COX RADIO INC, S-1, 1996-07-24

COX RADIO INC
S-1, 1996-07-24

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON , 1996

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
COX RADIO, INC.
(Exact name of Registrant as specified in its charter)

<TABLE>
<S> <C> <C>
DELAWARE 4832 58-1620022
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>

1400 LAKE HEARN DRIVE
ATLANTA, GEORGIA 30319
(404) 843-5000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
------------------------

MARITZA C. PICHON
CHIEF FINANCIAL OFFICER
COX RADIO, INC.
1400 LAKE HEARN DRIVE
ATLANTA, GEORGIA 30319
(404) 843-5000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:

<TABLE>
<S> <C>
STUART A. SHELDON, ESQ. KRIS F. HEINZELMAN, ESQ.
DOW, LOHNES & ALBERTSON, PLLC CRAVATH, SWAINE & MOORE
1200 NEW HAMPSHIRE AVENUE, N.W. WORLDWIDE PLAZA, 825 EIGHTH AVENUE
WASHINGTON, D.C. 20036-6802 NEW YORK, NEW YORK 10019
(202) 776-2000 (212) 474-1000
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement is declared effective.
------------------------

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
------------------------

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
------------------------

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
------------------------

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
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- ----------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) SHARE(2) PRICE (2) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $1.00 par
value per share.............. shares $ $138,000,000 $47,587
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>

(1) Includes shares of Class A Common Stock deliverable on exercise of an
over-allotment option, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act of 1933, as amended.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2

COX RADIO, INC.

CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(B) OF REGULATION S-K

<TABLE>
<CAPTION>
ITEM
NUMBER CAPTION LOCATION IN PROSPECTUS
- ----------- ---------------------------------------- --------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus.............................. Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus..................... Inside Front and Outside Back Cover Pages
3. Summary Information, Risk Factors....... Prospectus Summary; Risk Factors; Selected
Historical Consolidated Financial Data;
Management's Discussion and Analysis of the
Pro Forma Combined Results of Operations;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of Cox Radio; Management's
Discussion and Analysis of Financial
Condition and Results of Operations of
NewCity
4. Use of Proceeds......................... Prospectus Summary; Use of Proceeds
5. Determination of Offering Price......... Outside Front Cover Page; Underwriting
6. Dilution................................ Dilution
7. Selling Security Holders................ *
8. Plan of Distribution.................... Outside Front Cover Page; Underwriting
9. Description of Securities to be
Registered.............................. Outside Front Cover Page; Prospectus
Summary; Capitalization; Dividend Policy;
Description of Capital Stock; Underwriting
10. Interests of Named Experts and
Counsel................................. *
</TABLE>
<PAGE> 3

<TABLE>
<CAPTION>
ITEM
NUMBER CAPTION LOCATION IN PROSPECTUS
- ----------- ---------------------------------------- --------------------------------------------
<C> <S> <C>
11. Information with Respect to the
Registrant.............................. Outside Front Cover Page; Certain
Definitions and Market and Industry Data;
Prospectus Summary; Risk Factors; Use of
Proceeds; Dividend Policy; Dilution;
Capitalization; Unaudited Pro Forma Combined
Financial Data; Unaudited Pro Forma Combined
Balance Sheet; Unaudited Pro Forma Combined
Statements of Operations; Selected
Historical Consolidated Financial Data;
Management's Discussion and Analysis of the
Pro Forma Combined Results of Operations;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of Cox Radio; Management's
Discussion and Analysis of Financial
Condition and Results of Operations of
NewCity; Business; The NewCity Acquisition;
Management; Security Ownership of Certain
Beneficial Owners; Certain Relationships and
Related Transactions; Description of Capital
Stock; Description of Indebtedness; Shares
Eligible for Future Sale; Underwriting
12. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................. *
</TABLE>

- ---------------
* Omitted from Prospectus because item is inapplicable.
<PAGE> 4

EXPLANATORY NOTE

This Registration Statement contains a preliminary prospectus relating to
the offering of Class A Common Stock of Cox Radio, Inc. in the United States and
Canada (the "U.S. Offering"), together with separate preliminary prospectus
pages relating to a concurrent public offering of Class A Common Stock outside
the United States and Canada (the "International Offering"). The complete
preliminary prospectus for the U.S. Offering follows immediately after this
Explanatory Note. After such preliminary prospectus are the following alternate
pages for the preliminary prospectus for the International Offering: a front
cover page and a back cover page. Each such page has been labeled "Alternate
Page for International Prospectus." All other pages of the preliminary
prospectus for the U.S. Offering are to be used for both the U.S. Offering and
the International Offering.
<PAGE> 5

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

Subject to Completion, dated , 1996

PROSPECTUS

SHARES
COX RADIO, INC. [COX RADIO LOGO]
CLASS A COMMON STOCK
---------------------------
All of the shares of Class A Common Stock, par value $1.00 per share (the
"Class A Common Stock"), offered hereby are being sold by Cox Radio, Inc. ("Cox
Radio" or the "Company"). Of the shares of Class A Common Stock being
offered, shares are being offered initially in the United States and Canada
(the "U.S. Offering") by the U.S. Underwriters and shares are being
concurrently offered outside the United States and Canada (the "International
Offering") by the International Managers (together with the U.S. Underwriters,
the "Underwriters"). The U.S. Offering and the International Offering are
collectively referred to as the "Offerings."

Cox Radio's authorized capital stock includes Class A Common Stock and
Class B Common Stock, par value $1.00 per share (the "Class B Common Stock" and,
together with the Class A Common Stock, the "Common Stock"). Except with respect
to voting and conversion, the rights of holders of Class A Common Stock and
Class B Common Stock are identical. Each share of Class B Common Stock generally
entitles its holder to ten votes, whereas each share of Class A Common Stock
entitles its holder to one vote. Shares of Class B Common Stock are convertible
into shares of Class A Common Stock on a one-for-one basis at the option of the
holder. After giving effect to the sale of Class A Common Stock offered hereby
(assuming that the Underwriters' over-allotment option is not exercised), Cox
Enterprises, Inc. ("CEI") will own approximately % of the outstanding
Common Stock and % of the voting power of the Company. See "Description of
Capital Stock."

Prior to the Offerings, there has been no public market for the Class A
Common Stock. The initial public offering price is expected to be between
$ and $ per share. See "Underwriting" for information relating
to the factors to be considered in determining the initial public offering
price. The initial public offering price and the underwriting discounts and
commissions per share are identical for each of the Offerings. At the request of
Cox Radio, the Underwriters have reserved shares of the Class A Common
Stock for sale at the initial public offering price to certain of Cox Radio's
employees and certain other persons. If such shares are not purchased by such
employees or other persons, they will be offered by the Underwriters to the
public upon the terms and conditions set forth in this Prospectus. See
"Underwriting." Application has been made for listing of the Class A Common
Stock on under the symbol " ."
---------------------------

SEE "RISK FACTORS" COMMENCING ON PAGE 9 HEREIN FOR CERTAIN FACTORS THAT SHOULD
BE CONSIDERED BY PROSPECTIVE INVESTORS.
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
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<S> <C> <C> <C>
Per Share................................................. $ $ $
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Total(3).................................................. $ $ $
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</TABLE>
(1) Cox Radio has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933 (the
"Securities Act"). See "Underwriting."

(2) Before deducting expenses payable by Cox Radio estimated to be $ .

(3) Cox Radio has granted the Underwriters a 30-day option to purchase up to an
aggregate of additional shares of Class A Common Stock on the
same terms and conditions as set forth herein, solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to Public, Underwriting Discounts and Commissions and Proceeds to
Company will be $ , $ and $ , respectively. See
"Underwriting."
---------------------------

The shares of Class A Common Stock offered by this Prospectus are offered
by the U.S. Underwriters subject to prior sale, to withdrawal, cancellation, or
modification of the offer without notice, to delivery to and acceptance by the
U.S. Underwriters and to certain further conditions. It is expected that
delivery of the shares will be made at the offices of Lehman Brothers Inc., New
York, New York, on or about , 1996.
---------------------------
LEHMAN BROTHERS
ALLEN & COMPANY
INCORPORATED
CS FIRST BOSTON
MORGAN STANLEY & CO.
INCORPORATED
, 1996

<PAGE> 6

[STATION LOGOS OR MAP OF STATIONS TO BE SUPPLIED]

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

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

DURING THIS OFFERING, CERTAIN PERSONS AFFILIATED WITH PERSONS PARTICIPATING
IN THE DISTRIBUTION MAY ENGAGE IN TRANSACTIONS FOR THEIR OWN ACCOUNTS OR FOR THE
ACCOUNTS OF OTHERS IN THE CLASS A COMMON STOCK PURSUANT TO EXEMPTIONS FROM RULES
10B-6, 10B-7, AND 10B-8 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
------------------------

i
<PAGE> 7

CERTAIN DEFINITIONS AND MARKET AND INDUSTRY DATA

The terms "broadcast cash flow" and "EBITDA" are referred to in various
places in this Prospectus. Broadcast cash flow consists of operating income plus
depreciation and amortization and corporate general and administrative expenses.
EBITDA consists of operating income plus depreciation and amortization. Although
broadcast cash flow and EBITDA are not measures of performance calculated in
accordance with generally accepted accounting principles ("GAAP"), management
believes that broadcast cash flow is useful to a prospective investor because it
is a measure widely used in the radio broadcasting industry to evaluate a
broadcast company's operating performance and that EBITDA is generally accepted
as providing useful information regarding a company's ability to service and/or
incur debt. Neither broadcast cash flow nor EBITDA should be considered in
isolation or as a substitute for net income, cash flows from operating
activities and other income and cash flow statement data prepared in accordance
with GAAP, or as a measure of liquidity or profitability.

Unless otherwise indicated herein, (i) market ranking by radio advertising
revenue, radio market advertising revenue and radio market advertising data used
to calculate compounded annual growth rate ("CAGR") have been obtained from
Duncan's Radio Market Guide (1996 ed.) ("Duncan's") compiled by Duncan's
American Radio, Inc.; (ii) total industry listener and revenue levels have been
obtained from the Radio Advertising Bureau ("RAB"); (iii) all audience share
data and audience rankings, including ranking by population, except where
specifically stated to the contrary, have been derived from surveys of Adults 25
to 54, listening Monday through Sunday, 6 a.m. to 12 midnight, and are based on
the average of the Fall, Winter, Spring and Summer Market Reports (each an
"Arbitron Market Report") ending in the year presented or the four most recent
Arbitron Market Reports, as reported by Arbitron, Radio Market Reports, Metro or
Target Audience Trends, The Arbitron Company ("Arbitron"); (iv) revenue share
data in each market presented have been obtained from the Miller, Kaplan Market
Revenue Report (published monthly), a publication of Miller, Kaplan, Arase &
Co., Certified Public Accountants ("Miller Kaplan") or The Hungerford Market
Report, a publication of Hungerford, Aldrin, Nichols & Carter Certified Public
Accountants ("Hungerford"); (v) combined radio station group revenue share and
combined radio station group revenue rank in each market presented are estimates
by the Company that have been derived from Miller Kaplan, Duncan's and the
American Radio Guide compiled by Duncan's American Radio, Inc. ("American Radio
Guide") (to management's knowledge, there is no definitive, independent source
for radio station group share and radio station group rank otherwise
available.); (vi) percentage of national and local radio revenues per market
have been obtained from Investing in Radio 1996 Market Report, a publication of
Broadcasting Investor Analysts ("BIA"); and (vii) number of viable stations per
market has been obtained from Duncan's; Duncan's defines "viable stations" as
stations which are active and viable competitors for advertising dollars in the
market. If Duncan's assigned a 1/2 ranking to a viable station, the total number
of viable stations was rounded up to the nearest station. Each of Duncan's, RAB,
Arbitron, Miller Kaplan, Hungerford, BIA and American Radio Guide compiles its
audience share, revenue share and other statistical data, as the case may be,
under procedures and methodologies which are described, and which have the
limitations provided, in its respective reports or guides. All such information
is provided herein subject to those limitations.

The terms local marketing agreement ("LMA") and joint sales agreement
("JSA") are referred to in various places in this Prospectus. An LMA refers to
an agreement under which a radio station agrees to provide, on a cooperative
basis, the programming, sales, marketing and similar services for a different
radio station. A JSA refers to an agreement, similar to an LMA, under which a
radio station agrees to provide the sales and marketing services for another
station while the owner of such other radio station provides the programming for
such other radio station. The term "duopoly," as used in various places in this
Prospectus, refers to the ownership of two or more AM or two or more FM radio
stations in the same geographic market. A station or station group's power ratio
is defined as such station or station group's revenue market share divided by
audience market share.

ii
<PAGE> 8

PROSPECTUS SUMMARY

The following information is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus. As
indicated, the information with respect to Cox Radio contained in this
Prospectus, other than the historical financial data, gives effect to the
pending acquisition (the "NewCity Acquisition") by Cox Radio of NewCity
Communications, Inc. ("NewCity"), as well as certain other planned acquisitions
and dispositions (together with the NewCity Acquisition, the "Pending
Transactions"). See "Pending Transactions." Consummation of each of the Pending
Transactions is subject to certain conditions, including the approval of the
Federal Communications Commission ("FCC"); there can be no assurance that such
approval will be obtained or that other required conditions will be satisfied or
waived. See "Risk Factors." Unless otherwise indicated, the information in this
Prospectus does not give effect to the exercise of the Underwriters'
over-allotment option described herein under "Underwriting."

THE COMPANY

Cox Radio, upon completion of the Pending Transactions, will be one of the
ten largest radio broadcasting companies in the United States, based on both net
revenues and number of stations. Cox Radio will own or operate, or provide sales
and marketing services for, 40 radio stations (26 FM and 14 AM) clustered in 12
markets, including 18 stations to be acquired from NewCity. On a pro forma basis
for 1995, Cox Radio will be the number one radio station group ranked by revenue
share and audience share in five of its 12 markets. On a pro forma basis, Cox
Radio would have generated net revenue of $172 million and broadcast cash flow
of $49 million during the twelve month period ending March 31, 1996. Cox Radio,
as part of CEI, was a pioneer in radio broadcasting, building its first station
in 1934, acquiring its flagship station, WSB-AM (Atlanta), in 1939 and launching
its first FM station, WSB-FM (Atlanta), in 1948.

Cox Radio seeks to maximize the revenues and broadcast cash flow of its
radio stations by operating and developing clusters of stations in
demographically attractive and rapidly growing markets, including major markets
such as Los Angeles and Sunbelt markets such as Atlanta, Miami, Tampa, Orlando,
San Antonio and Birmingham. During the past five years, the 12 markets in which
the Company's stations will operate have demonstrated, on an aggregate basis,
greater radio advertising revenue growth than the U.S. radio industry as a
whole. The Pending Transactions will enhance the clustering of the Company's
radio stations; Cox Radio will operate three or more stations in nine of its 12
markets, and a total of 20 of the Company's 40 stations will be clustered in
four markets. In addition, the NewCity Acquisition will create a platform for
future strategic acquisitions to further cluster radio stations in the Company's
markets.

As a result of the Company's management, programming and sales efforts, the
Company's radio stations are characterized by strong ratings and above average
power ratios. In addition, Cox Radio has a track record of acquiring,
repositioning and improving the operating performance of previously
underperforming stations. Cox Radio's senior operating management, together with
the NewCity senior operating management which will join Cox Radio as part of the
NewCity Acquisition, will be comprised of six individuals with an average of
over 23 years of experience in the radio broadcasting industry, including an
average of over 14 years with their respective organizations. The Company
believes that this experienced senior management team will be well positioned to
manage larger radio station clusters and take advantage of new opportunities
arising in the U.S. radio broadcasting industry.

The following table sets forth certain information with respect to Cox
Radio and its markets:

<TABLE>
<CAPTION>
PRO FORMA COMPANY DATA MARKET DATA
---------------------------------------------------------- ------------------------------
1990 -
NUMBER 1995 COMBINED STATION GROUP 1995 1995
OF ------------------------------------------ RADIO 1995 RADIO
STATIONS REVENUE REVENUE AUDIENCE MARKET ARBITRON MARKET
------------ MARKET MARKET MARKET POWER REVENUE MARKET REVENUE
MARKET FM AM RANK SHARE SHARE(1) RATIO RANK RANK CAGR
- ---------------------------------- --- --- -------- -------- -------- ------ ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles....................... 2 1 4 10.9% 8.8 1.24 1 2 2.7%
Atlanta........................... 2 2 1 21.3% 15.9 1.34 10 12 8.3%
Miami............................. 2 -- 3 11.3% 8.5 1.33 12 11 5.9%
Tampa............................. 2 2 4 11.9% 13.0 0.92 21 21 6.1%
Orlando........................... 4 3 1 30.7% 28.5 1.08 26 39 6.3%
San Antonio....................... 2 1 4 14.3% 12.8 1.12 29 34 7.6%
Louisville........................ 3 -- 5 8.0% 7.0 1.14 45 49 5.8%
Birmingham........................ 2 1 1 32.5% 19.1 1.70 51 55 4.9%
Dayton............................ 1 1 2 25.5% 19.0 1.34 55 52 4.7%
Tulsa............................. 2 1 1 35.5% 26.4 1.34 56 60 7.4%
Bridgeport........................ 1 -- 3 21.6% 12.3 1.76 58 111 5.1%
Syracuse.......................... 3 2 1 55.3% 34.9 1.58 71 68 0.4%
</TABLE>

- ---------------
(1) Audience share data based upon all Persons 12+.

1
<PAGE> 9

The Company's stations are diversified in terms of format, target audience,
geographic location and stage of development. Management believes that a number
of the Company's stations have significant growth opportunities or turnaround
potential and can therefore be characterized as developing stations. Cox Radio
believes these stations can achieve significant broadcast cash flow growth by
employing the Company's operating strategy. Management believes that its mix of
stations in different stages of development enables it to maximize the Company's
growth potential.

OPERATING STRATEGY

Cox Radio operates its stations in clusters to (i) enhance net revenue
growth by increasing the appeal of the Company's radio stations to advertisers
and enabling such stations to compete more effectively with other forms of
advertising and (ii) achieve operating efficiencies by consolidating broadcast
facilities, eliminating duplicative positions in management and production and
reducing overhead expenses. In addition, Cox Radio has demonstrated an ability
to acquire underperforming stations and develop them into ratings and revenue
leaders. This is achieved through the Company's management philosophy which
emphasizes (i) market research and targeted programming; (ii) a customer-focused
selling strategy; and (iii) marketing and promotional activities. This
management philosophy is designed and coordinated by Cox Radio's experienced
senior operating management and implemented on a local level by the Company's
station managers. Cox Radio invests significant resources to identify and train
local managers who are given the responsibility for day-to-day operations of the
stations and the flexibility to develop policies that will improve station
performance and establish long-term relationships with advertisers.

ACQUISITION STRATEGY

During the last several years, the Company has implemented its clustering
strategy through the acquisition of radio stations in several of its existing
markets, and it intends to continue to make acquisitions in the 12 markets in
which it will operate following the completion of the Pending Transactions. In
the past, the Company has primarily acquired underperforming stations. Cox Radio
may also make opportunistic acquisitions in additional markets in which the
Company believes that it can cost-effectively achieve a leading position in
terms of audience and revenue share. In evaluating acquisition opportunities in
additional markets, Cox Radio intends to focus primarily on demographically
attractive markets, such as those in the Sunbelt, and markets ranked between ten
and 60 in terms of radio advertising revenues. The Company believes that such
markets offer the greatest potential for growth relative to the cost of entry.
Management also believes that Cox Radio will have the financial resources and
management expertise to continue to pursue its acquisition strategy.

PENDING TRANSACTIONS

Within the last six months, Cox Radio has entered into the following
transactions:

NEWCITY ACQUISITION

In July 1996, Cox Radio agreed to acquire NewCity for an aggregate
consideration of approximately $253 million, consisting of approximately $167
million in cash and approximately $86 million in assumption of NewCity debt. The
NewCity Acquisition will provide Cox Radio with an additional 18 stations (12 FM
and 6 AM): 14 stations in five new markets (Birmingham, Bridgeport, Orlando, San
Antonio and Tulsa) and four stations in two existing markets (Atlanta and
Syracuse). Three of the five new markets are in the Sunbelt, a region which the
Company believes will, over the next several years, demonstrate greater radio
advertising revenue growth than the U.S. radio industry as a whole. The
acquisition of three radio stations in Syracuse will provide Cox Radio with five
stations (three FM and two AM) and a 55% radio revenue share in that market, and
the acquisition of four radio stations in Orlando, together with the three
stations acquired in the Orlando Acquisition (see below), will provide Cox Radio
with seven stations (four FM and three AM) and a 31% radio revenue share in that
market. The Company expects NewCity's management group to join Cox Radio,

2
<PAGE> 10

providing continuity and management depth to the combined organization. Cox
Radio expects to consummate the NewCity Acquisition in the first half of 1997.

ORLANDO ACQUISITION

In July 1996, in order to expand its cluster of Orlando stations, Cox Radio
agreed to exchange its two Chicago radio stations for three Orlando stations
(the "Orlando Acquisition") and approximately $20 million in cash. Cox Radio
expects to consummate the Orlando Acquisition in the first half of 1997.

LOUISVILLE ACQUISITION

In June 1996, Cox Radio agreed to acquire one Louisville FM station for
$2.5 million in cash (the "Louisville Acquisition"), which will provide Cox
Radio with its third FM station and an 8% revenue share in that market. Cox
Radio expects to consummate the Louisville Acquisition in the fourth quarter of
1996.

MIAMI DISPOSITION

In April 1996, Cox Radio agreed to sell its AM station in Miami for $13
million in cash (the "Miami Disposition"). Cox Radio expects to consummate the
Miami Disposition in the fourth quarter of 1996.

TAMPA ACQUISITION

In July 1996, Cox Radio decided to exercise its option to purchase one AM
station in Tampa for $1.5 million comprised of $0.8 million in cash and the
forgiveness of $0.7 million in amounts due to Cox Radio (the "Tampa
Acquisition").

RELATIONSHIP WITH COX ENTERPRISES, INC.

Cox Radio is currently an indirect, wholly-owned subsidiary of CEI. CEI, a
privately-held corporation headquartered in Atlanta, Georgia, is one of the
largest media companies in the United States, with consolidated 1995 revenues of
approximately $4 billion. CEI, which has a 98-year history in the media and
communications industry and a 62-year history in the radio broadcasting
business, publishes 18 daily newspapers, owns and operates six television
stations and owns approximately 75% of Cox Communications, Inc. ("CCI"), a
publicly-traded broadband communications company (NYSE: COX) with approximately
3.3 million cable television customers. CEI is also the world's largest operator
of auto auctions through Manheim Auctions.

Immediately prior to the closing of the Offerings, all of CEI's U.S. radio
operations will be transferred to Cox Radio (the "Cox Radio Consolidation") and
Cox Radio will assume several notes in favor of CEI in the amount of $107.3
million (the "CEI Notes"). Cox Radio will apply $107.3 million of the net
proceeds of the Offerings to discharge completely all amounts owed under the CEI
Notes. See "Use of Proceeds" and "Certain Relationships and Related
Transactions." Upon completion of the Offerings, CEI will own approximately
% of the outstanding Common Stock of Cox Radio and % of the voting
power of Cox Radio.

The principal executive offices of Cox Radio are located at 1400 Lake Hearn
Drive, N.E., Atlanta, Georgia 30319 and the Company's telephone number is (404)
843-5000.

