounts payable and
accrued expenses . . . . . . . . . . . . . . (1,396,832) 708,448 935,241
Decrease in accrued interest . . . . . . . . . - - (5,633)
----------- ----------- ------------

Net cash provided by operating
activities . . . . . . . . . . . . . 8,067,855 3,615,435 (2,613,313)
----------- ----------- ------------

Cash flows from investing activities:
Cash paid for acquisition of intangibles and
other noncurrent assets . . . . . . . . . . . . . (363,174) (12,944) (46,419,228)
Payments for additions to property and
equipment . . . . . . . . . . . . . . . . . . . . (823,737) (968,929) (1,067,289)
Disposal of fixed assets . . . . . . . . . . . . . 113,825 - -
----------- ----------- ------------

Net cash used in investing activities . . (1,073,086) (981,873) (47,486,517)
----------- ----------- ------------

Cash flows from financing activities:
Repayment of note payable . . . . . . . . . . . . . (8,000,000) (800,000) (600,000)
Loan proceeds . . . . . . . . . . . . . . . . . . . 39,225,000 - -
Capital contributions from partners . . . . . . . . 573,481 6,378,048 52,776,525
Capital distributions to partners . . . . . . . . . (38,326,992) (8,190,101) (2,170,812)
----------- ----------- ------------

Net cash (used in) provided by
financing activities . . . . . . . . (6,528,511) (2,612,053) 50,005,713
----------- ----------- ------------

Net increase (decrease) in cash . . . . . . . . . . . 466,258 21,509 (94,117)
Cash, beginning of period . . . . . . . . . . . . . . 216,414 194,905 289,022
----------- ----------- ------------

Cash, end of period . . . . . . . . . . . . . . . . . $ 682,672 $ 216,414 $ 194,905
=========== =========== ============

Supplemental disclosure of cash
flow information --
Cash paid during the year for interest . . . . . . $ 615,900 $ 514,213 $ 530,001
=========== =========== ============

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

NOTES TO COMBINED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995, 1994, AND 1993

1. BASIS OF PRESENTATION:

The accompanying financial statements include the radio station
holdings of Colfax Communications, Inc. ("Colfax"), a Maryland
Corporation. Three of the stations serve the Washington, D.C. market:
WGMS-FM (classical format), WBIG-FM
(oldies format), and WTEM-AM (all-sports format). The remaining two
stations, WBOB-FM (country format) and KQQL-FM (oldies format), serve
the Minneapolis-St. Paul market. All five stations are owned by
entities under the common control of Colfax and its affiliates.

2. DESCRIPTION OF COLFAX COMMUNICATIONS, INC. RADIO GROUP:

Classical Acquisition Limited Partnership

Classical Acquisition Limited Partnership ("CALP") is a Maryland
limited partnership formed to acquire and operate radio stations
WGMS-AM (currently WTEM-AM) and WGMS-FM. Radio Acquisition Associates
Limited Partnership, a Maryland limited partnership, had a 98.04
percent general partner interest and Equity Group Holdings, a District
of Columbia general partnership, had a 1.96 percent limited partner
interest in CALP prior to the admission of the Class B Limited
Partners as discussed below. Radio Acquisition Associates Limited
Partnership has Colfax as a one percent general partner and Equity
Group Holdings as a 99 percent limited partner.

Certain Class B Limited Partners were admitted to the partnership
on January 1, 1993 and on January 1, 1995. The Class B Limited
Partners have a 13.25 percent interest in CALP and Equity Group
Holdings' limited partnership interest in CALP was reduced to 1.813
percent effective January 1, 1993. Radio Acquisition Associates'
Limited Partnership general partnership interest was reduced to 90.687
percent and 84.937 percent effective January 1, 1993 and January 1,
1995, respectively.

Radio 570 Limited Partnership

Radio 570 Limited Partnership ("Radio 570") is a Maryland limited
partnership formed on December 10, 1991, to operate radio station
WTEM-AM (formerly WGMS-AM). Radio 570 was formed by Colfax as the one
percent general partner and Equity Group Holdings as the 99 percent
limited partner. WTEM began broadcasting on May 24, 1992.

<PAGE>

Effective January 1, 1993, certain Class B Limited Partners were
admitted to the partnership. On September 15, 1995, a Class B Limited
Partner was redeemed of his partnership interest. At December 31,
1995, the Class B Limited Partners have a 9.25 percent interest and
Equity Group Holdings has a 89.75 percent interest.

Radio 100 Limited Partnership

Radio 100 Limited Partnership ("Radio 100") was formed on August
11, 1992, to acquire and operate radio stations. Radio 100 was formed
by Colfax as the one percent general partner and Equity Group Holdings
as the 99 percent limited partner.

In 1993, Radio 100 completed its acquisition of two radio
stations in Minnesota for $25,500,000. WBOB-FM (formerly WCTSFM) and
KQQL-FM began on-air operations under Radio 100 ownership on May 7,
1993, and February 18, 1993, respectively.

Effective January 1, 1993, certain Class B Limited Partners were
admitted to the partnership. The Class B Limited Partners have a 10.25
percent interest and the Equity Group Holdings interest was reduced to
88.75 percent.

Radio 100 of Maryland Limited Partnership

Radio 100 of Maryland Limited Partnership ("Radio 100 of
Maryland") was formed on December 2, 1992 to acquire and operate radio
stations. Radio 100 of Maryland was formed by Colfax as the one
percent general partner and Equity Group Holdings as the 99 percent
limited partner.

On June 3,1993, Radio 100 of Maryland acquired WBIG-FM (formerly
WJZE-FM) in Washington, D.C. for $19,500,000.

Effective January 1, 1993, certain Class B Limited Partners were
admitted to the partnership. On September 15, 1995, a Class B Limited
Partner was redeemed of his partnership interest. On October 1, 1995,
a Class B Limited Partner was admitted to the partnership. At December
31, 1995, the Class B Limited Partners have a 11.25 percent interest
and Equity Group Holdings has a 87.75 percent interest.

Partnership Allocations

The partnerships distribute cash from operations and allocate net
profits or losses to the partners, in general, in accordance with
their stated interests except that no partner shall receive any
distribution from a partnership until such time as the net invested
capital of the general partner and Class A Limited Partner have been
distributed, along with a cumulative priority return on the average
net invested capital at an annual

<PAGE>

rate equal to the prime rate plus one quarter of one percent
compounded monthly.

In accordance with the Company's new debt agreement (described
below) distributions to partners may be permitted on a quarterly basis
if certain requirements are met.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

The accompanying financial statements are presented on the
accrual basis of accounting in accordance with generally accepted
accounting principles.

Barter Transactions

The partnerships enter into barter transactions in which they
provide on-air advertising in exchange for goods and services.
Revenues and expenses from barter transactions are presented in the
accompanying statement of revenues and expenses based on the estimated
fair market value of the goods or services received. Barter revenue
approximated $1,590,000, $1,870,000 and $1,340,000 for the years ended
December 31, 1995, 1994, and 1993, respectively; while barter expense
approximated $1,486,000, $1,520,000 and $1,370,000, for the years
ended December 31, 1995, 1994, and 1993, respectively.

Income Taxes

Provision for Federal and state income taxes has not been made in
the accompanying financial statements since the partnerships do not
pay Federal and state income taxes but rather allocate profits and
losses to the partners for inclusion in their respective income tax
returns.

Buildings and Leasehold Improvements

Buildings and leasehold improvements are recorded at fair value
at the date of acquisition. Depreciation is recorded using the
straight-line method over 31.5 or 40 years.

Furniture, Fixtures and Equipment

Furniture, fixtures and equipment are recorded at fair value at
the date of acquisition. Depreciation is recorded using the
straight-line method over the estimated useful life of the assets,
which is typically 5 to 7 years.

<PAGE>

Intangible Assets

Intangible assets are recorded at fair value at the date of
acquisition. Amortization is recorded over their useful fives. The
estimated useful lives of intangible assets as of December 31, 1995,
are as follows:

Useful Life
-----------
<S> <C>

FCC Licenses . . . . . . . . . . . . . . . . . . 7-25 years
Covenants Not to Compete . . . . . . . . . . . . 3 years
Employment Agreements . . . . . . . . . . . . . . 2 years
Organizational Costs . . . . . . . . . . . . . . 5 years
Start-up Costs . . . . . . . . . . . . . . . . . 5 years

</TABLE>

Land

Certain partners have contributed to Radio 570 a parcel of land
in Germantown, Maryland, which is being used as the site for a new
array of broadcasting towers. The land has been recorded at its
original purchase price plus costs related to preparing the land for
its intended use.

Radio 100 of Maryland acquired a parcel of land and property in
Washington, D.C., through the purchase agreement with United
Broadcasting Company. This land was sold in February 1995. Radio 100
acquired a parcel of land in Nowthen, Minnesota, through the purchase
agreement with Trumper Communication of Minnesota Limited Partnership.
Both parcels of land were recorded at their appraised value at
acquisition.

Estimates

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from those estimates.

Fair Value of Financial Instruments

In 1995, the Company adopted Statement of Financial Accounting
Standard ("SFAS") No. 107, "Disclosure about Fair Value of Financial
Instruments," which requires disclosures of fair value information
about financial instruments, whether or not recognized in the balance
sheet.

The carrying amount reported in the balance sheets for cash,
accounts receivable, accounts payable and accrued liabilities,
approximate their fair value due to the immediate or short-term
maturity of such instruments. The carrying amount reported for

<PAGE>

long-term debt approximates fair value due to the debt being priced at
floating rates (see Note 7 for additional information).

New Pronouncements

In March 1995, the FASB issued No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of." This statement requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Long-lived assets and certain identifiable intangibles to be disposed
of are to be reported at the lower of carrying amount or fair value
less cost to sell. SFAS No. 121 requires adoption for fiscal years
beginning after December 15, 1995. In management's opinion, the
application of SFAS No. 121 will not have a significant impact on the
Company's financial statements.

4. PROPERTY AND EQUIPMENT:

The components of property and equipment at December 31, 1995,
1994, and 1993, are summarized below:

As of December 31,
-------------------------------------------

1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>

Land . . . . . . . . . . . . . . . . $ 1,901,663 $ 2,233,341 $ 2,233,341
Buildings . . . . . . . . . . . . . . 26,453 604,927 591,427
Construction in progress . . . . . . 27,232 201,404 1,894,049
Furniture, fixtures and equipment . . 8,520,853 7,690,841 5,582,139
Leasehold improvements . . . . . . . 816,031 522,806 489,328
----------- ----------- -----------

11,292,232 11,253,319 10,790,284
Less -- Accumulated depreciation . . (2,616,508) (1,644,716) (703,242)
----------- ----------- -----------

$ 8,675,724 $ 9,608,603 $10,087,042
=========== =========== ===========

</TABLE>

5. INTANGIBLES AND OTHER NONCURRENT ASSETS:

The components of FCC licenses and other noncurrent assets at
December 31, 1995, 1994, and 1993, are summarized below:

As of December 31,
-------------------------------------------

1995 1994 1993
------------- ------------- -------------
<S> <C> <C> <C>

FCC licenses . . . . . . . . . . . . $39,505,783 $39,505,773 $39,505,773
Covenants not to compete . . . . . . 8,493,147 8,493,147 9,993,147
Start-up and organizational costs . . 2,132,577 2,153,036 2,153,036
Other . . . . . . . . . . . . . . . . 958,245 1,891,395 1,870,832
----------- ----------- -----------

51,089,752 52,043,351 53,522,788

<PAGE>

Less -- Accumulated amortization . . (18,706,165) (14,389,548) 9,288,083)
----------- ----------- ----------

$32,383,587 $37,653,803 $44,234,705
=========== =========== ===========

</TABLE>

<PAGE>

6. RELATED-PARTY TRANSACTIONS:

Each partnership is involved in certain transactions with other
partnerships in the radio group related to sharing of services and
purchasing. These transactions are settled on a current basis through
adjustments to partners' equity accounts.

On January 18, 1995, CALP and Radio 100 of Maryland each entered
into a ten-year agreement to lease tower space from Colfax Towers,
Inc. The initial annual rental payment was $30,000 for CALP and
$36,000 for Radio 100 of Maryland. Colfax Towers, Inc. is owned by the
shareholders of Colfax Communications, Inc.

Employees of Colfax perform activities on behalf of and oversee
the operations of the radio stations included in the radio group.
Colfax does not charge any fees to the radio stations for the
performance of such services. Corporate expenses of $1,354,296,
$1,144,082 and $798,630 related to those services are not included in
the financial statements of the radio group for the years ending
December 31, 1995, 1994, and 1993, respectively. These amounts include
$148,000, $110,000 and $0, respectively, related to management
restructuring at certain radio stations. These corporate expenses were
funded directly by the owners of Colfax Communications, Inc.

CALP owned 100 percent of the stock of GRADH-104, Inc., an Ohio
corporation. On September 15, 1993, the stockholder and directors
authorized the dissolution of GRADH-104, Inc. The assets of GRADH-104
were distributed to its shareholder and recorded at their fair market
value at the time of transfer.

7. LONG-TERM DEBT:

On December 27, 1995, CALP, Radio 570, Radio 100, and Radio 100
of Maryland (collectively, the "Borrowers") entered into a $40 million
revolving loan agreement. At December 31, 1995, $39,225,000 was
outstanding under this agreement. The proceeds were allocated to each
borrower on the basis of each station's capital account as follows:

<S> <C>

CALP........................................................ $ 7,378,243
Radio 570................................................... 4,140,078
Radio 100................................................... 16,878,782
Radio 100 of Maryland....................................... 10,827,897
-----------
$39,225,000

===========

</TABLE>

The proceeds were used to repay the indebtedness of CALP
(described below), to make certain permitted distributions to partners
of the Borrowers, and for working capital purposes in the operations
of the Borrowers. Borrowings under this agreement bear interest at
floating rates equal to prime and/or LIBOR (as defined in the loan
agreement) plus an applicable margin

<PAGE>

determined by a leverage ratio. The expiration date of the loan
agreement is December 31, 2002. Under the loan agreement, the
Borrowers are required to maintain a specific leverage ratio and
certain ratios pertaining to cash flow coverage.

On March 31, 1992, CALP entered into a $10 million loan
agreement. This loan bore interest at a floating rate equal to prime
plus 0.5 percent, LIBOR plus 2.0 percent or the CD rate (as defined in
the loan agreement) plus 2.0 percent, along with certain other
interest rate options. As described above, this loan was paid in full
on December 27, 1995.

8. COMMITMENTS:

The Radio Group has entered into various contracts for exclusive
radio broadcasting rights and other programming. In addition, the
partnerships lease office space and have entered into various service
contracts, including certain personal service contracts. These
broadcasting rights, leases and service contracts expire over periods
ranging from 1996 to 2012. The minimum future commitments under these
agreements, leases and service contracts are as follows.

1996........................................................ $ 3,688,393
1997........................................................ 3,377,277
1998........................................................ 1,951,379
1999........................................................ 1,150,057
2000........................................................ 922,649
Thereafter.................................................. 1,950,932
-----------
$13,040,687

===========

</TABLE>

9. RESTRUCTURING CHARGES:

During 1995, the Radio Group incurred restructuring costs of
$737,729 at certain radio stations. These costs included severance and
salary payments to terminated employees of $357,563, costs related to
hiring a new general manager at one of the radio stations of $135,519
and costs related to a loss on space vacated by one of the radio
stations of $244,647.

10. SUBSEQUENT EVENTS:

Radio 94 of Phoenix Limited Partnership ("Radio 94") was formed
on January 3, 1996, to acquire and operate radio stations. Radio 94
was formed by Colfax as the one percent general partner and Equity
Group Holdings as the 99 percent limited partner. On April 1, 1996,
Radio 94 acquired KOOL (AM and KOOL-FM in Phoenix, Arizona for
$35,000,000. Effective April 5, 1996, certain Class B Limited Partners
were admitted to the partnership. The Class B Limited Partners have an
8.25 percent interest and the Equity Group Holdings interest was
reduced to 90.75 percent. In June 1996, Radio 94 entered into an asset
purchase agreement to sell KOOL (AM).

<PAGE>

Radio 95 of Phoenix Limited Partnership ("Radio 95") was formed
on May 3, 1996, to acquire and operate radio stations. Radio 95 was
formed by Colfax as the one percent general partner and Equity Group
Holdings as the 99 percent limited partner. On September 12, 1996,
Radio 95 acquired KYOT-FM, KZON-FM, KOY (AM) and KISO (AM), each in
Phoenix, Arizona; KIDO (AM) and KLTB (FM, each in Boise, Idaho; KARO
(FM) in Caldwell, Idaho; WMIL-FM in Waukesha, Wisconsin; and WOKY (AM)
in Milwaukee, Wisconsin for $95,000,000.

On August 24,1996, Chancellor Radio Broadcasting Company
("Chancellor") a Delaware Corporation, purchased substantially all of
the assets of CALP, Radio 570, Radio 100, Radio 100 of Maryland, Radio
94 (with the exception of KOOL (AM)) and Radio 95 (with the exception
of KIDO (AM, KLTB (FM) and KARO (FM) for $365,000,000 through the
execution of an Asset Purchase Agreement (the "Agreement"). The
Agreement stipulates that the purchase price for the assets be
allocated among the limited partnerships as follows:

CALP........................................................ $ 50,000,000
Radio 570................................................... 21,000,000
Radio 100................................................... 85,000,000
Radio 100 of Maryland....................................... 90,000,000
Radio 94.................................................... 30,000,000
Radio 95.................................................... 89,000,000
------------
$365,000,000

============

</TABLE>

<PAGE>

(b) Pro Forma Financial Information

The following unaudited pro forma financial information (referred
to for purposes of Item 7(b) as the "Pro Forma Financial Information")
is based on the historical financial statements of (i) the Company,
(ii) KDWB-FM (acquired by the Company in August 1995), (iii) Shamrock
Broadcasting (acquired by the Company in February 1996), (iv) KOOL-FM
(acquired by Colfax in April 1996), (v) KIMN-FM and KALC-FM (acquired
by the Company in July 1996 and for which a Houston station was
exchanged), (vi) the stations acquired by Colfax from Sundance in
September 1996, (vii) WKYN-AM, (acquired by the Company in November
1996) and (viii) the Colfax Stations (acquired by the Company in
January 1997), two of which will be divested. Financial information
for WKYN-AM is shown where applicable in the Pro Forma Financial
Information.

The pro forma condensed statements of operations for the year
ended December 31, 1995 and for the nine months ended September 30,
1995 and 1996 give effect to the consummation of the acquisition of
KDWB-FM, Shamrock Broadcasting, KOOL-FM, KIMN-FM and KALC-FM (for
which a Houston station was exchanged), WKYN-AM and the Colfax
Stations (two of which will be divested) and, in each case, the
financing thereof, as if each such transaction had occurred on January
1, 1995. The pro forma balance sheet as of September 30, 1996 has
been prepared as if the acquisition of WKYN-AM and the Colfax Stations
and, in each case, the financing thereof, had occurred on that date.
The Pro Forma Financial Information is not necessarily indicative of
either future results of operations or the results that might have
occurred if the foregoing transactions had been consummated on the
indicated dates.

The purchases of KDWB-FM, Shamrock Broadcasting and the Colfax
Stations were accounted for using the purchase method of accounting.
The acquisition of KIMN-FM and KALC-FM in exchange for a Houston
station was accounted for using the fair value of the Houston station
and the additional cash consideration paid. The total purchase costs
of the acquisitions and exchanges will be allocated to the tangible
and intangible assets and liabilities acquired based upon their
respective fair values. The allocation of the aggregate purchase
price reflected in the Pro Forma Financial Information is preliminary.
The final allocation of the purchase price is contingent upon the
receipt of final appraisals of the acquired assets; however, such
allocation is not expected to differ materially from the preliminary
allocation.