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<PAGE> 11

THE OFFERINGS

<TABLE>
<S> <C>
Class A Common Stock offered:
U.S. Offering............................... shares
International Offering...................... shares
Total............................... shares
Common Stock to be outstanding after the
Offerings:
Class A Common Stock(1)..................... shares
Class B Common Stock........................ shares
Total(1)............................ shares
Voting Rights................................. There will be two classes of Common Stock
outstanding after the Offerings: Class A
Common Stock and Class B Common Stock. Except
with respect to voting and conversion, the
rights of holders of Class A Common Stock and
Class B Common Stock are identical. Each
share of Class A Common Stock is entitled to
one vote and each share of Class B Common
Stock is entitled to ten votes. Class A
Common Stock and Class B Common Stock
generally vote as a single class with respect
to all matters submitted to a vote of
stockholders. Each share of Class B Common
Stock is convertible into one share of Class
A Common Stock at the option of the holder.
See "Description of Capital Stock."
Use of Proceeds............................... Cox Radio expects to use the net proceeds
from the Offerings to repay the CEI Notes, to
partially fund the NewCity Acquisition and
for general corporate purposes. In order to
consummate the NewCity Acquisition, Cox Radio
will be required to incur indebtedness. See
"Use of Proceeds."
Proposed Symbol..................... " "
</TABLE>

- ---------------
(1) If the Underwriters' over-allotment option were exercised in full,
shares of Class A Common Stock would be outstanding after the Offerings. See
"Underwriting" and "Description of Capital Stock." Includes shares of
restricted stock to be issued to management at the effective time of the
Offerings. Does not include shares of Class A Common Stock reserved
for issuance under Cox Radio's Long-Term Incentive Plan, Stock Purchase Plan
and Directors Restricted Stock Plan (as defined herein), of which
shares will be issuable upon exercise of options granted at the effective
time of the Offerings at an exercise price per share equal to the initial
public offering price. See "Management -- Long-Term Incentive Plan."

4
<PAGE> 12

SUMMARY UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following pro forma financial data are derived from the Unaudited Pro
Forma Combined Statements of Operations and Balance Sheet (the "Pro Forma
Financial Data") included elsewhere in this Prospectus. The pro forma combined
statements of operations data give effect to the Transactions (as defined
herein) as if they had occurred as of January 1, 1995 and the pro forma combined
balance sheet data give effect to the Transactions (other than the Prior
Louisville Acquisition) as if they had occurred as of March 31, 1996. The
Transactions include (i) the acquisition of WRKA-FM and WRVI-FM in Louisville,
which were acquired by Cox Radio in January 1996 (the "Prior Louisville
Acquisition"); (ii) the acquisition of WHEN-AM and WWHT-FM in Syracuse, which
were acquired by Cox Radio in June 1996 (the "Prior Syracuse Acquisition");
(iii) the Orlando Acquisition, the Louisville Acquisition and the Miami
Disposition; (iv) the Offerings; and (v) the NewCity Acquisition. The Pro Forma
Financial Data do not purport to represent what Cox Radio's results of
operations or financial condition would actually have been had the Transactions
in fact occurred on such dates or to project Cox Radio's results of operations
or financial condition for any future period or at any future date. The Summary
Unaudited Pro Forma Financial Information is based on certain assumptions and
adjustments described in the Notes to the Unaudited Pro Forma Combined
Statements of Operations and Balance Sheet and should be read in conjunction
therewith. See also "Management's Discussion and Analysis of the Pro Forma
Combined Results of Operations," "Management's Discussion and Analysis of
Financial Condition and Results of Operations of Cox Radio," "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
NewCity," and the Consolidated Financial Statements for each of Cox Radio and
NewCity included elsewhere in this Prospectus.

Consummation of each of the Pending Transactions is subject to certain
conditions, including the approval of the FCC; there can be no assurance that
such approval will be obtained or that other required conditions will be
satisfied or waived.

<TABLE>
<CAPTION>
PRO FORMA
---------------------------------
YEAR ENDED THREE MONTHS
DECEMBER 31, ENDED MARCH 31,
------------ ----------------
1995 1995 1996
------------ ----- ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net revenues(1)............................................. $167.1 $35.9 $ 40.6
Station operating expenses.................................. 120.0 26.8 29.5
Corporate general and administrative expenses............... 4.4 1.1 1.2
Depreciation and amortization............................... 15.4 3.6 3.9
------------ ----- ------
Operating income............................................ 27.3 4.4 6.0
Interest expense............................................ 20.7 5.0 5.3
Net income (loss)........................................... 1.5 (1.3) (0.3)
Net income (loss) per share.................................
Number of shares outstanding................................
OTHER OPERATING AND FINANCIAL DATA:
Broadcast cash flow(2)...................................... $ 47.1 $ 9.1 $ 11.1
Broadcast cash flow margin(2)............................... 28.2% 25.3% 27.3%
EBITDA(2)................................................... $ 42.7 $ 8.0 $ 9.9
After-tax cash flow(2)...................................... 16.9 2.3 3.6
Net debt to EBITDA(3)....................................... -- -- 5.1x
BALANCE SHEET DATA (end of period):
Cash and cash equivalents................................... $ -- $ -- $ 34.8(4)
Intangible assets, net...................................... -- -- 379.4
Total assets................................................ -- -- 495.8
Total debt.................................................. -- -- 260.3
Shareholders' equity........................................ -- -- 200.5
</TABLE>

5
<PAGE> 13

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

(1) Total revenues less advertising agency commissions.
(2) "Broadcast cash flow" consists of operating income plus depreciation and
amortization and corporate general and administrative expenses. "Broadcast
cash flow margin" is broadcast cash flow as a percentage of net revenues.
"EBITDA" is operating income plus depreciation and amortization. "After-tax
cash flow" is income (loss) before extraordinary items, plus depreciation
and amortization. Although broadcast cash flow, broadcast cash flow margin,
EBITDA and after-tax cash flow are not recognized under GAAP, they are
accepted by the broadcasting industry as generally recognized measures of
performance and are used by analysts who report publicly on the condition
and performance of broadcast companies. For the foregoing reasons, the
Company believes that these measures are useful to investors. However,
investors should not consider these measures to be an alternative to
operating income as determined in accordance with GAAP, an alternative to
cash flows from operating activities (as a measure of liquidity) or an
indicator of the Company's performance under GAAP.
(3) For purposes of this calculation, EBITDA is based on pro forma results for
the twelve month period ending March 31, 1996. Net debt represents total
debt less cash and cash equivalents (including restricted cash). If the
Underwriters' over-allotment option is exercised in full, net debt would be
$208.5 million and the net debt to EBITDA ratio would be 4.7x.
(4) Includes restricted cash of $32.5 million, representing the net proceeds
from the Miami Disposition and Orlando Acquisition which, for tax planning
purposes, may only be used for the purchase of additional radio properties.
See "Unaudited Pro Forma Combined Financial Data."

6
<PAGE> 14

SUMMARY HISTORICAL FINANCIAL DATA

The following sets forth summary historical financial data for Cox Radio
and NewCity for the three years ended December 31, 1993, 1994 and 1995 and the
three months ended March 31, 1995 and 1996. The comparability of the historical
consolidated financial data reflected herein has been significantly impacted by
acquisitions and dispositions. The information presented below is qualified in
its entirety by, and should be read in conjunction with "Management's Discussion
and Analysis of Financial Condition and Results of Operations of Cox Radio,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of NewCity," and the Consolidated Financial Statements for each of
Cox Radio and NewCity included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
COX RADIO
-------------------------------------------------
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- ---------------
1993 1994 1995 1995 1996
----- ------- ------- ----- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net revenues(1)................................ $95.0 $111.5 $123.6 $25.9 $29.6
Station operating expenses..................... 67.9 76.3 90.0 19.3 21.8
Corporate general and administrative
expenses(2)................................. 2.5 2.7 5.9 0.9 1.1
Depreciation and amortization.................. 7.3 6.9 7.2 1.8 2.0
----- ------- ------- ----- -----
Operating income............................... 17.3 25.6 20.5 3.9 4.7
Net income (loss).............................. (1.1)(3) 11.2 8.2 1.3 1.8
OTHER OPERATING DATA:
Broadcast cash flow(4)......................... $27.1 $ 35.2 $ 33.6 (5) $ 6.6 $ 7.8
Broadcast cash flow margin(4).................. 28.5% 31.6 % 27.2 % 25.5% 26.4%
EBITDA(4)...................................... $24.6 $ 32.5 $ 27.7 (5) $ 5.7 $ 6.7
After-tax cash flow(4)......................... 13.8 18.1 15.4 3.1 3.8
Number of stations owned or operated or for
which services are provided(6).............. 15 16 20 16 20
</TABLE>

<TABLE>
<CAPTION>
NEWCITY
---------------------------------------------
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------- ---------------
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net revenues(1).................................. $53.3 $52.7(7) $55.6 $12.6 $13.2
Station operating expenses....................... 36.8 36.9 40.7 9.6 9.5
Corporate general and administrative expenses.... 1.9 1.8 1.7 0.5 0.5
Depreciation and amortization.................... 3.8 3.1 3.5 0.7 0.8
----- ----- ----- ----- -----
Operating income................................. 10.8 10.9 9.7 1.8 2.4
Net income (loss)................................ 11.0(8) 2.1 (0.4) (0.7) (0.3)
OTHER OPERATING DATA:
Broadcast cash flow(4)........................... $16.5 $15.8(7) $14.9(9) $ 3.0 $ 3.7
Broadcast cash flow margin(4).................... 31.0% 30.0% 26.8% 23.8% 28.0%
EBITDA(4)........................................ $14.6 $14.0(7) $13.2(9) $ 2.5 $ 3.2
After-tax cash flow(4)........................... 16.9 5.3 3.1 -- 0.5
Number of stations owned or operated or for which
services are provided(6)...................... 14 17 17 17 17
</TABLE>

7
<PAGE> 15

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

(1) Total revenues less advertising agency commissions.

(2) As described in Note 9 to the Consolidated Financial Statements of Cox
Radio, certain of Cox Radio's executives participate in CEI's stock-based
compensation plan (the "Unit Appreciation Plan" or "UAP"). Because CEI and
Cox Radio are private companies, the benefits under the UAP are generally
payable in cash. This cash payment option has resulted in charges to
compensation expense of $0.9 million, $0.8 million and $1.6 million for the
years ended December 31, 1993, 1994 and 1995, respectively, and $0.4 million
and $0.6 million for the three months ended March 31, 1995 and 1996,
respectively. This compensation expense is included in historical corporate
general and administrative expenses. Public companies traditionally
implement stock award plans that provide for the issuance of stock to
participants and do not result in compensation expense under applicable
accounting standards. The Company intends to implement such a plan in 1996
and, therefore, Cox Radio does not expect to incur this expense in future
periods. See "Management -- Long-Term Incentive Plan." In addition, year
ended December 31, 1995 corporate general and administrative expenses
include a nonrecurring corporate charge.

(3) Includes a $7.6 million noncash charge for the cumulative effect of
accounting changes. See further discussion in Notes 2, 7 and 8 to the
Consolidated Financial Statements of Cox Radio.

(4) "Broadcast cash flow" consists of operating income plus depreciation and
amortization and corporate general and administrative expenses. "Broadcast
cash flow margin" is broadcast cash flow as a percentage of net revenues.
"EBITDA" is operating income plus depreciation and amortization. "After-tax
cash flow" is income (loss) before extraordinary items, plus depreciation
and amortization. Although broadcast cash flow, broadcast cash flow margin,
EBITDA and after-tax cash flow are not recognized under GAAP, they are
accepted by the broadcasting industry as generally recognized measures of
performance and are used by analysts who report publicly on the condition
and performance of broadcast companies. For the foregoing reasons, the
Company believes that these measures are useful to investors. However,
investors should not consider these measures to be an alternative to
operating income as determined in accordance with GAAP, an alternative to
cash flows from operating activities (as a measure of liquidity) or an
indicator of the Company's performance under GAAP.

(5) Declines in broadcast cash flow and EBITDA from the prior year are due
mainly to the impact of the baseball strike on advertiser spending, the cost
of sports programming rights in Atlanta, start-up costs related to
acquisitions or LMA's consummated in late 1994 and early 1995 and a
nonrecurring corporate charge in 1995. See further discussion in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Cox Radio."

(6) For the years ended December 31, 1994 and 1995 and the three months ended
March 31, 1995 and 1996, WJZF-FM (Atlanta) is included in Cox Radio's number
of stations owned or operated or for which sales and marketing services are
provided because it was operated by Cox Radio during those periods under an
LMA agreement with NewCity.

(7) Declines in net revenues, broadcast cash flow and EBITDA from 1993 are due
mainly to the sale of WYAY-FM (Atlanta) and the transfer of the operations
of WJZF-FM (Atlanta) to Cox Radio pursuant to an LMA. See further discussion
in "Management's Discussion and Analysis of Financial Condition and Results
of Operations of NewCity."

(8) Includes a $15.0 million pre-tax gain on the sale of broadcast property
assets. See further discussion in "Management's Discussion and Analysis of
Financial Condition and Results of Operations of NewCity."

(9) Declines in broadcast cash flow and EBITDA from 1994 are due mainly to the
losses incurred from the results of developing stations in Tulsa (KJSR-FM)
and Orlando (WZKD-AM) that began operating in January 1995. See further
discussion in "Management's Discussion and Analysis of Financial Condition
and Results of Operations of NewCity."

8
<PAGE> 16

RISK FACTORS

Prospective investors should carefully consider the following risk factors,
in addition to the other information contained elsewhere in this Prospectus,
prior to making an investment in the Class A Common Stock.

FAILURE TO CONSUMMATE THE PENDING TRANSACTIONS

Although Cox Radio has entered into definitive contracts regarding the
NewCity Acquisition and the other Pending Transactions, there can be no
assurance that any of the Pending Transactions will be consummated. The
consummation of each of the Pending Transactions is subject to certain closing
conditions, including filings with the U.S. Department of Justice ("DOJ") and
the Federal Trade Commission ("FTC") pursuant to the Hart-Scott-Rodino Act
("HSR") and the receipt of FCC approval. There can be no assurance that FCC
approval will be obtained or that the other closing conditions to any of the
Pending Transactions will be satisfied or waived.

Since CEI owns a television station in Orlando, the Company must obtain
waivers of the FCC's radio-television cross-ownership rules in order to complete
the NewCity Acquisition insofar as it pertains to NewCity's stations in Orlando
and the Orlando Acquisition. Although the Company expects to obtain such
waivers, there can be no assurance that such waivers will be granted. In the
absence of permanent waivers, the Company will request, and the Company would
expect the FCC to grant, temporary waivers of these cross-ownership rules on the
condition that Cox Radio divest its ownership of one or more of its radio
stations in Orlando within a six-to-eighteen month period following the NewCity
Acquisition and the Orlando Acquisition. Since CEI also owns a television
station and a newspaper in Atlanta, the Company also must obtain waivers of the
FCC's radio-television and radio-newspaper cross-ownership rules in order to
complete the NewCity Acquisition as it pertains to NewCity's station in Atlanta.
Although Cox Radio may request permanent waivers of such cross-ownership rules,
there can be no assurance that such waivers will be granted. In the absence of
permanent waivers, the Company will request, and the Company would expect the
FCC to grant, temporary waivers of these cross-ownership rules on the condition
that Cox Radio divest its ownership of the NewCity Atlanta station within a
six-to-eighteen month period following the closing of the NewCity Acquisition.

Obtaining the FCC rule waivers, or any further inquiry from the FTC or the
DOJ, could delay or prevent consummation of the NewCity Acquisition and the
Orlando Acquisition. If any Pending Transaction is not consummated, there can be
no assurance that Cox Radio will be able to enter into comparable transactions.

Additionally, if the requisite approval from the FCC is obtained, Cox Radio
may consummate the Pending Transactions before such approval becomes "final"
(that is, before the close of the time period within which aggrieved parties may
petition the FCC to, or the FCC may on its own motion, reconsider its consent).
If Cox Radio consummates any of the Pending Transactions before the FCC consent
becomes "final", and the FCC reconsiders its consent within the applicable time
period, it is possible that the FCC would rescind its consent of the Pending
Transactions and require the parties in effect to "unwind" part or all of the
transaction. Cox Radio is unable to predict whether, if FCC approval for the
Pending Transactions is received, the FCC would reconsider its approval or the
consequences thereof. However, if FCC approval for the Pending Transactions is
received, Cox Radio believes the possibility of the FCC requiring Cox Radio to
unwind part or all of the Pending Transactions would be remote, and Cox Radio
presently knows no reason why the FCC would take such an action. If part or all
of the Pending Transactions were required to be unwound, there can be no
assurance as to the effect upon Cox Radio.

RISKS ASSOCIATED WITH ACQUISITION STRATEGY

In addition to the Pending Transactions, Cox Radio intends to continue to
evaluate the acquisition of additional radio stations or radio station groups.
Any such acquisition will be subject to FCC approval and FCC limits on the
number and location of broadcasting properties that any one person or entity may
own. In addition, Cox Radio competes and will continue to compete with many
other buyers for the acquisition of

9
<PAGE> 17

radio stations. Some of those competitors have greater financial resources than
Cox Radio. As a result of these and other factors, there can be no assurance
that future acquisitions will be available on attractive terms.

While management expects to realize certain operating synergies and cost
savings as a result of the Pending Transactions and any future acquisition,
there can be no assurance that such synergies and savings will be achieved, that
the integration of Cox Radio and new stations or management groups can be
accomplished successfully or on a timely basis or that the Company's operating
strategy can be implemented. In addition, as a result of the Pending
Transactions, management will be required to operate substantially larger radio
station groups in certain markets. As a result, the Pending Transactions and any
future acquisition may have an adverse affect on Cox Radio's financial position
and results of operations.

IMPORTANCE OF LOS ANGELES AND ATLANTA RADIO STATIONS

In 1995, the Company's three radio stations in Los Angeles and four radio
stations in Atlanta generated approximately 35% and 25%, respectively, of Cox
Radio's net revenues. On a pro forma basis after giving effect to the Pending
Transactions, such radio stations in Los Angeles and Atlanta would have
generated approximately 26% and 18%, respectively, of Cox Radio's net revenues
in 1995. A significant decline in net revenues from the Company's stations in
these markets, as a result of a ratings decline or otherwise, could have a
material adverse effect on Cox Radio's financial position and results of
operations.

COMPETITION

Radio broadcasting is a highly competitive business. Each of the Company's
radio stations competes for audience share and advertising revenue directly with
other radio stations, as well as with other electronic and print media within
its respective market. There are typically other well-capitalized firms
competing in the same geographic markets as Cox Radio.

The financial success of each of the Company's radio stations is dependent
principally upon its share of the overall advertising revenue within its
geographic market, its promotional and other expenses incurred to obtain that
revenue and the economic strength of its geographic market. Radio advertising
revenues are, in turn, highly dependent upon audience share. Other stations may
change programming formats to compete directly with the Company's stations for
listeners and advertisers or launch aggressive promotional campaigns in support
of already existing competitive formats. If a competitor, particularly one with
substantial financial resources, were to attempt to compete in either of these
fashions, ratings at the Company's affected station could be negatively
impacted, resulting in lower net revenues.

Radio broadcasting is also subject to competition from electronic and print
media. Potential advertisers can substitute advertising through broadcast
television, cable television systems (which can offer concurrent exposure on a
number of cable networks to enlarge the potential audience), daily, weekly, and
free-distribution newspapers, other print media, direct mail, and on-line
computer services for radio advertising. Competing media commonly target the
customers of their competitors, and advertisers regularly shift dollars from
radio to these competing media and vice versa. Accordingly, there can be no
assurance that any of the Company's radio stations will be able to maintain or
increase its current audience share and advertising revenue share.

Radio broadcasting is also subject to competition from new media
technologies that are being developed or introduced, such as the delivery of
audio programming by cable television systems or the introduction of digital
audio broadcasting ("DAB"). DAB may deliver multi-channel, multi-format digital
radio services with sound quality equivalent to compact discs by satellite to
nationwide and regional audiences. Cox Radio cannot predict the effect, if any,
that any such new technologies may have generally on the radio broadcasting
industry as a whole or on the Company's radio stations.

RADIO BROADCASTING INDUSTRY AND ECONOMIC CONDITIONS

The profitability of the Company's radio stations is subject to various
factors that influence the radio broadcasting industry as a whole. The Company's
radio stations may be affected by numerous factors, including changes in
audience tastes, priorities of advertisers, new laws, governmental regulations
and policies,

10
<PAGE> 18

changes in broadcast technical requirements, technological changes and proposals
to eliminate the tax deductibility of expenses incurred by advertisers. Cox
Radio cannot predict which, if any, of these or other factors might have a
significant impact on the radio broadcasting industry in the future, nor can it
predict what impact, if any, the occurrence of these or other events might have
on Cox Radio's operations. Generally, advertising tends to decline during
economic recession or downturn. Consequently, Cox Radio's advertising revenue is
likely to be adversely affected by a recession or downturn in the United States
economy, the economy of an individual geographic market in which the Company
owns or operates radio stations, or provides sales and marketing services for,
or other events or circumstances that adversely affect advertising activity.

GOVERNMENT REGULATION OF RADIO BROADCASTING INDUSTRY

The radio broadcasting industry is subject to extensive and changing
regulation. Among other things, the Communications Act of 1934, as amended (the
"Communications Act") and FCC rules and policies limit the number of stations
that one entity can own in a given market. The Communications Act and FCC rules
and policies also require FCC approval for transfers of control of licensees and
assignments of FCC licenses. The filing of petitions or complaints against Cox
Radio or other FCC licensees could result in the FCC delaying the grant of, or
refusing to grant, its consent to the assignment of licenses to or from an FCC
licensee or the transfer of control of an FCC licensee. In certain
circumstances, the Communications Act and FCC rules will operate to impose
limitations on alien ownership and voting of the Common Stock. There can be no
assurance that there will not be changes in the current regulatory scheme, the
imposition of additional regulations or the creation of new regulatory agencies,
which changes could restrict or curtail the ability of Cox Radio to acquire,
operate and dispose of stations or, in general, to compete profitably with other
operators of radio and other media properties. Moreover, there can be no
assurance that there will not be other regulatory changes, including aspects of
deregulation, that will result in a decline in the value of the stations
operated by Cox Radio or adversely affect Cox Radio's competitive position. See
"Business -- Federal Regulation of Radio Broadcasting."

Each of the Company's radio stations operates pursuant to one or more
licenses issued by the FCC that presently have a maximum term of seven years.
The Company's licenses expire at various times from February 1, 1996 to April 1,
2003. Although Cox Radio may apply to renew these licenses, third parties may
challenge the Company's renewal applications. While Cox Radio is not aware of
facts or circumstances that would prevent the Company from having its current
licenses renewed, there can be no assurance that the licenses will be renewed.
Failure to obtain the renewal of any of Cox Radio's broadcast licenses or to
obtain FCC approval for an assignment or transfer to Cox Radio of a license in
connection with a radio station acquisition may have a material adverse effect
on the Company's business and operations. In addition, if Cox Radio or any of
its officers, Directors or significant stockholders materially violates the
FCC's rules and regulations or the Communications Act, is convicted of a felony
or is found to have engaged in unlawful anticompetitive conduct or fraud upon
another government agency, the FCC may, in response to a petition from a third
party or on its own initiative, in its discretion, commence a proceeding to
impose sanctions upon Cox Radio which could involve the imposition of monetary
penalties, the revocation of Cox Radio's broadcast licenses or other sanctions.
If the FCC were to issue an order denying a license renewal application or
revoking a license, Cox Radio would be required to cease operating the
applicable radio station only after Cox Radio had exhausted all rights to
administrative and judicial review without success.

CONTROL BY CEI; POTENTIAL CONFLICTS OF INTEREST

Prior to the Offerings, CEI, through wholly-owned subsidiaries,
beneficially owned 100% of the outstanding Common Stock and 100% of the voting
power of Cox Radio, allowing CEI to control all actions taken by Cox Radio.
After giving effect to the Offerings, CEI, through wholly-owned subsidiaries,
will own approximately % of the outstanding Common Stock and % of the
voting power of Cox Radio. As a result, CEI will be able to elect all the
members of the Board of Directors of Cox Radio (the "Cox Radio Board") and
effect other transactions without the approval of Cox Radio's public
stockholders. This voting control may have the effect of discouraging certain
types of transactions involving an actual or potential

11
<PAGE> 19

change of control of Cox Radio, including transactions in which the holders of
Class A Common Stock might otherwise receive a premium for their shares over the
then-current market prices, because the consummation of any such change of
control would require the consent of CEI.

The interests of CEI, which operates businesses in other industries,
including television broadcasting, broadband communications, auto auctions and
newspapers, may from time to time diverge from the interests of Cox Radio.
Conflicts of interest between Cox Radio and CEI could arise with respect to
business dealings between them, including potential acquisitions of businesses
or properties, the issuance of additional securities, the election of new or
additional members of the Cox Radio Board and the payment of dividends by Cox
Radio. Cox Radio will form an audit committee of the Cox Radio Board which will
consist of independent directors and which will address any potential conflicts
of interest that may arise between the Company and CEI. There can be no
assurance that any conflicts of interest will be resolved in favor of Cox Radio.

DEPENDENCE ON KEY PERSONNEL

Cox Radio's business depends upon the continued efforts, abilities and
expertise of its executive officers and other key employees, including Robert F.
Neil and, subsequent to the consummation of the NewCity Acquisition, Richard A.
Ferguson. The loss of the services of any executive officer or other key
employee could have a material adverse effect on Cox Radio's financial condition
and results of operations. Although there can be no assurance that the Company
will be successful in retaining any executive officer or other key employee, the
Company's incentive arrangements have been structured to encourage such
executive officers and other key employees to remain with the Company.

RESTRICTIONS IMPOSED BY NEWCITY DEBT

NewCity is, and subsequent to the consummation of the NewCity Acquisition,
will continue to be, subject to certain restrictions pursuant to the terms of
its 11.375% Senior Subordinated Notes due 2003 (the "NewCity Notes"). See
"Description of Indebtedness -- NewCity Notes." Such restrictions could limit
NewCity's ability to declare dividends or to incur additional debt. In addition,
the change of control contemplated pursuant to the NewCity Acquisition will
trigger an obligation on the part of NewCity to offer to repurchase the NewCity
Notes at 101% of the principal amount thereof plus accrued and unpaid interest
to the date of any such repurchase. If NewCity is required to repurchase any of
the NewCity Notes, the Company expects to fund such repurchase through debt
financing, including bank financing.

SHARES ELIGIBLE FOR FUTURE SALE

All outstanding shares of Class A Common Stock other than shares issued in
the Offerings, are "restricted securities" as that term is defined in Rule 144
("Rule 144") under the Securities Act.

The Company, its directors, CEI and certain officers of the Company, who
will directly or indirectly own shares of Class A Common Stock upon completion
of the Offering, have agreed not to, directly or indirectly, offer for sale,
sell or otherwise dispose of, or announce the offering of, any shares of Class A
Common Stock or any securities convertible into or exercisable or exchangeable
for Class A Common Stock for a period of 180 days after the date of this
Prospectus without the prior written consent of Lehman Brothers Inc.

No prediction can be made as to the effect, if any, that sales of shares of
Class A Common Stock or the availability of shares for sale will have on the
market price of the Class A Common Stock. Nevertheless, sales of significant
numbers of shares of Class A Common Stock in the public market could adversely
affect the market price of the Class A Common Stock and could impair the
Company's ability to raise capital through an offering of its equity securities.
See "Shares Eligible for Future Sale" and "Underwriting."

NO PRIOR PUBLIC MARKET

Prior to the Offerings, there has been no public market for the Class A
Common Stock and there can be no assurance that an active public market will
develop or, if one does develop, that it will be maintained. The initial public
offering price for the Class A Common Stock will be determined by negotiations
among Cox

12
<PAGE> 20

Radio and the representatives of the Underwriters based upon the consideration
of certain factors set forth herein under "Underwriting." There can be no
assurance that the initial public offering price will correspond to the price at
which the Class A Common Stock will trade in the public market subsequent to the
Offerings. Market conditions in the radio industry may have an adverse impact on
the market price of the Class A Common Stock. Furthermore, the stock market
typically experiences volatility that affects the market price of companies'
securities in ways often unrelated to the operating performance of such
companies. These market fluctuations may adversely affect the market price of
the Class A Common Stock.

DILUTION

Persons purchasing shares of Class A Common Stock in the Offerings will
sustain immediate dilution in net tangible book value per share. See "Dilution."

13
<PAGE> 21

USE OF PROCEEDS

The net proceeds from the sale of the shares of Class A Common
Stock offered hereby are estimated to be approximately $ million ($
million if the Underwriters' over-allotment option is exercised in full),
assuming an initial public offering price of $ per share (the midpoint
of the currently anticipated range of the initial public offering price set
forth on the cover page of this Prospectus), and after deducting the
underwriting discount and estimated offering expenses. Cox Radio intends to use
approximately $107 million of such net proceeds to repay all amounts then
outstanding under the CEI Notes. The balance of the net proceeds will be
available for general corporate purposes and acquisitions, including to
partially fund the NewCity Acquisition. Although Cox Radio is repaying
indebtedness with the net proceeds of the Offerings, Cox Radio will be required
to borrow approximately $166 million to consummate the NewCity Acquisition. Cox
Radio expects to be able to obtain the required loan from a syndicate of banks.
If such bank financing is not available, the required funds will be loaned by
CEI to Cox Radio at market rates.

The CEI Notes bear interest at a variable rate of interest equal to the
prime rate (as reported by Chase Manhattan Bank, N.A.) plus 1.5% (9.75% as of
June 30, 1996) and are repayable in full on December 31, 2005. Borrowings under
the CEI Notes relate to operations and acquisitions, including the Prior
Syracuse Acquisition and the Louisville Acquisition. See "Certain Relationships
and Related Transactions" and "Description of Indebtedness."

DIVIDEND POLICY

Cox Radio currently intends to retain any future earnings for use in the
development and operation of its business. Accordingly, Cox Radio does not
expect to pay cash dividends in the foreseeable future.

14
<PAGE> 22

DILUTION

The net tangible book value (deficit) of Cox Radio's Common Stock as of
, 1996 was $ or approximately $ per share. "Net
tangible book value (deficit)" per share represents the amount of Cox Radio's
tangible assets less total liabilities, divided by shares of Common
Stock outstanding.

Net tangible book value dilution per share represents the difference
between the amount per share paid by purchasers of shares of Class A Common
Stock in the Offerings and the as adjusted net tangible book value per share of
Class A Common Stock immediately after completion of the Offerings. After giving
effect to the sale of shares of Class A Common Stock in the Offerings
at an assumed initial public offering price of $ per share (the
midpoint of the currently anticipated range of the initial public offering price
set forth on the cover page of this Prospectus) and the application of the
estimated net proceeds therefrom, the as adjusted net tangible book value of Cox
Radio as of , 1996 would have been $ million, or $ per
share of Class A Common Stock. This represents an immediate increase in net
tangible book value of $ per share to existing stockholders and an
immediate dilution in net tangible book value of $ per share to
purchasers of Class A Common Stock in the Offerings as illustrated in the
following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.................. $
Net tangible book value (deficit) per share at ...... $
Increase per share to existing stockholders attributable to
sale of shares to new investors.............................
-------
As adjusted net tangible book value per share after the
Offerings......................................................
-------
Net tangible book value dilution per share to new investors(1)... $
=======
</TABLE>

The following table sets forth, on an adjusted basis as of ,
1996, the difference between the existing shareholders and the purchasers of
shares in the Offerings at an assumed initial public offering price of
$ per share (the midpoint of the currently anticipated range of the
initial public offering price set forth on the cover page of this Prospectus)
with respect to the number of shares of Common Stock purchased from Cox Radio,
the total consideration paid and the average price per share paid:

<TABLE>
<CAPTION>
AVERAGE
SHARES PURCHASED TOTAL CONSIDERATION PRICE
------------------- -------------------- PER
NUMBER PERCENT AMOUNT PERCENT SHARE
------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
Existing stockholders....................
New investors(1).........................
Total..........................
</TABLE>

- ---------------
(1) If the Underwriters' over-allotment option were exercised in full,
shares of Class A Common Stock would be outstanding after the Offerings. See
"Underwriting" and "Description of Capital Stock." Includes shares
of restricted stock to be issued to management at the effective time of the
Offerings. Does not include shares of Class A Common Stock reserved
for issuance under Cox Radio's Long-Term Incentive Plan, Stock Purchase Plan
and Directors Restricted Stock Plan (as defined herein), of which
shares will be issuable upon exercise of options granted at the effective
time of the Offerings at an exercise price per share equal to the initial
public offering price. See "Management -- Long-Term Incentive Plan."

15
<PAGE> 23

CAPITALIZATION

The following table sets forth the capitalization of Cox Radio at March 31,
1996 (i) on an historical basis (including the Prior Louisville Acquisition);
(ii) on a pro forma basis after giving effect to the Prior Syracuse Acquisition
and the Pending Transactions (exclusive of the NewCity Acquisition); (iii) on a
pro forma basis after giving effect to the Prior Syracuse Acquisition, the
Pending Transactions (exclusive of the NewCity Acquisition) and the Offerings;
and (iv) on a pro forma basis after giving effect to the Transactions (other
than the Prior Louisville Acquisition). This table should be read in conjunction
with the Unaudited Pro Forma Combined Financial Data and the Consolidated
Financial Statements of each of Cox Radio and NewCity included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
MARCH 31, 1996
-----------------------------------------------------------------------
PRO FORMA FOR THE
PRIOR SYRACUSE PRO FORMA FOR THE
ACQUISITION AND PRIOR SYRACUSE
THE PENDING ACQUISITION, THE
TRANSACTIONS PENDING TRANSACTIONS
(EXCLUSIVE OF THE (EXCLUSIVE OF THE PRO FORMA
HISTORICAL NEWCITY NEWCITY ACQUISITION) FOR THE
COX RADIO ACQUISITION) AND THE OFFERINGS(1) TRANSACTIONS
------------- ----------------- -------------------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Cash and cash equivalents............... $ 2,052 $ 34,552(2) $ 36,302(2) $ 34,844(2)
========== ============ =============== =========
Amounts due to CEI...................... $ 126,936 $ 134,186 $ -- $ --
Long-term debt (including current
maturities)........................... -- -- -- 260,250
Shareholders' equity:
Preferred Stock, $1.00 par value;
5,000,000 shares authorized........ -- -- -- --
Common Stock.......................... 1 1 -- --
Class A Common Stock, $1.00 par
value; 70,000,000 shares
authorized, shares
issued and outstanding........... -- --
Class B Common Stock, $1.00 par
value; 45,000,000 shares
authorized, shares
issued and outstanding........... -- --
Additional paid-in capital............ 90,947 90,947 226,884 226,884
Deficit in retained earnings.......... (41,966) (26,414) (26,414) (26,414)
------------- ----------------- ----------- ------------
Total shareholders' equity.... 48,982 64,534 200,470 200,470
------------- ----------------- ----------- ------------
Total capitalization.......... $ 175,918 $ 198,720 $200,470 $460,720
========== ============ =============== =========
</TABLE>

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

(1) Includes adjustments to reflect a $26.9 million capital contribution by CEI
as of June 30, 1996, in the form of the forgiveness of indebtedness owed to
CEI. See "Certain Relationships and Related Transactions."
(2) Includes restricted cash of $32.5 million, representing the net proceeds
from the Miami Disposition and Orlando Acquisition which, for tax planning
purposes, may only be used for the purchase of additional radio properties.
See "Unaudited Pro Forma Combined Financial Data."

16
<PAGE> 24

UNAUDITED PRO FORMA COMBINED FINANCIAL DATA

The following unaudited pro forma combined financial data (the "Pro Forma
Financial Data") are based on the historical Consolidated Financial Statements
of Cox Radio included elsewhere in this Prospectus, adjusted to give pro forma
effect to the Transactions. The Transactions include (i) the Prior Louisville
Acquisition (consummated in January 1996) and the Prior Syracuse Acquisition
(consummated in June 1996); (ii) the Orlando Acquisition, the Louisville
Acquisition and the Miami Disposition; (iii) the Offerings; and (iv) the NewCity
Acquisition. The Unaudited Pro Forma Statements of Operations give effect to the
Transactions as if they had occurred as of January 1, 1995 and the Unaudited Pro
Forma Combined Balance Sheet gives effect to the Transactions (other than the
Prior Louisville Acquisition) as if they had occurred as of March 31, 1996. The
Transactions and the related adjustments are described in the accompanying
notes. The Pro Forma Financial Data should be read in conjunction with the
historical Consolidated Financial Statements for each of Cox Radio and NewCity
included elsewhere in this Prospectus, "Management's Discussion and Analysis of
Financial Condition and Results of Operations of Cox Radio" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
NewCity."

The pro forma information with respect to the NewCity Acquisition is based
on the historical financial statements of NewCity included elsewhere in this
Prospectus. The NewCity Acquisition is accounted for under the purchase method
of accounting. The total purchase price is allocated to the tangible and
identifiable intangible assets and liabilities of the acquired business based
upon Cox Radio's preliminary estimates of their fair value, with the remainder
allocated to goodwill. The allocation of purchase price is subject to revision
when additional information concerning asset and liability valuations is
obtained. The Pro Forma Financial Data do not purport to represent what Cox
Radio's results of operations or financial condition would actually have been
had the Transactions occurred on such dates or to project Cox Radio's results of
operations or financial condition for any future period or at any future date.

17
<PAGE> 25

COX RADIO, INC.

UNAUDITED PRO FORMA COMBINED BALANCE SHEET
MARCH 31, 1996
<TABLE>
<CAPTION>
PRO FORMA FOR
PRO FORMA PRO FORMA FOR THE PRIOR
ADJUSTMENTS FOR THE PRIOR SYRACUSE
THE PRIOR SYRACUSE ACQUISITION,
SYRACUSE ACQUISITION THE PENDING
ACQUISITION AND AND THE TRANSACTIONS
THE PENDING PENDING (EXCLUSIVE OF
TRANSACTIONS TRANSACTIONS PRO FORMA THE NEWCITY
(EXCLUSIVE OF (EXCLUSIVE OF ADJUSTMENTS ACQUISITION)
HISTORICAL THE NEWCITY THE NEWCITY FOR THE AND THE HISTORICAL
COX RADIO ACQUISITION)(1) ACQUISITION) OFFERINGS(2) OFFERINGS NEWCITY
----------- --------------- ------------- ------------ ------------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents... $ 2,052 $ -- $ 2,052 $ 120,000 $ 3,802 $ 292
(11,000)
(107,250)
Restricted
cash.......... -- 12,750(a) 32,500 -- 32,500 --
19,750(b)
Accounts and
notes
receivable,
less allowance
for doubtful
accounts...... 25,105 -- 25,105 -- 25,105 9,816
Prepaid expenses
and other
current
assets........ 5,296 -- 5,296 -- 5,296 2,958
---------- ------- ----------- ---------- ----------- --------
Total
current
assets.... 32,453 32,500 64,953 1,750 66,703 13,066
---------- ------- ----------- ---------- ----------- --------
Plant and
equipment,
net............. 29,087 (2,041)(c) 27,046 -- 27,046 9,992
Intangible
assets, net..... 132,965 1,874(c) 134,839 -- 134,839 59,540
Other assets..... 1,175 -- 1,175 -- 1,175 178
---------- ------- ----------- ---------- ----------- --------
Total
Assets.... $ 195,680 $32,333 $ 228,013 $ 1,750 $ 229,763 $ 82,776
========== ======= =========== ========== =========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
LIABILITIES:
Current portion
of long-term
debt.......... $ -- $ -- $ -- $ -- $ -- $ 1,450
Accounts payable
and accrued
expenses...... 10,740 -- 10,740 -- 10,740 6,372
Income taxes
payable....... 1,694 -- 1,694 -- 1,694 954
Other current
liabilities... 1,021 -- 1,021 -- 1,021 1,930
---------- ------- ----------- ---------- ----------- --------
Total
current
liabilities... 13,455 -- 13,455 -- 13,455 10,706
---------- ------- ----------- ---------- ----------- --------
Long-term debt... -- -- -- -- -- 84,347
Amounts due to
Cox Enterprises,
Inc............. 126,936 4,650(d) 134,186 (134,186) -- --
2,600(e)
Deferred income
taxes........... 6,307 9,531(f) 15,838 -- 15,838 --
---------- ------- ----------- ---------- ----------- --------
Total
liabilities... 146,698 16,781 163,479 (134,186) 29,293 95,053
---------- ------- ----------- ---------- ----------- --------
Redeemable
preferred
stock........... -- -- -- -- -- 11,598
SHAREHOLDERS'
EQUITY:
Preferred stock,
$1.00 par value;
5,000,000 shares
authorized...... -- -- -- -- -- --
Common Stock..... 1 -- 1 -- -- 5
Class A Common
Stock, $1.00 par
value;
70,000,000
shares
authorized;
shares
outstanding..... -- -- --
Class B Common
Stock, $1.00 par
value;
45,000,000
shares
authorized;
shares
outstanding..... -- -- --
Additional
paid-in
capital......... 90,947 -- 90,947 109,000 226,884 --
26,936
Deficit in
retained
earnings........ (41,966) 15,552(f) (26,414) -- (26,414) (23,240)
Note receivable
from
shareholders.... -- -- -- -- -- (640)
---------- ------- ----------- ---------- ----------- --------
Total
shareholders'
equity.... 48,982 15,552 64,534 135,936 200,470 (23,875)
---------- ------- ----------- ---------- ----------- --------
Total
Liabilities
and
Shareholders'
Equity.... $ 195,680 $32,333 $ 228,013 $ 1,750 $ 229,763 $ 82,776
========== ======= =========== ========== =========== ========

PRO FORMA
ADJUSTMENTS FOR PRO FORMA
NEWCITY FOR
ACQUISITION(3) TRANSACTIONS
--------------- ------------

CURRENT ASSETS:
Cash and cash
equivalents... $ (1,750) (a) $ 2,344

Restricted
cash.......... -- 32,500

Accounts and
notes
receivable,
less allowance
for doubtful
accounts...... -- 34,921
Prepaid expenses
and other
current
assets........ -- 8,254
-------- --------
Total
current
assets.... (1,750) 78,019
-------- --------
Plant and
equipment,
net............. -- 37,038
Intangible
assets, net..... 185,060 (b) 379,439
Other assets..... -- 1,353
-------- --------
Total
Assets.... $ 183,310 $495,849
======== ========

CURRENT
LIABILITIES:
Current portion
of long-term
debt.......... $ -- $ 1,450
Accounts payable
and accrued
expenses...... -- 17,112
Income taxes
payable....... -- 2,648
Other current
liabilities... -- 2,951
-------- --------
Total
current
liabilities... -- 24,161
-------- --------
Long-term debt... 165,453 (c) 258,800
9,000 (b)
Amounts due to
Cox Enterprises,
Inc............. -- --

Deferred income
taxes........... (3,420) (b) 12,418
-------- --------
Total
liabilities... 171,033 295,379
-------- --------
Redeemable
preferred
stock........... (11,598)(d) --
SHAREHOLDERS'
EQUITY:
Preferred stock,
$1.00 par value;
5,000,000 shares
authorized...... -- --
Common Stock..... (5)(d) --
Class A Common
Stock, $1.00 par
value;
70,000,000
shares
authorized;
shares
outstanding.....
Class B Common
Stock, $1.00 par
value;
45,000,000
shares
authorized;
shares
outstanding.....
Additional
paid-in
capital......... -- 226,884

Deficit in
retained
earnings........ 23,240 (d) (26,414)
Note receivable
from
shareholders.... 640 (d) --
-------- --------
Total
shareholders'
equity.... 23,875 200,470
-------- --------
Total
Liabilities
and
Shareholders'
Equity.... $ 183,310 $495,849
======== ========
</TABLE>

18
<PAGE> 26

NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET

(1) To reflect the pro forma effect of the Prior Syracuse Acquisition and
the Pending Transactions (exclusive of the NewCity Acquisition):

(a) To reflect the pending sale of WIOD-AM (Miami) pursuant to an April
1996 asset purchase agreement for $13.0 million less estimated fees
and expenses (the Miami Disposition). Use of the cash proceeds from
the sale is restricted for the purchase of additional radio stations
due to tax considerations. The sale is expected to close in the last
quarter of 1996. See also (c) below.

(b) To reflect the proceeds (net of related expenses) from the pending
exchange of WCKG-FM and WYSY-FM (Chicago) for WHOO-AM, WHTQ-FM and
WMMO-FM (Orlando) and approximately $20.0 million in cash, subject
to certain adjustments, pursuant to a July 1996 asset exchange
agreement (the Orlando Acquisition). Use of the cash proceeds from
the sale is restricted for the purchase of additional radio stations
due to tax considerations. The transaction is expected to close in
the first half of 1997. See also (c) below.

(c) To reflect the net effect on net plant and equipment and intangibles
of the Miami Disposition, the Orlando Acquisition, the Prior
Syracuse Acquisition and the Louisville Acquisition:

<TABLE>
<CAPTION>
NET PLANT
AND EQUIPMENT INTANGIBLES TOTAL
------------- ----------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Stations acquired:
Syracuse.............................................. $ 532 $ 4,118 $ 4,650
Louisville............................................ -- 2,600 2,600
Orlando............................................... 3,551 16,699 20,250
Stations disposed of:
Miami................................................. (4,714) (5,949) (10,663)
Chicago............................................... (1,410) (15,594) (17,004)
------------- ----------- --------
$(2,041) $ 1,874 $ (167)
============= ========== ========
</TABLE>

Given the significant monetary consideration to be received, the
sale of the Chicago stations and the purchase of the Orlando
stations (Orlando Acquisition) will be recorded at fair value.

(d) To reflect the acquisition of WHEN-AM and WWHT-FM (Syracuse) in June
1996 for $4.5 million plus estimated acquisition costs (the Prior
Syracuse Acquisition). The Prior Syracuse Acquisition was financed
through the Acquisition Notes. See purchase price allocation at (c)
above.

(e) To reflect the pending acquisition of WXNU-FM (Louisville) pursuant
to a June 1996 asset purchase agreement for $2.5 million plus
estimated acquisition costs (the Louisville Acquisition). The
acquisition is expected to close in the last quarter of 1996, and
will be financed through the Acquisition Notes. See purchase price
allocation at (c) above.

(f) To reflect the estimated financial reporting gains and related
deferred taxes to be recorded on the Miami Disposition and Orlando
Acquisition (in thousands):

<TABLE>
<S> <C>
Net cash proceeds........................................................................ $ 32,500
Estimated fair value of Orlando.......................................................... 20,250
--------
Total consideration received..................................................... 52,750
Less net carrying amount of assets:
Plant and equipment.................................................................... (6,124)
Intangibles............................................................................ (21,543)
--------
Pre-tax gain............................................................................. 25,083
Less related taxes....................................................................... (9,531)
--------
Net after-tax gain............................................................... $ 15,552
========
</TABLE>

(2) To reflect the proceeds of the Offerings of $120.0 million, the estimated
costs associated with the Offerings of $11.0 million and the repayment of
$107.3 million owed to CEI under the CEI Notes. Also reflects a $26.9
million capital contribution by CEI as of June 30, 1996, in the form of
forgiveness of indebtedness owed to CEI. See "Certain Relationships and
Related Transactions."

19
<PAGE> 27

NOTES TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET -- (CONTINUED)

(3) To reflect the adjustments to record the NewCity Acquisition and the
application of purchase accounting to the accounts of NewCity, as follows:

(a) To reflect the partial funding of the NewCity Acquisition with an
estimated $1.8 million in net proceeds remaining from the Offerings. See
(c) below.

(b) To record the excess of the NewCity purchase price over the fair value
of tangible assets acquired and liabilities assumed (in thousands):

<TABLE>
<S> <C>
Purchase price plus net liabilities assumed:
Cash (including estimated working capital adjustment of $2,000)............................ $166,203
Assumption of NewCity debt................................................................. 85,797
Acquisition and other related costs........................................................ 1,000
--------
Total................................................................................ 253,000
Estimated fair value of tangible assets acquired and liabilities assumed:
Plant and equipment...................................................................... (9,992)
Long-term debt premium................................................................... 9,000
Deferred tax asset....................................................................... (3,420)
Other working capital accounts........................................................... (3,988)
--------
(8,400)
--------
Excess of purchase price over tangible assets acquired and liabilities assumed............. 244,600
--------
Less previously recorded intangibles....................................................... (59,540)
--------
Pro forma adjustment to intangibles.................................................. $185,060
========
</TABLE>

Purchase accounting requires the fair valuation of $75 million aggregate
principal amount of NewCity's 11.375% Senior Subordinated Notes due 2003,
which is estimated to be $84 million based on market rates and assuming
the notes are redeemed on November 1, 1998 at a redemption price of
104.266%. The debt premium gives rise to a deferred tax asset of $3.4
million at an effective tax rate of 38%.

(c) To reflect the partial financing of the NewCity Acquisition with $165.5
million in borrowings under a new bank credit facility to be negotiated
prior to the consummation of the acquisition.

(d) To reflect the elimination of the redeemable preferred stock and the
historical equity accounts of NewCity.