<PAGE>

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands)
Year Ended December 31, 1995

Historical
--------------------------------------------------------------------

Shamrock KIMN-FM
Chancellor Broadcasting KDWB-FM KALC-FM Colfax Sundance KOOL-FM Adjustments Pro Forma
---------- ------------ ------- ------- -------- -------- ------- --------- ----------

Net revenues . . . . . . . . $ 64,322 $94,605 $ 893 $7,205 $30,143 $14,840 $4,914 $ (540)(A) $212,257
(4,125)(B)
-------- ------- ----- ------ ------- ------- ------ --------- --------

Station operating
expenses . . . . . . . . . . 37,464 73,720 473 6,193 22,169 9,774 3,573 (540)(A) 137,353
(4,032)(B)
(11,441)(C)
Depreciation and
amortization . . . . . . . . 9,047 8,751 518 875 6,505 2,145 899 7,357 (D) 36,097
Corporate expenses . . . . . 1,816 3,139 - - - - - (955)(E) 4,000
Stock option
compensation expense . . . . 6,360 - - - - - - - 6,360
-------- ------- ----- ------ ------- ------- ------ -------- --------

Operating income (loss) . . 9,635 8,995 (98) 137 1,469 2,921 442 4,946 28,447
Interest expense . . . . . . 17,324 14,703 - - 656 - 1,162 7,789 (F) 41,634
Other (income) expense . . . 42 (78) 23 2 771 21 - - 781
-------- ------- ----- ------ ------- ------- ------ -------- --------

Income (loss) before
provision for income
taxes . . . . . . . . . . . (7,731) (5,630) (121) 135 42 2,900 (720) (2,842) (13,967)
Provision for income taxes . 3,800 (1,287) (93) - - - - 4,918 (G) 7,338
Dividends and accretion
on preferred stock
of subsidiary . . . . . . . . - - - - - - - 38,503 (H) 38,503
-------- ------- ----- ------ ------- ------- ------ -------- --------

Net income (loss) . . . . . (11,531) $(4,343) $ (28) $ 135 $ 42 $ 2,900 $ (720) $(46,263) (59,808)
======= ===== ====== ======= ======= ====== ========

Dividends and accretion
on preferred stock . . . . . - $ 7,000 (H) $ 7,000
-------- --------

Loss applicable to
common shares . . . . . . . . $(11,531) $(66,808)
======== ========

Deficiency of earnings to
fixed charges and preferred
stock dividends and
accretion . . . . . . . . . . $ 7,731 $ 89,805
Loss per common share (K) . . $ (1.30) $ (3.50)
Weighted average number of
shares outstanding (K) . . . 8,850,075 19,110,230

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands)
Nine Months Ended September 30, 1995

Historical
--------------------------------------------------------------------

Shamrock KIMN-FM
Chancellor Broadcasting KDWB-FM KALC-FM Colfax Sundance KOOL-FM Adjustments Pro Forma
---------- ------------ ------- ------- -------- -------- ------- --------- ----------

Net revenues . . . . . . . . $47,921 $69,630 $ 893 $5,210 $21,692 $10,718 $3,497 $ (540)(A) $155,792
(3,229)(B)
------- ------- ----- ------ ------- ------- ------ --------- --------

Station operating
expenses . . . . . . . . . . 28,120 55,413 473 4,519 15,678 7,389 2,838 (540)(A) 102,332
(3,312)(B)
(8,246)(C)
Depreciation and
amortization . . . . . . . . 6,708 6,549 518 699 5,084 1,761 657 5,096 (D) 27,072
Corporate expenses . . . . . 1,292 2,515 - - - - - (807)(E) 3,000
Stock option compensation
expense . . . . . . . . . . . 5,410 - - - - - - - 5,410
-------- ------- ----- ------ ------- ------- ------ -------- --------

Operating income (loss) . . 6,391 5,153 (98) (8) 930 1,568 2 4,040 17,978
Interest expense . . . . . . 12,780 11,067 - - 476 - 876 6,178 (F) 31,377
Other (income) expense . . . 82 (169) 23 - 939 17 - - 892
-------- ------- ----- ------ ------- ------- ------ -------- --------

Income (loss) before
provision for income
taxes . . . . . . . . . . . (6,471) (5,745) (121) (8) (485) 1,551 (874) (2,138) (14,291)
Provision for income
taxes . . . . . . . . . . . . 2,829 (1,798) (93) - - - - 4,565 (G) 5,503
Dividends and accretion
on preferred stock of
subsidiary . . . . . . . . . - - - - - - - 28,550 (H) 28,550
-------- ------- ----- ------ ------- ------- ------ -------- --------

Net income (loss) . . . . . (9,300) $(3,947) $ (28) $ (8) $ (485) $ 1,551 $ (874) $(35,254) (48,345)
======= ===== ====== ======= ======= ====== ========

Dividends and accretion
on preferred stock . . . . . - $ 5,250 (H) $ 5,250
-------- --------

Loss applicable to
common shares . . . . . . . . $ (9,300) $(53,595)
======== ========

Deficiency of earnings to
fixed charges and preferred
stock dividends and
accretion . . . . . . . . . . $ 6,471 $ 70,625
Loss per common share (K) . . $ (1.05) $ (2.80)
Weighted average number of
shares outstanding (K) . . . 8,849,851 19,110,230

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

UNAUDITED PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
(dollars in thousands)
Nine Months Ended September 30, 1996

Historical
-----------------------------------------------------------

Shamrock KIMN-FM
Chancellor Broadcasting KALC-FM Colfax Sundance KOOL-FM Adjustments Pro Forma
---------- ------------ ------- -------- -------- ------- --------- ----------

Net revenues . . . . . . . . . . . . $122,838 $ 8,464 $1,796 $28,146 $12,104 $1,431 $ (1,464)(B) $173,315
-------- ------- ------ ------- ------- ------ -------- --------

Station operating expenses . . . . . 74,922 7,762 1,617 18,684 7,678 852 (726)(B) 108,889
(1,900)(C)
Depreciation and amortization . . . . 17,704 595 511 3,933 1,242 229 3,129 (D) 27,343
Corporate expenses . . . . . . . . . 3,377 2,515 - - - - (2,292)(E) 3,300
Stock option compensation expense . . 2,850 - - - - - - 2,850
-------- ------- ------ ------- ------- ------ -------- --------

Operating income (loss) . . . . . . 23,985 (2,108) (332) 5,529 3,184 350 325 30,933
Interest expense . . . . . . . . . . 24,469 1,380 - 3,227 - 299 1,094 (F) 30,469
Other (income) expense . . . . . . . 130 49 (2,847) (120) 25 - - (2,763)
-------- ------- ------ ------- ------- ------ -------- --------

Income (loss) before
provision for income taxes . . . . (614) (3,537) 2,515 2,422 3,159 51 (769) 3,227
Provision for income taxes . . . . . 2,201 - - - - - 3,302 (G) 5,503
Dividends and accretion on
preferred stock of subsidiary . . . . 8,187 - - - - - 23,847 (H) 32,034
-------- ------- ------ ------- ------- ------ -------- --------

Net income (loss) before
extraordinary loss . . . . . . . . (11,002) (3,537) 2,515 2,422 3,159 51 (27,919) (34,311)
Extraordinary loss on early
extinguishment of debt . . . . . . . 5,609 - - - - - (5,609)(I) -
-------- ------- ------ ------- ------- ------ -------- --------

Net income(loss) (16,611) $(3,537) $2,515 $ 2,422 $ 3,159 $ 51 $(22,310) (34,311)
========= ======== ====== ======= ======= ====== ========= =========

Dividends and accretion on
preferred stock . . . . . . . . . . . - $ 5,250 (H) $ 5,250
Loss on repurchase of
preferred stock . . . . . . . . . . . 16,570 (16,570)(J) -
-------- --------

Loss applicable to common shares . . $(33,181) $(39,561)
======== ========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 8,801 $ 58,914
Loss per common share (K) . . . . . . $ (2.06) $ (2.07)
Weighted average number of
shares outstanding (K) . . . . . . . 16,125,754 19,110,230

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

UNAUDITED PRO FORMA BALANCE SHEET
September 30, 1996
(dollars in thousands)

ASSETS

Historical
-----------------------------

Chancellor Colfax Adjustments Pro Forma
-------------- ------------- ----------------- -------------

<S> <C> <C> <C> <C>
Current assets:
Cash . . . . . . . . . . . . . . . . . . $ 5,112 $ 2,504 $ - $ 7,616
Accounts receivable, net . . . . . . . . 42,172 9,848 - 52,020
Prepaid expenses and other . . . . . . . 1,955 646 - 2,601
-------- -------- --------- ----------

Total current assets . . . . . . . . . 49,239 12,998 - 62,237
Restricted Cash . . . . . . . . . . . . . . 20,000 - - 20,000
Property and equipment, net . . . . . . . . 49,082 10,218 21,682 (L) 80,982
Intangible and other assets, net . . . . . 586,863 147,520 (4,870)(M) 926,000
3,000 (M)
193,487 (L)
-------- -------- --------- ----------

Total assets . . . . . . . . . . . . . $705,184 $170,736 $ 213,299 $1,089,219
======== ======== ========= ==========

LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt . . . . 400 - 8,975 (M) 9,375
Accounts payable and other
accrued expenses . . . . . . . . . . . . 14,487 4,186 - 18,673
-------- -------- -------- ----------

Total current liabilities . . . . . . 14,887 4,186 8,975 28,048
-------- -------- -------- ----------

Long-term debt . . . . . . . . . . . . . . 364,708 57,950 (57,950) 451,952
87,244 (M)
Deferred tax liability . . . . . . . . . . 19,037 - - 19,037
Other . . . . . . . . . . . . . . . . . . . 821 - - 821
-------- -------- -------- ----------

Total liabilities . . . . . . . . . . 399,453 62,136 38,269 499,858
Senior exchangeable preferred stock . . . . 103,853 - - 103,853
Exchangeable preferred stock . . . . . . . - - 192,500 (N) 192,500
Stockholders' equity . . . . . . . . . . . 201,878 108,600 (4,870)(M) 293,008
(108,600)(O)
96,000 (N)
-------- -------- --------- ----------

Total liabilities and
stockholders' equity . . . . . . . . . $705,184 $170,736 $ 213,299 $1,089,219
======== ======== ========= ==========

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

NOTES TO PRO FORMA FINANCIAL INFORMATION
(dollars in thousands)

(B) The adjustment represents the elimination of net revenues and
station operating expenses of the Houston station, which was
exchanged for KIMN-FM and KALC-FM in Denver in July 1996.

Year Ended Nine Months Ended
December 31, September 30,
--------------------------------

1995 1995 1996
----------------- -------------- --------------
<S> <C> <C> <C>

Selling expenses . . . . . . . . . . . . . . . $ 3,135 $2,422 $ 523
Programming and technical . . . . . . . . . . . 2,297 1,610 383
Advertising and promotions . . . . . . . . . . 2,554 1,484 422
General and administrative . . . . . . . . . . 3,455 2,730 572
------- ------ ------

Total $11,441 $8,246 $1,900
======= ====== ======

</TABLE>

(D) The adjustment reflects (i) a change in depreciation and
amortization resulting from conforming the estimated useful lives
of the acquired stations and (ii) the additional depreciation and
amortization expenses resulting from the allocation of the
purchase price of the acquired stations, net of stations
exchanged, including an increase in property and equipment and
intangible assets to their estimated fair market value and the
recording of goodwill associated with the acquisitions. Goodwill
is amortized over 40 years.

(F) The adjustment reflects the effect on interest expense of the
change in debt structure resulting from each pro forma event.
Pro forma interest reflects $200,000 of 9 3/8% Senior
Subordinated Notes due 2004 and $60,000 of 12 1/2% Senior
Subordinated Notes due 2004 and $200,327 of bank financing, with
an annual interest rate of approximately 7.7%.

<PAGE>

(G) The adjustment reflects the change in the provision for income
taxes resulting from the deferred tax liabilities generated
during each period from the respective acquisitions, offset by
additional reversals of book/tax basis differences of Shamrock
Broadcasting during each period.

(H) The adjustment reflects the dividends and accretion on the 12
1/4% Series A Senior Cumulative Exchangeable Preferred Stock due
2008, where not already included, and the 12% Exchangeable
Preferred Stock due 2009 and the 7% Convertible Preferred Stock.

(I) The adjustment reflects the elimination of a non-recurring
extraordinary loss on early extinguishment of debt in connection
with the refinancing of the Company's term and revolving loan
facilities in conjunction with the acquisition Shamrock
Broadcasting and a partial prepayment of the Company's existing
credit agreement in August 1996.

(J) The adjustment reflects the elimination of a non-recurring
extraordinary loss on repurchase of preferred stock, which was
recognized in February 1996 in connection with the acquisition of
Shamrock Broadcasting.

(K) Reflects the effect of the recapitalization of the number of
shares outstanding and the additional shares issued in 1996 in
conjunction with the Company's initial public offering of its
Class A Common Stock.

(L) The adjustment reflects a preliminary allocation of the purchase
price of the acquisition of WKYN and the Colfax Stations to the
assets being acquired and liabilities being assumed resulting in
an increase in property and equipment and intangible assets to
their estimated fair values and the recording of goodwill
associated with the transactions as follows:

<PAGE>

Cash . . . . . . . . . . . . . . . . . . . . . $ 2,504
Accounts receivable, net . . . . . . . . . . . 9,848
Prepaid expenses and other . . . . . . . . . . 646
Property and equipment . . . . . . . . . . . . 31,900
Goodwill . . . . . . . . . . . . . . . . . . . 341,007
Accounts payable and other accrued expenses . . (4,186)
--------

Total $381,719
========

</TABLE>

(M) The adjustment reflects (i) borrowings under the Company's new
$345 million credit agreement (the "New Credit Agreement")
($200,327) to finance the acquisition of the Colfax Stations,
(ii) additional deferred financing costs associated with the New
Credit Agreement ($3,000), (iii) the repayment of the existing
credit agreement ($105,108) and (iv) the elimination of the
Company's deferred financing costs associated with the existing
credit agreement ($4,870), which will be recognized as an
extraordinary loss in the period the refinancing occurs.

(N) The adjustment reflects the issuance of the 12% Exchangeable
Preferred Stock due 2009 ($192,500) and the sale of the 7%
Convertible Preferred Stock ($96,000), both net of related
transaction costs.

(O) The adjustment reflects the elimination of the historical equity
balances of the stations being acquired.

1.1 Asset Purchase Agreement dated as of August 24, 1996 by and
among Classical Acquisition Limited Partnership, Radio 100
of Maryland Limited Partnership, Radio 100 Limited
partnership, Radio 570 Limited partnership, Radio 94 of
Phoenix Limited partnership, Radio 95 of Phoenix Limited
Partnership and Chancellor Radio Broadcasting Company*

1.2 Purchase Agreement dated as of January 17, 1997 among
Chancellor Broadcasting Company and Smith Barney Inc., Alex.
Brown & Sons Incorporated, BT Securities Corporation, Credit
Suisse First Boston Corporation and Goldman, Sachs & Co.

4.1 Certificate of Designation for Chancellor Broadcasting
Company's 7% Convertible Preferred Stock

4.2 Registration Rights Agreement dated as of January 23, 1997
among Chancellor Broadcasting Company and Smith Barney Inc.,
Alex. Brown & Sons Incorporated, BT Securities Corporation,
Credit Suisse First Boston Corporation and Goldman, Sachs &
Co.

<PAGE>

4.3 Certificate of Designation for Chancellor Radio Broadcasting
Company's 12% Exchangeable Preferred Stock**

10.1 Purchase Agreement dated as of January 17, 1997 among
Chancellor Radio Broadcasting Company and BT Securities
Corporation, Credit Suisse First Boston Corporation,
Goldman, Sachs & Co., NationsBanc Capital Markets, Inc. and
Smith Barney Inc.**

10.2 Registration Rights Agreement dated as of January 23, 1997
among Chancellor Radio Broadcasting Company, BT Securities
Corporation, Credit Suisse First Boston Corporation,
Goldman, Sachs & Co., NationsBanc Capital Markets, Inc. and
Smith Barney Inc.**

10.3 Indenture dated as of January 23, 1997 between Chancellor
Radio Broadcasting Company and U.S. Trust Company of Texas,
N.A.**

99.1 Press release dated January 23, 1997

----------------
* Incorporated by reference to Chancellor Radio Broadcasting
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.

** Incorporated by reference to Chancellor Radio Broadcasting
Company's Current Report on Form 8-K dated January 23, 1997.

ITEM 9. SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S.

As stated in Item 5 herein, on January 23, 1997 the Company sold
an aggregate of 2,000,000 shares (the "Shares") of its $100
liquidation preference 7% Convertible Preferred Stock, par value $0.01
per share, in a private placement. The initial purchasers of the
Shares were Smith Barney Inc., Alex. Brown & Sons Incorporated, BT
Securities Corporation, Credit Suisse First Boston Corporation and
Goldman, Sachs & Co (the "Initial Purchasers"). 2,500 of the Shares
were sold by the Initial Purchasers to an account of an investment
advisor in the British Virgin Islands (the "Reg S Purchaser") pursuant
to Rule 903 of Regulation S of the Securities Act of 1933, as amended.
The Initial Purchasers paid $48.25 per share (after giving effect to a
discount of $1.75 per share) for the 7% Convertible Preferred Stock
and subsequent purchasers, including the Reg S Purchaser, paid $50.00
per share for the 7% Convertible Preferred Stock. The 7% Convertible
Preferred Stock is convertible into the Company's Class A Common
Stock, par value $0.01 per share, at the option of the holder at any
time after March 23, 1997, unless previously redeemed, at an initial
conversion price of $32.90 per share, subject to adjustment in certain
circumstances.

<PAGE>

Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.

CHANCELLOR BROADCASTING COMPANY

Date: February 5, 1997 By: /s/ JACQUES D. KERREST
-------------------------------------
Jacques D. Kerrest
Senior Vice President and
Chief Financial Officer

<PAGE>

INDEX TO EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
------ -----------

</TABLE>
1.1 Asset Purchase Agreement dated as of August 24, 1996 by and
among Classical Acquisition Limited Partnership, Radio 100
of Maryland Limited Partnership, Radio 100 Limited
partnership, Radio 570 Limited partnership, Radio 94 of
Phoenix Limited partnership, Radio 95 of Phoenix Limited
Partnership and Chancellor Radio Broadcasting Company*

4.1 Certificate of Designation for Chancellor Broadcasting
Company's 7% Convertible Preferred Stock

4.3 Certificate of Designation for Chancellor Radio Broadcasting
Company's 12% Exchangeable Preferred Stock**

10.3 Indenture dated as of January 23, 1997 between Chancellor
Radio Broadcasting Company and U.S. Trust Company of Texas,
N.A.**

<PAGE>

99.1 Press Release dated January 23, 1997

----------------
* Incorporated by reference to Chancellor Radio Broadcasting
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.

** Incorporated by reference to Chancellor Radio Broadcasting
Company's Current Report on Form 8-K dated January 23, 1997.

<PAGE>

EXHIBIT 1.2

<PAGE>

2,000,000 SHARES

CHANCELLOR BROADCASTING COMPANY

7% CONVERTIBLE PREFERRED STOCK

PURCHASE AGREEMENT
------------------

January 17, 1997

Smith Barney Inc.
Alex. Brown & Sons Incorporated
BT Securities Corporation
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

Chancellor Broadcasting Company (the "Company"), a Delaware
-------
corporation, hereby confirms its agreement with you (the "Initial
-------
Purchasers"), as set forth below.
----------
1. The Securities. Subject to the terms and conditions
--------------
herein contained, the Company proposes to issue and sell to the
Initial Purchasers 2,000,000 shares (the "Firm Shares") of its
-----------
Convertible Preferred Stock, par value $.01 per share (the
"Convertible Preferred Stock"). The Company also proposes to sell to
---------------------------
the Initial Purchasers, upon the terms and conditions set forth in
Section 3 hereof, up to an additional 300,000 shares (the "Additional
----------
Shares") of Convertible Preferred Stock. The Firm Shares and the
------
Additional Shares are hereinafter collectively referred to as the
"Shares."
------

The Shares are to be convertible at the option of the holder
at any time after March 25, 1997, unless previously redeemed, into
Class A Common Stock, par value $.01 per share

<PAGE>

(the "Common Stock"), of the Company at a conversion price of $32.90
------------
per share of Common Stock, subject to adjustment in certain events as
described in the Certificate of Designation governing the Shares (the
"Certificate of Designation"). The Shares and the shares of Common
--------------------------
Stock into which they are convertible are referred to herein
collectively as the "Securities."
----------
The Securities will be offered and sold to the Initial
Purchasers without being registered under the Securities Act of 1933,
as amended (the "Act"), in reliance on exemptions therefrom.
---
In connection with the sale of the Securities, the Company
has prepared a preliminary offering memorandum dated January 3, 1997
(the "Preliminary Memorandum") and a final offering memorandum dated
----------------------
January 17, 1997 (the "Final Memorandum"; the Preliminary Memorandum
----------------
and the Final Memorandum each herein being referred to as a
"Memorandum") setting forth or including a description of the terms of
----------
the Securities, the terms of the offering of the Securities, a
description of the Company and any material developments relating to
the Company occurring after the date of the most recent historical
financial statements included therein.

The Initial Purchasers and their direct and indirect
transferees of the Securities will be entitled to the benefits of the
Registration Rights Agreement, substantially in the form attached
hereto as Exhibit B (the "Registration Rights Agreement"), pursuant to
--------- -----------------------------
which the Company has agreed, among other things, to file a shelf
registration statement (the "Shelf Registration Statement") with the
----------------------------
Securities and Exchange Commission (the "Commission") registering the
----------
Shares and, if such Shares are subsequently converted into Common
Stock, the Common Stock under the Act.

Concurrently with the sale of the Securities, Chancellor
Radio Broadcasting Company, a wholly owned subsidiary of the Company
("Chancellor Radio Broadcasting"), (i) is offering $200 million
-----------------------------
liquidation preference of its 12% Exchangeable Preferred Stock (the
"Exchangeable Preferred Stock") and (ii) is entering into an amended
----------------------------
and restated Credit Agreement (the "New Credit Agreement"), to be
--------------------
dated on or about the Closing Date, among Chancellor Radio
Broadcasting, Bankers Trust Company, as administrative agent and a
lender thereunder, and the other institutions party thereto, which
will provide for loans to Chancellor Radio Broadcasting of up to
$345,000,000. In

<PAGE>

addition, Chancellor Radio Broadcasting has entered into an agreement
to acquire eight radio stations from OmniAmerica Group (the "Omni
----
Acquisition") pursuant to a purchase agreement between Chancellor
-----------
Radio Broadcasting and OmniAmerica Group dated May 15, 1996 (the
"Omni Agreement") and has entered into an agreement to acquire twelve
--------------
radio stations from Colfax Communications, Inc. (the "Colfax
------
Acquisition") pursuant to a purchase agreement between Chancellor
-----------
Radio Broadcasting and Colfax Communications, Inc. dated August 24,
1996 (the "Colfax Agreement"). In connection with the Omni
----------------
Acquisition, Chancellor Radio Broadcasting (i) on June 24, 1996,
entered into an agreement (the "American Radio Agreement") with
------------------------
American Radio Systems Corporation ("American Radio") for, among other
---------------
things, the exchange of a radio station being acquired pursuant to the
Omni Acquisition for a radio station currently owned by American Radio
(the "American Radio Transaction") and (ii) on July 1, 1996 entered
--------------------------
into an agreement (the "SFX Agreement") with SFX for, among other
-------------
things, the exchange of a radio station being acquired pursuant to the
Omni Acquisition for four radio stations currently owned by SFX (the
"SFX Transaction"). In connection with the Colfax Acquisition,
---------------
Chancellor Radio Broadcasting entered into a letter of intent dated
December 19, 1996 (the "Milwaukee Letter of Intent") for the sale of
--------------------------
the Milwaukee stations being acquired pursuant to the Colfax
Acquisition. The Colfax Acquisition will be consummated on the
Closing Date. "Chancellor Radio Broadcasting," as defined, shall
-----------------------------
include radio stations being acquired pursuant to the Colfax
Agreement. The transactions contemplated by this Agreement and the
New Credit Agreement, and the consummation of the Colfax Acquisition
are herein collectively referred to as the "Transactions." The Omni
------------
Agreement, the American Radio Agreement, the SFX Agreement and the
Milwaukee Letter of Intent are referred to herein collectively as the
"Pending Agreements."
------------------
2. Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to and agrees with the Initial
Purchasers that:

(a) Neither the Preliminary Memorandum as of the date
thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up
to the Closing Date (as defined in Section 3 below) contained or
contains any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth
in this Section 2(a) do not apply to

<PAGE>

statements or omissions made in reliance upon and in conformity with
information relating to any of the Initial Purchasers furnished to
the Company in writing by the Initial Purchasers expressly for use in
the Preliminary Memorandum, the Final Memorandum or any amendment or
supplement thereto.

(b) Each of the Company and the subsidiaries of the Company
set forth on Schedule B hereto (collectively, the "Subsidiaries") has
------------
been duly incorporated and is validly existing and in good standing as
a corporation under the laws of its jurisdiction of incorporation,
with all requisite corporate power and authority to own or lease its
properties and conduct its businesses, as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions where the
ownership or leasing of its properties or the conduct of its
businesses requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business,
condition (financial or other) or results of operations of the Company
and the Subsidiaries, taken as a whole, or on the validity or
enforceability of the Securities; immediately after the Closing Date,
the Company will have the authorized, issued and outstanding
capitalization set forth in the Final Memorandum (on the bases as are
set forth in the Final Memorandum); the outstanding shares of capital
stock of each of the Company and the Subsidiaries have been, and as of
the Closing Date will be, duly authorized and validly issued, are and
will be fully paid and nonassessable and were not and will not be
issued in violation of any preemptive or similar rights; and except as
otherwise set forth in the Final Memorandum, all of the outstanding
shares of capital stock (i) of Chancellor Radio Broadcasting,
excluding Chancellor Radio Broadcasting's existing shares of 12 1/4%
Series A Cumulative Exchangeable Preferred Stock and the Exchangeable
Preferred Stock, are, and as of the Closing Date will be, owned by the
Company and (ii) of each of the Other Subsidiaries are, and as of the
Closing Date will be, owned directly or indirectly by the Company.
Except for the stock of each of the Subsidiaries owned directly or
indirectly by the Company, and partnership interests in partnerships
owning certain of the Company's transmitter facilities, the Company
does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt securities or have any equity interest in any
firm, partnership, joint venture or other entity. No holders of
securities of the Company are entitled to have such securities
registered under the registration statement required to be filed by
the Company pursuant to the Registration Rights Agreement other than
as expressly permitted thereby.

<PAGE>

(c) The Certificate of Designation has been duly authorized
by the Company. Prior to the Closing Date, the Shares shall have been
duly authorized and, when issued and delivered against payment
therefor in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable and free of any preemptive or similar
rights; as of the Closing Date, the capital stock of the Company shall
conform, in all material respects, to the description thereof in the
Final Memorandum. The Certificate of Incorporation of the Company, by
virtue of the Certificate of Designation, sets forth the rights,
preferences and priorities of the Shares. The certificates for the
Shares that are being sold by the Company are in due and proper form
and the holders of such Shares will not be subject to personal
liability by reason of being such holders.

(d) The Shares, when issued and delivered, will be
convertible at the option of the holder thereof into shares of Common
Stock in accordance with the terms of the Certificate of Designation;
the Common Stock issuable upon such conversion has been duly
authorized and validly reserved for issuance upon such conversion by
all necessary corporate action and such Common Stock, when issued and
delivered upon such conversion, will be validly issued, fully paid and
nonassessable and free of any preemptive or similar rights.

(e) The Company has all requisite corporate power and
authority to execute and deliver the Registration Rights Agreement;
the Registration Rights Agreement has been duly authorized by the
Company and, when executed and delivered by the Company (assuming due
authorization, execution and delivery by you), will constitute a valid
and legally binding agreement of the Company enforceable against it in
accordance with its terms, except that (A) the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and
(B) any rights to indemnity or contribution thereunder may be limited
by federal and state securities laws and public policy considerations.

(f) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and, subsequent to the
filing of the Certificate of Designation, to issue and deliver the
Securities and to consummate the transactions

<PAGE>

contemplated hereby. This Agreement has been duly authorized,
executed and delivered by the Company. No consent, approval,
authorization or order of any court or governmental agency or body
(including, without limitation, the Federal Communications Commission
(the "FCC")) is required for the performance of this Agreement by the
---
Company or the consummation by the Company of the transactions
contemplated hereby, except such as have been obtained and such as may
be required under state securities or "Blue Sky" laws in connection
with the purchase and resale of the Securities by the Initial
Purchasers.

(g) Neither the Company nor any of the Subsidiaries is
(i) in violation of its certificate of incorporation or by-laws,
(ii) in violation of any statute, judgment, decree, order, rule or
regulation applicable to the Company or any of the Subsidiaries, which
violation would have a material adverse effect on the business,
condition (financial or other) or results of operations of the Company
and the Subsidiaries, taken as a whole, or on the validity or
enforceability of the Securities, as the case may be, or (iii) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, note, lease, license, franchise agreement,
permit, certificate, contract or other agreement or instrument to
which the Company or any of the Subsidiaries is a party or to which
the Company or any of the Subsidiaries is subject, which default would
have a material adverse effect on the business, condition (financial
or other) or results of operations of the Company and the
Subsidiaries, taken as a whole, or on the validity or enforceability
of the Securities, as the case may be.

(h) Neither the issuance and sale of the Securities nor the
execution, delivery and performance by the Company of this Agreement
or the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby will conflict with or
constitute or result in a breach or violation of any of (i) the terms
or provisions of, or constitute a default by the Company under any
indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, or other agreement or instrument to
which the Company is a party or to which the Company or its
respective properties is subject, which conflict, breach, violation or
default would have a material adverse effect on the business,
condition (financial or other) or results of operations of the Company
or on the validity or enforceability of the Securities, as the case
may be, (ii) the certificate of incorporation or by-laws of the
Company, as the same will be in effect on the Closing Date, or
(iii) (assuming

<PAGE>

compliance with all applicable state securities and "Blue Sky" laws
and assuming the accuracy of the representations and warranties of the
Initial Purchasers in Section 8 hereof) any statute, judgment, decree,
order, rule or regulation of any court or governmental agency or other
body applicable to the Company or any of its respective properties,
which conflict, breach, violation or default would have a material
adverse effect on the business, condition (financial or other) or
results of operations of the Company or on the validity or
enforceability of the Securities, as the case may be.

(i) The audited consolidated financial statements and
schedules of the Company included in the Final Memorandum present
fairly, in all material respects, the consolidated financial position,
results of operations and cash flows of the Company at the dates and
for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein. The unaudited
financial statements and the related notes included in the Final
Memorandum present fairly, in all material respects (on the basis
stated therein), the financial position, results of operations and
cash flows of the Company at the dates and for the periods to which
they relate, subject to year-end audit adjustments, and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein.
Coopers & Lybrand L.L.P., which has examined certain of such
consolidated financial statements and schedules as set forth in its
reports included in the Final Memorandum, is an independent public
accounting firm within the meaning of the Act and the rules and
regulations promulgated thereunder.

(j) The audited financial statements and schedules of "Old
Chancellor Communications" (as defined in the Final Memorandum)
included in the Final Memorandum present fairly, in all material
respects, the financial position, results of operations and cash flows
of Old Chancellor Communications at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except
as otherwise stated therein. Coopers & Lybrand L.L.P., which has
examined certain of such financial statements and schedules as set
forth in its reports included in the Final Memorandum, is an
independent public accounting firm within the meaning of the Act and
the rules and regulations promulgated thereunder.

(k) The audited consolidated financial statements and

<PAGE>

schedules of "Trefoil Communications, Inc." (as defined in the Final
Memorandum) included in the Final Memorandum present fairly, in all
material respects, the consolidated financial position, results of
operations and cash flows of Trefoil Communications, Inc. at the dates
and for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein. Price
Waterhouse LLP, which has examined certain of such consolidated
financial statements and schedules as set forth in its reports
included in the Final Memorandum, is an independent public accounting
firm within the meaning of the Act and the rules and regulations
promulgated thereunder.

(l) The audited financial statements and schedules of
"KDWB-FM" (as defined in the Final Memorandum) included in the Final
Memorandum present fairly, in all material respects, the financial
position, results of operations and cash flows of KDWB-FM at the dates
and for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein. The unaudited
financial statements and the related notes included in the Final
Memorandum present fairly, in all material respects (on the basis
stated therein), the financial position, results of operations and
cash flows of KDWB-FM at the dates and for the periods to which they
relate, subject to year-end audit adjustments, and have been prepared
in accordance with generally accepted accounting principles applied on
a consistent basis, except as otherwise stated therein. Coopers &
Lybrand L.L.P., which has examined certain of such financial
statements and schedules as set forth in its reports included in the
Final Memorandum, is an independent public accounting firm within the
meaning of the Act and the rules and regulations promulgated
thereunder.

(m) The audited combined financial statements and schedules
of Colfax included in the Final Memorandum present fairly, in all
material respects, the financial position, results of operations and
cash flows of Colfax at the dates and for the periods to which they
relate and have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis, except as
otherwise stated therein. The unaudited combined financial statements
and the related notes included in the Final Memorandum present fairly,
in all material respects (on the basis stated therein), the financial
position, results of operations and cash flows of Colfax at the dates
and for the periods to which they relate, subject to year-end audit

<PAGE>

adjustments, and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except
as otherwise stated therein. Arthur Andersen LLP, which has examined
certain of such financial statements and schedules as set forth in its
reports included in the Final Memorandum, is an independent public
accounting firm within the meaning of the Act and the rules and
regulations promulgated thereunder.

(n) The audited combined financial statements and schedules
of the "Sundance Stations" (as defined in the Final Memorandum)
included in the Final Memorandum present fairly, in all material
respects, the financial position, results of operations and cash flows
of the Sundance Stations at the dates and for the periods to which
they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except
as otherwise stated therein. The unaudited combined financial
statements and the related notes included in the Final Memorandum
present fairly, in all material respects (on the basis stated
therein), the financial position, results of operations and cash flows
of the Sundance Stations at the dates and for the periods to which
they relate, subject to year-end audit adjustments, and have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, except as otherwise stated therein.
Coopers & Lybrand L.L.P., which has examined certain of such financial
statements and schedules as set forth in its reports included in the
Final Memorandum, is an independent public accounting firm within the
meaning of the Act and the rules and regulations promulgated
thereunder.

(o) The audited combined financial statements and schedules
of the Omni Corporations included in the Final Memorandum present
fairly, in all material respects, the financial position, results of
operations and cash flows of Omni at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, except
as otherwise stated therein. Coopers & Lybrand L.L.P., which has
examined certain of such financial statements and schedules as set
forth in its reports included in the Final Memorandum, is an
independent public accounting firm within the meaning of the Act and
the rules and regulations promulgated thereunder.

(p) The pro forma condensed financial statements and other
pro forma financial information (including the notes thereto) included
in the Final Memorandum (A) present fairly in all material respects
the information shown therein; (B) have

<PAGE>

been prepared in accordance with the applicable requirements of
Regulation S-X promulgated under the Act; (C) have been prepared in
accordance with the Commission's rules and guidelines with respect to
pro forma financial statements; and (D) have been properly computed on
the bases described therein. The assumptions used in the preparation
of the pro forma financial statements and other pro forma condensed
consolidated financial information included in the Final Memorandum
are reasonable and the adjustments used therein are reasonably
appropriate to give effect to the transactions or circumstances
referred to therein.

(q) Except as described in the Final Memorandum, there is
neither pending nor, to the knowledge of the Company, threatened any
action, suit, proceeding, inquiry or investigation involving the
Company or any of the Subsidiaries or to which any of their respective
properties is subject, before or brought by any court or governmental
agency or body (including, without limitation, the FCC) that would be
reasonably likely to have a material adverse effect on the business,
condition (financial or other) or results of operations of the Company
and the Subsidiaries, taken as a whole.

(r) Each of the Company and the Subsidiaries owns or
possesses adequate licenses or other rights to use all patents,
trademarks, service marks, trade names, copyrights and know-how
necessary to conduct the businesses operated by it, and on the Closing
Date will possess such licenses, rights and know-how necessary to
conduct the businesses proposed to be operated by it, as described in
the Final Memorandum, and none of the Company or any Subsidiary has
received any notice of infringement of, or conflict with (or knows of
any such infringement of or conflict with), asserted rights of others
with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how that, if such assertion of infringement or
conflict were sustained, would have a material adverse effect on the
business, condition (financial or other) or results of operations of
the Company and the Subsidiaries, taken as a whole.

(s) Each of the Company and the Subsidiaries has obtained,
or has applied for, all licenses, permits, franchises and other
governmental authorizations necessary to conduct its businesses as
described in the Final Memorandum, the lack of which would have a
material adverse effect on the business, condition (financial or
other) or results of operations of the Company and the Subsidiaries,
taken as a whole.

(t) Subsequent to the respective dates as of which

<PAGE>

information is given in the Final Memorandum and except as described
therein or contemplated thereby, (i) none of the Company or any
Subsidiary has incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, not
in the ordinary course of business; and (ii) the Company has not
purchased any of its outstanding capital stock or declared, paid or
otherwise made any dividend or distribution of any kind on its capital
stock.

(u) There are no legal or governmental proceedings that
would be required to be described in a prospectus pursuant to the Act
that are not described in the Final Memorandum, nor are there any
contracts or other documents that would be required to be described in
a prospectus pursuant to the Act that have not been described in the
Final Memorandum. Except as described in the Final Memorandum,
neither the Company nor any Subsidiary is in default under any
material contract, has received a notice or claim of any such default
or has knowledge of any breach of any such contract by the other party
or parties thereto, except such defaults or breaches as would not,
individually or in the aggregate, have a material adverse effect on
the business, condition (financial or other) or results of operations
of the Company and the Subsidiaries, taken as a whole, or on the
validity or enforceability of the Securities, as the case may be.

(v) Each of the Company and the Subsidiaries has filed all
necessary federal, state, local and foreign income and franchise tax
returns, except where the failure to so file such returns would not
have a material adverse effect on the business, condition (financial
or other) or results of operations of the Company and the
Subsidiaries, taken as a whole, and each of the Company and the
Subsidiaries has paid all taxes shown as due thereon; and other than
tax deficiencies that the Company or any Subsidiary is contesting in
good faith and for which adequate reserves have been provided, there
is no tax deficiency that has been asserted against the Company or any
Subsidiary that would, individually or in the aggregate, have a
material adverse effect on the business, condition (financial or
other) or results of operations of the Company and the Subsidiaries,
taken as a whole.

(w) Neither the Company nor any agent acting on its behalf
has taken or will take any action that might cause this Agreement or
the issuance and sale of the Securities to violate Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System, in each
case as in effect on the Closing Date.

(x) Each of the Company and the Subsidiaries has good

<PAGE>

and marketable title to all real property and good title to all
personal property described in the Final Memorandum as being owned by
it and good and marketable title to all leasehold estates in the real
and personal property described in the Final Memorandum as being
leased by it (except for those leases of real property in which the
Company or any Subsidiary has good title and that would be marketable
but for the requirement that the landlord consent to an assignment or
sublease of the lease), free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as described in
the Final Memorandum or to the extent the failure to have such title
or the existence of such liens, charges, encumbrances or restrictions
would not, individually or in the aggregate, have a material adverse
effect on the business, condition (financial or other) or results of
operations of the Company and the Subsidiaries, taken as a whole.

(y) The Company is in compliance with all provisions of
Section 517.075 of Florida Statutes, as amended, relating to issuers
doing business with Cuba.

(z) The Company is not an "investment company," as defined
in the Investment Company Act of 1940, as amended, and the rules and
regulations thereunder.

(aa) Neither the Company nor any of its directors, officers
or controlling persons has taken, directly or indirectly, any action
designed, or that might reasonably be expected, to cause or result,
under the Act or otherwise, in, or that has constituted, stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.

(ab) None of the Company, any Subsidiary or any of their
respective Affiliates (as defined in Rule 501(b) of Regulation D under
the Act) has directly, or through any agent, (i) sold, offered for
sale, solicited offers to buy or otherwise negotiated in respect of,
any "security" (as defined in the Act) which is or could be integrated
with the sale of the Securities in a manner that would require the
registration under the Act of the Securities or (ii) engaged in any
form of general solicitation or general advertising (as those terms
are used in Regulation D under the Act) in connection with the
offering of the Securities or in any manner involving a public
offering within the meaning of Section 4(2) of the Act. Assuming the
accuracy of the representations and warranties of the Initial
Purchasers in Section 8 hereof, it is not necessary in connection with
the offer, sale and delivery of the Securities to the

<PAGE>

Initial Purchasers in the manner contemplated by this Agreement to
register any of the Securities under the Act or to qualify the
Indenture under the TIA.

(ac) No securities of the Company or any Subsidiary are of
the same class (within the meaning of Rule 144A under the Act) as the
Shares and listed on a national securities exchange registered under
Section 6 of the Exchange Act, or quoted in a U.S. automated inter-
dealer quotation system.

(ad) Chancellor Radio Broadcasting has all requisite
corporate power and authority to consummate the Colfax Acquisition and
the New Credit Agreement. No consent, approval, authorization or
order of any court or governmental agency or body (including, without
limitation, the Federal Communications Commission (the "FCC")) is
---
required for the performance of the Colfax Acquisition and the New
Credit Agreement by Chancellor Radio Broadcasting or the consummation
by Chancellor Radio Broadcasting of the transactions contemplated
thereby. In addition, no consent, approval, authorization or order of
any court or governmental agency or body (except for such consents,
approvals or authorizations as are required by the FCC or under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976) is required for
the performance by Chancellor Radio Broadcasting of the transactions
contemplated by the Pending Agreements and the Company has no
reasonable basis to believe that the transactions contemplated by the
Pending Agreements will not be consummated in accordance with their
terms.

3. Purchase, Sale and Delivery of the Securities.
---------------------------------------------
(a) On the basis of the representations, warranties,
agreements and covenants herein contained herein and subject to the
terms and conditions herein set forth herein, the Company agrees to
issue and sell to each of the Initial Purchasers, and each of the
Initial Purchasers severally agrees to purchase from the Company, at a
price of $48.25 per share, the number of Shares set forth opposite
their respective names on Schedule A hereto. The obligations of the
Initial Purchasers under this Agreement are several and not joint.

(b) Upon the basis of the representations, warranties,
agreements and covenants contained herein and subject to all the terms
and conditions set forth herein, the Company also agrees to sell to
the Initial Purchasers, and the Initial Purchasers shall have the
right to purchase from the Company, solely for the purpose of covering
over-allotments in connection with sales of the Firm Shares, at the
purchase price per share, pursuant to an

<PAGE>

option (the "over-allotment option") which may be exercised at any
---------------------
time and from time to time prior to 5:00 P.M., New York City time, on
the 30th day after the date of the Final Memorandum (or, if such 30th
day shall be a Saturday or Sunday or a holiday, on the next business
day thereafter when the Nasdaq National Market is open for trading),
up to an aggregate of 300,000 Additional Shares. Upon the exercise of
the over-allotment option, each Initial Purchaser, severally and not
jointly, agrees to purchase from the Company the number of Additional
Shares (subject to such adjustments as you may determine in order to
avoid fractional shares) that bears the same proportion to the
aggregate number of Additional Shares to be sold by the Company upon
such exercise of the over-allotment option as the number of Firm
Shares set forth opposite the name of such Initial Purchaser in
Schedule I hereto bears to the aggregate number of Firm Shares.

Delivery of and payment for the Firm Shares shall be made at
the offices of Cahill Gordon & Reindel, 80 Pine Street, New York, New
York on or about 9:00 A.M., New York City time, on January 23, 1997
(the Company having requested, and the Initial Purchasers having
agreed to such date in order for certain conditions to the Initial
Purchasers' obligations to be able to be satisfied) or at such other
place, time or date as the Initial Purchasers and the Company may
agree upon, such time and date of delivery against payment being
herein referred to as the "Closing Date." Delivery to the Initial
------------
Purchasers of and payment for any Additional Shares to be purchased by
the Initial Purchasers shall be made at the aforementioned office of
Cahill Gordon & Reindel at such time on such date (the "Option Closing
--------------
Date"), which may be the same as the Closing Date but shall in no
----
event be earlier than the Closing Date nor earlier than two nor later
than ten business days after the giving of the notice hereinafter
referred to, as shall be specified in a written notice from you on
behalf of the Initial Purchasers to the Company of the Initial
Purchasers' determination to purchase a number, specified in such
notice, of Additional Shares. The place of closing for any Additional
Shares and the Option Closing Date for such Shares may be varied by
agreement between you and the Company. One or more certificates in
definitive form for the Firm Shares and any Additional Shares that the
Initial Purchasers have agreed to purchase hereunder, and in such
denomination or denominations and registered in such name or names as
each Initial Purchaser requests upon notice to the Company at least 48
hours prior to the Closing Date or any Option Closing Date, shall be
delivered by or on behalf of the Company to the Initial Purchasers,
against payment by or on behalf of the Initial Purchasers of the pur-
chase price therefor, by wire transfer payable to or upon the order of

<PAGE>

the Company in immediately available funds. The Company will make
such certificate or certificates for the Firm Shares and any
Additional Shares available for checking and packaging by the Initial
Purchasers at the offices in New York, New York of BT Securities
Corporation at least 24 hours prior to the Closing Date or the Option
Closing Date.

4. Offering by the Initial Purchasers. The Initial
----------------------------------
Purchasers propose to make an offering of the Securities at the price
and upon the terms set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into and as in the
judgment of the Initial Purchasers is advisable.

5. Covenants of the Company. The Company covenants and
------------------------
agrees with the Initial Purchasers that:

(a) The Company will not amend or supplement the Final
Memorandum or any amendment or supplement thereto of which the Initial
Purchasers shall not previously have been advised and furnished a copy
for a reasonable period of time, prior to the proposed amendment or
supplement and as to which the Initial Purchasers shall not have given
their consent. The Company will promptly, upon the reasonable request
of the Initial Purchasers or counsel for the Initial Purchasers, make
any amendments or supplements to the Preliminary Memorandum or the
Final Memorandum that may be necessary or advisable in connection with
the resale of the Securities by the Initial Purchasers.