20
<PAGE> 28

COX RADIO, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
------------------------------------------------------------------------------
PRO FORMA
ADJUSTMENTS PRO FORMA FOR
FOR THE PRIOR THE PRIOR
SYRACUSE SYRACUSE
ACQUISITION AND ACQUISITION
THE PENDING AND THE
PRO FORMA TRANSACTIONS PENDING
ADJUSTMENTS FOR PRO FORMA FOR (EXCLUSIVE TRANSACTIONS
THE PRIOR THE PRIOR OF THE (EXCLUSIVE OF
HISTORICAL LOUISVILLE LOUISVILLE NEWCITY THE NEWCITY
COX RADIO ACQUISITION(1) ACQUISITION ACQUISITION)(2) ACQUISITION)
---------- --------------- ------------- --------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues................................. $ 123,572 $ 2,498 $ 126,070 $ (18,850) $ 107,220
Costs and expenses:
Operating.................................. 41,831 489 42,320 (8,967) 33,353
Selling, general and administrative........ 48,131 1,271 49,402 (9,780) 39,622
Corporate general and administrative....... 5,853 -- 5,853 -- 5,853
Depreciation and amortization.............. 7,247 632 7,879 (456) 7,423
---------- ------- ------------- --------------- -------------
Operating income............................. 20,510 106 20,616 353 20,969
Interest expense............................. (5,974) -- (5,974) 1,212 (11,047)
(6,285)(3)
Other, net................................... (147) (6) (153) 85 (68)
---------- ------- ------------- --------------- -------------
Income (loss) before income taxes............ 14,389 100 14,489 (4,635) 9,854
Income taxes(10)............................. 6,226 38 6,264 (1,761) 4,503
---------- ------- ------------- --------------- -------------
Net income (loss)............................ $ 8,163 $ 62 $ 8,225 $ (2,874) $ 5,351
========= ============ =========== ============ ==========
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
------------------------------------------------------------------------------------------------------
PRO FORMA
PRO FORMA FOR THE PRIOR
FOR THE PRIOR SYRACUSE
SYRACUSE ACQUISITION,
ACQUISITION AND THE OFFERINGS
THE PENDING AND THE PENDING
TRANSACTIONS PRO FORMA TRANSACTIONS PRO FORMA
(EXCLUSIVE OF ADJUSTMENTS (EXCLUSIVE OF ADJUSTMENTS
THE NEWCITY FOR THE THE NEWCITY HISTORICAL FOR NEWCITY PRO FORMA FOR
ACQUISITION) OFFERINGS ACQUISITION) NEWCITY ACQUISITION(4) TRANSACTIONS
--------------- ----------- --------------- ---------- -------------- ----------------
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net revenues............. $ 107,220 $ -- $ 107,220 $ 55,636 $ 4,230 $167,086
Costs and expenses:
Operating.............. 33,353 -- 33,353 20,059 2,316 55,728
Selling, general and
administrative....... 39,622 -- 39,622 20,654 3,990 64,266
Corporate general and
administrative....... 5,853 (3,646)(5) 2,207 1,745 418 4,370
Depreciation and
amortization......... 7,423 -- 7,423 3,510 4,461(6) 15,394
--------------- ----------- --------------- ---------- -------------- ----------------
Operating income......... 20,969 3,646 24,615 9,668 (6,955) 27,328
Interest expense......... (11,047) 11,047(7) -- (9,817) (11,582)(8) (20,668)
731(9)
Other, net............... (68) -- (68) -- (49) (117)
--------------- ----------- --------------- ---------- -------------- ----------------
Income (loss) before
income taxes........... 9,854 14,693 24,547 (149) (17,855) 6,543
Income taxes(10)......... 4,503 5,583 10,086 249 (5,322) 5,013
--------------- ----------- --------------- ---------- -------------- ----------------
Net income (loss)........ $ 5,351 $ 9,110 $ 14,461 $ (398) $(12,533) $ 1,530
============ ========== ============ ======== ============ =============
Pro forma per share data:
Earnings per share..... $
=============
Average shares
outstanding..........
=============
</TABLE>

21
<PAGE> 29

COX RADIO, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
---------------------------------------------------------------------------------
PRO FORMA
ADJUSTMENTS
FOR THE PRIOR PRO FORMA
SYRACUSE FOR THE PRIOR
ACQUISITION AND SYRACUSE
THE PENDING ACQUISITION AND
PRO FORMA TRANSACTIONS THE PENDING
ADJUSTMENTS FOR PRO FORMA FOR (EXCLUSIVE OF TRANSACTIONS
THE PRIOR THE PRIOR THE (EXCLUSIVE OF
HISTORICAL LOUISVILLE LOUISVILLE NEWCITY THE NEWCITY
COX RADIO ACQUISITION(1) ACQUISITION ACQUISITION)(2) ACQUISITION)
---------- --------------- ------------- --------------- ----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues............................... $ 29,568 $ -- $ 29,568 $ (3,303) $ 26,265
Costs and expenses:
Operating................................ 9,440 -- 9,440 (1,360) 8,080
Selling, general and administrative...... 12,343 -- 12,343 (2,104) 10,239
Corporate general and administrative..... 1,103 -- 1,103 -- 1,103
Depreciation and amortization............ 1,982 -- 1,982 1 1,983
---------- ------- ------------- --------------- --------
Operating income........................... 4,700 -- 4,700 160 4,860
Interest expense........................... (1,467) -- (1,467) 292 (2,815)
(1,640)(3)
Other, net................................. (96) -- (96) -- (96)
---------- ------- ------------- --------------- --------
Income (loss) before income taxes.......... 3,137 -- 3,137 (1,188) 1,949
Income taxes(10)........................... 1,325 -- 1,325 (451) 874
---------- ------- ------------- --------------- --------
Net income (loss).......................... $ 1,812 $ -- $ 1,812 $ (737) $ 1,075
========= ============ =========== ============ ============
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1996
------------------------------------------------------------------------------------------------------
PRO FORMA
PRO FORMA FOR THE PRIOR
FOR THE PRIOR SYRACUSE
SYRACUSE ACQUISITION, THE
ACQUISITION AND OFFERINGS AND THE
THE PENDING PENDING
TRANSACTIONS PRO FORMA TRANSACTIONS PRO FORMA
(EXCLUSIVE OF ADJUSTMENTS (EXCLUSIVE OF THE ADJUSTMENTS
THE NEWCITY FOR THE NEWCITY HISTORICAL FOR NEWCITY PRO FORMA FOR
ACQUISITION) OFFERINGS ACQUISITION) NEWCITY ACQUISITION(4) TRANSACTIONS
----------------- ----------- ----------------- ---------- -------------- --------------
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net revenues............. $26,265 $ -- $ 26,265 $ 13,157 $ 1,186 $ 40,608
Costs and expenses:
Operating.............. 8,080 -- 8,080 4,163 614 12,857
Selling, general and
administrative....... 10,239 -- 10,239 5,303 1,078 16,620
Corporate general and
administrative....... 1,103 (562)(5) 541 487 166 1,194
Depreciation and
amortization......... 1,983 -- 1,983 817 1,145(6) 3,945
-------- ----------- ----------------- ---------- -------------- --------------
Operating income......... 4,860 562 5,422 2,387 (1,817) 5,992
Interest expense......... (2,815) 2,815(7) -- (2,564) (2,895)(8) (5,276)
183(9)
Other, net............... (96) -- (96) -- -- (96)
-------- ----------- ----------------- ---------- -------------- --------------
Income (loss) before
income taxes........... 1,949 3,377 5,326 (177) (4,529) 620
Income taxes(10)......... 874 1,283 2,157 112 (1,356) 913
-------- ----------- ----------------- ---------- -------------- --------------
Net income (loss)........ $ 1,075 $ 2,094 $ 3,169 $ (289) $ (3,173) $ (293)
============= ========== ============= ======== ============ ============
Pro forma per share data:
Earnings per share..... $
============
Average shares
outstanding..........
============
</TABLE>

22
<PAGE> 30

COX RADIO, INC.

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1995
----------------------------------------------------------------------------------
PRO FORMA
ADJUSTMENTS
FOR THE PRIOR PRO FORMA
SYRACUSE FOR THE PRIOR
ACQUISITION AND SYRACUSE
THE PENDING ACQUISITION AND
PRO FORMA TRANSACTIONS THE PENDING
ADJUSTMENTS FOR PRO FORMA FOR (EXCLUSIVE TRANSACTIONS
THE PRIOR THE PRIOR OF THE (EXCLUSIVE OF
HISTORICAL LOUISVILLE LOUISVILLE NEWCITY THE NEWCITY
COX RADIO ACQUISITION(1) ACQUISITION ACQUISITION)(2) ACQUISITION)
---------- --------------- ------------- --------------- -----------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues............................. $ 25,856 $ 478 $ 26,334 $ (3,788) $22,546
Costs and expenses:
Operating.............................. 8,150 142 8,292 (1,861) 6,431
Selling, general and administrative.... 11,130 297 11,427 (2,320) 9,107
Corporate general and administrative... 879 -- 879 -- 879
Depreciation and amortization.......... 1,841 158 1,999 (262) 1,737
---------- ------- ------------- --------------- --------
Operating income......................... 3,856 (119) 3,737 655 4,392
Interest expense......................... (1,427) -- (1,427) 288 (2,681)
(1,542)(3)
Other, net............................... (45) (17) (62) -- (62)
---------- ------- ------------- --------------- --------
Income (loss) before income taxes........ 2,384 (136) 2,248 (599) 1,649
Income taxes(10)......................... 1,120 (52) 1,068 (228) 840
---------- ------- ------------- --------------- --------
Net income (loss)........................ $ 1,264 $ (84) $ 1,180 $ (371) $ 809
========= ============ =========== ============ ===============
</TABLE>

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1995
----------------------------------------------------------------------------------------------------------
PRO FORMA
PRO FORMA FOR THE PRIOR
FOR THE PRIOR SYRACUSE
SYRACUSE ACQUISITION, THE
ACQUISITION AND OFFERINGS AND THE
THE PENDING PENDING
TRANSACTIONS PRO FORMA TRANSACTIONS PRO FORMA
(EXCLUSIVE OF ADJUSTMENTS (EXCLUSIVE OF THE ADJUSTMENTS
THE NEWCITY FOR THE NEWCITY HISTORICAL FOR NEWCITY PRO FORMA FOR
ACQUISITION) OFFERINGS ACQUISITION) NEWCITY ACQUISITION(4) TRANSACTIONS
----------------- ----------- ------------------- ---------- -------------- ----------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net revenues......... $22,546 $ -- $ 22,546 $ 12,645 $ 672 $ 35,863
Costs and expenses:
Operating.......... 6,431 -- 6,431 4,193 591 11,215
Selling, general
and
administrative... 9,107 -- 9,107 5,446 984 15,537
Corporate general
and
administrative... 879 (412)(5) 467 531 104 1,102
Depreciation and
amortization..... 1,737 -- 1,737 724 1,191(6) 3,652
-------- ----------- ---------- ---------- -------------- ----------------
Operating income..... 4,392 412 4,804 1,751 (2,198) 4,357
Interest expense..... (2,681) 2,681(7) -- (2,288) (2,895)(8) (5,000)
183(9)
Other, net........... (62) -- (62) -- -- (62)
-------- ----------- ---------- ---------- -------------- ----------------
Income (loss) before
income taxes....... 1,649 3,093 4,742 (537) (4,910) (705)
Income taxes(10)..... 840 1,176 2,016 124 (1,500) 640
-------- ----------- ---------- ---------- -------------- ----------------
Net income (loss).... $ 809 $ 1,917 $ 2,726 $ (661) $ (3,410) $ (1,345)
============= ========== ============== ======== ============ =============
Pro forma per share
data:
Earnings per
share............ $
=============
Average shares
outstanding......
=============
</TABLE>

23
<PAGE> 31

NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS

(1) To reflect the pro forma effect of the operations of WRKA-FM and WRVI-FM
(Louisville) (Prior Louisville Acquisition), which were acquired in January
1996, as if such acquisitions were consummated as of January 1, 1995. Since
the acquisition took place in early January 1996, no pro forma adjustments
for historical operations were made for the three months ended March 31,
1996 due to immateriality. In addition, no pro forma adjustment was made for
interest expense as the purchase was financed through non-interest bearing
intercompany advances from CEI. Pro forma adjustments have been made for
depreciation and amortization resulting from the allocation of the $8.7
million purchase price.

The pro forma adjustments for the Prior Louisville Acquisition are as
follows:

<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Year ended December 31, 1995:
Net revenues.............................................................. $2,498 $ -- $ 2,498
Costs and expenses:
Operating............................................................... 489 -- 489
Selling, general and administrative..................................... 1,271 -- 1,271
Depreciation and amortization........................................... 349 283 632
Other, net................................................................ (6) -- (6)
Three months ended March 31, 1995:
Net revenues.............................................................. 478 -- 478
Costs and expenses:
Operating............................................................... 142 -- 142
Selling, general and administrative..................................... 297 -- 297
Depreciation and amortization........................................... 99 59 158
Other, net................................................................ (17) -- (17)
</TABLE>

No pro forma adjustments have been made for KACE-FM (Los Angeles), acquired
in August 1995, as the station was operated by the Company pursuant to an
LMA since August 1994. In addition, no pro forma adjustments have been made
for WCNN-AM (Atlanta), operated by the Company pursuant to an LMA since
April 1995, due to immateriality. No pro forma adjustments have been made
for the Tampa Acquisition as WFNS-AM has been operated under a JSA since
June 1995 and due to immateriality.

24
<PAGE> 32

NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(2) To reflect the pro forma effect of the Prior Syracuse Acquisition and the
Pending Transactions (exclusive of the NewCity Acquisition). Pro forma
adjustments have been made for depreciation and amortization resulting from
purchase price allocations for the acquisition of WHEN-AM and WWHT-FM (Prior
Syracuse Acquisition) and the acquisition of WHOO-AM, WHTQ-FM, and WMMO-FM
(Orlando Acquisition). In addition, adjustments have been made to reflect
the estimated fees associated with LMAs with NewCity for the operation of
the Syracuse and Orlando stations.

The pro forma adjustments are set forth as follows:

<TABLE>
<CAPTION>
DISPOSITIONS ACQUISITIONS TOTAL
-------------------- -------------------- PRO FORMA
MIAMI CHICAGO ORLANDO SYRACUSE ADJUSTMENTS
------- -------- ------- -------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1995:
Net Revenues....................................... $(7,723) $(13,227) $1,500 $600 $ (18,850)
Costs and expenses:
Operating........................................ (5,630) (3,337) -- -- (8,967)
Selling, general and administrative.............. (3,142) (6,638) -- -- (9,780)
Depreciation and amortization.................... (443) (1,093) 895 185 (456)
Interest........................................... 285 927 -- -- 1,212
Other, net......................................... 31 54 -- -- 85
Three months ended March 31, 1996:
Net Revenues....................................... $(1,589) $ (2,239) $ 375 $150 $ (3,303)
Costs and expenses:
Operating........................................ (696) (664) -- -- (1,360)
Selling, general and administrative.............. (679) (1,425) -- -- (2,104)
Depreciation and amortization.................... (109) (192) 254 48 1
Interest........................................... 68 224 -- -- 292
Three months ended March 31, 1995:
Net Revenues....................................... $(1,322) $ (2,991) $ 375 $150 $ (3,788)
Costs and expenses:
Operating........................................ (1,063) (798) -- -- (1,861)
Selling, general and administrative.............. (724) (1,596) -- -- (2,320)
Depreciation and amortization.................... (109) (355) 156 46 (262)
Interest........................................... 67 221 -- -- 288
</TABLE>

The pro forma results do not include the estimated nonrecurring after-tax
gains of $15.6 million from the Miami Disposition and the Orlando
Acquisition described in Note 1 to the Unaudited Pro Forma Combined Balance
Sheet.

(3) To reflect that, of the $134.2 million owed by Cox Radio to CEI as of June
30, 1996, $26.9 million was contributed by CEI to the capital of Cox Radio
and the remaining $107.3 million was evidenced by the CEI Notes. See
"Business -- Organizational History." The CEI Notes bear interest at the
prime rate (as reported by Chase Manhattan Bank, N.A.) plus 1.5%. Pro forma
adjustments to interest expense were $6.3 million, $1.6 million and $1.5
million for the year ended December 31, 1995, and the three months ended
March 31, 1996 and 1995, respectively. The assumed interest rates were
10.3%, 10.5% and 10.0% for the year ended December 31, 1995, and the three
months ended March 31, 1996 and 1995, respectively.

25
<PAGE> 33

NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(4) To reflect the effect of the historical operations of the Syracuse and the
Orlando stations which are being operated by NewCity pursuant to LMAs prior
to the NewCity Acquisition, and the corresponding elimination of LMA fees
paid by NewCity to the Company.

The pro forma adjustments are set forth as follows:

<TABLE>
<CAPTION>
HISTORICAL TOTAL
------------------ ELIMINATION PRO FORMA
ORLANDO SYRACUSE OF LMA FEES ADJUSTMENTS
------- -------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Year ended December 31, 1995:
Net Revenues................................................ $5,632 $698 $(2,100) $ 4,230
Cost and expenses:
Operating................................................. 1,488 828 -- 2,316
Selling, general and administrative....................... 3,281 709 -- 3,990
Corporate general and administrative...................... 418 -- -- 418
Other, net.................................................. (39) (10) -- (49)
Three months ended March 31, 1996:
Net Revenues................................................ $1,570 $141 $ (525) $ 1,186
Costs and expenses:
Operating................................................. 448 166 -- 614
Selling, general and administrative....................... 931 147 -- 1,078
Corporate general and administrative...................... 166 -- -- 166
Three months ended March 31, 1995:
Net Revenues................................................ $1,050 $147 $ (525) $ 672
Costs and expenses:
Operating................................................. 390 201 -- 591
Selling, general and administrative....................... 810 174 -- 984
Corporate general and administrative...................... 104 -- -- 104
</TABLE>

(5) To eliminate compensation expense historically allocated to Cox Radio by
CEI under the Unit Appreciation Plan, which was included in corporate
general and administrative expenses. As a result of the Offerings, Cox
Radio expects to implement a Long-Term Incentive Plan in 1996 that provides
for the issuance of stock to participants that will not result in
compensation expense under applicable accounting standards. Therefore,
going forward, Cox Radio does not expect to incur this expense in future
periods. See "Management -- Cox Enterprises, Inc. Unit Appreciation Plan"
and "Long-Term Incentive Plan." Also reflects the elimination of a
nonrecurring corporate charge for the year ended December 31, 1995.

(6) To record additional amortization expense related to approximately $244.6
million in intangibles arising from the NewCity Acquisition, net of the
amount of amortization previously recorded in the historical financial
statements of NewCity.

(7) To adjust interest expense resulting from the repayment of the CEI Notes
from a portion of the net proceeds of the Offerings. See "Use of Proceeds"
and "Certain Relationships and Related Transactions." The net reduction in
interest expense was limited to Cox Radio's pro forma interest expense
recorded prior to the Offerings.

(8) To adjust interest expense to reflect borrowings of approximately $165.5
million under a bank credit facility to be entered into to finance a
portion of the NewCity Acquisition, at an estimated interest rate under the
facility of 7% for all periods presented. A fluctuation of 0.25% in the
estimated interest rate would impact interest expense by $0.4 million and
$0.1 million for the year and three month periods, respectively.

(9) To adjust interest expense to reflect the amortization of the debt premium
as a result of recording the NewCity debt at fair value. See Note 3 to
Unaudited Pro Forma Combined Balance Sheet.

(10) An effective tax rate of 38% was used to calculate the adjustments
reflected in Notes 1 through 5 and 7 through 9. No tax effect is reflected
for the adjustment in Note 6 because the amortization of intangibles
arising from the NewCity Acquisition is not deductible for tax purposes.

26
<PAGE> 34

SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

COX RADIO

The following selected financial data are derived from the Consolidated
Financial Statements of Cox Radio. The data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of Cox Radio" and the Consolidated Financial Statements of Cox Radio
included elsewhere in this Prospectus. The statement of operations data and
other operating and financial data for the years ended December 31, 1993, 1994
and 1995 and the balance sheet data as of December 31, 1994 and 1995 have been
derived from audited consolidated financial statements of Cox Radio. The
statement of operations data and other operating and financial data for the
years ended December 31, 1991 and 1992 and the three months ended March 31, 1995
and 1996 and the balance sheet data as of December 31, 1991, 1992 and 1993 and
as of March 31, 1995 and 1996 have been derived from unaudited Consolidated
Financial Statements of Cox Radio, which, in the opinion of management, include
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of financial position at such dates and results of
operations for such periods. Operating results for the three months ended March
31, 1996 are not necessarily indicative of the results that may be expected for
the entire year ended December 31, 1996.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
-------------------------------------------------- -----------------
1991 1992 1993 1994 1995 1995 1996
------ ------ ------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues(1).................... $ 98.1 $ 97.7 $ 95.0 $111.5 $123.6 $ 25.9 $ 29.6
Station operating expenses......... 73.9 70.9 67.9 76.3 90.0 19.3 21.8
Corporate general and
administrative expenses(2)....... 2.0 2.2 2.5 2.7 5.9 0.9 1.1
Depreciation and amortization...... 8.3 7.5 7.3 6.9 7.2 1.8 2.0
------ ------ ------ ------ ------ ------ ------
Operating income................... 13.9 17.1 17.3 25.6 20.5 3.9 4.7
Interest expense................... 10.0 7.7 5.6 5.2 6.0 1.4 1.5
Net income (loss).................. 1.1 4.2 (1.1)(3) 11.2 8.2 1.3 1.8
OTHER OPERATING DATA:
Broadcast cash flow(4)............. $ 24.2 $ 26.8 $ 27.1 $ 35.2 $ 33.6(5) $ 6.6 $ 7.8
Broadcast cash flow margin(4)...... 24.7% 27.4% 28.5% 31.6% 27.2% 25.5% 26.4%
EBITDA(4).......................... $ 22.2 $ 24.6 $ 24.6 $ 32.5 $ 27.7(5) $ 5.7 $ 6.7
After-tax cash flow(4)............. 9.4 11.7 13.8 18.1 15.4 3.1 3.8
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents.......... $ 0.6 $ 1.1 $ 1.7 $ 1.9 $ 1.7 $ 2.1 $ 2.1
Intangible assets, net............. 119.2 113.9 114.2 120.1 126.8 118.8 133.0
Total assets....................... 172.8 165.2 168.3 180.0 191.8 174.4 195.7
Total debt (including amounts due
to CEI).......................... 66.9 86.2 89.7 120.5 126.1 115.3 126.9
Shareholder's equity............... 95.4 70.3 64.2 40.4 47.2 41.7 49.0
</TABLE>

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

(1) Total revenues less advertising agency commissions.

(2) As described in Note 9 to the Consolidated Financial Statements of Cox
Radio, certain of Cox Radio's executives participate in CEI's UAP. Because
CEI and Cox Radio are private companies, the benefits under the UAP are
generally payable in cash. This cash payment option has resulted in charges
to compensation expense of $0.2 million, $0.4 million, $0.9 million, $0.8
million, and $1.6 million for the years ended December 31, 1991, 1992, 1993,
1994 and 1995, respectively, and $0.4 million and $0.6 million for the three
months ended March 31, 1995 and 1996, respectively. This compensation
expense is included in historical corporate general and administrative
expenses. Public companies traditionally implement stock award plans that
provide for the issuance of stock to participants and do not result in
compensation expense under applicable accounting standards. The Company
intends to implement such a plan in 1996 and, therefore, Cox Radio does not
expect to incur this expense in future periods. See "Management -- Long-Term
Incentive Plan." In addition, year ended December 31, 1995 corporate general
and administrative expenses include a nonrecurring corporate charge.

(3) Includes a $7.6 million noncash charge for the cumulative effect of
accounting changes. See further discussion in Notes 2, 7 and 8 to the
Consolidated Financial Statements of Cox Radio.

27
<PAGE> 35

depreciation and amortization. "After-tax cash flow" is income (loss) before
extraordinary items plus depreciation and amortization. Although broadcast
cash flow, broadcast cash flow margin, EBITDA and after-tax cash flow are
not recognized under GAAP, they are accepted by the broadcasting industry as
generally recognized measures of performance and are used by analysts who
report publicly on the condition and performance of broadcast companies. For
the foregoing reasons, the Company believes that these measures are useful
to investors. However, investors should not consider these measures to be an
alternative to operating income as determined in accordance with GAAP, an
alternative to cash flows from operating activities (as a measure of
liquidity) or an indicator of the Company's performance under GAAP.

28
<PAGE> 36

NEWCITY

The following selected financial data are derived from the Consolidated
Financial Statements of NewCity. The data should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations of NewCity" and the Consolidated Financial Statements of NewCity
included elsewhere in this Prospectus. Period to period comparisons of NewCity's
historical financial statements are not necessarily meaningful due to the
disposition or acquisition of certain of NewCity's radio stations and the use of
LMAs.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
-------------------------------------------------- -----------------
1991 1992 1993 1994 1995 1995 1996
------ ------ ------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues(1)...................... $ 46.0 $ 49.4 $ 53.3 $ 52.7(2) $ 55.6 $ 12.6 $ 13.2
Station operating expenses........... 32.9 34.7 36.8 36.9 40.7 9.6 9.5
Corporate general and administrative
expenses........................... 1.9 1.8 1.9 1.8 1.7 0.5 0.5
Depreciation and amortization........ 4.0 3.9 3.8 3.1 3.5 0.7 0.8
------ ------ ------ ------ ------ ------ ------
Operating income..................... 7.2 9.0 10.8 10.9 9.7 1.8 2.4
Interest expense..................... 11.9 11.8 11.6 10.1 9.8 2.3 2.6
Gain on sale of broadcasting
assets............................. -- -- 15.0(3) 1.6(4) -- -- --
Income (loss) before extraordinary
item............................... (4.7) (2.9) 13.1 2.2 (0.4) (0.7) (0.3)
Extraordinary item................... -- -- (2.0)(5) (0.2)(6) -- -- --
------ ------ ------ ------ ------ ------ ------
Net income (loss).................... (4.7) (2.9) 11.0(3) 2.1 (0.4) (0.7) (0.3)
====== ====== ====== ====== ====== ====== ======
OTHER OPERATING AND FINANCIAL DATA:
Broadcast cash flow(7)............... $ 13.1 $ 14.7 $ 16.5 $ 15.8(2) $ 14.9(8) $ 3.0 $ 3.7
Broadcast cash flow margin(7)........ 28.5% 29.8% 31.0% 30.0% 26.8% 23.8% 28.0%
EBITDA(7)............................ $ 11.2 $ 12.9 $ 14.6 $ 14.0(2) $ 13.2(8)) $ 2.5 $ 3.2
After-tax cash flow(7)............... (0.7) 1.0 16.9 5.3 3.1 -- 0.5
BALANCE SHEET DATA (END OF PERIOD):
Cash and cash equivalents............ $ 2.3 $ 2.8 $ 2.4 $ 0.2 $ 0.2 $ 0.7 $ 0.3
Intangible assets, net............... 58.4 46.8 53.8 51.8 60.1 54.7 59.5
Total assets......................... 81.0 80.4 84.3 72.4 81.9 77.0 82.8
Total debt........................... 90.3 91.4 87.6 76.0 87.0 78.5 85.8
Redeemable preferred stock........... 12.2 14.1 10.4 10.3 11.3 10.6 11.6
------ ------ ------ ------ ------ ------ ------
Total debt and redeemable preferred
stock.............................. 102.5 105.5 98.0 86.3 98.3 89.1 97.4
Stockholders' deficiency(9).......... (27.0) (31.8) (22.8) (21.9) (23.3) (22.8) (23.9)
</TABLE>

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

(1) Total revenues less advertising agency commissions.

(2) Declines in net revenues, broadcast cash flow and EBITDA from 1993 are due
mainly to the sale of the Atlanta stations (WJZF-FM and WYAY-FM). See
further discussion in "Management's Discussion and Analysis of Financial
Condition and Results of Operations of NewCity."

(3) As a result of the sale of the assets of WYAY-FM (Atlanta) during 1993,
NewCity recorded a gain of $15.0 million for financial reporting purposes
equal to the difference between the contract selling price less all
related selling expenses and the net carrying value of the assets sold in
August 1993. A substantial portion of the assets sold was comprised of
intangibles and plant and equipment.

(4) As a result of the "Option Payment" received during 1994 in connection
with WJZF-FM (Atlanta), NewCity recorded a gain of $1.6 million for
financial reporting purposes. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations of NewCity."

(5) NewCity recorded an extraordinary loss of $2.0 million related to its
November 1993 refinancing during the year ended December 31, 1993. The
components of the extraordinary loss include prepayment penalties of $0.4
million and $0.6 million related to the early retirement of its insurance
company term notes payable and its $6.0 million subordinated notes payable
to Investors, (see Note 6 to the Consolidated Financial Statements of
NewCity), respectively. In addition, the extraordinary loss includes $0.6
million related to the write-off of unamortized deferred financing costs
and $0.4 million due to the recognition of a liability in an amount equal
to the present value of future payments due on existing interest rate swap
agreements that expired in April and June 1994. See Note 2 to the
Consolidated Financial Statements of NewCity.

(6) During the year ended December 31, 1994, NewCity recorded an extraordinary
loss of $0.2 million in connection with the early retirement of its 25%
junior subordinated notes payable due December 31, 2005. Such loss was due
to the write off of unamortized deferred financing costs.

29
<PAGE> 37

(7) "Broadcast cash flow" consists of operating income plus depreciation and
amortization and corporate general and administrative expenses. "Broadcast
cash flow margin" is broadcast cash flow as a percentage of net revenues.
"EBITDA" is operating income plus depreciation and amortization.
"After-tax cash flow" is income (loss) before extraordinary items, plus
depreciation and amortization. Although broadcast cash flow, broadcast
cash flow margin, EBITDA and after-tax cash flow are not recognized under
GAAP, they are accepted by the broadcast industry as generally recognized
measures of performance and are used by analysts who report publicly on
the condition and performance of broadcast companies. For the foregoing
reasons, NewCity believes that these measures are useful to investors.
However, investors should not consider these measures to be an alternative
to operating income as determined in accordance with GAAP, an alternative
to cash flows from operating activities (as a measure of liquidity) or an
indicator of NewCity's performance under GAAP.

(8) Declines in broadcast cash flow and EBITDA from 1994 are due mainly to the
losses incurred from the results of developing stations in Tulsa (KJSR-FM)
and Orlando (WZKD-AM) that began operating in January 1995. See further
discussion in "Management's Discussion and Analysis of Financial Condition
and Results of Operations of NewCity."

(9) No cash dividends were declared or paid on NewCity's common stock during
any of these periods.

30
<PAGE> 38

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
THE PRO FORMA COMBINED RESULTS OF OPERATIONS

The following sets forth summary unaudited pro forma combined financial
information for Cox Radio for the year ended December 31, 1995 and the three
months ended March 31, 1995 and 1996. The summary unaudited pro forma financial
information is based on certain assumptions and adjustments described in the
Notes to the Unaudited Pro Forma Combined Statements of Operations and should be
read in conjunction therewith. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations of Cox Radio," "Management's
Discussion and Analysis of Financial Condition and Results of Operations of
NewCity," "Selected Historical Consolidated Financial Data," and the
Consolidated Financial Statements for each of Cox Radio and NewCity.

<TABLE>
<CAPTION>
PRO FORMA FOR THE
TRANSACTIONS
-------------------
THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, -------------------
1995 1995 1996
------------ ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net revenues............................................... $167,086 $35,863 $40,608
Station operating expenses................................. 119,994 26,752 29,477
Corporate general and administrative expenses.............. 4,370 1,102 1,194
Depreciation and amortization.............................. 15,394 3,652 3,945
------------ ------- -------
Operating income........................................... 27,328 4,357 5,992
Interest expense........................................... 20,668 5,000 5,276
Net income (loss).......................................... 1,530 (1,345) (293)
OTHER OPERATING DATA:
Broadcast cash flow(1)..................................... $ 47,092 $ 9,111 $11,131
Broadcast cash flow margin(1).............................. 28.2% 25.4% 27.4%
EBITDA(1).................................................. $ 42,722 $ 8,009 $ 9,937
After-tax cash flow(1)..................................... 16,924 2,307 3,652
</TABLE>

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

(1)See Note 4 in "Selected Historical Consolidated Financial Data -- Cox Radio"
for definitions.

RESULTS OF OPERATIONS

Cox Radio, upon completion of the Transactions, will own or operate, or
provide sales and marketing services for, 40 radio stations (26 FM and 14 AM)
clustered in 12 markets. The summary unaudited pro forma combined financial
information presented herein does not purport to represent what Cox Radio's
results of operations would actually have been had the Transactions occurred on
January 1, 1995 or to project Cox Radio's results of operations for any future
period. The following analysis is intended only as a comparison of the pro forma
results of operations for the three months ended March 31, 1995 and 1996 as
presented in "Unaudited Pro Forma Combined Financial Data."

THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995

Net Revenues. Net revenues for the three months ended March 31, 1996
increased $4.7 million to $40.6 million, a 13% increase over the comparable
period in 1995. The increase was due generally to growth in market share and
advertising rate increases throughout the Company's markets and included $1.2
million at WSB-AM (Atlanta) due to pre-Olympic advertising and increased sports
programming revenues, $1.1 million at the Company's Los Angeles stations
primarily reflecting a rebound in listenership subsequent to the completion of
the O.J. Simpson trial and $1.0 million at the Company's Orlando stations
reflecting a strong local economy.

Station Operating Expenses. Station operating expenses increased $2.7
million to $29.5 million, an increase of 10% over the comparable period in 1995.
Higher sports programming costs in Atlanta and selling expenses related to
higher revenues throughout the Company contributed to the increase.

31
<PAGE> 39

Broadcast Cash Flow. Broadcast cash flow for the three months ended March
31, 1996 increased $2.0 million to $11.1 million, an increase of 22% over the
comparable period in 1995. In addition, the broadcast cash flow margin increased
to 27.4% for the three months ended March 31, 1996 from 25.4% for the comparable
period in 1995. Such increases resulted primarily from improvements in net
revenues over station operating expenses at the Company's Los Angeles and
Orlando Stations.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $0.1 million to $1.2 million, an increase of
8% over the comparable period in 1995.

Operating Income. Operating income for the three months ended March 31,
1996 increased $1.6 million to $6.0 million, a 38% increase over the comparable
period of 1995. In addition, the operating margin increased to 14.8% for the
three months ended March 31, 1996 from 12.1% for the comparable period of 1995.

Net Income (Loss). Net loss for the three months ended March 31, 1996
decreased $1.1 million to $0.3 million from the first quarter of 1995 primarily
for the reasons noted above.

Specific factors which are expected to affect the future operating results
of the Company are discussed below.

ACQUISITIONS

Within the last six months, in response to the removal of certain station
ownership restrictions in the 1996 Act, the Company has acquired or contracted
to acquire 27 radio stations for approximately $290 million to substantially
increase its station portfolio. In particular, upon the consummation of the
NewCity Acquisition, the Company will acquire 18 radio stations which will
enhance the Company's existing station group clusters and provide a platform for
the establishment of new station group clusters. The consummation of these
acquisitions will have a material effect on the Company's results of operations
and will limit the comparability of the Company's historical results. As
acquired stations are integrated into the Company, management expects to achieve
certain cost savings, revenue enhancements and broadcast cash flow growth as a
result of (i) the creation of station group clusters and (ii) the development of
underperforming stations.

CREATION OF CLUSTERS

Management expects that the creation and operation of station clusters will
result in (i) revenue growth by increasing the appeal of the Company's stations
to advertisers and enabling such stations to compete more effectively with other
forms of advertising and (ii) efficiencies by consolidating broadcast
facilities, eliminating duplicative positions in management and production and
reducing overhead expenses. Upon the consummation of the acquisitions, the
Company will have created station clusters in several of its markets including
seven stations in Orlando, five in Syracuse and three or more in nine of its 12
markets. Management believes that the Company's future operating results should
reflect the benefits of the Company's clustering strategy.

DEVELOPMENT OF UNDERPERFORMING STATIONS

Management believes that a number of the Company's stations, including
several in the group to be acquired, can be characterized as underperforming
stations which can achieve broadcast cash flow growth through application of Cox
Radio's operating strategy. The operation of underperforming stations will
initially require the Company to incur development costs; thereafter, management
intends to develop these stations into ratings leaders to improve revenue and
broadcast cash flow. Management has historically demonstrated its ability to
acquire underperforming stations and develop them into ratings and revenue
leaders. See "Business -- Operating Strategy-Develop Underperforming Stations."

32
<PAGE> 40

DIVESTITURE OF NON-STRATEGIC PROPERTIES

Although the Company expects to concentrate on identifying and acquiring
radio stations that fit its acquisition strategy, it has contracted to dispose
of certain existing stations. In the Orlando Acquisition, the Company has agreed
to exchange its two stations in Chicago for approximately $20 million in cash,
and three stations in Orlando, a market in which management believes it is cost
effective to cluster. In the Miami Disposition, the Company has agreed to sell
an underperforming AM station for approximately $13 million in cash. For tax
purposes, the Company will account for the Orlando Acquisition and Miami
Disposition as like-kind exchanges. Tax rules will allow the Company to defer
the taxable gain on these transactions upon the reinvestment of the $32.5
million in net proceeds in qualifying future acquisitions (other than the
Pending Transactions). The Company has not yet identified the properties to be
acquired.

33
<PAGE> 41

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF COX RADIO

GENERAL

Cox Radio is a leading national radio broadcasting company whose business
is devoted exclusively to operating, acquiring and developing radio stations
located throughout the United States. Prior to the Offerings, CEI and certain of
its subsidiaries will transfer ownership of their U.S. radio broadcast
properties to Cox Radio (the "Cox Radio Consolidation"). CEI's historical basis
in the assets and liabilities of the operations will be carried over to Cox
Radio. The Consolidated Financial Statements of Cox Radio represent the
operations of the radio stations currently owned or operated or to which sales
and marketing services were provided in connection with CEI's radio broadcasting
operations. The historical consolidated financial statements do not necessarily
reflect the results of operations or financial position that would have existed
had Cox Radio been an independent company.

The primary source of the Company's revenues is the sale of advertising
time to local and national advertisers. Historically, approximately three
quarters of the Company's revenues were generated from local advertising which
is sold by each station's sales staff. The Company's most significant station
operating expenses are employees' salaries and benefits, commissions,
programming expenses and advertising and promotional expenditures.

The Company's revenues are primarily affected by the advertising rates
charged by its radio stations for advertising time. The Company's advertising
rates are in large part based on a station's ability to attract audiences in the
demographic groups targeted by its advertisers, as measured principally by
Arbitron Radio Market Reports.

The Company's revenues vary throughout the year. As is typical in the radio
broadcasting industry, the Company's first calendar quarter generally produces
the lowest revenues for the year, and the second and fourth calendar quarters
generally produce higher revenues. The Company's operating results in any period
may be affected by advertising and promotional expenses that do not necessarily
produce commensurate revenues until the impact of the advertising and promotion
is realized in future periods.

ACQUISITIONS AND DISPOSITIONS

During the past several years, the Company has actively managed its
portfolio of radio stations through selected acquisitions, dispositions and
swaps, as well as through the use of LMAs and JSAs. Specific transactions
entered into by the Company during the past three years are discussed below.

In December 1993, the Company acquired WYSY-FM (Chicago) for $9.4 million.
Also in December 1993, Cox Radio exchanged KLRX-FM (Dallas) for WYNF-FM (Tampa)
and approximately $4.7 million. Subsequent to the exchange, the Company switched
the dial position of WYNF-FM with its existing Tampa station, WWRM-FM, and
changed WYNF-FM's call letters to WCOF-FM.

In January 1994, the Company entered into an LMA to operate WJZF-FM
(Atlanta). Subsequently, in September 1994, the Company paid $9.4 million for an
option to purchase substantially all of the station's assets. In August 1994,
the Company began operating KACE-FM (Los Angeles) under an LMA until the station
was acquired in August 1995 for $11.7 million.

In April 1995, Cox Radio entered into an LMA to operate WCNN-AM (Atlanta).
In June 1995, Cox Radio entered into a JSA with WFNS-AM (Tampa) and, in July
1996, decided to exercise its option to purchase WFNS-AM for $1.5 million,
consisting of $0.8 million in cash and the forgiveness of $0.7 million in
amounts due to Cox Radio.

In January 1996, Cox Radio completed the acquisition of two stations in
Louisville, WRKA-FM and WRVI-FM, for $8.7 million (the Prior Louisville
Acquisition). In April 1996, the Company agreed to sell WIOD-AM (Miami) for
approximately $13.0 million (the Miami Disposition). This transaction is
expected to close during the last quarter of 1996. In June 1996, the Company
acquired WHEN-AM and WWHT-FM

34
<PAGE> 42

(Syracuse) for $4.5 million (the Prior Syracuse Acquisition). The Syracuse
stations are operated by NewCity under an LMA. In June 1996, the Company agreed
to purchase WXNU-FM (Louisville) for $2.5 million (the Louisville Acquisition).
In July 1996, the Company agreed to exchange its two Chicago stations, WCKG-FM
and WYSY-FM, for three stations in Orlando, WHOO-AM, WHTQ-FM and WMMO-FM, and
approximately $20 million (the Orlando Acquisition). The Orlando stations are
operated by NewCity under an LMA. The exchange is expected to be consummated in
the first half of 1997. For tax purposes, the Company will account for the
Orlando Acquisition and the Miami Disposition as like-kind exchanges. Tax rules
will allow the Company to defer the related tax gains on these transactions upon
the investment of the $32.5 million in net proceeds in qualifying future
acquisitions (other than the Pending Transactions). In July 1996, the Company
agreed to acquire NewCity for an aggregate consideration of $253 million,
subject to certain working capital adjustments, consisting of approximately $167
million in cash and approximately $86 million in the assumption of NewCity debt
(the NewCity Acquisition). The NewCity Acquisition is expected to close in the
first half of 1997.

RESULTS OF OPERATIONS

This discussion should be read in conjunction with the accompanying audited
and unaudited Consolidated Financial Statements of Cox Radio. The results of
operations for Cox Radio represent the operations of the radio stations
currently owned or operated or to which sales and marketing services were
provided in connection with CEI's radio broadcasting operations. The historical
financial statements do not necessarily reflect the results of operations or
financial position that would have been reported had Cox Radio been an
independent company.

As a result of the acquisition activity discussed above, the Company's
historical financial statements are not directly comparable from period to
period.

The following table summarizes Cox Radio's financial results as reflected
in the historical financial statements included elsewhere herein, and other
operating data:

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
------------------------------- -----------------
1993 1994 1995 1995 1996
------- -------- -------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Net revenues................................ $94,950 $111,535 $123,572 $25,856 $29,568
Station operating expenses.................. 67,948 76,314 89,962 19,280 21,783
Corporate general and administrative
expenses(1).............................. 2,522 2,667 5,853 879 1,103
Depreciation and amortization............... 7,224 6,995 7,247 1,841 1,982
------- -------- -------- ------- -------
Operating income............................ 17,256 25,559 20,510 3,856 4,700
Interest expense............................ 5,590 5,229 5,974 1,427 1,467
Net income (loss)........................... (1,101)(2) 11,207 8,163 1,264 1,812
OTHER OPERATING DATA:
Broadcast cash flow(3)...................... $27,002 $ 35,221 $ 33,610 $ 6,576 $ 7,785
Broadcast cash flow margin(3)............... 28.4% 31.6% 27.2% 25.4% 26.3%
EBITDA(3)................................... $24,480 $ 32,554 $ 27,757 $ 5,697 $ 6,682
After-tax cash flow(3)...................... 13,715 18,202 15,410 3,105 3,794
</TABLE>

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

(1) As described in Note 9 to the Consolidated Financial Statements of Cox
Radio, certain of Cox Radio's executives participate in CEI's UAP. Because
CEI and Cox Radio are private companies, the benefits under the UAP are
generally payable in cash. This cash payment option has resulted in charges
to compensation expense of $0.9 million, $0.8 million and $1.6 million for
the years ended December 31, 1993, 1994 and 1995, respectively, and $0.4
million and $0.6 million for the three months ended March 31, 1995 and 1996,
respectively. This compensation expense is included in historical corporate
general and administrative expenses. Public companies traditionally
implement stock award plans that provide for the issuance of stock to
participants and do not result in compensation expense under applicable
accounting standards. The Company intends to implement such a plan in 1996
and, therefore does not expect to incur this expense in future periods. See
"Management -- Long-Term Incentive Plan." In addition, year ended December
31, 1995 corporate general and administrative expenses include a
nonrecurring corporate charge.

(2) Includes a $7.6 million noncash charge for the cumulative effect of
accounting changes. See further discussion in Notes 2, 7 and 8 to the
Consolidated Financial Statements of Cox Radio.

(3) See Note 4 in "Selected Historical Consolidated Financial Data -- Cox Radio"
for definitions.

35
<PAGE> 43

THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995

Net Revenues. Net revenues for the three months ended March 31, 1996
increased $3.7 million to $29.6 million, a 14% increase over the comparable
period in 1995. The increase was due to higher ratings at the Company's existing
stations as well as an increase in the number of stations owned or operated. The
increase at individual stations included $1.2 million at WSB-AM (Atlanta) due to
ratings increases, pre-Olympic advertising and increased sports programming
revenues, $0.5 million at KFI-AM (Los Angeles) reflecting a rebound in
listenership subsequent to the completion of the O.J. Simpson trial, and $1.6
million related to the operations of WCNN-AM (Atlanta), WFNS-AM (Tampa) and
Louisville stations, WRKA-FM and WRVI-FM, which were initially included in the
Company's operations after March 31, 1995. On a "same station" basis (reflecting
results from stations operated for the three months ended March 31 in both 1996
and 1995), net revenues increased $2.1 million to $28.0 million, an increase of
8% over the three months ended March 31, 1995.

Station Operating Expenses. Station operating expenses increased $2.5
million to $21.8 million, an increase of 13% over the comparable period in 1995.
Approximately $2.0 million of the increase was attributable to the operations of
WCNN-AM, WFNS-AM, WRKA-FM and WRVI-FM. Higher sports programming costs in
Atlanta and selling expenses related to higher revenues throughout the Company
also contributed to the increase. On a "same station" basis, station operating
expenses increased $0.5 million to $19.8 million, an increase of 2% over the
first quarter of 1995.

Broadcast Cash Flow. Broadcast cash flow increased $1.2 million to $7.8
million, an 18% increase over the comparable period in 1995. On a "same station"
basis, broadcast cash flow increased by $1.6 million to $8.2 million, an
increase of 24% over the comparable period in 1995. Such increases resulted
primarily from improvements in net revenues over station operating expenses at
WSB-AM and KFI-AM as discussed above.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $0.2 million to $1.1 million primarily due to
an increase in CEI's Unit Appreciation Plan ("UAP") expense.

Operating Income. Operating income increased $0.8 million to $4.7 million,
an increase of 22% over the first quarter of 1995 for the reasons noted above.

Interest Expense. Interest expense for the three months ended March 31,
1996 remained substantially the same as the comparable period in 1995.

Net Income. Net income increased by $0.5 million to $1.8 million in 1995,
an increase of 43% over the comparable period in 1995, for the reasons noted
above.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Revenues. Net revenues increased $12.0 million to $123.6 million in
1995, an increase of 11% over the prior year. Favorable ratings driven by
Atlanta sports programming, an improved advertising economy and an increase in
the number of stations owned or operated in existing station groups all
contributed to the increase. In Atlanta, net revenues increases of $8.8 million
were due primarily to the acquisition by WSB-AM of broadcast rights for the
Atlanta Braves and the Atlanta Hawks and the addition of the operations of
WCNN-AM. In Los Angeles, a $1.6 million increase in net revenues reflected
continued strong performance by KOST-FM and the operation of KACE-FM for a full
year, offset by the effects of a temporary decline in audience share at KFI-AM
during the O.J. Simpson trial. The remaining stations combined contributed an
increase in net revenues of $1.6 million despite a $1.8 million decrease in
revenues at WIOD-AM (Miami). The Company has contracted to sell WIOD-AM. That
transaction is expected to close in the fourth quarter of 1996. On a "same
station" basis (reflecting results from stations operated for the entire twelve
months in both 1995 and 1994), net revenues increased $8.0 million to $118.8
million, an increase of 7% over 1994.