(b) The Company will cooperate with the Initial Purchasers
in arranging for the qualification of the Securities for offering and
sale under the securities or "Blue Sky" laws of such jurisdictions as
the Initial Purchasers may designate and will continue such
qualifications in effect for as long as may be necessary to complete
the resale of the Securities by the Initial Purchasers; provided,
--------
however, that in connection therewith the Company shall be required
-------
to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction.

(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Shares, any event occurs
as a result of which the Final Memorandum as then amended or
supplemented would include an untrue statement of a material fact, or
omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if for any other reason it is necessary at any time
to amend or supplement the Final Memorandum

<PAGE>

in order to comply with applicable law, the Company will promptly
notify the Initial Purchasers thereof and will prepare, at the
Company's expense, an amendment to the Final Memorandum that corrects
such statement or omission or effects such compliance.

(d) The Company will, without charge, provide to the
Initial Purchasers and to counsel for the Initial Purchasers, as many
copies of the Preliminary Memorandum and the Final Memorandum or any
amendment or supplement thereto as the Initial Purchasers may
reasonably request.

(e) The Company will apply the net proceeds from the sale
of the Securities substantially as set forth under "Use of Proceeds"
in the Final Memorandum.

(f) For and during the five-year period ending on the fifth
anniversary of this Agreement, the Company will furnish to the Initial
Purchasers copies of all reports and other communications (financial
or otherwise) furnished by the Company to the Trustee or the holders
of the Securities and, as soon as available, copies of any reports or
financial statements furnished to or filed by the Company with the
Commission or any national securities exchange on which any class of
securities of the Company may be listed.

(g) Prior to the Closing Date, the Company will furnish to
the Initial Purchasers, as soon as they have been prepared by or are
available to the Company, a copy of any unaudited interim consolidated
financial statements of the Company for any period subsequent to the
period covered by its most recent financial statements appearing in
the Final Memorandum.

(h) None of the Company or any of its Affiliates will sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be
integrated with the sale of the Securities in a manner which would
require the registration under the Act of the Securities.

(i) Except in connection with the Registration Rights
Agreement, the Company will not, and will not permit any of the
Subsidiaries to, engage in any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) in
connection with the offering of the Securities or in any manner
involving a public offering within the meaning of Section 4(2) of the
Act.

<PAGE>

(j) For so long as any of the Shares remain outstanding,
the Company will make available at its expense, upon request, to any
holder of such Shares and any prospective purchasers thereof the
information specified in Rule 144A(d)(4) under the Act, unless the
Company is then subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended.

(k) The Company will use its best efforts to (i) permit the
Shares to be designated PORTAL securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"Portal Market"), (ii) permit the Shares to be eligible for clearance
-------------
and settlement through The Depository Trust Company and (iii) have the
shares of Common Stock issuable upon conversion of the Shares listed,
subject to official notice of issuance, on NASDAQ prior to or
concurrently with the Closing Date.

6. Expenses. The Company agrees to pay the following
--------
costs and expenses and all other costs and expenses incident to the
performance of its obligations under this Agreement, whether or not
the transactions contemplated herein are consummated or this Agreement
is terminated pursuant to Section 11 hereof: (i) the printing, word
processing or other production of documents with respect to such
transactions, including any costs of printing the Preliminary
Memorandum and the Final Memorandum and any amendments thereto, and
any "Blue Sky" memoranda, (ii) all arrangements relating to the
delivery to the Initial Purchasers of copies of the foregoing
documents, (iii) the fees and disbursements of the counsel, the
accountants and any other experts or advisors retained by the Company,
(iv) the preparation (including printing), issuance and delivery to
the Initial Purchasers of any certificates evidencing the Shares,
including transfer agent's fees, (v) the qualification of the
Securities under state securities and "Blue Sky" laws, including
filing fees and reasonable fees and disbursements of counsel for the
Initial Purchasers relating thereto and (vi) the expenses of the
Company in connection with any meetings with prospective investors in
the Securities. If the issuance and sale of the Securities provided
for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 11
hereof or because of any failure, refusal or inability on the part of
the Company to perform all obligations and satisfy all conditions on
its part to be performed or satisfied hereunder other than by reason
of a default by the Initial Purchasers, the Company will reimburse the

<PAGE>

Initial Purchasers upon demand for all reasonable out-of-pocket
expenses (including reasonable counsel fees and disbursements) that
shall have been incurred by the Initial Purchasers in connection with
the proposed purchase and sale of the Securities.

7. Conditions of the Initial Purchasers' Obligations. The
-------------------------------------------------
obligations of the Initial Purchasers to purchase and pay for the
Securities shall, in their sole discretion, be subject to the
following conditions:

(a) The Initial Purchasers shall have received opinions in
form and substance satisfactory to the Initial Purchasers and counsel
for the Initial Purchasers, dated the Closing Date, of (i) Weil,
Gotshal & Manges LLP, counsel for the Company, substantially in the
form of Exhibit A-1 hereto and (ii) Leibowitz & Associates, regulatory
counsel for the Company, substantially in the form of Exhibit A-2
hereto.

(b) The Initial Purchasers shall have received an opinion,
dated the Closing Date, of Cahill Gordon & Reindel, counsel for the
Initial Purchasers, with respect to certain legal matters relating to
this Agreement, and such other related matters as the Initial
Purchasers may require. In rendering such opinion, Cahill Gordon &
Reindel shall have received and may rely upon such certificates and
other documents and information as they may reasonably request to pass
upon such matters. In addition, in rendering their opinion, Cahill
Gordon & Reindel may state that their opinion is limited to matters of
New York, Delaware corporate and federal law.

(c) The Initial Purchasers shall have received from each of
Coopers & Lybrand L.L.P., independent public accountants for the
Company, and Arthur Andersen LLP, independent public accountants for
Colfax, letters dated, respectively, the date hereof and the Closing
Date, in form and substance satisfactory to the Initial Purchasers and
counsel for the Initial Purchasers.

(d) The representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date (other than to the extent any
such representation or warranty is expressly made as to a certain
date); the Company shall have performed, in all material respects, all
covenants and agreements and satisfied, in all material respects, all
conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date; and subsequent to the date of the most
recent financial statements in the Final Memorandum, there shall have
been no material adverse

<PAGE>

change in the business, condition (financial or other) or results of
operations of the Company and the Subsidiaries, taken as a whole,
except as set forth in, or contemplated by, the Final Memorandum.

(e) The issuance and sale of the Securities pursuant to
this Agreement shall not be enjoined (temporarily or permanently) and
no restraining order or other injunctive order shall have been issued
or any action, suit or proceeding shall have been commenced with
respect to this Agreement before any court or governmental authority
(including, without limitation, the FCC).

(f) Subsequent to the respective dates as of which
information is given in the Final Memorandum, except in each case as
described in or as contemplated by the Final Memorandum, the Company
and the Subsidiaries shall not have incurred any liabilities or
obligations, direct or contingent, that are material to the Company
and the Subsidiaries taken as a whole, or entered into any
transactions that are material to the business, condition (financial
or other) or results of operations of the Company and the
Subsidiaries taken as a whole, and there shall not have been any
change in the capital stock or long-term indebtedness of the Company
that is material to the business, condition (financial or other) or
results of operations of the Company and the Subsidiaries, taken as a
whole.

(g) The Initial Purchasers shall have received
certificates, dated the Closing Date, signed on behalf of the Company
by its President and Chief Executive Officer and Senior Vice President
and Chief Financial Officer to the effect that:

(i) The representations and warranties of the Company in
this Agreement are true and correct in all material respects as if
made on and as of the Closing Date (other than to the extent any such
representation or warranty is expressly made to a certain date), and
the Company has performed, in all material respects, all covenants and
agreements and satisfied, in all material respects, all conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date;

(ii) Subsequent to the respective dates as of which
information is given in the Final Memorandum, there has not been any
material adverse change in the business, condition (financial or
other) or results of operations of the Company and the Subsidiaries,
taken as a whole;

<PAGE>

(iii) Subsequent to the respective dates as of which
information is given in the Final Memorandum, except in each case as
described in or as contemplated by the Final Memorandum, none of the
Company or any Subsidiary has incurred any liabilities or obligations,
direct or contingent that are material to the Company or the
Subsidiaries taken as a whole, or entered into any transactions that
are material to the business, condition (financial or other) or
results of operations of the Company and the Subsidiaries, taken as a
whole, and there has been no change in the capital stock or long-term
indebtedness of the Company that is material to the business,
condition (financial or other) or results of operations of the Company
and the Subsidiaries taken as a whole; and

(iv) The issuance and sale of the Securities by the
Company has not been enjoined (temporarily or permanently).

(h) On the Closing Date, the Initial Purchasers shall
have received the Registration Rights Agreement executed by the
Company and such agreement shall be in full force and effect at all
times from and after the Closing Date.

(i) The closing under the New Credit Agreement and the
completion of the offering by Chancellor Radio Broadcasting of its
Exchangeable Preferred Stock shall have occurred concurrently with the
closing hereunder on the Closing Date.

(j) The Colfax Acquisition shall have been consummated
on or prior to the Closing Date.

(k) On or before the Closing Date, the Initial
Purchasers and counsel for the Initial Purchasers shall have received
such further documents, opinions, certificates and schedules or
instruments relating to the business, corporate, legal and financial
affairs of the Company as they shall have heretofore reasonably
requested from the Company.

All such documents, opinions, certificates and schedules
or instruments delivered pursuant to this Agreement will comply with
the provisions hereof only if they are reasonably satisfactory in all
material respects to the Initial Purchasers and counsel for the
Initial Purchasers. The Company shall furnish to the Initial
Purchasers such conformed copies of such documents, opinions,
certificates and schedules or instruments in such quantities as the
Initial Purchasers shall reasonably request.

<PAGE>

8. Offering of Securities; Restrictions on Transfer.
------------------------------------------------
Each of the Initial Purchasers represents and warrants (as to itself
only) that it is a QIB. Each of the Initial Purchasers agrees with
the Company (as to itself only) that (i) it has not and will not
solicit offers for, or offer or sell, the Securities by any form of
general solicitation or general advertising (as those terms are used
in Regulation D under the Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act; and (ii) it
has and will solicit offers for the Securities only from, and will
offer the Securities only to (A) in the case of offers inside the
United States, (x) persons whom the Initial Purchasers reasonably
believe to be QIBs or, if any such person is buying for one or more
institutional accounts for which such person is acting as fiduciary or
agent, only when such person has represented to the Initial Purchasers
that each such account is a QIB, to whom notice has been given that
such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A or (y) a limited number of
other institutional investors reasonably believed by the Initial
Purchasers to be accredited investors, as defined in Rule 501(a)(1),
(2), (3) or (7) promulgated under the Act that, prior to their
purchase of the Securities, deliver to the Initial Purchasers a letter
containing the representations and agreements set forth in Annex A to
the Final Memorandum and (B) in the case of offers outside the United
States, to persons other than U.S. persons ("foreign purchasers,"
------------------
which term shall include dealers or other professional fiduciaries in
the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)); provided, however,
-------- -------
that, in the case of this clause (B), in purchasing such Securities
such persons are deemed to have represented and agreed as provided
under the caption "Transfer Restrictions" contained in the Final
Memorandum.

9. Indemnification and Contribution. (a) The Company
--------------------------------
agrees to indemnify and hold harmless each of you and each other
Initial Purchaser and each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Memorandum
or the Final Memorandum or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except

<PAGE>

insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which has been made therein or omitted
therefrom in reliance upon and in conformity with information relating
to any Initial Purchaser furnished in writing to the Company by or on
behalf of any Initial Purchaser expressly for use in connection
therewith; provided, however, that the indemnification contained in
-------- -------
this paragraph (a) with respect to the Preliminary Memorandum shall
not inure to the benefit of any Initial Purchaser (or to the benefit
of any person controlling such Initial Purchaser) on account of any
such loss, claim, damage, liability or expense arising from the sale
of the Shares by the Initial Purchaser to any person if the untrue
statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such Preliminary Memorandum was
corrected in the Final Memorandum and such Initial Purchaser sold
Shares to that person without sending or giving at or prior to the
written confirmation of such sale, a copy of the Final Memorandum (as
then supplemented) if the Company has previously furnished sufficient
copies thereof to the several Initial Purchasers. The foregoing
indemnity agreement shall be in addition to any liability which the
Company may otherwise have.

(b) If any action, suit or proceeding shall be brought
against any Initial Purchaser or any person controlling any Initial
Purchaser in respect of which indemnity may be sought against the
Company, any such Initial Purchaser or any such controlling person
shall promptly notify the parties against whom indemnification is
being sought (the "indemnifying parties"), and such indemnifying
parties shall assume the defense thereof, including the employment of
counsel and payment of all fees and expenses. Such Initial Purchaser
or any such controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in
the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Initial Purchaser or such controlling person
unless (i) the indemnifying parties have agreed in writing to pay such
fees and expenses, (ii) the indemnifying parties have failed to assume
the defense and employ counsel, or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include
both such Initial Purchaser or such controlling person and the
indemnifying parties and such Initial Purchaser or such controlling
person shall have been advised by its counsel that representation of
such indemnified party and any indemnifying parties by the same
counsel would be inappropriate under applicable standards of
professional conduct (whether or

<PAGE>

not such representation by the same counsel has been proposed) due to
actual or potential differing interests between them (in which case
the indemnifying parties shall not have the right to assume the
defense of such action, suit or proceeding on behalf of such Initial
Purchaser or such controlling person). It is understood, however,
that the indemnifying parties shall, in connection with any one such
action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Initial Purchasers and controlling persons not having actual or
potential differing interests with you or among themselves, which firm
shall be designated in writing by Smith Barney Inc., and that all
such fees and expenses shall be reimbursed on a monthly basis. The
indemnifying parties shall not be liable for any settlement of any
such action, suit or proceeding effected without their written
consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold
harmless any Initial Purchaser, to the extent provided in paragraph
(a) hereof, and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or
judgment.

(c) Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors,
its officers and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange act, to
the same extent as the foregoing indemnity from the Company to each
Initial Purchaser set forth in paragraph (a) hereof, but only with
respect to information relating to such Initial Purchaser furnished in
writing by or on behalf of such Initial Purchaser expressly for use in
the Preliminary Memorandum or Final Memorandum, or any supplement
thereto. If any action, suit or proceeding shall be brought against
the Company, any of its directors, any such officer, or any such
controlling person based on the Preliminary Memorandum or Final
Memorandum, or supplement thereto, and in respect of which indemnity
may be sought against any Initial Purchaser pursuant to this paragraph
(c), such Initial Purchaser shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall
have assumed the defense thereof such Initial Purchaser shall not be
required to do so, but may employ separate counsel therein and
participate in the defense thereof, but the fees and expenses of such
counsel shall be at such Initial

<PAGE>

Purchaser's expense), and the Company, its directors, any such
officer, and any such controlling person, shall have the rights and
duties given to the Initial Purchasers by paragraph (b) above. The
foregoing indemnity agreement shall be in addition to any liability
which the Initial Purchasers may otherwise have.

(d) If the indemnification provided for in this Section
9 is unenforceable although available by its terms to an indemnified
party under paragraphs (a) or (c) hereof in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then an
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, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the
Initial Purchasers on the other hand from the offering of the Shares,
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault of the Company on the one hand and the
Initial Purchasers on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the Initial Purchasers on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Initial Purchasers, in each
case as set forth in the table on the cover page of the Final
Memorandum; provided that, in the event that the Initial Purchasers
--------
shall have purchased any Additional Shares hereunder, any
determination of the relative benefits received by the Company and the
Initial Purchasers from the offering of the Shares shall include the
net proceeds (before deducting expenses) received by the Company and
the discounts and commissions received by the Initial Purchasers from
the sale of such Additional Shares, in each case computed on the basis
of the respective amounts set forth in the notes to the table on the
cover page of the Final Memorandum. The relative fault of the Company
on the one hand and the Initial Purchasers on the other hand shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company on the one hand or by the Initial Purchasers on the other
hand and the parties' relative intent, knowledge, access to
information

<PAGE>

and opportunity to correct or prevent such statement or omission.

(e) The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by a pro rata allocation (even if the
Initial Purchasers were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in
paragraph (d) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding.
Notwithstanding the provisions of this Section 9, no Initial Purchaser
shall be required to contribute any amount in excess of the amount by
which the total price of the Shares purchased by it and sold to
Eligible Purchasers exceeds the amount of any damages which such
Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The Initial Purchasers' obligations to contribute pursuant to this
Section 9 are several in proportion to the respective numbers of Firm
Shares set forth opposite their names in Schedule I hereto and not
joint.

(f) No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened action, suit or proceeding in respect of which
any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
action, suit or proceeding.

(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or
contribution under this Section 9 shall be paid by the indemnifying
party to the indemnified party on a monthly basis. The indemnity and
contribution agreements contained in this Section 9 and the
representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect,
regardless of

<PAGE>

(i) any investigation made by or on behalf of any Initial Purchaser or
any person controlling any Initial Purchaser, the Company, its
directors or officers or any person controlling the Company,
(ii) acceptance of any Shares and payment therefor hereunder, and
(iii) any termination of this Agreement. A successor to any Initial
Purchaser or any person controlling any Initial Purchaser, or to the
Company, its directors or officers, or any person controlling the
Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 9.

10. Survival Clause. The respective representations,
---------------
warranties, agreements, covenants, indemnities and other statements of
the Company, its officers and the Initial Purchasers set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement shall remain in full force and effect, regardless of
(i) any investigation made by or on behalf of the Company, any of its
officers or directors, the Initial Purchasers or any controlling
person referred to in Section 9(a) hereof and (ii) delivery of and
payment for the Securities. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 9 hereof
shall remain in full force and effect, regardless of any termination
or cancellation of this Agreement.

11. Termination. (a)This Agreement may be terminated in
-----------
the sole discretion of the Initial Purchasers by notice to the Company
given prior to the Closing Date in the event that the Company shall
have failed, refused or been unable to perform, in all material
respects, all obligations and satisfy all conditions on its part to be
performed or satisfied hereunder at or prior thereto or, if at or
prior to the Closing Date:

(i) trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited;

(ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal,
state or other governmental authorities;

(iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic calamity, crisis or
change in political, financial or economic conditions, the effect of
which on the financial markets of the United States is such as to make
it, in the judgment of the Initial Purchasers, impracticable or
inadvisable to commence or

<PAGE>

continue the offering of the Securities as contemplated by the Final
Memorandum, as amended as of the date hereof; or

(iv) any securities of the Company shall have been
downgraded or placed on any "watch list" for possible downgrading by
any nationally recognized statistical rating organization.

(b) Termination of this Agreement pursuant to this
Section 11 shall be without liability of any party to any other party
except as provided in Section 10 hereof.

12. Notices. All communications hereunder shall be in
-------
writing and, if sent to the Initial Purchasers, shall be mailed or
delivered or telecopied and confirmed in writing to Smith Barney Inc.,
388 Greenwich Street, New York, New York 10013, Attention: Corporate
Finance Department; if sent to the Company, shall be mailed or
delivered or telecopied and confirmed in writing to the Company at
12655 North Central Expressway, Suite 405, Dallas, Texas 75243,
Attention: Jacques Kerrest.

13. Successors. This Agreement shall inure to the
----------
benefit of and be binding upon the Initial Purchasers and the Company
and their respective successors and legal representatives, and nothing
expressed or mentioned in this Agreement is intended or shall be
construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and
provisions hereof being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other
person except that (i) the indemnities of the Company contained in
Section 9 of this Agreement shall also be for the benefit of any
person or persons who control the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act and
(ii) the indemnities of the Initial Purchasers contained in Section 9
of this Agreement shall also be for the benefit of the directors of
the Company, its officers and any person or persons who control the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act. No purchaser of Securities from the Initial
Purchasers will be deemed a successor because of such purchase.

14. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF
--------------
THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, WITHOUT GIVING EFFECT TO ANY PROVISIONS RELATING TO
CONFLICTS OF LAW.

<PAGE>

15. Counterparts. This Agreement may be executed in two
------------
or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

16. Default of Initial Purchasers. If any Initial
-----------------------------
Purchaser defaults in its obligations to purchase Securities hereunder
and arrangements satisfactory to the non-defaulting Initial Purchasers
and the Company for the purchase of such Securities by other persons
are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of the non-defaulting Initial
Purchaser or the Company, except as provided in Sections 5 and 6. As
used in this Agreement, the term "Initial Purchaser" includes any
person substituted for an Initial Purchaser under this Section.
Nothing herein will relieve a defaulting Initial Purchaser from
liability for its default.

<PAGE>

If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding
agreement among the Company and the Initial Purchasers.

Very truly yours,

CHANCELLOR BROADCASTING COMPANY

By: /s/ STEVEN DINETZ
---------------------------------------
Name: Steven Dinetz
Title: President and Chief Executive
Office

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

SMITH BARNEY INC.

/s/ AUTHORIZED SIGNATORY OF
By: SMITH BARNEY INC.
-----------------------------------

ALEX. BROWN & SONS INCORPORATED

/s/ AUTHORIZED SIGNATORY OF
By: ALEX. BROWN & SONS INCORPORATED
-----------------------------------

BT SECURITIES CORPORATION

/s/ AUTHORIZED SIGNATORY OF
By: BT SECURITIES CORPORATION
-----------------------------------

CREDIT SUISSE FIRST BOSTON CORPORATION

/s/ AUTHORIZED SIGNATORY OF
By: CREDIT SUISSE FIRST BOSTON CORPORATION
-----------------------------------------

<PAGE>

GOLDMAN, SACHS & CO.