Station Operating Expenses. Station operating expenses increased $13.6
million to $90.0 million, an increase of 18% over the prior year. Significant
components of the increase include $6.3 million for the acquisition of broadcast
rights for the Atlanta Braves and the Atlanta Hawks, $2.0 million of
programming,

36
<PAGE> 44

sales and other operating expenses resulting from a full year of operations at
KACE-FM and $2.6 million of station operating expenses incurred at WCNN-AM which
has been operated under an LMA since April 1995. Higher selling costs associated
with revenue increases posted by the Company's existing stations also
contributed to the increase in station operating expenses. On a "same station"
basis, station operating expenses increased $8.5 million to $84.0 million, an
increase of 11% over 1994.

Broadcast Cash Flow. Broadcast cash flow decreased $1.6 million to $33.6
million, a decrease of 5% from the prior year, primarily attributable to the
operations of WCNN-AM discussed above. On a "same station" basis, broadcast cash
flow decreased $0.5 million to $34.8 million, a decrease of 1% over the prior
year, primarily attributable to the operations of the Company's Atlanta radio
stations, exclusive of WCNN-AM.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $3.2 million to $5.9 million principally due
to a $0.8 million increase in UAP expense and a non-recurring corporate charge.

Operating Income. Operating income decreased $5.0 million to $20.5
million, a 20% decrease from 1994, for the reasons discussed above.

Interest Expense. Interest expense increased $0.7 million to $6.0 million
in 1995, a 14% increase over the prior year due to an increase in interest rates
during 1995.

Net Income. Net income decreased $3.0 million from 1994 to $8.2 million in
1995, due to the operational changes and the nonrecurring corporate charge
discussed above.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Net Revenues. Net revenues increased 17% to $111.5 million in 1994, a
$16.6 million increase over the prior year. The net revenue gains were the
result of an increase in the number of stations owned or operated during 1994
and improved advertising rates. In Atlanta, an increase of net revenues of $4.5
million was attributable to WJZF-FM, operated under an LMA agreement beginning
in January 1994, and improved ratings resulting from programming changes at
WSB-AM. In Chicago, an increase of net revenues of $6.3 million included $4.9
million attributable to a full year of operations of WYSY-FM, which was acquired
in December 1993. In Los Angeles, net revenues growth of $3.3 million resulted
from higher ratings at KOST-FM and KFI-AM and the addition of KACE-FM, operated
under an LMA beginning in August 1994. All other markets posted a net revenues
increase of $2.5 million in 1994. On a "same station" basis (reflecting results
from stations operated for the entire twelve months in both 1994 and 1993), net
revenues increased $8.4 million to $100.8 million, an increase of 9% over 1993.

Station Operating Expenses. Station operating expenses increased $8.4
million to $76.3 million, an increase of 12% over the prior year. This increase
was due to increased costs associated with the operation and promotion of
additional stations ($4.8 million for WJZF-FM, KACE-FM, and WYSY-FM), additional
programming and promotional costs across all other stations, as well as
increased sales commissions resulting from the Company's revenue growth. On a
"same station" basis, station operating expenses increased $4.8 million to $69.5
million, an increase of 7% over 1994.

Broadcast Cash Flow. Broadcast cash flow increased $8.2 million to $35.2
million, an increase of 30% over the prior year. On a "same station" basis,
broadcast cash flow increased $3.6 million to $31.3 million, an increase of 13%
over the prior year. Such increases resulted primarily from the operations of
WJZF-FM, WYSY-FM and, on a same station basis, the Company's Los Angeles radio
stations.

Corporate General and Administrative Expenses. Corporate general and
administrative expenses increased $0.1 million over the prior year.

Operating Income. Operating income increased $8.3 million to $25.6
million, a 48% increase over 1993, for the reasons discussed above.

37
<PAGE> 45

Interest Expense. Interest expense decreased $0.4 million in 1994 to $5.2
million, a 6% decrease from the prior year, primarily as a result of a $4.6
million reduction in notes payable to CEI during 1994.

Net Income. Net income was $11.2 million in 1994, a $12.3 million increase
over 1993 due to the operational changes discussed above and the impact of the
noncash, nonrecurring cumulative effect of accounting changes of $7.6 million
recorded in 1993.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary source of liquidity is cash provided by operations.
Cash requirements have been funded by Cox Radio's operating activities and
historically, as needed, through intercompany advances from CEI. CEI continues
to perform day-to-day cash management services for Cox Radio. See "Description
of Indebtedness" and "Certain Relationships and Related Transactions."

Cox Radio will be required to borrow approximately $166 million to
consummate the NewCity Acquisition. Although Cox expects to be able to obtain
the required loan from a syndicate of banks, if such bank financing is not
available, the required funds will be loaned by CEI to Cox Radio at market
rates.

Future cash requirements are expected to include capital expenditures,
principal and interest payments on indebtedness and funds for acquisitions. The
Company expects its operations to generate sufficient cash to meet its capital
expenditures and debt service requirements. Additional cash requirements,
including funds for pending or other acquisitions, will be funded by various
sources, including the proceeds from the Offerings, bank financing and, if or
when appropriate, other issuances of Company securities.

Selected statements of cash flow and operations data are summarized as
follows:

<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------- ----------------
1993 1994 1995 1995 1996
------- ------- ------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net cash provided by operating
activities.............................. $11,429 $13,881 $13,211 $ 8,683 $9,447
Net cash used in investing activities
(including acquisitions)................ 6,053 12,292 17,342 688 9,185
Net cash provided by (used in) financing
activities.............................. (4,776) (1,420) 3,925 (7,828) 99
Broadcast cash flow....................... 27,002 35,221 33,610 6,576 7,785
Interest expense.......................... 5,590 5,229 5,974 1,427 1,467
Income taxes.............................. 6,048 8,863 6,226 1,120 1,325
Capital expenditures...................... 1,065 2,705 4,073 680 442
</TABLE>

The Company has contractual commitments for sports programming and on-air
personality of $9.2 million, $9.7 million, $10.1 million and $9.0 million for
1996, 1997, 1998 and 1999, which are expected to be funded through operations.

IMPACT OF INFLATION

The impact of inflation on the Company's operations has not been
significant to date. However, there can be no assurance that a high rate of
inflation in the future would not have an adverse impact on the Company's
operating results.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

38
<PAGE> 46

criteria are first applied based on the fair value of the asset. Long-lived
assets and certain intangibles to be disposed of are required to be reported at
the lower of carrying amount or fair value less cost to sell. Cox Radio adopted
SFAS No. 121 in the first quarter of 1996. Adoption of SFAS No. 121 did not have
a material impact on the Company's financial statements.

In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation,"
was issued. The adoption of the new recognition provisions for stock-based
compensation expense included in SFAS No. 123 is optional; however, the pro
forma effects on net income and earnings per share had the new recognition
provisions been elected is required to be disclosed in the financial statements.
Cox Radio will continue to follow the requirements of APB No. 25, "Accounting
for Stock Issued to Employees" in its accounting for employee stock options;
therefore, no impact on the Company's financial position and results of
operations is expected. Cox Radio will provide the new disclosure requirements
under SFAS No. 123 in the annual financial statements for the year ending
December 31, 1996.

UNAUDITED QUARTERLY FINANCIAL INFORMATION

The following table sets forth selected quarterly financial information for
Cox Radio. This information is derived from unaudited financial statements of
Cox Radio and includes, in the opinion of management, all normal and recurring
adjustments that management considers necessary for a fair presentation of the
results for such periods. The operating results for any quarter are not
necessarily indicative of results for any future period.

<TABLE>
<CAPTION>
1ST 2ND 3RD 4TH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
1994
Net revenues............................................ $21,608 $27,546 $29,907 $32,474
Corporate general and administrative expenses........... 638 632 659 738
Depreciation and amortization........................... 1,709 1,731 1,744 1,811
Operating income........................................ 3,036 6,275 9,641 6,607
Net income.............................................. 641 3,034 4,613 2,919
1995
Net revenues............................................ $25,856 $32,695 $31,402 $33,619
Corporate general and administrative expenses........... 879 994 2,979(1) 1,001
Depreciation and amortization........................... 1,841 1,874 1,768 1,764
Operating income........................................ 3,856 6,098 3,610 6,946
Net income.............................................. 1,264 2,532 1,355 3,012
1996
Net revenues............................................ $29,568
Corporate general and administrative expenses........... 1,103
Depreciation and amortization........................... 1,982
Operating income........................................ 4,700
Net income.............................................. 1,812
</TABLE>

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

(1) Includes a nonrecurring corporate charge.

39
<PAGE> 47

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OF NEWCITY

GENERAL

NewCity's financial results depend on a number of factors, including the
strength of the national economy and the local economies of NewCity's served
markets, local market competition from other radio stations and other
advertising media, government regulation and policies and NewCity's ability to
provide popular programming.

NewCity's revenues depend directly on the advertising rates that its
stations are able to charge, and those in turn depend on the stations' ability
to attract audiences in the demographic groups targeted by its advertisers, as
measured principally by Arbitron. NewCity monitors the popularity of the formats
it employs through the regular use of market research and takes other steps to
develop strong listener loyalty.

Advertising contracts are generally short-term. Most of NewCity's revenue
is generated from local advertising, which is sold primarily by a station's
sales staff. For the years ended December 31, 1993, 1994 and 1995, and the three
months ended March 31, 1996, approximately 66.1%, 66.5%, 68.2%, and 68.0%
respectively, of NewCity's total revenues were from local advertising. To
generate national advertising sales, NewCity engages Katz Radio, a subsidiary of
Katz Communications, Inc., a national sales representative firm that specializes
in national sales, for each of its stations. In addition, NewCity employs a
national sales manager in each of its markets to maximize its national sales
effort.

Period to period comparisons of NewCity's historical financial statements
are not necessarily meaningful due to the disposition or acquisition of certain
of NewCity's radio stations and the use of LMAs. In addition, NewCity's revenues
and operating income are typically lowest in the first quarter and highest in
the second and fourth quarters. Seasonal revenue fluctuations are common in the
radio broadcasting industry and are due primarily to fluctuations in advertising
expenditures. In August 1993, NewCity sold substantially all the assets of
WYAY-FM in Atlanta and in June 1993 entered into an agreement to sell WJZF-FM in
Atlanta. During the years ended December 31, 1993, 1994 and 1995, WYAY-FM and
WJZF-FM had aggregate net revenues of $3.7 million, $0.3 million and $0.4
million or 7%, 0.5% and 0.6% of NewCity's consolidated net revenues,
respectively.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995

Net Revenues. Net revenues increased from $12.6 million during the three
months ended March 31, 1995 to $13.2 million during the three months ended March
31, 1996, an increase of $0.5 million, or 4%. Such increase was primarily due to
an increase in local broadcasting revenues of $0.6 million which was partially
offset by a decrease of $0.1 million in national revenues. The overall increase
in local broadcasting revenues was primarily caused by increased local revenues
in the Tulsa and Orlando markets due to growth in audience share and advertising
rate increases. The overall decrease in national broadcasting revenues was
substantially caused by a reduction in such revenues in the Birmingham and San
Antonio markets due to a decrease in audience share and reduced national
advertising market activity which was partially offset by an increase in
national revenues in the Syracuse market due to increased national advertising
market activity.

Operating Costs. Total operating costs decreased from $10.9 million during
the three months ended March 31, 1995 to $10.8 million during the three months
ended March 31, 1996, a decrease of $0.1 million, or 1%. Contributing to the
decrease in total operating costs of $0.1 million were decreases of $30,000 in
broadcasting operations costs, $0.1 million in selling, general and
administrative costs and $44,000 in corporate general and administrative
expenses which were partially offset by an increase in depreciation and
amortization of $93,000. The decrease of $30,000 in broadcasting operations
costs includes an overall reduction in marketing and promotional costs that was
substantially offset by increases in certain programming and technical costs.
The decrease in marketing and promotional costs resulted from strategically
reduced promotional activity within most markets in response to decreased
efforts by competitors. The increase in

40
<PAGE> 48

programming and technical costs resulted from increased salaries related to
certain programming personnel and additional technical costs to operate certain
radio stations not owned during the three months ended March 31, 1995.

Selling, General and Administrative Expenses. The reduction in selling,
general and administrative expenses during the three months ended March 31, 1996
was primarily due to the elimination of lease costs related to local marketing
agreements for certain radio stations that were not owned during the three
months ended March 31, 1995 but that were owned during the first quarter in
1996. Partially offsetting such decrease was an increase in commissions paid as
a result of increased revenues during the first quarter in 1996.

Depreciation and Amortization Expense. Depreciation and amortization
expense increased from $0.7 million during the three months ended March 31, 1995
to $0.8 million during the three months ended March 31, 1996, an increase of
$93,000, or 13%. This increase was due to depreciation of equipment purchased or
acquired subsequent to the three months ended March 31, 1995.

Operating Income. Operating income increased by $0.6 million, or 36%, from
$1.8 million during the three months ended March 31, 1995 to $2.4 million during
the three months ended March 31, 1996. Such increase was due to the increase in
net revenues of $0.5 million along with the decrease in total operating expenses
of $0.1 million.

EBITDA. EBITDA increased by $0.7 million, or 29%, from $2.5 million during
the three months ended March 31, 1995 to $3.2 million during the three months
ended March 31, 1996. Such increase was primarily due to improved EBITDA in the
Tulsa, Orlando and Syracuse markets generally as a result of increased revenues.

Interest Expense. Interest expense increased by $0.3 million during the
first three months of 1996 compared to the same period in 1995, from $2.3
million to $2.6 million. Such increase was principally due to an increase in
total outstanding indebtedness in 1996 as compared to the same period in 1995.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Revenues. Net revenues increased from $52.7 million during the year
ended December 31, 1994 to $55.6 million during the year ended December 31,
1995, an increase of $3.0 million, or 6%. Such increase was primarily caused by
net revenue increases in the Tulsa, Orlando, Syracuse and Bridgeport markets. In
aggregate, a substantial portion of the $3.0 million increase in net revenues
was due to increased local broadcasting revenues partially offset by a minor
decrease in national broadcasting revenues. Contributing significantly to the
net revenue increases in the Tulsa, Orlando, Syracuse and Bridgeport markets
were growth in market revenue share or advertising rate increases. In addition,
net revenues attributable to a new radio station, KJSR-FM, that began operating
in January 1995 caused a substantial portion of the Tulsa market net revenues
increase.

Operating Costs. Total operating costs increased from $41.8 million during
the year ended December 31, 1994 to $46.0 million during the year ended December
31, 1995, an increase of $4.2 million, or 10%. Contributing to the increase in
total operating costs of $4.2 million were increases of $2.8 million in
broadcasting operations costs, $1.0 million in selling, general and
administrative costs and $0.4 million in depreciation and amortization expense.
The increase of $2.8 million in broadcasting operations costs was due primarily
to the programming and marketing costs associated with operating two new radio
stations in the Tulsa and Orlando markets, approximately $1.2 million and,
additionally, marketing cost increases in the Orlando and San Antonio markets to
advertise and promote new radio station programming formats or to address
increased competition within the markets and in the Bridgeport market due to
increased marketing efforts in response to increased competition. Also,
increases in programming salaries and research expenses in most markets
contributed to the overall increase in broadcasting operations costs.

Selling, General and Administrative Expenses. The increase of $1.0 million
in selling, general and administrative expenses was principally due to an
increase of $0.9 million in such costs to operate two new radio stations in the
Tulsa and Orlando markets.

41
<PAGE> 49

Depreciation and Amortization Expense. Depreciation and amortization
expense increased from $3.1 million during the year ended December 31, 1994 to
$3.5 million during the year ended December 31, 1995, an increase of $0.4
million, or 14%. Such increase was primarily due to the depreciation of
equipment acquired during 1995 in connection with the purchase of four radio
stations.

Operating Income. Operating income decreased by $1.2 million from $10.9
million during the year ended December 31, 1994 to $9.7 million for the year
ended December 31, 1995. Such decrease was due to the increase in operating
costs of $4.2 million partially offset by the increase in consolidated net
revenues of $3.0 million.

EBITDA. EBITDA decreased from $13.9 million during the year ended December
31, 1994 to $13.2 million during the year ended December 31, 1995, a decrease of
$0.8 million or 6%. Excluding the EBITDA attributable to the two new radio
stations that began operating in January 1995 in the Tulsa and Orlando markets,
NewCity's EBITDA for the year ended December 31, 1995 would have been $14.0
million.

Interest Expense. Interest expense decreased by $0.2 million during the
year ended December 31, 1995 compared to the same period in 1994, from $10.1
million to $9.8 million. Such decrease was principally due to a reduction in
deferred interest expense of approximately $0.7 million in 1995, resulting from
the payment in September 1994 of certain 25% debt to an association of
investment partnerships and individual investors (collectively, the "Investors")
partially offset by an increase in total cash interest expense of approximately
$0.5 million due to increased borrowings.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Net Revenues. Net revenues decreased from $53.3 million during the year
ended December 31, 1993 to $52.7 million during the year ended December 31,
1994, a decrease of $0.6 million, or 1%. This decrease was caused by a decrease
of $3.4 million in net revenues attributable to the Atlanta radio stations sold
or held for sale partially offset by an aggregate increase of $2.8 million in
net revenues in all of NewCity's current markets. Primarily contributing to this
increase were increases in net revenues in the Birmingham and Tulsa markets due
to both growth in market revenue share and advertising rate increases. In
addition, a net revenues increase in the Syracuse market, caused by a new radio
station's revenue for a full year in 1994 compared to a partial year's revenues
in 1993 since the radio station was not acquired until April 1993, also
contributed to the aggregate net revenues increase. Excluding the Atlanta radio
stations sold or held for sale, net revenues were $49.6 million during the year
ended December 31, 1993 compared to $52.4 million during the year ended December
31, 1994, an increase of $2.8 million or approximately 6%.

Operating Costs. Total operating costs decreased from $42.5 million during
the year ended December 31, 1993 to $41.8 million during the year ended December
31, 1994, a decrease of $0.7 million, or 2%. Such decrease was due to a decrease
of $3.1 million in operating costs related to the Atlanta radio stations sold or
held for sale that was substantially offset by an aggregate increase of $2.3
million in costs to operate the radio stations located in all of NewCity's
current markets. Contributing primarily to the aggregate increase of $2.3
million were increases of $1.4 million in broadcasting operations costs and $1.4
million in selling, general and administrative costs partially offset by a
decrease in depreciation and amortization of approximately $0.3 million,
excluding the Atlanta radio stations. The increase in broadcasting costs of $1.4
million was due to increases in marketing costs in most markets as a result of
increased competition, increased rights fees for certain programming contracts
in the Syracuse, Tulsa and Orlando markets, and increases in certain
broadcasting personnel costs in most markets.

Marketing and Promotional Costs. Excluding the Atlanta radio stations sold
or held for sale, marketing and promotional costs for the year ended December
31, 1994 were $4.9 million, approximately 26% greater than those incurred for
the year ended December 31, 1993, which were $3.9 million.

Selling, General and Administrative Expenses. Excluding the Atlanta radio
stations, the increase in selling, general and administrative expenses during
the year ended December 31, 1994 of $1.4 million, was substantially due to
increased commissions paid as a result of the aggregate growth in net revenues,
additional salaries, selling and administrative expenses incurred to operate a
new radio station in the Syracuse market

42
<PAGE> 50

that was not part of NewCity's operations until April 1993, increased salaries
and administrative expenses of approximately $250,000 to operate a new research
division in 1994 that did not exist during most of 1993, increased employee
health insurance costs and a general increase in employee compensation.

Depreciation and Amortization Expense. Depreciation and amortization
expense decreased from $3.9 million during the year ended December 31, 1993 to
$3.1 million during the year ended December 31, 1994, a decrease of $0.8
million. Such decrease was principally due to a reduction of $0.5 million in
depreciation and amortization related to the Atlanta radio stations sold or held
for sale. The remaining reduction was caused by certain equipment that became
fully depreciated during 1994.

EBITDA. EBITDA decreased from $14.6 million during the year ended December
31, 1993 to $13.9 million during the year ended December 31, 1994, a decrease of
$0.7 million, or approximately 5%. Excluding the Atlanta radio stations, EBITDA
was $13.7 million during the year ended December 31, 1993 and $13.9 million
during the year ended December 31, 1994, an increase of $0.2 million, or 1%.

Interest Expense. Interest expense decreased by $1.6 million, or 14%,
during the year ended December 31, 1994 compared to the same period in 1993,
from $11.6 million to $10.1 million. Such decrease was principally due to
NewCity's major refinancing of its total indebtedness in 1993 which resulted in
a reduction in total outstanding indebtedness in 1994 compared to 1993. See Note
2 to the Consolidated Financial Statements of NewCity.

On September 20, 1994, the Company amended the WJZF-LMA (the "Amendment").
Among other items, the Amendment provided for the issuance by NewCity to Cox
Radio, Inc. of an exclusive option to purchase substantially all the assets of
radio station WJZF-FM (Atlanta) during the extended term of the LMA (the
"Option"). In consideration for the Option, NewCity received a non-refundable
cash payment of $9.1 million (the "Option Payment"). Upon the exercise of the
Option, NewCity will receive additional cash consideration of $100. Because the
cash proceeds received from the Option are non-refundable and such proceeds, in
the opinion of management, approximated the fair market value of the assets of
WJZF-FM, NewCity accounted for the economic substance of this transaction as if
a sale of substantially all the assets of WJZF-FM had occurred. Accordingly, a
gain of $1.6 million was recorded for financial reporting purposes equal to the
difference between the Option payment received, less all related selling
expenses, and the net carrying value of the assets of WJZF-FM, including all
intangibles and equipment. For the year ended December 31, 1993, NewCity had a
gain on sale of broadcasting assets of $15.0 million as a result of the sale of
WYAY-FM.

Income Tax Expense. Income tax expense decreased by $0.9 million during
the year ended December 31, 1994 as compared to 1993. Such decrease is the
result of federal and state income taxes associated with the gain recognized on
the sale of WYAY-FM (Atlanta) in 1993 while in 1994 the gain recognized on the
sale of WJZF-FM resulted in no federal or state income taxes for income tax
purposes because of differences in book and tax asset bases. See Note 11 to the
Consolidated Financial Statements of NewCity.

Extraordinary Loss. During the year ended December 31, 1994, NewCity
recorded an extraordinary loss of $0.2 million which was caused by the write-off
of unamortized income financing costs related to the Junior Notes. During the
year ended December 31, 1993, the $2.0 million loss was incurred in connection
with the early extinguishment of debt to Investors.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In March 1995, SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of," was issued. This Statement
requires that long-lived assets and certain intangibles be reviewed for
impairment when events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable, with any impairment losses being
reported in the period in which the recognition criteria are first applied based
on the fair value of the asset. Long-lived assets and certain intangibles to be
disposed of are required to be reported at the lower of carrying amount or fair
value less cost to sell. NewCity adopted SFAS No. 121 in the first quarter of
1996. Adoption of SFAS No. 121 did not have a material impact on the Company's
financial statements.

43
<PAGE> 51

BUSINESS

44
<PAGE> 52

The following table summarizes certain information relating to the
Company's radio stations, assuming the consummation of the Pending Transactions:

<TABLE>
<CAPTION>
1995 AUDIENCE
RADIO 1995 SHARE IN
MARKET AND MARKET ARBITRON TARGET TARGET
STATION CALL REVENUE MARKET DEMOGRAPHIC DEMOGRAPHIC
LETTERS(1) FORMAT RANK(2) RANK(3) GROUP GROUP
- ------------ --------------------------- ------- -------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
LOS ANGELES 1 2
KFI-AM Talk Adults 35-54(4) 5.8
KOST-FM Adult Contemporary Women 25-44(4) 5.1
KACE-FM R&B Oldies African American 11.7
Adults 35-54
ATLANTA 10 12
WSB-AM News/Talk Adults 35-64 8.8
WSB-FM Adult Contemporary Women 25-54 7.7
WJZF-FM(5) Jazz Men 25-54 4.3
WCNN-AM(6) Sports/Talk Men 25-54 2.2
MIAMI 12 11
WFLC-FM Hot Adult Contemporary Adults 25-54 4.9
WHQT-FM Urban Adult Contemporary Adults 25-54 6.2
TAMPA 21 21
WWRM-FM Soft Adult Contemporary Women 35-54(4) 9.0
WCOF-FM 70's Oldies Adults 25-44(4) 5.5
WSUN-AM Sports/Talk Men 25-54 3.8
WFNS-AM(7) Sports/Talk Men 25-54 1.4
ORLANDO 26 39
WDBO-AM(5) News/Talk Adults 35-64 7.6
WWKA-FM(5) Country Adults 25-54 8.5
WCFB-FM(5) Rhythmic Adult Contemporary Women 25-54 5.4
WZKD-AM(5) Kids Radio Children 3-11 --
WHOO-AM(8) Standards Adults 55+ 12.8
WHTQ-FM(8) Classic Rock Men 25-54 6.7
WMMO-FM(8) Rock Adult Contemporary Adults 25-54 6.5
SAN ANTONIO 29 34
KCYY-FM(5) Country Adults 25-54 7.2
KKYX-AM(5) Classic Country Adults 35-64 2.9
KCJZ-FM(5) Jazz Adults 25-54 5.3
LOUISVILLE 45 49
WRKA-FM Oldies Adults 35-54(4) 6.7
WRVI-FM Rock Adult Adults 25-49 1.8 (9)
WXNU-FM(10) Contemporary Alternative Adults 18-34 3.9

1995 1995
COMBINED COMBINED
STATION STATION
GROUP GROUP
MARKET AND TARGET REVENUE REVENUE
STATION CALL DEMOGRAPHIC MARKET MARKET
LETTERS(1) RANK RANK SHARE
- ------------ ----------- -------- --------
<S> <C> <C> <C>
LOS ANGELES 4 10.9 %
KFI-AM 1
KOST-FM 2
KACE-FM 2

ATLANTA 1 21.3 %
WSB-AM 2
WSB-FM 5
WJZF-FM(5) 10
WCNN-AM(6) 17
MIAMI 3 11.3 %
WFLC-FM 4
WHQT-FM 2
TAMPA 4 11.9 %
WWRM-FM 1
WCOF-FM 10
WSUN-AM 14
WFNS-AM(7) 16
ORLANDO 1 30.7 %
WDBO-AM(5) 4
WWKA-FM(5) 2
WCFB-FM(5) 8
WZKD-AM(5) --
WHOO-AM(8) 2
WHTQ-FM(8) 5
WMMO-FM(8) 6
SAN ANTONIO 4 14.3 %
KCYY-FM(5) 2
KKYX-AM(5) 14
KCJZ-FM(5) 9
LOUISVILLE 5 8.0 %
WRKA-FM 4
WRVI-FM 14 (9)
WXNU-FM(10) 10

</TABLE>

45
<PAGE> 53
<TABLE>
<CAPTION>
1995 AUDIENCE
RADIO 1995 SHARE IN
MARKET AND MARKET ARBITRON TARGET TARGET
STATION CALL REVENUE MARKET DEMOGRAPHIC DEMOGRAPHIC
LETTERS(1) FORMAT RANK(2) RANK(3) GROUP GROUP
- ------------ ------------------ ------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
BIRMINGHAM 51 55
WZZK-FM(5) Country Adults 25-54 14.1
WZZK-AM(5) Country Adults 25-54 N.A. (11)
WODL-FM(5) Oldies Adults 25-54 8.0

DAYTON 55 52
WHIO-AM News/Talk Adults 35-64 6.3
WHKO-FM Country Adults 25-54 14.9
TULSA 56 60
KRMG-AM(5) News/Talk Adults 25-54 6.5
KWEN-FM(5) Country Adults 25-54 13.1
KJSR-FM(5) 70's Oldies Adults 25-54 8.5
BRIDGEPORT 58 111
WEZN-FM(5) Adult Contemporary Adults 25-54 14.3 (12)
SYRACUSE 71 68
WSYR-AM(5) News/Talk Adults 35-64 11.6
WYYY-FM(5) Adult Contemporary Adults 25-54 12.4
WBBS-FM(5) Country Adults 25-54 9.7
WHEN-AM Sports/Talk Men 25-54 3.4
WWHT-FM Adult Hit Radio Women 18-34 3.6

<CAPTION>
1995 1995
COMBINED COMBINED
STATION STATION
GROUP GROUP
MARKET AND TARGET REVENUE REVENUE
STATION CALL DEMOGRAPHIC MARKET MARKET
LETTERS(1) RANK RANK SHARE
- ------------ ----------- -------- --------
<S> <C> <C> <C>
BIRMINGHAM 1 32.5 %
WZZK-FM(5) 1
WZZK-AM(5) N.A. (11)
WODL-FM(5) 5
DAYTON 2 25.5 %
WHIO-AM 4
WHKO-FM 1
TULSA 1 35.5 %
KRMG-AM(5) 5
KWEN-FM(5) 1
KJSR-FM(5) 4
BRIDGEPORT 3 21.6 %
WEZN-FM(5) 1 (12)
SYRACUSE 1 55.3 %
WSYR-AM(5) 1
WYYY-FM(5) 1
WBBS-FM(5) 3
WHEN-AM 10
WWHT-FM 7
</TABLE>

- ---------------
(1) Metropolitan market served; city of license may differ.

(2) Ranking of the principal radio market served by the stations among all
radio markets in the United States by 1995 market revenue.

(3) Ranks assigned by Arbitron based on 12+ population in the market.

(4) Arbitron does not report the audience share on these specific target
audiences. Therefore, the closest representative target audience shares and
rankings were used.

(5) Station to be acquired pursuant to the NewCity Acquisition.

(6) Station operated by Cox Radio pursuant to an LMA.

(7) Advertising time on WFNS-AM is sold and marketed by Cox Radio pursuant to a
JSA. Station to be acquired pursuant to the Tampa Acquisition.

(8) Station to be acquired pursuant to the Orlando Acquisition.

(9) Broadcasting on WRVI-FM began in January 1996. Accordingly, audience share
and audience rank are based only on the Winter 1996 Arbitron Market Report.

(10) Station to be acquired pursuant to the Louisville Acquisition.

(11) Audience share and audience rank information for WZZK-AM and WZZK-FM are
combined because the stations are simulcast.

(12) Audience share and rank data is based only on Arbitron Market Reports for
Spring 1995 and Fall 1995 because Arbitron does not produce Summer and
Winter Arbitron Market Reports for the Bridgeport/Fairfield County market.

46
<PAGE> 54

OPERATING STRATEGY

The following is a description of the key elements of the Company's
operating strategy:

Cluster Stations

Cox Radio operates its stations in clusters to (i) enhance net revenues
growth by increasing the appeal of the Company's stations to advertisers and
enabling such stations to compete more effectively with other forms of
advertising and (ii) achieve operating efficiencies by consolidating broadcast
facilities, eliminating duplicative positions in management and production and
reducing overhead expenses. Management believes that operating several radio
stations in each of its markets will enable its sales teams to offer advertisers
more attractive advertising packages. Furthermore, as radio groups achieve
significant audience share, they can deliver to advertisers the audience reach
that historically only television and newspapers could offer, with the added
benefit of frequent exposure to advertisers' potential customers. Management
believes that the Company's clusters of stations, and their corresponding
audience share, provide opportunities to capture an increased share of total
advertising revenue in each of its markets.

Develop Underperforming Stations

The Company's management has demonstrated its ability to acquire
underperforming radio stations and develop them into consistent ratings and
revenue leaders. The following illustrates certain past successes of both Cox
Radio and NewCity in developing underperforming stations:

In Miami, Cox Radio acquired WHQT-FM in late 1993 in exchange for its only
Charlotte station to further cluster its Miami station group. At the time of the
acquisition, WHQT-FM was ranked eighth in the market with a 4.3 audience share
among Adults 25-54. Cox Radio instituted its research, programming, and
marketing strategy and modified the station's format, installing a morning show
and more focused music programming. The station achieved a 5.8 audience share
among Adults 25-54 in the Summer 1994 Arbitron Market Report, improving its rank
from eighth to second. The station has consistently been a ratings leader,
finishing in the top three among Adults 25-54 since the Winter 1995 Arbitron
Market Report, and capturing the number one audience share among Adults 25-54 in
the Fall 1995 and Winter 1996 Arbitron Market Reports. Furthermore, as a result
of this increase in ratings, Cox Radio significantly increased the station's
broadcast cash flow margins.

In Tampa, Cox Radio acquired WYNF-FM in 1993 in exchange for its only
Dallas radio station to further cluster its Tampa station group. After
reevaluating its market position, Cox Radio switched WYNF-FM's dial position
with Cox Radio's existing Tampa station, WWRM-FM, changed WYNF-FM's call letters
to WCOF-FM and installed its 70's Oldies format, one of the first in the United
States. This transaction enhanced Cox Radio's presence in the market. At the
time of the acquisition, WCOF-FM had a 1.3 audience share among Adults 25-54 and
ranked thirteenth in the market. After the format change, WCOF-FM debuted with a
7.3 audience share among Adults 25-54 in the Fall 1993 Arbitron Market Report,
ranking sixth in the market. The station was ranked eighth and had a 5.5
audience share among Adults 25-54 in the Winter 1996 Arbitron Market Report. In
addition, the new dial position helped WWRM-FM reach a larger audience within
the Women 35-64 demographic (which is representative of WWRM-FM's target
demographic, Women 35-54), resulting in a 6.3 audience share and number six rank
in the Fall 1993 Arbitron Market Report. In the Winter 1996 Arbitron Market
Report, WWRM-FM had an 8.5 audience share and was ranked second.

47
<PAGE> 55

In Los Angeles, Cox Radio entered into an LMA in August 1994 to operate
KACE-FM and acquired the station in August 1995. The station has a limited
signal that covers only a portion of the Southern California market. At the time
of the acquisition, KACE-FM was the thirty-eighth ranked station with a 0.4
audience share among Adults 25-54, and ranked last among stations targeting
African American adults. Cox Radio changed the format of the station to Rhythm
and Blues Oldies in late 1994. The station subsequently achieved a 1.4 audience
share among Adults 25-54 in the Spring 1995 Arbitron Market Report, ranking
twenty-sixth. In the Winter 1996 Arbitron Market Report, the station achieved a
1.4 audience share among Adults 25-54, and ranked second in its target
demographic of African American Adults 35-54 for the entire Los Angeles market
despite its signal limitations.

In Birmingham, NewCity purchased WZZK-FM in August 1980. When acquired, the
station was a low-rated automated Country station. In a six-month period,
NewCity hired a new staff, installed a Contemporary Country format and moved the
station to new facilities. In the Spring 1981 Arbitron Market Report, WZZK-FM
ranked first among Persons 12+ and Adults 25-54 and, with the exception of only
a few rating periods, has maintained that rank for the past 15 years.

In Syracuse, NewCity acquired a third station in the market, WBBS-FM, in
August 1993. NewCity immediately installed a Country format. In its first
complete Arbitron Market Report as a Country station, WBBS-FM increased its
audience share among Adults 25-54 from 6.3 to 8.0. Over the last six Arbitron
Market Reports, the station has consistently achieved an audience share above
8.2 and has had an average audience share of 9.6 among Adults 25-54. In the
Winter 1996 Arbitron Market Report, WBBS-FM ranked first among Adults 25-54 with
an audience share of 11.6.

In Tulsa, NewCity entered into an LMA in January 1995 to operate KJSR-FM.
NewCity immediately replaced the station's low-rated Country format with a
popular 70's format and renamed the station. In its first Arbitron Market Report
using the new format, the station achieved a 9.0 audience share, ranking third
among Adults 25-54. In the Winter 1996 Arbitron Market Report, the station
ranked second with a 9.9 audience share among Adults 25-54. In May 1995, NewCity
acquired the station.

In Orlando, NewCity entered into an LMA in August 1992 to operate WCFB-FM
and acquired the station in May 1995, NewCity then renamed the station and
changed its format from Country to Rhythmic Adult Contemporary. Rhythmic Adult
Contemporary is a unique format designed by NewCity specifically for the Orlando
market. WCFB-FM's ratings have improved among Adults 25-54 in each succeeding
Arbitron Market Report and the station ranked ninth with a 5.3 audience share in
the Winter 1996 Arbitron Market Report.

The Company's historic margins reflect the acquisition and continued
development of underperforming stations, as well as the fact that increases in
net revenue are typically realized subsequent to increases in audience share.
Management believes that a number of the Company's stations have significant
growth opportunities or turnaround potential and can therefore be characterized
as developing stations.

Implement the Company's Management Philosophy

The Company's local station operations are supported by a lean corporate
staff which employs a management philosophy emphasizing (i) market research and
targeted programming; (ii) a customer-focused selling strategy; and (iii)
marketing and promotional activities.

Market Research and Targeted Programming. Cox Radio's research,
programming and marketing strategy combines extensive research with an
assessment of competitors' vulnerabilities and market dynamics in order to
identify specific audience opportunities within each market. Cox Radio also
retains consultants and research organizations to continually evaluate listener
preferences. Using this information, Cox Radio tailors the programming,
marketing and promotions of each Cox Radio station to maximize its appeal to its
target audience. Cox Radio's disciplined application of market research enables
each of its stations to be responsive to the changing preferences of its
targeted listeners. This approach focuses on the needs of the listener and its
community and is designed to improve ratings and maximize the impact of
advertising for the Company's customers.

48
<PAGE> 56

Through its research, programming and marketing, Cox Radio also seeks to
create a distinct and marketable local identity for each of its stations in
order to enhance audience share and listener loyalty and to protect against
direct format competition. To achieve this objective, the Company employs and
promotes distinct high-profile on-air personalities and local sports programming
at many of its stations. For example, the Company broadcasts (i) "Dr. Laura,"
which originates at one of the Company's stations in Los Angeles, in Atlanta,
Dayton, Los Angeles, Syracuse, Tulsa and, beginning in September 1996, Orlando;
(ii) "Rush Limbaugh" in Atlanta, Los Angeles, Orlando, Syracuse and Tulsa; (iii)
the 1995 World Champion Atlanta Braves in Atlanta and Tampa; and (iv) the
Orlando Magic in Orlando and Tampa.

Customer-Focused Selling Strategy. The Company has implemented a unique,
customer-focused approach to selling advertising known as the Consultative
Selling System. The Company's sales personnel are trained to approach each
advertiser with a view towards solving the marketing needs of the customer. In
this regard, the sales staff consults with customers, attempts to understand
their business goals and offers comprehensive marketing solutions, including the
use of radio advertising. Instead of merely selling station advertising time,
the Company's sales personnel are encouraged to develop innovative marketing
strategies for the station's advertising customers.

Cox Radio's local sales strategy is determined by station managers based on
the individual needs of a given market. The Company generally utilizes a
separate sales force for each station. However, in certain markets, the Company
has created a combined sales force for several stations. For example, in
Atlanta, Cox Radio's sales force for WSB-AM, WSB-FM and WCNN-AM is organized
along product lines and divided into sports, FM and AM product teams. This
structure allows each individual sales person to specialize in specific
demographic targets, thus catering more closely to the needs of an advertiser,
and to deliver to its advertisers an entire demographic group. In Los Angeles,
the Company has a separate sales force for KFI-AM, but a combined sales force
for KOST-FM and KACE-FM, which target a different demographic group than KFI-AM.

Marketing and Promotional Activities. The Company's stations regularly
engage in significant local promotional activities, including advertising on
local television and in local print media, participating in telemarketing and
direct mailings and sponsoring contests, concerts and events. Special events may
include charitable athletic events (such as a paralympic basketball challenge),
events centered around a major local occasion (such as an Olympic t-shirt
auction in Atlanta or golf tournament in connection with the Kentucky Derby) or
local ethnic group (such as a Haitian American Cultural Festival in Miami) and
special community or family events (such as arts festivals, job fairs and family
expos). Cox Radio also engages in joint promotional activities with other media
in their markets to further leverage their promotional spending. These
promotional efforts help the Company's stations add new listeners and increase
the amount of time spent listening to the stations.

Leverage Senior Operating Management Team

Cox Radio's senior operating management, together with the NewCity senior
operating management, which will join Cox Radio as part of the NewCity
Acquisition, will be comprised of six individuals with an average of over 23
years of experience in the radio broadcasting industry, including an average of
over 14 years with their respective organizations. Management believes that
these two management teams share a common operating philosophy, which will
facilitate the integration of the two companies. A significant portion of the
compensation of each member of the senior operating management team is linked to
the Company's operating results and each will participate in the Company's
Long-Term Incentive Plan. See "Management -- Long-Term Incentive Plan."

Cultivate Strong Local Management Teams

The Company places great importance on the hiring and development of strong
local management teams and has been successful in retaining experienced
management teams that have strong ties to their communities and customers. The
general managers of Cox Radio and NewCity have been with their

49
<PAGE> 57

respective organizations for an average of 11 years; Program Directors an
average of four years and Chief Engineers/Technical Directors an average of 12
years.

The Company invests significant resources in identifying and training
employees to create a talented team of managers at all levels of station
operations. These resources include: (i) Gallup/SRI, which helps the Company
identify and select talented individuals for management and sales positions;
(ii) NewCity Associates, an independent sales and management training company
initially created by NewCity, which trains and develops managers and sales
executives; and (iii) a program of seminars conducted by the Company's senior
operating management and outside consultants.

Local managers are empowered to run the day-to-day operations of their
stations and to develop and implement policies that will improve station
performance and establish long-term relationships with listeners and
advertisers. A significant portion of the compensation of each local station
manager is dependent upon the financial performance of the station that he
manages and certain of the station managers will participate in the Company's
Long-Term Incentive Plan. See "Management -- Long-Term Incentive Plan."

ACQUISITION STRATEGY

During the last several years, the Company has implemented its clustering
strategy through the acquisition of radio stations in several of its existing
markets. Management believes that recent changes in federal regulations will
allow Cox Radio to continue to pursue its acquisition strategy. The
Telecommunications Act of 1996 (the "1996 Act") removed the limit on the number
of radio stations an operator may own nationwide and increased the number of
radio stations an operator may own in a single market. As a result of this
legislation, the competitive landscape in the radio broadcasting industry is
changing. Management believes that larger, well-capitalized companies with
experienced management, such as Cox Radio, will be best positioned to take
advantage of this changing environment. Management considers the following
factors when making an acquisition.

Market Selection Considerations. Cox Radio intends to continue to acquire
additional radio stations in the 12 markets in which it will operate following
the completion of the Pending Transactions. In the past, the Company has
primarily acquired underperforming stations. Cox Radio may also make
opportunistic acquisitions in additional markets in which the Company believes
that it can cost-effectively achieve a leading position in terms of audience and
revenue share. In evaluating acquisition opportunities in additional markets,
Cox Radio intends to focus primarily on demographically attractive markets, such
as those in the Sunbelt, and markets ranked between ten and 60 in terms of radio
advertising revenues. Management believes that such markets offer the greatest
potential for growth relative to the cost of entry. Management also believes
that Cox Radio will have the financial resources and management expertise to
continue to pursue its acquisition strategy. Certain future acquisitions may be
limited by the multiple and cross-ownership rules of the FCC. See "Federal
Regulation of Broadcasting -- Ownership Matters" and "-- Recent Changes."

Station Considerations. Cox Radio expects to concentrate on acquiring
radio stations that offer, through application of Cox Radio's operating
philosophy, the potential for improvement in the station's performance,
particularly its broadcast cash flow. Such stations may be in various stages of
development, presenting Cox Radio with an opportunity to apply its management
techniques and to enhance asset value. In evaluating potential acquisitions, the
Company considers the strength of a station's broadcast signal. A powerful
broadcast signal enhances delivery range and clarity, thereby influencing
listener preference and loyalty. Cox Radio also assesses the strategic fit of an
acquisition with its existing clusters of radio stations. When entering a new
market, Cox Radio expects to acquire a "platform" upon which to expand its
portfolio of stations and to build a leading cluster of stations. Cox Radio
believes that the NewCity Acquisition will create such a platform in several
markets for the pursuit of its acquisition strategy.

STATION OPERATIONS

The Company's stations, including the stations to be acquired in the
Pending Transactions, are located in markets which, during the last five years,
have demonstrated, in the aggregate, greater radio advertising revenue growth
than the U.S. radio industry as a whole. These markets include six Sunbelt
markets and four

50
<PAGE> 58

markets which management believes have a disproportionately small number of
stations relative to the size of the potential market audience. In most of its
markets, radio captures a small percentage of the total advertising dollars
spent, with local advertisers accounting for the majority of the spending.
Clustering creates an opportunity to increase radio's share of a market's
advertising revenues. The following table sets forth certain information
relating to each of the markets in which the Company's stations operate or will
operate:

<TABLE>
<CAPTION>
RADIO
1995 MARKET RADIO NUMBER OF
RADIO 1995 REVENUES(4) MARKET REVENUE VIABLE PRO FORMA
MARKET ARBITRON ---------------- CAGR(1) STATIONS(1) NUMBER OF
REVENUE MARKET % % ----------------- --------- COMPANY
MARKET RANK(1) RANK(2) NATIONAL LOCAL 1990-95 1995-99 FM AM STATIONS(5)
- ---------------------------------- ------- ------- -------- ----- ------- ------- --- --- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Los Angeles....................... 1 2 28% 72% 2.7% 5.1% 21 11 3
Atlanta........................... 10 12 28 72 8.3 7.4% 14 2 4
Miami............................. 12 11 27 73 5.9 5.5% 18 6 2
Tampa............................. 21 21 25 75 6.1 5.9% 14 4 4
Orlando........................... 26 39 30 70 6.3 5.6% 13 2 7
San Antonio....................... 29 34 22 78 7.6 5.9% 13 6 3
Louisville........................ 45 49 13 87 5.8 5.5% 13 2 3
Birmingham........................ 51 55 20 80 4.9 5.3% 10 5 3
Dayton............................ 55 52 15 85 4.7 4.9% 11 2 2
Tulsa............................. 56 60 17 83 7.4 6.1% 13 3 3
Bridgeport........................ 58 111 20 80 5.1 5.0% 4 (4) 2 (4) 1
Syracuse.......................... 71 68 30 70 0.4 5.0% 9 3 5
</TABLE>

- ---------------
(1) Source, Duncan's.

(2) Ranks assigned by Arbitron based on 12+ population in the market.

(3) Source, Duncan's. Includes television, radio, newspaper, outdoor and cable.

(4) Source, BIA.

(5) Assumes consummation of all Pending Transactions.

As a result of the Company's management, programming and sales efforts, the
Company's radio stations are characterized by strong ratings and above average
power ratios. A third of the Company's stations are ranked first or second in
terms of audience share in their target demographic groups. In five of the
Company's markets, the Company's station groups ranked number one with respect
to combined station revenue market share. The section below describes the
Company's stations and selected audience and revenue share on a market-by-market
basis.

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<PAGE> 59

LOS ANGELES, CALIFORNIA Market Revenue Rank: 1 - KFI-AM (Talk), KOST-FM (Adult
Contemporary), KACE-FM (Rhythm & Blues Oldies).

Los Angeles is the largest radio revenue market in the United States based
on 1995 radio advertising revenue of $476.2 million, a 4.1% increase from 1994 .
KFI-AM, which is a 50,000 watt "clear channel" station (the strongest AM signal
permitted by the FCC) has a Talk plus news format with its talk programming
designed to be informative and stimulating and to focus on everyday issues.
KFI-AM originates the syndicated talk show host "Dr. Laura," carries the popular
"Rush Limbaugh" show and is the leading Talk station in Los Angeles. KOST-FM,
which plays Adult Contemporary music and targets Women 25-44, has maintained the
same music format for over 13 years and is currently the number one rated
English-speaking music station with women over the age of 18 in Los Angeles.
KOST-FM employs extensive marketing research to determine listening preferences
within the Adult Contemporary music category and, as a result, has finished
ahead of all other Adult Contemporary stations in Los Angeles with Persons 12+
for 54 consecutive ratings books. KACE-FM, which was operated under an LMA
beginning in August 1994 and was purchased in August 1995, is the only Rhythm
and Blues Oldies radio station in Los Angeles and, through promotions and
community activities, maintains close ties with the African American community.
KOST-FM and KACE-FM are often sold in combination to advertisers.

- ---------------
(1) Tied.

(2) KACE-FM was operated by Cox Radio pursuant to an LMA beginning in August
1994 and was acquired in August 1995.