/s/ AUTHORIZED SIGNATORY OF
By: GOLDMAN, SACHS & CO.
-----------------------------------

<PAGE>

SCHEDULE A

Underwriter Number of Shares
----------- ----------------
<S> <C>

Smith Barney Inc. . . . . . . . . . . . . 800,000

Alex. Brown & Sons Incorporated . . . . . 300,000

BT Securities Corporation . . . . . . . . 300,000

Credit Suisse First Boston
Corporation . . . . . . . . . . . . . . 300,000

Goldman, Sachs & Co. . . . . . . . . . . . 300,000
_________
Total . . . . . . . . . . . . . . . . 2,000,000

=========

</TABLE>

<PAGE>

SCHEDULE B

Subsidiaries of Chancellor Broadcasting Company

Chancellor Radio Broadcasting Company
Chancellor Broadcasting Licensee Company
Trefoil Communications, Inc.
Shamrock Broadcasting Inc.
Shamrock Radio Licenses, Inc.
Shamrock Broadcasting Licenses of Denver, Inc.
Shamrock Broadcasting of Texas, Inc.

<PAGE>

EXHIBIT 4.1

<PAGE>

CERTIFICATE OF DESIGNATION
OF
7% CONVERTIBLE PREFERRED STOCK OF
CHANCELLOR BROADCASTING COMPANY

Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware

The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors of Chancellor
Broadcasting Company, a Delaware corporation (the "Corporation"), by
unanimous written consent:

RESOLVED, that pursuant to the authority conferred on the
Board of Directors of the Corporation by provisions of the
Corporation's Second Restated Certificate of Incorporation, and
pursuant to Section 151(g) of the General Corporation Law of the State
of Delaware, the Senior Vice President of the Corporation be, and
hereby is, authorized and directed to execute and file with the
Secretary of State of the State of Delaware the Certificate of
Designation of Convertible Preferred Stock of the Corporation fixing
the designation, powers, preferences and rights of a new series of the
Corporation's Convertible Preferred Stock, and the qualifications,
limitations or restrictions thereof, as follows:

1. Number of Shares; Designation. A total of 2,300,000
-----------------------------
shares of Preferred Stock, par value $.01 per share, of the
Corporation are hereby designated as 7% Convertible Preferred Stock
(the "Convertible Preferred Stock"). The number of authorized shares
of Convertible Preferred Stock may be decreased, at any time and from
time to time, by resolution of the Board of Directors of the
Corporation; provided, however, that no decrease shall reduce the
-------- -------
authorized number of shares of the Series to a number less than the
number of shares outstanding.

2. Rank. The Convertible Preferred Stock shall, with
----
respect to payment of dividends, redemption payments and rights upon
liquidation, dissolution or winding up of the affairs of the
Corporation, (x) rank senior and prior to (a) the Common Stock, par
value $.01 per share, of the Corporation (the "Common Stock") and
(b) any other class or series of capital stock of the Corporation that
by its terms ranks junior to the Series as to payment of dividends,
redemption payments and rights upon liquidation, dissolution or
winding up of the affairs of the Corporation, (y) rank on a parity
with all Parity Dividend Shares

<PAGE>

(as defined in Section 3 (c)) and all Parity Liquidation Shares (as
defined in Section 5(b)), and (2) rank junior to all Senior Dividend
Shares (as defined in Section 3(a)), all Senior Liquidation Shares (as
defined in Section 5(b)) and to any class or series of capital stock
(other than Common Stock) of the Corporation, whether currently issued
or issued in the future, that does not by its terms expressly provide
that it ranks on a parity with or junior to the Convertible Preferred
Stock as to dividends and rights upon liquidation, dissolution or
winding-up of the Corporation (which shall include, for purposes of
the foregoing, any entity with which the Corporation may be merged or
consolidated or to which all or substantially all the assets of the
Corporation may be transferred or which transfers all or substantially
all of its assets to the Corporation).

3. Dividends. (a) The cash dividend rate on shares of
---------
the Convertible Preferred Stock shall be 7% of the liquidation
preference per share per annum. Dividends on shares of Convertible
Preferred Stock shall be fully cumulative, accruing, without interest,
from the most recent date to which dividends have been paid or, if
none have been paid, from the date of original issuance of Convertible
Preferred Stock, and shall be payable quarterly in arrears, when, as
and if declared by the Board of Directors out of funds legally
available for the payment of dividends on January 15, April 15, July
15 and October 15 of each year (each, a "Dividend Payment Date"),
commencing April 15, 1997, except that if any Dividend Payment Date is
not a business day then the Dividend Payment Date shall be on the
first immediately succeeding business day (as used herein, the term
"business day" shall mean any day except a Saturday, Sunday or day on
which banking institutions are legally authorized to close in the City
of New York). Each dividend shall be paid to the holders of record of
shares of the Series as they appear on the stock register of the
Corporation at the close of business on such record dates (each, a
"Dividend Payment Record Date"), which shall be not more than 60 days
nor fewer than 10 days preceding each Dividend Payment Date thereof,
as shall be fixed by the Board of Directors of the Corporation.
Dividends payable for each quarterly dividend period shall be computed
by dividing the annual dividend by four. Dividends payable for any
partial dividend period shall be computed on the basis of a 360-day
year of twelve 30-day months. Dividends on account of arrears for any
past dividend periods may be declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of record
on such date, not exceeding 60 days nor fewer than 10 days preceding
the date on which dividends in arrears will be paid, as may be fixed
by the Board of Directors of the Corporation. No interest shall be
payable with respect to any

<PAGE>

dividend payment that may be in arrears. Holders of shares of the
Convertible Preferred Stock shall be entitled to receive dividends in
preference to and in priority over dividends upon the Common Shares
and any other series or class of the Corporation's capital stock that
ranks junior as to dividends to the Convertible Preferred Stock
("Junior Dividend Shares") and shall be on a parity as to dividends
with any series or class of the Corporation's capital stock that does
not rank senior or junior as to dividends with the Convertible
Preferred Stock ("Parity Dividend Shares"). The holders of shares of
the Convertible Preferred Stock shall not be entitled to any dividends
other than the cash dividends provided for in this Section 3.

(b) No dividends, other than dividends payable solely in
Common Shares, Junior Dividend Shares, or warrants or other rights to
acquire such Common Shares or Junior Dividend Shares, shall be paid or
declared and set apart for payment on, and no purchase, redemption or
other acquisition shall be made by the Corporation of, any Common
Shares or Junior Dividend Shares unless and until all accrued and
unpaid dividends on the Convertible Preferred Stock, including the
full dividend for the then current quarterly dividend period, shall
have been paid or declared and set apart for payment without interest.

(c) If at any time the Corporation issues any class or
series of capital stock ranking senior and prior to the Convertible
Preferred Stock with respect to the payment of dividends ("Senior
Dividend Shares") and fails to pay or declare and set apart for
payment accrued and unpaid dividends on such Senior Dividend Shares,
in whole or in part, then (except to the extent allowed by the terms
of the Senior Dividend Shares) no dividend shall be paid or declared
and set apart for payment on the Convertible Preferred Stock unless
and until all accrued and unpaid dividends with respect to the Senior
Dividend Shares, including the full dividends for the then-current
dividend period, shall have been paid or declared and set apart for
payment, without interest. Except as provided in Section 3(d) below,
no dividends shall be paid or declared and set apart for payment on
any Parity Dividend Shares for any period unless the Company has paid
or declared and set apart for payment, or contemporaneously pays or
declares and sets apart for payment, on the Convertible Preferred
Stock all accrued and unpaid dividends for all dividend payment
periods terminating on or prior to the date of payment of such
dividends. Except as provided in Section 3(d) below, no dividends
shall be paid or declared and set apart for payment on the Convertible
Preferred Stock for any period unless the Company has paid or declared
and set apart for

<PAGE>

payment, or contemporaneously pays or declares and sets apart for such
payment, on any Parity Dividend Shares all accrued and unpaid
dividends for all dividend payment periods terminating on or prior to
the date of payment of such dividends.

(d) If at any time the Corporation has failed to pay
accrued dividends on any shares of the Convertible Preferred Stock on
any Dividend Payment Date or any Parity Dividend Shares on a stated
payment date, as the case may be, the Corporation shall not:

(i) purchase any shares of the Convertible Preferred Stock
or Parity Dividend Shares (except for a consideration payable in
Common Shares or Junior Dividend Shares) or redeem fewer than all
of the shares of the Convertible Preferred Stock and Parity
Dividend Shares then outstanding except for (x) the repurchase or
redemption of shares of the Convertible Preferred Stock made pro
---
rata among the holders of the shares of the Convertible Preferred
----
Stock then outstanding and (y) the repurchase or redemption made
pro rata with respect to all shares of the Convertible Preferred
--- ----
Stock and Parity Dividend Shares then outstanding so that the
amounts repurchased or redeemed shall in all cases bear to each
other the same ratio that, at the time of the repurchase or
redemption, the required redemption payments on the shares of the
Convertible Preferred Stock and the other Parity Dividend Shares
then outstanding, respectively, bear to each other, or

(ii) permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase any Common
Shares, Junior Dividend Shares, shares of the Convertible
Preferred Stock or Parity Dividend Shares, except to the same
extent that the Corporation could purchase such shares.

Unless and until all dividends accrued but unpaid in respect
of prior dividend payment periods on shares of the Convertible
Preferred Stock and any Parity Dividend Shares at the time outstanding
have been paid in full or a sum sufficient for such payment is
declared and set apart, as provided in the preceding paragraph, all
dividends accrued by the Corporation upon shares of the Convertible
Preferred Stock or Parity Dividend Shares shall be declared pro rata
--- ----
with respect to all shares of the Convertible Preferred Stock and
Parity Dividend Shares then outstanding, so that the amounts of any
dividends declared on shares of the Convertible Preferred Stock and on
the Parity Dividend Shares shall in all cases bear to each other the

<PAGE>

same ratio that, at the time of the declaration, all accrued but
unpaid dividends in respect of prior dividend payment periods on
shares of the Convertible Preferred Stock and the other Parity
Dividend Shares, respectively, bear to each other.

4. Optional Redemptions for Cash. (a) Shares of the
-----------------------------
Convertible Preferred Stock shall not be redeemable prior to January
19, 2000. Thereafter, subject to the restrictions in Section 3 above,
shares of the Convertible Preferred Stock may be redeemed by the
Corporation, in whole or in part, at the option of the Corporation at
the following redemption prices (expressed as percentages of the
liquidation preference thereof) per share if redeemed during the
12-month period beginning January 15 (January 19 in the case of 2000)
in the year indicated below:

Year Percentage Year Percentage

2000 . . . . . 104.90% 2004 . . . . . . . . 102.10%
2001 . . . . . 104.20% 2005 . . . . . . . . 101.40%
2002 . . . . . 103.50% 2006 . . . . . . . . 100.70%
2003 . . . . . 102.80% 2007 and thereafter 100.00%

</TABLE>

plus, in each case, an amount equal to the dividends accrued and
unpaid thereon, whether or not declared, to the redemption date
("Optional Redemption Price").

(b) Not less than 15 nor more than 60 days (such date as
fixed by the Board of Directors of the Corporation referred to herein
as the "Redemption Record Date") prior to the date fixed for any
redemption of shares of the Convertible Preferred Stock pursuant to
this Section 4, a notice specifying the time and place of the
redemption and the number of shares to be redeemed shall be given by
first class mail, postage prepaid, to the holders of record on the
Redemption Record Date of the shares of the Convertible Preferred
Stock to be redeemed at their respective addresses as the same shall
appear on the books of the Corporation, calling upon each holder of
record to surrender to the Corporation on the redemption date at the
place designated in the notice such holder's certificate or
certificates representing the number of shares specified in the notice
of redemption. Neither failure to mail such notice, nor any defect
therein or in the mailing thereof, to any particular holder shall
affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any
notice mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the holder receives
the notice. On or after the redemption date, each holder of shares of
Convertible Preferred Stock to be redeemed shall present and

<PAGE>

surrender such holder's certificate or certificates for such shares to
the Corporation at the place designated in the redemption notice and
thereupon the Optional Redemption Price of the shares shall be paid to
or on the order of the person whose name appears on such certificate
or certificates as the owner thereof, and each surrendered certificate
shall be canceled. In case fewer than all the shares represented by
any such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.

(c) If a notice of redemption has been given pursuant to
this Section 4 and if, on or before the redemption date, the funds
necessary for such redemption (including all dividends on the shares
of Convertible Preferred Stock to be redeemed that will accrue to but
not including the redemption date) shall have been set aside by the
Corporation, separate and apart from its other funds, in trust for the
pro rata benefit of the holders of the shares so called for
--- ----
redemption, then, notwithstanding that any certificates for such
shares have not been surrendered for cancellation, on the redemption
date dividends shall cease to accrue on the shares of the Convertible
Preferred Stock to be redeemed, and at the close of business on the
date on which such funds have been segregated and set aside by the
Corporation as provided in this Section 6(c), the holders of such
shares shall cease to be stockholders with respect to those shares,
shall have no interest in or claims against the Corporation by virtue
thereof and shall have no voting or other rights with respect thereto,
except the conversion rights provided in Section 6 below and the right
to receive the moneys payable upon such redemption, without interest
thereon, upon surrender (and endorsement, if required by the
Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. Subject to applicable escheat laws,
any moneys so set aside by the Corporation and unclaimed at the end of
two years from the redemption date shall revert to the general funds
of the Corporation, after which reversion the holders of such shares
so called for redemption shall look only to the general funds of the
Corporation for the payment of the Optional Redemption Price, without
interest. Any interest accrued on funds so deposited shall belong to
the Corporation and be paid thereto from time to time.

(d) If a notice of redemption has been given pursuant to
this Section 4 and any holder of shares of Convertible Preferred Stock
shall, prior to the close of business on the redemption date, give
written notice to the Corporation pursuant to Section 6 below of the
conversion of any or all of the shares to be redeemed held by the
holder (accompanied by a certificate

<PAGE>

or certificates for such shares, duly endorsed or assigned to the
Corporation, and any necessary transfer tax payment, as required by
Section 6 below), then such redemption shall not become effective as
to such shares to be converted and such conversion shall become
effective as provided in Section 6 below, whereupon any funds
deposited by the Corporation for the redemption of such shares shall
(subject to any right of the holder of such shares to receive the
dividend payable thereon as provided in Section 6 below) immediately
upon such conversion be returned to the Corporation or, if then held
in trust by the Corporation, shall automatically and without further
corporate action or notice be discharged from the trust.

(e) In every case of redemption of fewer than all of the
outstanding shares of the Convertible Preferred Stock pursuant to this
Section 4, the shares to be redeemed shall be selected pro rata or by
--------
lot or in such other manner as the Board of Directors of the
Corporation may determine, as may be prescribed by resolution of the
Board of Directors of the Corporation, provided that only whole shares
shall be selected for redemption.

5. Liquidation. (a) The liquidation value of shares of
-----------
Convertible Preferred Stock, in case of the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, shall be
$50.00 per share, plus an amount equal to the dividends accrued and
unpaid thereon, whether or not declared, to the payment date (the
"Liquidation Value").

(b) In the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, the holders
of shares of Convertible Preferred Stock (i) shall not be entitled to
receive the Liquidation Value of the shares held by them until payment
in full or provision has been made for the payment of all claims of
creditors of the Corporation and the liquidation preference of any
class or series of capital stock ranking senior to the Convertible
Preferred Stock with respect to redemption rights and rights upon
liquidation, dissolution or winding up of the affairs of the
Corporation ("Senior Liquidation Shares") shall have been paid in full
and (ii) shall be entitled to receive the Liquidation Value of such
shares held by them in preference to and in priority over any
distributions upon the Common Shares and any other series or class of
the Corporation's capital stock that ranks junior to the Convertible
Preferred Stock as to redemption rights and rights upon liquidation,
dissolution or winding up of the affairs of the Corporation ("Junior
Liquidation Shares"). Upon payment in full of the Liquidation Value
to which the holders of shares of the

<PAGE>

Convertible Preferred Stock are entitled, the holders of shares of the
Convertible Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation.
Subject to clause (i) above, if the assets of the Corporation are not
sufficient to pay in full the Liquidation Value payable to the holders
of shares of the Convertible Preferred Stock and the liquidation
preference payable to the holders of any series or class of the
Corporation's capital stock, outstanding on the date hereof or
hereafter issued, that ranks on a parity with the Convertible
Preferred Stock as to redemption rights and rights upon liquidation,
dissolution or winding up of the affairs of the Corporation ("Parity
Liquidation Shares"), the holders of all such shares shall share
ratably in accordance with the respective preferential amounts payable
on such shares in any distribution.

(c) Neither a consolidation or merger of the Corporation
with or into any other entity, nor a merger of any other entity with
or into the Corporation, nor a sale or transfer of all or any part of
the Corporation's assets for cash, securities or other property shall
be considered a liquidation, dissolution or winding-up of the
Corporation within the meaning of this Section 5.

6. Conversion. (a) Holders of shares of Convertible
----------
Preferred Stock will have the right, exercisable at any time after
March 23, 1997, except in the case of shares of Convertible Preferred
Stock called for redemption (as described in Section 4(d) above), to
convert shares of Convertible Preferred Stock into shares of Class A
Common Stock (the "Class A Common Stock") at the conversion price of
$32.90 per share of Class A Common Stock, subject to adjustment as
described below in Section 6(f) (the "Conversion Price"). The number
of shares of Class A Common Stock into which a share of the
Convertible Preferred Stock shall be convertible (calculated as to
each conversion to the nearest 1/100th of a share) shall be determined
by dividing $50.00 by the Conversion Price then in effect. In the
case of shares of the Convertible Preferred Stock called for
redemption, conversion rights will expire at the close of business on
the redemption date. Certificates representing shares of the
Convertible Preferred Stock surrendered for conversion during the
period between the close of business on any Dividend Payment Record
Date and the opening of business on any corresponding Dividend Payment
Date must be accompanied by payment of an amount equal to the dividend
payable on such shares on such Dividend Payment Date. No such payment
will be required to accompany shares of the Convertible Preferred
Stock called for redemption and surrendered during the period between
the close of business on any Dividend

<PAGE>

Payment Record Date and the opening of business on any corresponding
Dividend Payment Date (it being the case that, except as provided in
Section 4(a), any shares so redeemed shall not be entitled to receive
the dividend payable by the Company on such Dividend Payment Date).
Notwithstanding the foregoing, a holder of shares of the Convertible
Preferred Stock on a Dividend Payment Record Date who (or whose
transferee) tenders any such shares for conversion into shares of
Class A Common Stock on the relevant Dividend Payment Date shall be
entitled to receive the dividend payable by the Company on such shares
of Convertible Preferred Stock on such Dividend Payment Date, and the
converting holder need not include payment of the amount of such
dividend upon surrender of shares of Convertible Preferred Stock for
conversion. Except as provided in the immediately preceding sentence,
no payment or allowance for accrued dividends on the shares of
Convertible Preferred Stock is to be made on conversion.

(b) Any holder of shares of Convertible Preferred Stock
electing to convert the shares or any portion thereof in accordance
with Section 6(a) above shall deliver the certificates therefor and
the dividend payment referred to in Section 6(a) above, if applicable,
to the principal office of any transfer agent for the Class A Common
Stock, with a form of conversion notice fully completed and duly
executed and, if required by Section 6(a) above, accompanied by
payment of an amount equal to the dividend payable on such shares on
the applicable Dividend Payment Date. The conversion right with
respect to any shares of Convertible Preferred Stock shall be deemed
to have been exercised at the date upon which the certificates
therefor and the dividend payment referred to in Section 6(a) above,
if applicable, with the conversion notice duly executed (and the
payment required by Section 6(d), if applicable), shall have been so
delivered, and the person or persons entitled to receive the Class A
Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Class A Common Stock
upon that date.

(c) No fractional shares of Class A Common Stock or scrip
representing fractional shares shall be issued upon conversion of
shares of Convertible Preferred Stock. If more than one share of
Convertible Preferred Stock shall be surrendered for conversion at one
time by the same record holder, the number of full shares of Class A
Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of Convertible Preferred Stock
so surrendered. Instead of any fractional share of Class A Common
Stock otherwise issuable upon conversion of any shares of

<PAGE>

Convertible Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such fraction in an amount equal to the same
fraction of Sale Price of the Class A Common Stock at the close of
business on the day of conversion. In the absence of a Sale Price,
the Board of Directors shall in good faith determine the current
market price on such basis as it considers appropriate and such
current market price shall be used to calculate the cash adjustment.
As used herein, "Sale Price" means the closing sales price of the
Class A Common Stock (or if no sale price is reported, the average of
the high and low bid prices) as reported by the principal national or
regional stock exchange on which the Class A Common Stock is listed
or, if the Class A Common Stock is not listed on a national or
regional stock exchange, as reported by the Nasdaq Stock Market and if
not so reported, then as reported by the National Quotation Bureau
Incorporated.

(d) If a holder converts shares of Convertible Preferred
Stock, the Corporation shall pay any documentary, stamp or similar
issue or transfer tax due on the issue of Class A Common Stock upon
the conversion or due upon the issuance of a new certificate or
certificates for any shares of Convertible Preferred Stock not
converted. The holder, however, shall pay any such tax that is due
because any such shares of the Class A Common Stock or of the
Convertible Preferred Stock are issued in a name other than the name
of the holder.

(e) The Corporation shall reserve out of its authorized but
unissued Class A Common Stock or its Class A Common Stock held in
treasury enough shares of Common Stock to permit the conversion of all
of the then-outstanding shares of Convertible Preferred Stock. For
the purposes of this Section 6(e), the full number of shares of Class
A Common Stock then issuable upon the conversion of all
then-outstanding shares of Convertible Preferred Stock shall be
computed as if at the time of computation all outstanding shares of
Convertible Preferred Stock were held by a single holder. The
Corporation shall from time to time, in accordance with the laws of
the State of Delaware and its certificate of incorporation, increase
the authorized amount of its Class A Common Stock if at any time the
authorized amount of its Class A Common Stock remaining unissued shall
not be sufficient to permit the conversion of all shares of
Convertible Preferred Stock at the time outstanding. If any shares of
Class A Common Stock required to be reserved for issuance upon
conversion of shares of Convertible Preferred Stock hereunder require
registration with or approval of any governmental authority under any
federal or state law before the shares may be issued upon conversion,
the Corporation will in

<PAGE>

good faith and as expeditiously as possible endeavor to cause the
shares to be so registered or approved. All shares of Class A Common
Stock issued upon conversion of the shares of Convertible Preferred
Stock shall be validly issued, fully paid and nonassessable.

(f) The Conversion Price shall be subject to adjustment as
follows:

(i) In case the Corporation shall (A) pay a dividend on any
class of its capital stock in shares of its Class A Common Stock,
(B) subdivided its outstanding shares of Class A Common Stock
into a greater number of shares or (C) combine its outstanding
shares of Class A Common Stock into a smaller number of shares,
the Conversion Price in effect immediately prior thereto shall be
adjusted retroactively as provided below so that the Conversion
Price thereafter shall be determined by multiplying the
Conversion Price at which the shares of Convertible Preferred
Stock were theretofore convertible by a fraction of which the
denominator shall be the number of shares of Class A Common Stock
outstanding immediately following such action and of which the
numerator shall be the number of shares of Class A Common Stock
outstanding immediately prior thereto. Such adjustment shall be
made whenever any event listed above shall occur and shall become
effective retroactively immediately after the record date in the
case of a dividend and immediately after the effective date in
the case of a subdivision or combination.

(ii) In case the Corporation shall issue rights or warrants
to all holders of its Class A Common Stock entitling them (for a
period expiring within 45 days after the record date for
determining stockholders entitled to receive such rights or
warrants) to subscribe for or purchase shares of Class A Common
Stock at a price per share less than the current market price per
share of Class A Common Stock (as determined in accordance with
the provisions of Section 6(f)(iv) below) at the record date
therefor (the "Current Market Price"), or in case the Corporation
shall issue to all holders of its Class A Common Stock other
securities convertible into or exchangeable for Class A Common
Stock for a consideration per share of Class A Common Stock
deliverable upon conversion or exchange thereof less than the
Current Market Price, then the Conversion Price in effect
immediately prior thereto shall be adjusted as provided below so
that the Conversion Price therefor shall be equal to the price
determined by

<PAGE>

multiplying (A) the Conversion Price at which shares of
Convertible Preferred Stock were theretofore convertible by (B) a
fraction of which the denominator shall be the sum of (1) the
number of shares of Class A Common Stock outstanding on the date
of issuance of the convertible or exchangeable securities, rights
or warrants and (2) the number of additional shares of Class A
Common Stock offered for subscription or purchase, or issuable
upon such conversion or exchange, and of which the numerator
shall be the sum of (1) the number of shares of Class A Common
Stock outstanding on the date of issuance of such convertible or
exchangeable securities, rights or warrants and (2) the number of
additional shares of Class A Common Stock which the aggregate
offering price of the number of shares of Class A Common Stock so
offered would purchase at the Current Market Price per share of
Class A Common Stock (as determined in accordance with the
provisions of Section 6(f)(iv) below). Such adjustment shall be
made whenever such convertible or exchangeable securities, rights
or warrants are issued, and shall become effective immediately
after the record date for the determination of stockholders
entitled to receive such securities. However, upon the
expiration of any right or warrant to purchase Class A Common
Stock, the issuance of which resulted in an adjustment in the
Conversion Price pursuant to this Section 6(f)(ii), if any such
right or warrant shall expire and shall not have been exercised,
the Conversion Price shall be recomputed immediately upon such
expiration and effective immediately upon such expiration shall
be increased to the price it would have been (but reflecting any
other adjustments to the Conversion Price made pursuant to the
provisions of this Section 6(f) after the issuance of such
rights or warrants) had the adjustment of the Conversion Price
made upon the issuance of such rights or warrants been made on
the basis of offering for subscription or purchase only that
number of shares of Class A Common Stock actually purchased upon
the exercise of such rights or warrants. No further adjustment
shall be made upon exercise of any right, warrant, convertible
security or exchangeable security if any adjustment shall have
been made upon issuance of such security.

(iii) In case the Corporation shall pay a dividend to all
holders of its Class A Common Stock (including any dividend paid
in connection with a consolidation or merger in which the
Corporation is the continuing corporation) of any shares of
capital stock of the Corporation or its subsidiaries (other than
Class A Common Stock) or evidences of its indebtedness or assets
(excluding cash dividends

<PAGE>

payable solely in cash that may from time to time be fixed by the
Board of Directors, or dividends or distributions in connection
with the liquidation, dissolution or winding up of the
Corporation) or rights or warrants to subscribe for or purchase
any of its securities or those of its subsidiaries or securities
convertible or exchangeable for Class A Common Stock (excluding
those securities referred to in Section 6(f)(ii) above), then in
each such case the Conversion Price in effect immediately prior
thereto shall be adjusted as provided below so that the
Conversion Price thereafter shall be equal to the price
determined by multiplying (A) the Conversion Price in effect on
the record date mentioned below by (B) a fraction, the numerator
of which shall be the Current Market Price per share of Class A
Common Stock on the record date mentioned below less the then
fair market value (as determined by the Board of Directors, whose
good faith determination shall be conclusive) as of such record
date of the assets, evidences of indebtedness or securities so
paid with respect to one share of Class A Common Stock, and the
denominator of which shall be the Current Market Price per share
of Class A Common Stock on such record date; provided, however,
-------- -------
that in the event the then fair market value (as so determined)
so paid with respect to one share of Class A Common Stock is
equal to or greater than the Current Market Price per share of
Class A Common Stock on the record date mentioned above, in lieu
of the foregoing adjustment, adequate provision shall be made so
that each holder of shares of the Convertible Preferred Stock
shall have the right to receive the amount and kind of assets,
evidences of indebtedness, or securities such holder would have
received had such holder converted each such share of Convertible
Preferred Stock immediately prior to the record date for such
dividend. Such adjustment shall be made whenever any such
payment is made, and shall become effective retroactively
immediately after the record date for the determination of
stockholders entitled to receive the payment.

(iv) For the purpose of any computation under Sections
6(f)(ii) and 6(f)(iii) above, the Current Market Price per share
of Class A Common Stock at any date shall be deemed to be the
average Sale Price for the 30 consecutive trading days commencing
45 trading days before the day in question.

(v) No adjustment in the Conversion Price shall be required
unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Price then in effect; provided,
--------
however, that any adjustments that by
-------

<PAGE>

reason of this Section 6(f)(v) are not required to be made shall
be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 6(f) shall be
made to the nearest cent.

(vi) In the event that, at any time as a result of an
adjustment made pursuant to Section 6(f)(i) or 6(f)(iii) above,
the holder of any share of Convertible Preferred Stock thereafter
surrendered for conversion shall become entitled to receive any
shares of the Corporation other than shares of the Class A Common
Stock, thereafter the number of such other shares so receivable
upon conversion of any share of Convertible Preferred Stock shall
be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Class A Common Stock contained in Section 6(f)(i)
through 6(f)(v) above, and the other provisions of this Section 6
with respect to the Class A Common Stock shall apply on like
terms to any such other shares.

(vii) Whenever the Conversion Price is adjusted, as herein
provided, the Corporation shall promptly file with the transfer
agent for Convertible Preferred Stock a certificate of an officer
of the Corporation setting forth the Conversion Price after the
adjustment and setting forth a brief statement of the facts
requiring such adjustment and a computation thereof. The
certificate shall be conclusive evidence of the correctness of
the adjustment. The Corporation shall promptly cause a notice of
the adjusted Conversion Price to be mailed to each registered
holder of shares of Convertible Preferred Stock.

(viii) In case of any reclassification of the Class A Common
Stock, any consolidation of the Corporation with, or merger of
the Corporation into, any other entity, any merger of another
entity into the Corporation (other than a merger that does not
result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Class A Common Stock of the
Corporation), any sale or transfer of all or substantially all of
the assets of the Corporation or any compulsory share exchange
pursuant to which share exchange the Class A Common Stock is
converted into other securities, cash or other property, then
lawful provision shall be made as part of the terms of such
transaction whereby the holder of each share of Convertible
Preferred Stock then outstanding shall have the right thereafter,
during the period such share shall be convertible, to convert
such share only into the kind and amount of

<PAGE>

securities, cash and other property receivable upon the
reclassification, consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Class A Common
Stock of the Corporation into which a share of Convertible
Preferred Stock would have been convertible immediately prior to
the reclassification, consolidation, merger, sale, transfer or
share exchange. The Corporation, the person formed by the
consolidation or resulting from the merger or which acquires such
assets or which acquires the Corporation's shares, as the case
may be, shall make provisions in its certificate or articles of
incorporation or other constituent document to establish such
rights. The certificate or articles of incorporation or other
constituent document shall provide for adjustments, which, for
events subsequent to the effective date of the certificate or
articles of incorporation or other constituent document, shall be
as nearly equivalent as may be practicable to the adjustments
provided for in this Section 6. The provisions of this Section
6(f)(viii) shall similarly apply to successive reclassifications,
consolidations, mergers, sales, transfers or share exchanges.

(g) The Corporation from time to time may reduce the
Conversion Price by any amount for any period of time if the period is
at least 20 days and if the reduction is irrevocable during the
period. Whenever the Conversion Price is so reduced, the Corporation
shall mail to holders of record of the Convertible Preferred Stock a
notice of the reduction at least 15 days before the date the reduced
Conversion Price takes effect, stating the reduced Conversion Price
and the period it will be in effect. A voluntary reduction of the
Conversion Price does not change or adjust the Conversion Price
otherwise in effect for purposes of paragraph 6(f) above.

7. Status of Shares. All shares of the Convertible
----------------
Preferred Stock that are at any time redeemed pursuant to Section 4
above or converted pursuant to Section 6 above and all shares of the
Convertible Preferred Stock that are otherwise reacquired by the
Corporation and subsequently canceled by the Board of Directors of the
Corporation shall have the status of authorized but unissued shares of
Preferred Stock, without designation as to series, subject to
reissuance by the Board of Directors of the Corporation as shares of
any one or more other series.

8. Voting Rights. Except as set forth below or otherwise
-------------
required by law, holders of shares of the Convertible Preferred Stock
shall have no voting rights. In connection with

<PAGE>

any right to vote, each holder of shares of Convertible Preferred
Stock will have one vote for each share held.

(a) Dividend Defaults.
-----------------
(i) Whenever, at any time or times, dividends payable
on the shares of Convertible Preferred Stock at the time
outstanding shall be in arrears in an aggregate amount equal to
at least six quarterly dividend payments (whether or not
consecutive), the holders of shares of Convertible Preferred
Stock shall have the right, voting separately as a class with
holders of Parity Dividend Shares to the extent such Parity
Dividend Shares have such voting rights (the shares of
Convertible Preferred Stock and any such other Parity Dividend
Shares, collectively for purposes of this Section 8, the
"Defaulted Preferred Stock"), to elect two directors of the
Corporation at the Corporation's next annual meeting of
stockholders and at each subsequent annual meeting of
stockholders; provided, however, that if such voting rights shall
-------- -------
become vested more than 90 days or less than 20 days before the
date prescribed for the annual meeting of stockholders, the
holders of the shares of Defaulted Preferred Stock shall be
entitled to exercise their voting rights at a special meeting of
the holders of shares of Defaulted Preferred Stock as set forth
in Section 8(a)(ii) hereof. At elections for such directors,
each holder of shares of Convertible Preferred Stock shall be
entitled to on vote for each share held (the holders of any
Parity Preferred Stock being entitled to such number of votes, if
any, for each share of stock held as may be granted to them).
Upon the vesting of such voting rights, the maximum authorized
number of members of the Board of Directors of the Corporation
shall automatically be increased by two and the two vacancies so
created shall be filled by vote of the holders of outstanding
Defaulted Preferred Stock as hereinafter set forth. The right of
holders of Defaulted Preferred Stock, voting separately as a
class without regard to series, to elect members of the Board of
Directors of the Corporation as aforesaid shall continue until
such time as all dividends accumulated on Defaulted Preferred
Stock shall have been paid in full or declared and set aside for
payment in full, at which time such right immediately shall
terminate subject to revesting in the event of each and every
subsequent default of the character above mentioned.

(ii) At any time when such voting right shall have
vested in the holders of shares of Defaulted Preferred Stock

<PAGE>

entitled to vote thereon, and if such right shall not already
have been initially exercised, an officer of the Corporation
shall, upon the written request of holders of record of 10% of
the voting power represented by the shares of such Defaulted
Preferred Stock then outstanding, addressed to the Secretary of
the Corporation, call a special meeting of holders of shares of
such Defaulted Preferred Stock. Such meeting shall be held at
the earliest practicable date upon the notice required for annual
meetings of stockholders at the place for holding annual meetings
of stockholders of the Corporation or, if none, at a place
designated by the Secretary of the Corporation. If such meeting
shall not be called by the proper officers of the Corporation
within 30 days after the personal service of such written request
upon the Secretary of the Corporation, or within 30 days after
mailing the same within the United States, by registered mail,
addressed to the Secretary of the Corporation at its principal
office (such mailing to be evidenced by the registry receipt
issued by the postal authorities), then the holders of record of
10% of the voting power represented by the shares of Defaulted
Preferred Stock then outstanding may designate in writing any
person to call such meeting at the expense of the Corporation,
and such meeting may be called by such person so designated upon
the notice required for annual meetings of stockholders and shall
be held at the same place as is elsewhere provided in this
Section. Any holder of shares of Defaulted Preferred Stock then
outstanding that would be entitled to vote at such meeting shall
have access to the stock books of the Corporation for the purpose
of causing a meeting of stockholders to be called pursuant to the
provisions of this Section. Notwithstanding the provisions of
this Section, however, no such special meeting shall be called or
held during a period within 45 days immediately preceding the
date fixed for the next annual meeting of stockholders.

(iii) So long as any shares of Convertible Preferred
Stock are outstanding, the By-laws shall contain no provisions
that would restrict the exercise, by the holders of Defaulted
Preferred Stock, of the right to elect directors under the
circumstances provided in Section 8(a)(i) above.

(iv) Directors elected pursuant to Section 8(a)(i)
shall serve until the earlier of (A) the next annual meeting of
the stockholders of the Corporation and the election (by the
holders of Defaulted Preferred Stock) and qualification

<PAGE>

of their respective successors or (B) the date upon which all
dividends in default on the Defaulted Preferred Stock shall have
been paid in full or declared and set apart for payment. If,
prior to the end of the term of any director elected as
aforesaid, a vacancy in the office of that director shall occur
during the continuation of a default in dividends on the shares
of the Convertible Preferred Stock or such Parity Dividend Shares
by reason of death, resignation or disability, the vacancy shall
be filled for the unexpired term by the appointment by the
remaining director elected as aforesaid of a new director for the
unexpired term of the former director.

(b) Miscellaneous. Without the affirmative vote of the
-------------
holders of at least 66 2/3% of the outstanding shares of the
Convertible Preferred Stock and outstanding Parity Dividend Shares,
voting as a single class (or, if less than all shares of the
Convertible Preferred Stock of Parity Dividend Shares then outstanding
would be adversely affected thereby, without the affirmative vote of
the holders of at least 66 2/3% of the outstanding shares of each
series so affected, voting as a separate class), the Corporation may
not:

(i) amend, alter or repeal (by merger or otherwise)
any provision of the Corporation's Certificate of Incorporation
or this Certificate or the By-laws of the Corporation so as to
adversely affect the relative rights, preferences,
qualifications, limitations or restrictions of the shares of the
Convertible Preferred Stock; or

(ii) effect any reclassification of the shares of the
Convertible Preferred Stock.

The above notwithstanding, the Corporation's Certificate of
Incorporation may be amended (i) to increase or decrease the number of
authorized shares of Preferred Stock (but not below the number of
shares thereof then outstanding) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to vote
thereon or (ii) to authorize any other class or series of capital
stock of the Corporation, regardless of the relative rights,
preferences, qualifications, limitations or restrictions thereof,
including an amendment to increase the authorized number of shares of
Common Stock or Preferred Stock of the Corporation without the vote of
the holders of shares of the Convertible Preferred Stock.

9. Change of Control.
-----------------

<PAGE>

(a) In the event of a Change of Control (the date of
such occurrence being the "Change of Control Date"), the
Corporation shall notify the holders of the Convertible Preferred
Stock in writing of such occurrence and shall make an offer to
purchase (the "Change of Control Offer") all then outstanding
shares of Convertible Preferred Stock at a purchase price of 101%
of the liquidation preference thereof plus an amount in cash
equal to all accumulated and unpaid dividends per share
(including an amount in cash equal to a prorated dividend for the
period from the Dividend Payment Date immediately prior to the
Change of Control Payment Date to the Change of Control Payment
Date).

(b) Within 30 days following the Change of Control
Date, the Corporation shall send, by first class mail, postage
prepaid, a notice to each holder of Convertible Preferred Stock
at such holder's address as it appears on the stock books of the
Corporation, which notice shall govern the terms of the Change of
Control Offer. The notice to the Holders shall contain all
instructions and materials necessary to enable such holders to
tender Convertible Preferred Stock pursuant to the Change of
Control Offer. Such notice shall state:

(i) that a Change of Control has occurred, that
the Change of Control Offer is being made pursuant to this
Section 9 and that all Convertible Preferred Stock validly
tendered and not withdrawn will be accepted for payment;

(ii) the purchase price (including the amount of
accrued dividends, if any) and the purchase date (which
shall be no earlier than 30 days nor later than 45 days from
the date such notice is mailed, other than as may be
required by law) (the "Change of Control Payment Date");

(iii) that any shares of Convertible Preferred
Stock not tendered will continue to accrue dividends;

(iv) that, unless the Corporation defaults in
making payment therefor, any share of Convertible Preferred
Stock accepted for payment pursuant to the Change of Control
Offer shall cease to accrue dividends after the Change of
Control Payment Date;

(v) that holders electing to have any shares of
Convertible Preferred Stock purchased pursuant to a

<PAGE>

Change of Control Offer will be required to surrender the
certificate or certificates representing such shares,
properly endorsed for transfer together with such customary
documents as the Corporation and the transfer agent may
reasonably require, in the manner and at the place specified
in the notice prior to the close of business on the business
day prior to the Change of Control Payment Date;

(vi) that holders will be entitled to withdraw
their election if the Corporation receives, not later than
five business days prior to the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the holder, the number of shares
of Convertible Preferred Stock the holder delivered for
purchase and a statement that such holder is withdrawing his
election to have such shares of Convertible Preferred Stock
purchased;

(vii) that holders whose shares of Convertible
Preferred Stock are purchased only in part will be issued a
new certificate representing the unpurchased shares of
Convertible Preferred Stock; and

(viii) the circumstances and relevant facts
regarding such Change of Control.

(c) The Corporation will comply with any securities laws
and regulations, to the extent such laws and regulations are
applicable to the repurchase of the Convertible Preferred Stock
in connection with a Change of Control Offer.

(d) On the Change of Control Payment Date the Corporation
shall (x) accept for payment the shares of Convertible Preferred
Stock validly tendered pursuant to the Change of Control Offer,
(y) pay to the holders of shares so accepted the purchase price
therefor in cash and (z) cancel and retire each surrendered
certificate. Unless the Corporate defaults in the payment for
the shares of Convertible Preferred Stock tendered pursuant to
the Change of Control Offer, dividends will cease to accrue with
respect to the shares of Convertible preferred Stock tendered and
all rights of holders of such tendered shares will terminate,
except for the right to receive payment therefor, on the Change
of Control Payment Date.

<PAGE>

(e) If the purchase of the Convertible Preferred Stock
would violate or constitute a default under indebtedness of the
Corporation, then, notwithstanding anything to the contrary
contained above, prior to complying with the foregoing
provisions, but in any event within 30 days following the Change
of Control Date, the Corporation shall either (A) repay in full
all such indebtedness or (B) obtain the requisite consents, if
any under such indebtedness required to permit the repurchase of
Convertible Preferred Stock required by this paragraph (9).
Until the requirements of the immediately preceding sentence are
satisfied, the Corporation shall not make, and shall not be
obligated to make, any Change of Control Offer.

"Change of Control" means the occurrence of one or more of
the following events: (i) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions)
of all or substantially all of the assets of the Corporation to
any person or group of related Persons for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended (a
"Group"), other than to Hicks Muse or any of its affiliates,
officers and directors or to Steven Dinetz (the "Permitted
Holders"); or (ii) a majority of the Board of Directors of the
Corporation shall consist of Persons who are not Continuing
Directors; or (iii) the acquisition by any Person or Group (other
than the Permitted Holders) of the power, directly or indirectly,
to vote or direct the voting of securities having more than 50%
of the ordinary voting power for the election of directors of the
Corporation.

"Continuing Director" means, as of the date of
determination, any Person who (i) was a member of the Board of
Directors of the Corporation on January 23, 1997, (ii) was
nominated for election or elected to the Board of Directors of
the Corporation with the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors
at the time of such nomination or election, or (iii) is a
representative of a Permitted Holder.

"Person" means an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or
joint venture, or a governmental agency or political subdivision
thereof.

10. Mandatory Redemption. The shares of the Convertible
--------------------
Preferred Stock are not subject to mandatory

<PAGE>

redemption or sinking fund requirements.

11. Certain Definitions. As used in this Certificate, the
-------------------
following terms shall have the following terms shall have the
following respective meanings:

"Common Shares" shall mean any stock of the Corporation
-------------
which has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation and which is not subject to
redemption by the Corporation. Unless the context otherwise specifies
or requires, all references in this certificate to "Common Shares"
include the Common Stock.

<PAGE>

IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be duly executed on its behalf by its undersigned duly
authorized officer this 23rd day of January, 1997.

CHANCELLOR BROADCASTING COMPANY

By: /s/ JACQUES D. KERREST
-------------------------------------
Name: Jacques D. Kerrest
Title: Senior Vice President
and Chief Financial
Officer

<PAGE>

EXHIBIT 4.2

<PAGE>

______________________________________________________________________

----------------------------------------------------------------------

REGISTRATION RIGHTS AGREEMENT

Dated as of January 23, 1997

Among

CHANCELLOR BROADCASTING COMPANY
as Issuer

and

SMITH BARNEY INC.,
ALEX. BROWN & SONS INCORPORATED
BT SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
as Initial Purchasers

----------------------------------------------------------------------

<PAGE>

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is
---------
dated as of January 23, 1997 among Chancellor Broadcasting Company, a
Delaware corporation (the "Company"), and Smith Barney Inc., Alex.
-------
Brown & Sons Incorporated, BT Securities Corporation, Credit Suisse
First Boston Corporation and Goldman, Sachs & Co. (the "Initial
-------
Purchasers").
----------
This Agreement is entered into in connection with the
Purchase Agreement, dated as of January 17, 1997, among the Company
and the Initial Purchasers (the "Purchase Agreement"), which provides
------------------
for the purchase by the Initial Purchasers of 2,000,000 shares (the
"Firm Shares") of 7% Convertible Preferred Stock with a liquidation
-----------
preference of $50.00 per share (the "Preferred Stock") of the Company
---------------
and, upon the terms and conditions set forth in the Purchase
Agreement, up to an additional 300,000 shares (the "Additional
----------
Shares") of Preferred Stock. The Firm Shares and the Additional
------
Shares are hereinafter collectively referred to as the "Shares." In
------
order to induce the Initial Purchasers to enter into the Purchase
Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement for the benefit of the Initial Purchasers
and their direct and indirect transferees and assigns. The execution
and delivery of this Agreement is a condition to the obligations of
the Initial Purchasers set forth in the Purchase Agreement. All
defined terms used but not defined herein shall have the meanings
ascribed to them in the Purchase Agreement.

The parties hereby agree as follows:

SECTION 1. DEFINITIONS

As used in this Agreement, the following capitalized
terms shall have the following meanings:

Act: The Securities Act of 1933, as amended and the
---
rules and regulations of the Commission promulgated thereunder.

Advice: See Section 5 hereof.
------
Agreement: See the introductory paragraphs hereto.
---------
Certificate of Designation: The Certificate of
--------------------------
Designation governing the Preferred Stock as filed with the

<PAGE>

Secretary of State of the State of Delaware, as amended from time to
time.

Closing Date: The Closing Date as defined in the
------------
Purchase Agreement.

Commission: The Securities and Exchange Commission.
----------
Common Stock: The Class A Common Stock, par value $.01
------------
per share, of the Company.

Company: See the introductory paragraphs hereto.
-------
Damages Payment Date: With respect to the Shares or the
--------------------
Common Stock, as applicable, each Dividend Payment Date.

Dividend Payment Date: The record date for each dividend
---------------------
payment with respect to the Shares or the Common Stock, as applicable,
fixed by the Board of Directors of the Company.

Effectiveness Date: The date on which the Shelf
------------------
Registration Statement is declared effective by the Commission under
the Act.

Effectiveness Target Date: See Section 4 hereof.
-------------------------
Exchange Act: The Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations of the Commission promulgated
thereunder.

Exempt Resales: Offers and sales of the Shares purchased
--------------
by the Purchasers pursuant to the Purchase Agreement on the terms and
in the manner set forth in the Offering Memorandum (i) to persons whom
the Initial Purchasers reasonably believe to be qualified
institutional buyers as defined under Rule 144A under the Act, as such
rule may be amended from time to time ("Rule 144A"), in transactions
---------
under Rule 144A, (ii) to a limited number of "accredited investors"
(as defined in Rule 501(a)(1), (2), (3), or (7) under the Act that are
institutional investors and (iii) to certain persons in offshore
transactions in reliance upon Regulation S under the Act.

Holder: See Section 2(b) hereof.
------

Initial Purchasers: See the introductory paragraphs
------------------
hereto.

<PAGE>

Issue Date: The date on which the Shares were sold by
----------
the Company to the Initial Purchasers pursuant to the Purchase
Agreement.

NASD: The National Association of Securities Dealers,
----
Inc.

Offering Memorandum: The Offering Memorandum, dated
-------------------
January [ ], 1997, and all supplements thereto, relating to the Shares
and prepared by the Company pursuant to the Purchase Agreement.

Outstanding Registration Rights Agreements: means (i) the
------------------------------------------
Amended and Restated Stockholders Agreement, dated as of February 14,
1996, (ii) the Registration Rights Agreement, dated as of October 12,
1994, (iii) the Registration Rights granted pursuant to the Securities
Purchase Agreement, dated as of February 13, 1996, and (iv) the
Registration Rights Agreement to be entered into in connection with
the OmniAmerica Acquisition.

Person: An individual, partnership, corporation, limited
------
liability company, joint venture, trust or unincorporated
organization, or a government or agency or political subdivision
thereof.

Preliminary Prospectus: See Section 3(f) hereof.
----------------------
Prospectus: The prospectus included in the Shelf
----------
Registration Statement, as amended or supplemented by any Prospectus
Supplement with respect to the terms of the offering of any portion of
the Transfer Restricted Securities (as defined herein) covered by the
Shelf Registration Statement and by all other amendments and
supplements to such prospectus, including any prospectus included in
any post-effective amendments to the Shelf Registration Statement, and
all material which may be incorporated by reference into such
prospectus.

Prospectus Supplement: See Section 5(b) hereof.
---------------------
Purchase Agreement: See the introductory paragraphs
------------------
hereto.

Record Holder: (i) With respect to any Damages Payment
-------------
Date relating to the Shares constituting Transfer Restricted
Securities, each Person who is registered on the books of the Transfer
Agent as the holder of Shares on the record date with respect to the
Dividend Payment Date on which such Damages

<PAGE>

Payment Date shall occur and (ii) with respect to any Damages Payment
Date relating to the Common Stock constituting Transfer Restricted
Securities, each Person who is a holder of record of such Common Stock
on the record date with respect to the Dividend Payment Date on which
such Damages Payment Date shall occur.

Registration Expenses: See Section 6(a) hereof.
---------------------
Shares: The Firm Shares and the Additional Shares,
------
collectively.

Shelf Registration Statement: See Section 3(a) hereof.
----------------------------
Suspension Period: See Section 3(a) hereof.
-----------------
Transfer Restricted Securities: Each Share and
------------------------------
underlying share of Common Stock until the date on which (i) such
Share or share of Common Stock has been effectively registered under
the Securities Act and disposed of in accordance with the Shelf
Registration Statement, (ii) such Share or underlying share of Common
Stock is distributed to the public pursuant to Rule 144 under the
Securities Act or (iii) the date on which such Share or share of
Common Stock may be sold or transferred pursuant to Rule 144(k) (or
any similar provisions then in force).

Underwriter: Any underwriter, placement agent, selling
-----------
broker, dealer manager, qualified independent underwriter or similar
securities industry professional.

Underwritten Registration or Underwritten Offering: An
--------------------------------------------------
offering in which securities of the Company are sold to an
Underwriter or with the assistance of such Underwriter for reoffering
to the public on a firm commitment basis.

SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT

(a) Transfer Restricted Securities. The securities
------------------------------
entitled to the benefits of this Agreement are the Transfer Restricted
Securities.

(b) Holders of Transfer Restricted Securities. A Person
-----------------------------------------
is deemed to be a holder of Transfer Restricted Securities (each, a
"Holder") whenever such Person owns of record Transfer Restricted
Securities.
------

<PAGE>

SECTION 3. SHELF REGISTRATION

(a) The Company shall use its reasonable best efforts to
cause to be filed with the Commission on or prior to 90 days after the
Issue Date, a shelf registration statement pursuant to Rule 415 under
the Act (as may then be amended) (the "Shelf Registration Statement")
----------------------------
on Form S-1 or Form S-3, if the use of such form is then available and
as determined by the Company, to cover resales of Transfer Restricted
Securities by the Holders thereof in accordance with Section 3(e).
The Company shall use its reasonable best efforts to cause such Shelf
Registration Statement to be declared effective by the Commission on
or prior to 180 days after the Issue Date. The Company shall use its
reasonable best efforts to keep such Shelf Registration Statement
continuously effective for a period ending three years from the
effective date thereof or such shorter period that will terminate when
each of the Transfer Restricted Securities covered by the Shelf
Registration Statement shall cease to be a Transfer Restricted
Security. The Company further agrees to use its reasonable best
efforts to cause the Shelf Registration Statement to be effective and
usable for resale of the Transfer Restricted Securities during the
period that such Shelf Registration Statement is required to be
effective and usable.

Subject to the immediately following paragraph, upon the
occurrence of any event that would cause the Shelf Registration
Statement (i) to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of
the circumstances under which they were made or (ii) to be not
effective and usable for resale of Transfer Restricted Securities
during the period that such Shelf Registration Statement is required
to be effective and usable, the Company shall as promptly as
practicable file an amendment to the Shelf Registration Statement, in
the case of clause (i), correcting any such misstatement or omission,
and in the case of either clause (i) or (ii), use its reasonable best
efforts to cause such amendment to be declared effective and such
Shelf Registration Statement to become usable as soon as practicable
thereafter.

Notwithstanding anything to the contrary in this Section
3, subject to compliance with Sections 4 and 5(b), if applicable, the
Company may prohibit offers and sales of Transfer Restricted
Securities pursuant to the Shelf Registration Statement at any time if
(A)(i) it is in possession of material non-public information, (ii)
the Board of Directors of the

<PAGE>

Company determines (based on advice of counsel) that such prohibition
is necessary in order to avoid a requirement to disclose such material
non-public information and (iii) the Board of Directors of the Company
determines in good faith that disclosure of such material non-public
information would not be in the best interests of the Company and its
shareholders or (B) the Company has made a public announcement
relating to an acquisition or business combination transaction
including the Company and/or one or more of its subsidiaries (i) that
is material to the Company and its subsidiaries taken as a whole and
(ii) the Board of Directors of the Company determines in good faith
that offers and sales of Transfer Restricted Securities pursuant to
the Shelf Registration Statement prior to the consummation of such
transaction (or such earlier date as the Board of Directors shall
determine) is not in the best interests of the Company and its
shareholders or that it would be impracticable at the time to obtain
any financial statements relating to such acquisition or business
combination transaction that would be required to be set forth in the
Shelf Registration Statement (the period during which any such
prohibition of offers and sales of Transfer Restricted Securities
pursuant to the Shelf Registration Statement is in effect pursuant to
clause (A) or (B) of this subparagraph (a) is referred to herein as a
"Suspension Period"). A Suspension Period shall commence on and
-----------------
include the date on which the Company provides written notice to
Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement that offers and sales of Transfer Restricted
Securities cannot be made thereunder in accordance with this Section 3
and shall end on the date on which each Holder of Transfer Restricted
Securities covered by the Shelf Registration Statement either receives
copies of a Prospectus Supplement contemplated by Section 5(b) or is
advised in writing by the Company that offers and sales of Transfer
Restricted Securities pursuant to the Shelf Registration Statement and
use of the Prospectus may be resumed; provided, however, that the
-------- -------
Suspension Period shall in no event be longer than 60 days in the
aggregate in any of the one-year periods ending on the first, second
or third anniversaries of the Issue Date, or longer than 30 days in
the aggregate in any calendar quarter within any one-year period.

(b) None of the Company nor any of its securityholders
(other than the Holders of Transfer Restricted Securities in such
capacity, other shareholders having registration rights permitting
them to participate therein, as disclosed in the Offering Memorandum
and shareholders entitled to the benefits of the Other Registration
Rights Agreements) shall have the right to include any of the
Company's securities in the

<PAGE>

Shelf Registration Statement.

(c) If the Holders of a majority of the Transfer
Restricted Securities outstanding as of the Closing Date so elect
(with holders of Common Stock constituting Transfer Restricted
Securities being deemed to be Holders of the number of Shares
converted by them into such Common Stock for purposes of such
calculation), an offering of Transfer Restricted Securities pursuant
to the Shelf Registration Statement may be effected in the form of an
Underwritten Offering; provided, however, that notwithstanding
-------- -------
anything contained in this Agreement to the contrary, the Company
shall not be required to undertake more than one such Underwritten
Offering during any consecutive 12-month period. The Holders of the
Transfer Restricted Securities to be registered shall pay all
underwriting discounts and commissions of such Underwriters and the
fees and expenses of any counsel for the Holders.

(d) If any of the Transfer Restricted Securities covered
by the Shelf Registration Statement are to be sold in an Underwritten
Offering, the Underwriter(s) that will administer the offering will be
selected by the Company and shall be a nationally recognized
investment bank(s) reasonably satisfactory to the Holders of a
majority of the outstanding Transfer Restricted Securities (with
holders of Common Stock constituting Transfer Restricted Securities
being deemed to be Holders of the number of Shares converted by them
into such Common Stock for purposes of such calculation).

(e) The Company will mail only one request (the
"Request") for information for use in connection with any Shelf
Registration Statement or Prospectus or Preliminary Prospectus
included therein to Holders of the Transfer Restricted Securities as
of the close of business on a business day selected by the Company to
be no more than three business days prior to the date the Request is
mailed. No Holder of Transfer Restricted Securities may include any
of its Transfer Restricted Securities in the Shelf Registration
Statement pursuant to this Agreement, unless (i) such Holder furnishes
to the Company in writing, within 10 business days after the Request
is mailed, the information requested therein, including the identity
of the beneficial owner for whom any Holder may be acting as nominee,
or (ii) follows the procedure set forth in Section 5(c) hereof.

SECTION 4. LIQUIDATED DAMAGES

(a)If (i) the Shelf Registration Statement is not

<PAGE>

filed with the Commission on or prior to 90 days after the Issue Date,
(ii) the Shelf Registration Statement has not been declared effective
by the Commission within 180 days after the Issue Date, or (iii) the
Shelf Registration Statement is filed and declared effective but shall
thereafter cease to be effective (without being succeeded immediately
by an additional registration statement filed and declared effective)
or usable for resale for a period of time (including any Suspension
Period) which shall exceed 60 days in the aggregate in any of the
one-year periods ending on the first, second or third anniversaries of
the Issue Date, (each such event referred to in clauses (i) through
(iii), a "Registration Default"), the Company will pay liquidated
--------------------
damages to each Holder of Transfer Restricted Securities who has
complied with such Holder's obligations under this Agreement. The
amount of liquidated damages payable during any period during which a
Registration Default shall have occurred and be continuing will accrue
at a rate per annum which is equal to $2.50 per $1,000 liquidation
preference of Preferred Stock or $2.50 per 30.4 shares of Common stock
(subject to adjustment in the event of stock splits, stock
recombinations, stock dividends and the like) constituting Transfer
Restricted Securities to and including the 90th day following such
Registration Default and $5.00 per $1,000 liquidation preference of
Preferred Stock or $5.00 per 30.4 shares of Common Stock (subject to
adjustment as set forth above) constituting Transfer Restricted
Securities from and after the 91st day following such Registration
Default. All accrued liquidated damages shall be paid to Record
Holders by wire transfer of immediately available funds (if such
Record Holders shall have provided wire transfer instructions to the
transfer agent for the Preferred Stock and to the Company) or by
federal funds check by the Company on the next succeeding Damages
Payment Date. Following the cure of a Registration Default,
liquidated damages will cease to accrue with respect to such
Registration Default.

All of the Company's obligations set forth in the
preceding paragraph which are outstanding with respect to any Transfer
Restricted Security shall cease at the time such security ceases to be
a Transfer Restricted Security.

The parties hereto agree that the liquidated damages
provided in this Section 4 constitute a reasonable estimate of the
damages that will be incurred by Holders of Transfer Restricted
Securities by reason of the failure of the Shelf Registration
Statement to be filed, declared effective or to remain effective, as
the case may be, and shall constitute the sole remedy for a
Registration Default.

<PAGE>

SECTION 5. REGISTRATION PROCEDURES

In connection with the Shelf Registration Statement, the
Company will use its reasonable best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution or disposition thereof, and pursuant thereto the Company
will:

(a) on or prior to the date 90 days after the Issue
Date, prepare and file with the Commission a Shelf Registration
Statement relating to the registration on Form S-1 or Form S-3, if the
use of such form is then available and as determined by the Company,
for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution thereof and shall
include all financial statements required to be included or
incorporated by reference therein; use its reasonable best efforts to
cause such Shelf Registration Statement to become effective and
approved by such governmental agencies or authorities as may be
necessary to enable the selling Holders to consummate the disposition
of such Transfer Restricted Securities in the manner specified in the
Shelf Registration Statement; provided, however, that the Company
-------- -------
will, on the same day as Requests are mailed, mail to the Initial
Purchasers and to Holders of Transfer Restricted Securities to which
Requests are sent copies of the Shelf Registration Statement, as filed
with the Commission (except that the Company shall not be required to
furnish any exhibits to such documents including those incorporated by
reference, unless so requested by an Initial Purchaser or Holder in
writing), and the Company will not permit the Shelf Registration
Statement to be declared effective if (i) the Initial Purchasers shall
reasonably object or (ii) if the Holders of a majority of the
outstanding Transfer Restricted Securities shall reasonably object
(with holders of Common Stock constituting Transfer Restricted
Securities being deemed to be Holders of the number of Shares
converted by them into such Common Stock for purposes of such
calculation), in each such case within fifteen business days after the
mailing of the Shelf Registration Statement. A Holder shall be deemed
to have reasonably objected if the Shelf Registration Statement or
Prospectus contains any untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading which misstatement or
omission is specifically identified to the Company in writing within
such fifteen business days;

<PAGE>

(b) prepare and file with the Commission such amendments
and post-effective amendments to the Shelf Registration Statement as
may be necessary to keep the Shelf Registration Statement effective
for the applicable period set forth in Section 3(a) hereof; cause the
Prospectus to be supplemented by any required supplement thereto (a
"Prospectus Supplement"), and as so supplemented to be filed pursuant
---------------------
to Rule 424(b) under the Act, and to comply fully with the applicable
provisions of Rule 424(b) under the Act in a timely manner; and comply
with the provisions of the Act with respect to the disposition of all
securities covered by such Shelf Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Shelf
Registration Statement, Prospectus or Prospectus Supplement;

(c) if requested by the Holders of Transfer Restricted
Securities, or, if the Transfer Restricted Securities are being sold
in an Underwritten Offering, the Underwriter(s) of such Underwritten
Offering, promptly incorporate in the Prospectus, any Prospectus
Supplement or post-effective amendment to the Shelf Registration
Statement such information as the Underwriters and/or the Holders of
Transfer Restricted Securities being sold agree should be included
therein relating to the plan of distribution of the Transfer
Restricted Securities, including, without limitation, information with
respect to the number of Shares and/or the number of shares of Common
Stock being sold by the Holders, the purchase price being paid
therefor and any other terms with respect to the offering of the
Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus, Prospectus Supplement or
post-effective amendment as soon as practicable after the Company is
notified of the matters to be incorporated in such Prospectus,
Prospectus Supplement or post-effective amendment;

(d) advise the Initial Purchasers promptly and, if
requested, confirm such advice in writing, (i) when the Prospectus or
any Prospectus Supplement or post-effective amendment to the Shelf
Registration Statement has been filed, and, with respect to the Shelf
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (ii) of any request by the Commission
for an amendment of or supplement to the Shelf Registration Statement,
any Preliminary Prospectus, or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or of
the suspension of qualification of the Transfer

<PAGE>

Restricted Securities for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iv) if at any time
the representations and warranties of the Company contemplated by
paragraph (l)(i) below cease to be true and correct in all material
respects, and (v) or of the happening of any event, including the
filing of any information, documents or reports pursuant to the
Exchange Act, that makes any statement made in the Shelf Registration
Statement or the Prospectus (as then amended or supplemented) untrue
or which requires the making of any additions to or changes in the
Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or
the regulations thereunder to be stated therein or necessary in order
to make the statements therein not misleading, or of the necessity to
amend or supplement the Prospectus (as then amended or supplemented)
to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of
the Shelf Registration Statement, or any state securities commission
or other regulatory authority shall issue an order suspending the
qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the
Company shall use its commercially reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;

(e) furnish to each Holder (upon request in writing) and
each of the Initial Purchasers, if any, without charge, at least one
copy of the Shelf Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (excluding exhibits
to documents incorporated by reference therein unless requested by
such Holder or Initial Purchaser);

(f) deliver to each selling Holder and each of the
Initial Purchasers, without charge, as many copies of any Preliminary
Prospectus and the Prospectus and any amendments or supplements
thereto as such Persons may reasonably request; the Company consents
to the use of any Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto by each of the selling Holders and
each of the Underwriter(s), if any, in connection with the public
offering and the sale of the Transfer Restricted Securities covered by
any Preliminary Prospectus and the Prospectus or any amendments or
supplements thereto in the manner specified therein;

(g) prior to any public offering of Transfer

<PAGE>

Restricted Securities, cooperate with the selling Holders, the
Underwriter(s), if any, and their respective counsel in connection
with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions
as the selling Holders or Underwriter(s) may reasonably request and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdiction of the Transfer Restricted Securities
in the manner specified in the Shelf Registration Statement; provided,
--------
however, that the Company shall not be required (i) to register or
-------
qualify as a foreign corporation where it is not now so qualified or
(ii) to take any action that would subject it to the service of
process in suits, other than as to matters and transactions relating
to the Shelf Registration Statement, in any jurisdiction where it is
not now so subject;

(h) cooperate with the selling Holders and the
Underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities
to be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the Underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities;

(i) use its reasonable best efforts to cause the
Transfer Restricted Securities covered by the Shelf Registration
Statement to be registered with or approved by such other governmental
agencies or authorities as may be reasonably necessary to enable the
seller or sellers thereof or the Underwriter(s), if any, to consummate
the disposition of such Transfer Restricted Securities, subject to the
provisos contained in clause (g) above;

(j) if any fact or event contemplated by clause (d)(v)
above shall exist or have occurred, prepare a post-effective amendment
or supplement to the Shelf Registration Statement or related
Prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not misleading,
in light of the circumstances under which they are made;

(k) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of the

<PAGE>

Shelf Registration Statement and provide the transfer agent for the
Common Stock with printed certificates for the Transfer Restricted
Securities which are in a form eligible for deposit with The
Depository Trust Company;

(l) enter into such agreements (including an
underwriting agreement reasonably acceptable to the Company) and take
all such other actions in connection therewith as may reasonably be
required in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to the Shelf Registration
Agreement in connection with an Underwritten Registration, which shall
include (i) making such representations and warranties to the Holders
and the Underwriter(s), in form, substance and scope as they may
reasonably request and as are customarily made by issuers to
Underwriters in primary Underwritten Offerings and covering matters,
including, but not limited to, those set forth in the Purchase
Agreement; (ii) obtaining opinions of counsel for the Company and
updates thereof in customary form and covering matters reasonably
requested by the Underwriter(s) of the type customarily covered in
legal opinions to Underwriters in connection with primary Underwritten
Offerings addressed to the Underwriter requesting the same and
covering the matters as may be reasonably requested by such Holders
and Underwriters; (iii) obtaining "cold comfort" letters and updates
thereof from the Company's independent certified public accountants,
and the independent certified public accountants of any other
corporation or person ("Other Companies") with respect to which
---------------
audited financial statements are required to be included or
incorporated by reference in the Shelf Registration Statement,
addressed to the Underwriters requesting the same, such letters to be
in customary form and covering matters of the type customarily covered
in "cold comfort" letters to Underwriters in connection with primary
Underwritten Offerings; and (iv) delivering such documents and
certificates as may be reasonably requested by the Holders of the
Transfer Restricted Securities being sold or the Underwriter(s) of
such Underwritten Offering to evidence compliance with clause (i)
above and with any customary conditions contained in the underwriting
agreement entered into by the Company pursuant to this clause (l).
The above shall be done at or prior to each closing under such
underwriting agreement, as and to the extent required thereunder;

(m) make available at reasonable times and in a
reasonable manner for inspection by a representative of the Holders of
the Transfer Restricted Securities, any Underwriter participating in
any disposition pursuant to such Shelf

<PAGE>

Registration Statement and any attorney or accountant retained by such
selling Holders or any of the Underwriters all relevant financial and
other records, pertinent corporate documents and properties of the
Company and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Holder,
Underwriter, attorney or accountant in connection with such Shelf
Registration Statement prior to its effectiveness; provided, however,
-------- -------
that such representatives, attorneys or accountants shall agree to
keep confidential (which agreement shall be confirmed in writing in
advance to the Company if the Company shall so request) all
information, records or documents made available to such persons which
are not otherwise available to the general public unless disclosure of
such records, information or documents is required by court or
administrative order (of which the Company shall have been given prior
notice and an opportunity to defend) after the exhaustion of all
appeals therefrom, and to use such information obtained pursuant to
this provision only in connection with the transaction for which such
information was obtained, and not for any other purpose.

(n) otherwise use its commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission,
and make generally available to its security holders, as soon as
practicable, a consolidated earnings statement, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of
the Act, for the twelve-month period (i) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
Underwriters in a firm commitment Underwritten Offering or (ii) if not
sold to Underwriters in such an offering, beginning with the first
month of the Company's first fiscal quarter commencing after the
effective date of the Shelf Registration Statement;

(o) cause all Common Stock issuable upon conversion of
the Preferred Stock to be accepted for listing, subject to official
notice of issuance, on each securities exchange or quotation system on
which similar securities issued by the Company have been listed by the
Company; and

(p) cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any Underwriter (including any "qualified independent
underwriter" that is required to be retained in accordance with the
rules and regulations of the NASD).

Each Holder whose securities are covered by any

<PAGE>

Shelf Registration Statement agrees to furnish promptly to the Company
all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not
materially misleading or necessary to cause such Shelf Registration
Statement not to omit a material fact with respect to such Holder
necessary in order to make the statements therein not misleading.

Each Holder agrees by acquisition of such Transfer
Restricted Securities that, upon receipt of any notice from the
Company of the existence of any fact of the kind described in Section
5(d)(v) hereof, such Holder will forthwith discontinue disposition of
Transfer Restricted Securities until such Holder's receipt of the
copies of the supplemented or amended Prospectus contemplated by
Section 5(j) hereof, or until it is advised in writing (the "Advice")
------
by the Company that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings with respect
to the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other
than permanent file copies then in such Holder's possession, of the
Prospectus covering such Transfer Restricted Securities current at the
time of receipt of such notice. In the event the Company shall give
any such notice, the time period regarding the effectiveness of the
Shelf Registration Statement set forth in Section 3(a) hereof shall be
extended (but not beyond the date on which there no longer are
Transfer Restricted Securities) by the number of days during the
period from and including the date of the giving of such notice
pursuant to Section 5(d)(v) hereof to and including the date when each
selling Holder covered by such Shelf Registration Statement shall have
received the copies of the supplemented or amended Prospectus
contemplated by Section 5(j) hereof or shall have received the Advice.

SECTION 6. REGISTRATION EXPENSES

(a) Except as set forth in Section 6(b) hereof, all
expenses incident to the Company's performance of or compliance with
this Agreement (the "Registration Expenses") will be borne by the
---------------------
Company, regardless of whether a Shelf Registration Statement becomes
effective, including without limitation:

(i) all registration and filing fees and expenses
(including filings made with the NASD);

<PAGE>

(ii) reasonable fees and expenses of compliance with
federal securities or state blue sky laws;

(iii) expenses of printing (including, without limitation,
expenses of printing or engraving certificates for the Transfer
Restricted Securities in a form eligible for deposit with Depository
Trust Company and of printing the Prospectus and any Preliminary
Prospectus), messenger and delivery services and telephone;

(iv) fees and disbursements of counsel for the Company;

(v) fees and disbursements of all independent certified
public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incidental to
the preparation and filing of a Shelf Registration Statement and
Prospectus and the disposition of Transfer Restricted Securities); and

(vi) fees and expenses of listing the Transfer Restricted
Securities on any securities exchange or quotation system in
accordance with Section 5(p) hereof.

The Company will, in any event, bear its internal
expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the
expense of any annual audit, rating agency fees and the fees and
expenses of any person, including special experts, retained by the
Company.

(b) The Holders of Transfer Restricted Securities shall
bear the expense of any broker's commission or Underwriter's discount
or commission and the fees and expenses of any counsel for the
Holders. In addition, each Holder of Transfer Restricted Securities
shall pay all Registration Expenses to the extent required by
applicable law. Notwithstanding anything herein to the contrary, the
Company shall not be responsible for fees and expenses of counsel to
any Underwriter(s), whether in connection with the Shelf Registration
Statement, NASD matters or otherwise, except to the extent
specifically agreed in any underwriting agreement for an Underwritten
Offering.

SECTION 7. INDEMNIFICATION

<PAGE>

(a)(i) The Company agrees to indemnify and hold harmless
(i) each of the Initial Purchasers, (ii) each Holder, and (iii) each
person, if any, who controls any of the Initial Purchasers or any
Holder within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act (any person referred to in clause (i), (ii) or (iii)
may hereinafter be referred to as a Non-Company Indemnitee), from and
against any and all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) arising out of or based
upon any untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus or in the Shelf
Registration Statement or the Prospectus or in any amendment or
supplement thereto, or arising out of or based upon 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 any Preliminary Prospectus or the Prospectus, in light of the
circumstances in which such statements were made) not misleading,
except insofar as such losses, claims, damages, liabilities or
expenses arise out of or are based upon any untrue statement or
omission or alleged untrue statement or omission which has been made
therein or omitted therefrom in reliance upon and in conformity with
the information relating to any Non-Company Indemnitee expressly for
use in connection therewith; provided, however, that the
-------- -------
indemnification contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any
Non-Company Indemnitee on account of any such loss, claim, damage,
liability or expense arising from the sale of the Transfer Restricted
Securities by such Non-Company Indemnitee to any person, at or prior
to the written confirmation of such sale, and the untrue statement or
alleged untrue statement or omission or alleged omission of a material
fact contained in such Preliminary Prospectus was corrected in the
Prospectus; provided that the Company has delivered the Prospectus to
--------
such Non-Company Indemnitee in requisite quantity on a timely basis to
permit such delivery or sending. The foregoing indemnity agreement
shall be in addition to any liability which the Company may otherwise
have.

(b) If any action, suit or proceeding shall be brought
against any Non-Company Indemnitee, such Non-Company Indemnitee shall
promptly notify the parties against whom indemnification is being
sought (the "indemnifying parties"), and such indemnifying parties
--------------------
shall assume the defense thereof, including the employment of counsel
and payment of all fees and expenses. Such Non-Company Indemnitee
shall have the right to employ separate counsel in any such action,
suit or proceeding and to participate in the defense thereof, but the
fees and

<PAGE>

expenses of such counsel shall be at the expense of such Non-Company
Indemnitee unless (i) the indemnifying parties have agreed in writing
to pay such fees and expenses, (ii) the indemnifying parties have
failed to assume the defense and employ counsel, or (iii) the named
parties to any such action, suit or proceeding (including any
impleaded parties) include both such Non-Company Indemnitee and the
indemnifying parties and such Non-Company Indemnitee shall have been
advised by its counsel that representation of such indemnified party
and any indemnifying parties by the same counsel would be
inappropriate under applicable standards of professional conduct
(whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them
(in which case the indemnifying parties shall not have the right to
assume the defense of such action, suit or proceeding on behalf of
such Non-Company Indemnitee). It is understood, however, that the
indemnifying parties shall, in connection with any one such action,
suit or proceeding or separate but substantially similar or related
actions, suits or proceedings in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the
reasonable fees and expenses of only one separate firm of attorneys
(in addition to any local counsel) at any time for all such Non-
Company Indemnities not having actual or potential differing interests
with you or among themselves, which firm shall be designated in
writing by Smith Barney Inc., and that all such fees and expenses
shall be reimbursed on a monthly basis. The indemnifying parties
shall not be liable for any settlement of any such action, suit or
proceeding effected without their written consent, but if settled with
such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the indemnifying
parties agree to indemnify and hold harmless any Non-Company
Indemnitee, to the extent provided in paragraph (a) hereof, from and
against any loss, claim, damage, liability or expense by reason of
such settlement or judgment.

(c) Each Holder agrees to indemnify and hold harmless
(i) the Company, (ii) each of the Initial Purchasers, (iii) each
other Holder, (iv) any person controlling (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act) the Company,
the Initial Purchasers and each other Holder and (v) the respective
directors, officers, employees, representatives, and agents of each of
the parties referred to in clauses (i), (ii), (iii) and (iv), to the
same extent as the foregoing indemnity from the Company to each Non-
Company Indemnitee set forth in paragraph (a) hereof, but only with
respect to information relating to such Holder furnished in

<PAGE>

writing by or on behalf of such Holder expressly for use in the
Registration Statement, the Prospectus or any Preliminary Prospectus,
or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors,
any such officer, or any such controlling person based on the
Registration Statement, the Prospectus or any Preliminary Prospectus,
or any amendment or supplement thereto, and in respect of which
indemnity may be sought against any Holder pursuant to this
paragraph (c), such Holder shall have the rights and duties given to
the Company by paragraph (b) above (except that if the Company shall
have assumed the defense thereof such Holder shall not be required to
do so, but may employ separate counsel therein and participate in the
defense thereof, but the fees and expenses of such counsel shall be at
such Holder's expense), and the Company, its directors, any such
officer, and any such controlling person, shall have the rights and
duties given to the Holders by paragraph (b) above. The foregoing
indemnity agreement shall be in addition to any liability which the
Holder may otherwise have.

(d) If the indemnification provided for in this
Section 7 is unenforceable although available by its terms to an
indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein,
then an 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, claims, damages,
liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party, on the one hand,
and the indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as other relevant equitable
considerations. The relative fault of the indemnifying party, on the
one hand, and the indemnified party, on the other hand, shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the indemnifying party, on the one hand, or the indemnified party, on
the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.

(e) The Company, each of the Initial Purchasers and each
Holder of Transfer Restricted Securities agree that it would not be
just and equitable if contribution pursuant to this Section 7 were
determined by a pro rata allocation or by any

<PAGE>

other method of allocation that does not take account of the equitable
considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims,
damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating any claim or
defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, no Holder shall be required to
contribute any amount in excess of the amount by which the total
amount received by such Holder with respect to the sale of Transfer
Restricted Securities exceeds the sum of (A) the amount paid by such
Holder for such Shares plus (B) the amount of any damages which such
Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 7 are
several in proportion to the respective liquidation preference of
Preferred Stock held by each of the Holders hereunder (or, if such
Preferred Stock has been converted, the liquidation preference of the
shares of Preferred Stock so converted) and not joint.

(g) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or
contribution under this Section 7 shall be paid by the indemnifying
party to the indemnified party on a monthly basis. The indemnity and
contribution agreements contained in this Section 7 and any
representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any
Initial Purchaser or any person controlling any Initial Purchaser, any
Holder, the Company, its directors or officers or any person

<PAGE>

controlling the Company, and (ii) any termination of this Agreement.
A successor to any Initial Purchaser, or any person controlling any
Initial Purchaser, or to any Holder, or to the Company, its directors
or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 7.

SECTION 8. RULE 144A

The Company hereby agrees with each Holder, for so long
as any of the Shares or shares of Common Stock that are Transfer
Restricted Securities remain outstanding and during any such period in
which the Company is not subject to Section 13 or 15(d) of the
Exchange Act, to make available to any Initial Purchaser or any
beneficial owner of the Shares or shares of such Common Stock in
connection with any sale thereof and any prospective purchaser of such
Shares or Common Stock from such Initial Purchaser or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in
order

<PAGE>

to permit resales of such Transfer Restricted Securities pursuant to
Rule 144A.

SECTION 9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS

No Holder may participate in any Underwritten Offering
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve
such arrangements, (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other
documents required under the terms of such underwriting arrangements
and (c) furnishes the Company in writing information in accordance
with Section 3(e) and agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration
Statement and any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act to the extent
contemplated by Section 7(c).

SECTION 10. MISCELLANEOUS

(a) Remedies. Each Initial Purchaser and Holder of
--------
Transfer Restricted Securities agrees that the liquidated damages
provided herein are the sole and exclusive remedy for the breach by
the Company of its obligations hereunder.

(b) No Inconsistent Agreements. The Company will not on
--------------------------
or after the date of this Agreement enter into any agreement with
respect to its securities that is inconsistent with the rights granted
to the Holders of Transfer Restricted Securities in this Agreement or
otherwise conflicts in any material respect with the provisions
hereof. The rights granted to the Holders of Transfer Restricted
Securities hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's
securities under any other agreements, including the Other
Registration Rights Agreements.

(c) Amendments and Waivers. The provisions of this
----------------------
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of a majority of
the outstanding Transfer Restricted Securities affected by

<PAGE>

such amendment, modification, supplement, waiver or departure (with
holders of Common Stock constituting Transfer Restricted Securities
being deemed to be Holders of the number of Shares converted by them
into such Common Stock for purposes of such calculation).
Notwithstanding the foregoing, a waiver or consent to departure from
the provisions hereof that relates exclusively to the rights of
Holders of Transfer Restricted Securities whose securities are being
sold pursuant to such Shelf Registration Statement and that does not
directly or indirectly affect the rights of other Holders of Transfer
Restricted Securities shall be valid only with the written consent of
Holders of at least 66-2/3% of the Transfer Restricted Securities
being sold, in each case calculated in accordance with the provisions
of Section 3(c).

(d) Notices. All notices and other communications
-------
provided for or permitted hereunder shall be made in writing by
hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier guaranteeing
overnight delivery:

(i) if to a Holder of Transfer Restricted Securities, at
the address set forth on the records of the Transfer Agent, with a
copy to the Registrar; and

(ii) if to the Company, at the address as follows:

Chancellor Broadcasting Company
12655 North Central Expressway
Suite 405
Dallas, TX 75243
Facsimile No: (972) 239-6220
Attention: Jacques D. Kerrest

with copies to:

Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, TX 75201-6950
Facsimile No: (214) 746-7777
Attention: Jeremy W. Dickens, Esq.

(iii) if to an Initial Purchaser, at the address as
follows:

<PAGE>

Smith Barney Inc.
Alex Brown & Sons Incorporated
BT Securities Corporation
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
c/o BT Securities Corporation
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No: (212) 250-7200
Attention: Corporate Finance Department

with a copy to

Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Facsimile No: (212) 269-5420
Attention: William M. Hartnett, Esq.

All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if personally
delivered; three business days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when
receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.

(e) Successors and Assigns. This Agreement shall inure
----------------------
to the benefit of and be binding upon the successors and assigns of
each of the parties, including, without limitation, and without the
need for an express assignment, subsequent Holders of Transfer
Restricted Securities; provided, however, that this Agreement shall
-------- -------
not inure to the benefit of or be binding upon a successor or assign
of a Holder of Transfer Restricted Securities unless and to the extent
such successor or assign acquired Transfer Restricted Securities from
such Holder; and provided, further, that nothing herein shall be
--- -------- -------
deemed to permit any assignment, transfer or any disposition of
Transfer Restricted Securities in violation of the terms of the
Purchase Agreement or applicable law. If any transferee of any Holder
shall acquire Transfer Restricted Securities, in any manner, whether
by operation of law or otherwise, such Transfer Restricted Securities
shall be held subject to all of the terms of this Agreement and by
taking and holding such Transfer Restricted Securities such person
shall be conclusively deemed to

<PAGE>

have agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.

(f) Counterparts. This Agreement may be executed in any
------------
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.

(g) Headings. The headings in this Agreement are for
--------
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.

(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS
APPLIED TO CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

(i) Severability. In the event that any one or more of
------------
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.

(j) Entire Agreement. This Agreement together with the
----------------
other Operative Documents (as defined in the Purchase Agreement) is
intended by the parties as a final expression of their agreement and
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 with
respect to the registration rights granted by the Company with respect
to the securities sold pursuant to the Purchase Agreement. This
Agreement supersedes all prior agreements and understandings between
the parties with respect to such subject matter.

<PAGE>

IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.

CHANCELLOR BROADCASTING COMPANY

By: /s/ STEVEN DINETZ
-------------------------------------
Name: Steven Dinetz
Title: President and Chief
Executive Office

SMITH BARNEY INC.

/s/ AUTHORIZED SIGNATORY OF
By: SMITH BARNEY INC.
----------------------------------------

ALEX. BROWN & SONS INCORPORATED

/s/ AUTHORIZED SIGNATORY OF
By: ALEX. BROWN & SONS INCORPORATED
-----------------------------------

BT SECURITIES CORPORATION

/s/ AUTHORIZED SIGNATORY OF
By: BT SECURITIES CORPORATION
-----------------------------------

CREDIT SUISSE FIRST BOSTON CORPORATION

/s/ AUTHORIZED SIGNATORY OF
By: CREDIT SUISSE FIRST BOSTON CORPORATION
-----------------------------------------

GOLDMAN, SACHS & CO.

/s/ AUTHORIZED SIGNATORY OF
By: GOLDMAN, SACHS & CO.
-----------------------------------

<PAGE>

EXHIBIT NO. 99.1

CHANCELLOR BROADCASTING COMPANY COMPLETES
THE ACQUISITION OF 12 RADIO STATIONS FROM
COLFAX COMMUNICATIONS, INC.

DALLAS, TX, January 23, 1997 -- Chancellor Radio Broadcasting
Company, the wholly-owned subsidiary of Chancellor Broadcasting
Company (Nasdaq: CBCA), announced today that it consummated the
previously announced acquisition of 12 radio stations from Colfax
Communications, Inc.

Chancellor Broadcasting Company and Chancellor Radio Broadcasting
Company also announced that they closed their previously announced
private offering of securities. Chancellor Broadcasting Company
issued $100 million of 7% convertible preferred stock convertible at a
price of $32.90 per share into shares of Chancellor's Class A Common
Stock, which is traded in The Nasdaq National Market (Nasdaq: CBCA).
On January 22, 1997, the last reported sale price of the Class A
Common Stock on The Nasdaq National Market was $29.375 per share.
Chancellor Radio Broadcasting Company issued $200 million ($100
million more than previously announced) of 12% Exchangeable Preferred
Stock due 2009.

The proceeds from the sale of the preferred stock offerings,
together with borrowings under Chancellor Radio Broadcasting Company's
new $345 million credit facility were used, in part, to fund the
Colfax acquisition, with the remaining portion to be used to fund the
cash purchase price for the pending Omni acquisition. The Company has
agreed to sell or swap certain of the stations it is acquiring in the
Colfax and Omni transactions. When consummated, those transactions
would generate $92.0 million in net cash proceeds, which Chancellor
Radio Broadcasting will use to reduce its credit agreement borrowings.
The consummation of the pending station swaps and sales are subject to
governmental approvals and, in the case of the sale of the Milwaukee
stations to be acquired from Colfax, the negotiation of definitive
documentation.

Steven Dinetz, Chancellor's President and Chief Executive
Officer, stated, "We are very pleased to announce the completion of
the second largest transaction in the company's history. The addition
of the Colfax stations reflects our strategy of optimizing our station
portfolio by focusing on growing markets where we can develop leading
positions. In Washington D.C., the

<PAGE>

nation's eighth largest market, we will now operate three stations
diversified by audience and exclusive format, two of which rank among
the top-ten adult stations in the market. We will also become the
leading radio broadcaster in Phoenix, one of the nation's fastest
growing major markets, as well as in Minneapolis-St. Paul, an under-
radioed market where revenue and population per station are among the
highest in the country. In all three markets, we will focus on
developing synergies and consolidation savings as a result of the in-
market stations combinations. With the addition of the Colfax
stations and including the close of other recently announced
transactions, we will own and operate 51 stations located in 14 of the
largest markets in the country."

Chancellor Broadcasting was formed in 1993 by Steven Dinetz and
Hicks, Muse, Tate & Furst to pursue acquisitions in the radio
broadcasting industry. Chancellor Broadcasting is one of the leading
pure-play radio broadcasting companies in the United States. Upon
consummation of all pending acquisitions, Chancellor will own and
operate 51 stations in 14 markets, including New York, Los Angeles,
San Francisco, Washington D.C., Atlanta, Minneapolis-St. Paul ,Nassau-
Suffolk (Long Island, New York), Phoenix, Pittsburgh, Denver,
Cincinnati, Sacramento, Orlando and Riverside-San Bernadino
(California). Chancellor Broadcasting Company is listed on The Nasdaq
National Market and trades under the symbol: CBCA.

For more information please contact:
------------------------------------
Chancellor Broadcasting Steve Dinetz (972) 239-6220
Jacques Kerrest

Brainerd Communicators: Chris Plunkett (212) 986-6667
John Buckley

<PAGE>