(3) Excludes revenue from KACE-FM.

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<PAGE> 60

ATLANTA, GEORGIA Market Revenue Rank: 10 -- WSB-AM (News/Talk), WSB-FM (Adult
Contemporary), WJZF-FM (Jazz), WCNN-AM (Sports/Talk).

Atlanta is the tenth largest radio revenue market in the United States
based on 1995 radio advertising revenue of $170.0 million, a 13.6% increase from
1994. Over the past five-year period, the Atlanta radio market has grown at a
CAGR in excess of 7%. Cox Radio's station group is the leading station group in
Atlanta, with strong Adult Contemporary, Jazz, News/Talk and Sports formats. The
WSB call letters are a "brand name" in the market, having served Atlanta for
over 73 years. WSB-AM is Atlanta's heritage AM station with a 50,000 watt "clear
channel" signal. The station features the market's premier news radio operation
along with popular on-air personalities such as "Dr. Laura" and the leading
local talk host, Neal Boortz. WSB-AM also broadcasts the 1995 World Champion
Atlanta Braves, the Atlanta Hawks and the University of Georgia Bulldogs, and
WCNN-AM broadcasts the Georgia Tech Yellow Jackets. WSB-FM is the leading Adult
Contemporary station in the market and has consistently been the number one or
two Adult Contemporary station since 1986. WSB-FM's morning personality, Gary
McKee, has been a prominent Atlanta radio personality for over 20 years. WJZF-FM
has been operated by Cox under an LMA since January 1994 and, as the market's
only commercial Jazz station, has established a profitable niche. Cox Radio's
Atlanta stations achieved a combined 21.3% revenue share in 1995. Cox Radio's
sales force for WSB-AM, WSB-FM and WCNN-AM is organized along product lines and
divided into sports, FM and AM product teams. WJZF-FM is sold in combination
with another Atlanta station which targets the same audience, enabling both
stations to offer a more comprehensive marketing package to advertisers. This
structure allows each individual sales person to specialize in specific
demographic targets, catering more closely to the needs of an advertiser.

- ---------------
(1) Cox Radio began operating WJZF-FM pursuant to an LMA in January 1994.

(2) Cox Radio began operating WCNN-AM pursuant to an LMA in April 1995.

(3) Excludes revenue from WJZF-FM and WCNN-AM.

(4) Excludes revenue from WCNN-AM.

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<PAGE> 61

MIAMI, FLORIDA Market Revenue Rank: 12 -- WFLC-FM (Hot Adult
Contemporary),WHQT-FM (Urban Adult Contemporary)

Miami is the twelfth largest radio revenue market in the United States
based on 1995 radio advertising revenue of $141.0 million, an 8.0% increase from
1994. After completion of the Miami Disposition, Cox Radio will own two FM
stations in the Miami market. WHQT-FM, which plays Urban Adult Contemporary
music and targets Adults 25-54, was the number one rated English-speaking
station in the Fall 1995 and Winter 1996 Arbitron Market Reports and has
generated broadcast cash flow margins which are among the highest in the
Company. WHQT-FM carries "Tom Joyner", the number one ranked morning drive show
in the market. In addition, WHQT-FM maintains strong community ties through its
participation in various community events. WFLC-FM, a music intensive Hot Adult
Contemporary station which targets Adults 25-54, is often the number one rated
non-ethnic format station in Miami. WHQT-FM and WFLC-FM rank second and fourth,
respectively, in their target demographics.

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<PAGE> 62

TAMPA, FLORIDA Market Revenue Rank: 21 - WWRM-FM (Soft Adult Contemporary),
WCOF-FM
(70's Oldies), WSUN-AM (Sports/Talk), WFNS-AM (Sports/Talk).

Tampa is the twenty-first largest radio revenue market in the United States
based on 1995 radio advertising revenue of $78.5 million, a 7.5% increase from
1994. WWRM-FM, which plays Soft Adult Contemporary music and targets Women
35-54, ranked first in its target audience in 1995. WCOF-FM, which was one of
the first stations in the United States to broadcast the 70's Oldies format,
targets Adults 25-44 and was ranked tenth in its target audience in 1995. Cox
Radio's AM stations, WSUN-AM and WFNS-AM, both broadcast a Sports/Talk format
and carry the NHL's Tampa Bay Lightning, the Orlando Magic, the Atlanta Braves
and New York Yankees. Cox Radio has sold advertising under a JSA for WFNS-AM
since June 1995 and has recently exercised its option to purchase the station.
The Company expects to reduce costs at its AM stations by consolidating certain
operations and management functions and, in particular, eliminating significant
expenses associated with certain high-cost talent contracts which expire at the
end of 1996.

- ---------------
(1) Tied.

(2) WCOF-FM began operating under its current format in December 1993.

(3) Cox Radio sold advertising for WFNS-AM pursuant to a JSA beginning in June
1995 and recently decided to exercise its option to acquire WFNS-AM.

(4) Excludes revenue from WCOF-FM and WFNS-AM.

(5) Excludes revenue from WFNS-AM.

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<PAGE> 63

ORLANDO, FLORIDA Market Revenue Rank: 26 - WDBO-AM (News/Talk), WWKA-FM
(Country), WCFB-FM (Rhythmic Adult Contemporary), WZKD-AM (Kids Radio), WHOO-AM
(Standards), WHTQ-FM (Classic Rock), WMMO-FM (Rock Adult Contemporary).

Orlando is the twenty-sixth largest radio revenue market in the United
States based on 1995 radio advertising revenue of $62.6 million, a 9.8% increase
from 1994. Upon consummation of the Pending Transactions, the Company will own
seven stations in the Orlando market which, on an aggregate basis, accounted for
30.7% of the market's 1995 radio advertising revenues. Since 1983, WWKA-FM,
which plays Country music, has consistently ranked among the top three stations
in terms of audience share among Adults 25-54, and has ranked number one in
terms of radio revenue share since 1988. WDBO-AM is Orlando's leading News/Talk
radio station, featuring a popular morning drive time show and an award-winning
news operation. In addition, WDBO-AM broadcasts the Orlando Magic, "Rush
Limbaugh", and recently contracted to carry "Dr. Laura." NewCity began operating
WCFB-FM in 1992 under an LMA and acquired the station in May 1995. Following the
acquisition, NewCity changed the format of the station from Country to a unique
format that NewCity refers to as Rhythmic Adult Contemporary, resulting in
improved audience and revenue share. NewCity began operating WZKD-AM, which
broadcasts a unique format targeting children ages 4-11, under an LMA in
December 1994, and acquired the station in March 1995.

In May 1996, Cox Radio agreed to acquire WMMO-FM, WHTQ-FM and WHOO-AM (the
Orlando Acquisition). Pending consummation of the Orlando Acquisition, pursuant
to an agreement between Cox Radio and NewCity, NewCity provides programming,
sales and marketing services to those stations under an LMA. WHOO-AM utilizes an
Adult Standards format to capture the growing target market of Adults 55 and
over. WMMO-FM, which is the market's only Rock Adult Contemporary station, and
WHTQ-FM, which is the market's sole Classic Rock station, capture an 11.1
combined audience share among Adults 25-54.

<TABLE>
<CAPTION>
1996
LATEST FOUR
BOOK AVERAGE/
LATEST
FIVE MONTH
1993 1994 1995 REVENUE DATA
---- ---- ---- -------------
(AUDIENCE SHARE AND RANK DATA
BASED ON ADULTS 25-54)
<S> <C> <C> <C> <C>
WDBO-AM (NewCity Acquisition)
Audience Share........................................... 6.7 6.0 5.3 4.5
Audience Rank............................................ 5 6 9 11(1)
WWKA-FM (NewCity Acquisition)
Audience Share........................................... 9.4 7.2 7.7 8.5
Audience Rank............................................ 1 3 3 2
WCFB-FM (NewCity Acquisition)(2)
Audience Share........................................... 3.9 3.0 3.1 4.5
Audience Rank............................................ 12 14 14 11
WZKD-AM (NewCity Acquisition)(3)
Audience Share........................................... N.A. N.A. N.A. N.A.
Audience Rank............................................ N.A. N.A. N.A. N.A.
WHOO-AM (Orlando Acquisition)
Audience Share........................................... 0.4 0.7 0.6 0.7
Audience Rank............................................ 19(1) 19(1) 20 20
WHTQ-FM (Orlando Acquisition)
Audience Share........................................... 4.0 4.6 4.3 4.6
Audience Rank............................................ 11 13 11 10
WMMO-FM (Orlando Acquisition)
Audience Share........................................... 7.5 5.8 7.5 6.5
Audience Rank............................................ 3 7 4 6
Combined Revenue Share..................................... 25.1(4) 22.0(4) 20.6(4) 21.1(4)
Combined Revenue Rank...................................... 1 1 1 N.A.
</TABLE>

- ---------------
(1) Tied.
(2) WCFB-FM was operated pursuant to an LMA beginning in August 1992 and was
acquired in May 1995.
(3) WZKD-AM was operated pursuant to an LMA beginning in December 1994 and was
acquired in March 1995. WZKD-AM Audience and Revenue Share data is not
reported in industry guides.
(4) Excludes revenue from WZKD-AM, WHOO-AM, WHTQ-FM and WMMO-FM.

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<PAGE> 64

SAN ANTONIO, TEXAS Market Revenue Rank: 29 -- KCYY-FM (Country), KKYX-AM
(Classic Country), KCJZ-FM (Jazz).

San Antonio is the nation's twenty-ninth largest radio revenue market in
the United States based on 1995 radio advertising revenue of $57.6 million, a
9.3% increase from 1994. Upon consummation of the Pending Transactions, Cox
Radio will own three stations in the San Antonio market which, on an aggregate
basis, accounted for 14.3% of the market's 1995 radio advertising revenues.
KCYY-FM, the market's leading Country station in terms of audience share,
targets Adults 25-54. KKYX-AM, the market's only Classic Country station, whose
daytime signal covers all of South Texas, targets Adults 35-64. The stations are
sold as a package, providing advertisers with an effective vehicle to reach the
majority of country music listeners in San Antonio. KCJZ-FM, which targets
Adults 25-54, recently changed its format and is the market's only commercial
Jazz station.

- ---------------
(1) KCJZ-FM was operated pursuant to an LMA beginning in March 1992 and was
acquired in March 1995. The station reported as KDIL-FM through the Fall
1994 Arbitron Market Report.

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<PAGE> 65

LOUISVILLE, KENTUCKY Market Revenue Rank: 45 -- WRKA-FM (Oldies), WRVI-FM (Rock
Adult Contemporary), WXNU-FM (Contemporary Alternative).

Louisville is the forty-fifth largest radio revenue market in the United
States based on 1995 radio advertising revenue of $35.8 million, a 5.6% increase
from 1994. Cox Radio acquired WRKA-FM and WRVI-FM in January 1996 and has an
agreement to acquire a third station, WXNU-FM. WRKA-FM, which plays Oldies music
and targets Adults 35-54, is currently ranked fourth in its target demographic.
WRVI-FM, which plays Rock Adult Contemporary music and targets Adults 25-49, has
only been in operation since December 1995. Cox Radio has agreed to acquire
WXNU-FM (the Louisville Acquisition), which plays Contemporary Alternative music
and targets Adults 18-34. The Company intends to sell advertising time on these
three stations through a single sales force. Cox Radio's acquisitions in
Louisville represent an example of the Company's acquisition strategy, whereby
it purchases an underperforming station or group of stations in order to
establish a platform on which to build a station cluster. Through this strategy,
Cox Radio cost effectively built a significant market presence, which captured
approximately 8% of the market's 1995 radio advertising revenues.

- ---------------
(1) WRKA-FM and WRVI-FM were acquired in January 1996.

(2) Broadcasting on WRVI-FM began in December 1995. Accordingly, Audience Share
and Audience Rank are based only on the Winter 1996 Arbitron Market Report.

(3) Reported under the call letters WQNF-FM through the Summer 1995 Arbitron
Market Report.

(4) Tied.

(5) Excludes revenue from WXNU-FM.

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<PAGE> 66

BIRMINGHAM, ALABAMA Market Revenue Rank: 51 -- WZZK-FM (Country), WZZK-AM
(Country), WODL-FM (Oldies).

Birmingham is the fifty-first largest radio revenue market in the United
States based on 1995 market radio advertising revenue of $31.4 million, a 5.0%
increase from 1994. Upon consummation of the Pending Transactions, Cox Radio
will own three stations which, on an aggregate basis, accounted for 32.5% of the
market's 1995 radio advertising revenue. WZZK-FM shifted to its current Country
format in 1980. For the past five years, WZZK-FM has ranked number one in terms
of audience share among Adults 25-54 and has consistently captured over 25% of
the market's revenues since 1988. WZZK-AM was acquired in 1985 and since that
time has simulcast WZZK-FM's programming. Management believes that the WZZK-AM
facility provides the Company with programming flexibility as opportunities
arise in the Birmingham market. NewCity began operating WODL-FM under an LMA in
the fall of 1992, and acquired the station in May 1993. WODL-FM, Birmingham's
only Oldies station, currently ranks number five in terms of audience share and
accounts for 8% of the market's radio advertising revenue.

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

(1) WZZK-AM and WZZK-FM report as a combined entity for purposes of Arbitron
Market Reports.

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<PAGE> 67

DAYTON, OHIO Market Revenue Rank: 55 -- WHIO-AM (News/Talk), WHKO-FM (Country).

Dayton is the fifty-fifth largest radio revenue market in the United States
based on 1995 radio advertising revenue of $28.8 million, a 5.9% increase from
1994. Cox Radio currently owns two stations which accounted for over 25% of the
market's 1995 radio advertising revenues. WHKO-FM, which plays Country music and
targets Adults 25-54, consistently ranks number one in terms of audience share
in its target demographic. WHIO-AM, which features a News/Talk format and
targets Adults 35-64, is the leading News/Talk station in Dayton and broadcasts
sports programming such as the Cincinnati Reds and the University of Dayton
Flyers. The stations are very active in producing revenue from alternative
sources, including production of events (Baby Fair, A Day in the Country), local
print media (Home Magazine, What's Happening Magazine) and other special
projects which contribute significantly to the stations' profitability.

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<PAGE> 68

TULSA, OKLAHOMA Market Revenue Rank: 56 -- KRMG-AM (News/Talk), KWEN-FM
(Country), KJSR-FM (70's Oldies).

Tulsa is the fifty-sixth largest radio revenue market based on 1995 radio
advertising revenue of $28.7 million, a 7.1% increase from 1994. Upon
consummation of the Pending Transactions, Cox Radio will own three stations in
Tulsa which, on an aggregate basis, accounted for 35.5% of the market's 1995
radio advertising revenues. KRMG-AM, a full-service News/Talk station,
broadcasts "Rush Limbaugh" and "Dr. Laura" and has consistently ranked among the
top stations in the Tulsa market. KRMG-AM was also a recent recipient of the
National Association of Broadcasters' prestigious Crystal Award for unparalleled
community service. KWEN-FM, a Country station targeting Adults 25-54, has ranked
number one in terms of audience share since 1988 and revenue share since 1991.
NewCity began operating KJSR-FM in January 1995 under an LMA and changed its
format from Country to 70's Oldies. In the Fall 1995 Arbitron Market Report,
KJSR-FM ranked number two in terms of audience share among Adults 25-54. NewCity
acquired KJSR-FM in May 1995.

- ---------------
(1) KJSR-FM was operated pursuant to an LMA beginning in January 1995 and was
acquired in May 1995.

(2) Excludes revenue from KJSR-FM.

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<PAGE> 69

BRIDGEPORT/FAIRFIELD COUNTY, CONNECTICUT Market Revenue Rank: 58 - WEZN-FM
(Adult Contemporary).

The Bridgeport/Fairfield County market is the nation's fifty-eighth largest
radio revenue market based on 1995 radio advertising revenue of $27.3 million,
an 11.4% increase from 1994. Fairfield County, one of the nation's most affluent
regions, is a particularly attractive market to advertisers and therefore
receives an above-average share of local and national media expenditures
relative to its population. WEZN-FM is currently ranked number one in terms of
audience share among Adults 25-54 and accounted for 21.6% of the market's 1995
radio advertising revenues. WEZN-FM also has a significant presence in adjoining
New Haven County, resulting in a significant contribution to the station's
advertising revenue.

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

(1) Audience share and rank data are based only on Arbitron Market Reports for
the Spring and Fall Arbitron Market Reports for the related years because
Arbitron does not produce Summer and Winter Arbitron Market Reports for the
Bridgeport/Fairfield County market.

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<PAGE> 70

SYRACUSE, NEW YORK Market Revenue Rank: 71 -- WSYR-AM (News/Talk), WYYY-FM
(Adult Contemporary), WBBS-FM (Country), WHEN-AM (Sports/Talk), WWHT-FM (Adult
Hit Radio).

Syracuse is the seventy-first largest radio revenue market based on 1995
radio advertising revenue of $19.7 million, a 2.1% increase from 1994. Upon
consummation of the Pending Transactions, Cox Radio will own five radio stations
in the Syracuse market which, on an aggregate basis, accounted for over 55% of
the market's 1995 radio advertising revenues. NewCity entered the Syracuse
market in 1982 with the acquisition of WSYR-AM and WSYR-FM. In early 1983, the
Company changed the format of WSYR-FM to Adult Contemporary, and changed its
call letters to WYYY-FM. With the exception of a few ratings periods, WYYY-FM
has ranked number one with Adults 25-54 with respect to audience share and has
ranked number one in terms of revenue share since 1988. WSYR-AM has consistently
ranked among the top stations in the market in terms of audience share and
currently ranks number one among Adults 35-64 its target demographic. WSYR-AM
carries Syracuse University football and basketball and broadcasts both "Rush
Limbaugh" and "Dr. Laura." WBBS-FM was acquired in 1993 and converted to its
present Country format. WBBS-FM has consistently performed well as a Country
station and is currently ranked number three in terms of audience share for
Adults 25-54. Cox Radio acquired WHEN-AM and WWHT-FM (formerly WHEN-FM) in June
1996 and entered into an LMA with NewCity to operate these stations. The Company
has recently changed the format of WWHT-FM from Country to Adult Hit Radio.

<TABLE>
<CAPTION>
1996
LATEST FOUR
BOOK AVERAGE/
LATEST
FIVE MONTH
1993 1994 1995 REVENUE DATA
---- ---- ---- -------------
(AUDIENCE SHARE AND RANK DATA
BASED ON ADULTS 25-54)
<S> <C> <C> <C> <C>
WSYR-AM (NewCity Acquisition)
Audience Share......................................... 7.9 8.5 7.1 6.9
Audience Rank.......................................... 4 4 6 6
WYYY-FM (NewCity Acquisition)
Audience Share......................................... 12.8 14.4 14.0 12.4
Audience Rank.......................................... 1 1 1 1
WBBS-FM (NewCity Acquisition)(1)
Audience Share......................................... 7.2 7.7 9.4 9.7
Audience Rank.......................................... 5 6 3 3
WHEN-AM(2)
Audience Share......................................... 2.1 2.5 2.6 2.4
Audience Rank.......................................... 10 10 10 10
WWHT-FM(2)
Audience Share......................................... 3.0 3.8 4.2 3.7
Audience Rank.......................................... 9 7 8 8
Combined Revenue Share................................... 45.6(3) 51.2(4) 51.7(4) 54.3(4)
Combined Revenue Rank.................................... 1 1 1 N.A.
</TABLE>

- ---------------
(1) WBBS-FM was acquired in August 1993.

(2) WHEN-AM and WWHT-FM were acquired by Cox Radio in June 1996.

(3) Excludes revenue from WHEN-AM, WWHT-FM and WBBS-FM.

(4) Excludes revenue from WHEN-AM and WWHT-FM.

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<PAGE> 71

ORGANIZATIONAL HISTORY

Cox Radio is currently an indirect, wholly-owned subsidiary of CEI. Upon
completion of the Offerings, CEI will own approximately % of the Common
Stock of Cox Radio and % of the voting power of Cox Radio. Immediately
prior to the closing of the Offerings, the Cox Radio Consolidation will be
effected through the transfer to Cox Radio of all CEI's United States radio
operations.

INDUSTRY OVERVIEW

The primary source of revenues for radio stations is generated from the
sale of advertising time to local and national spot advertisers and national
network advertisers. During the past decade, local advertising revenue as a
percentage of total radio advertising revenue in a given market has ranged from
approximately 72% to 87%. The growth in total radio advertising revenue tends to
be fairly stable and has generally grown at a rate faster than the Gross
National Product ("GNP"). With the exception of 1991, when total radio
advertising revenue fell by approximately 3.1% compared to the prior year,
advertising revenue has risen in each of the past 15 years more rapidly than
both inflation and the GNP. Total domestic radio advertising revenue in 1995 of
$11.5 billion, as reported by the RAB, was at its highest level in the
industry's history.

According to the RAB's Radio Marketing Guide and Fact Book for Advertisers,
1994-1995, radio reaches approximately 96% of all Americans over the age of 12
every week. More than one-half of all radio listening is done outside the home,
in contrast to other advertising media, and three out of four adults are reached
by car radio each week. The average listener spends approximately three hours
and 20 minutes per day listening to radio. Most radio listening occurs during
the morning, particularly between the time a listener wakes up and the time the
listener reaches work. This "morning drive time" period reaches more than 85% of
people over the age of 12 and, as a result, radio advertising sold during this
period achieves premium advertising rates. Radio listeners have gradually
shifted over the years from AM to FM stations. FM reception, as compared to AM,
is generally clearer and provides greater tonal range and higher fidelity. In
comparison to AM, FM's listener share is now in excess of 75%, despite the fact
that the number of AM and FM commercial stations in the United States is
approximately equal.

Radio is considered an efficient, cost-effective means of reaching
specifically identified demographic groups. Stations are typically classified by
their on-air format, such as country, adult contemporary, oldies and news/talk.
A station's format and style of presentation enables it to target certain
demographics. By capturing a specific share of a market's radio listening
audience, with particular concentration in a targeted demographic, a station is
able to market its broadcasting time to advertisers seeking to reach a specific
audience. Advertisers and stations utilize data published by audience measuring
services, such as Arbitron, to estimate how many people within particular
geographical markets and demographics listen to specific stations.

The number of advertisements that can be broadcast without jeopardizing
listening levels (and the resulting ratings) is limited in part by the format of
a particular station and the local competitive environment. Although the number
of advertisements broadcast during a given time period may vary, the total
number of advertisements broadcast on a particular station generally does not
vary significantly from year to year.

A station's local sales staff generates the majority of its local and
regional advertising sales through direct solicitations of local advertising
agencies and businesses. To generate national advertising sales, a station
usually will engage a firm that specializes in soliciting radio advertising
sales on a national level. National sales representatives obtain advertising
principally from advertising agencies located outside the station's market and
receive commissions based on the revenue from the advertising obtained.

COMPETITION; CHANGES IN THE BROADCASTING INDUSTRY

The radio broadcasting industry is a highly competitive business. The
success of each of the Company's stations depends largely upon its audience
ratings and its share of the overall advertising revenue within its market. The
Company's stations compete for listeners and advertising revenue directly with
other radio stations within their respective markets. Radio stations compete for
listeners primarily on the basis of program content that appeals to a target
demographic group. By building a strong listener base consisting of a specific
demographic in each of its markets, Cox Radio is able to attract advertisers
seeking to reach those listeners.

Factors that are material to a station's competitive position include
management experience, the station's audience share rank in its market,
transmitter power, assigned frequency, audience characteristics, local

64
<PAGE> 72

program acceptance, and the number and characteristics of other stations in the
market area. Cox Radio attempts to improve its competitive position with
promotional campaigns aimed at the demographics targeted by its stations and by
sales efforts designed to attract advertisers. Recent changes in the law and in
FCC rules and policies have increased the number of radio stations a broadcaster
may own in a given market and permit, within limits, joint arrangements with
other stations in the market relating to programming, advertising sales, and
station operation. Management believes that radio stations that elect to take
advantage of these opportunities may, in certain circumstances, have lower
operating costs and may be able to offer advertisers more attractive rates and
services.

Although the radio broadcasting industry is highly competitive, some
barriers to entry exist. The operation of a radio broadcast station requires a
license from the FCC and the number of radio stations that can operate in a
given market is limited by the availability of FM and AM radio frequencies
allotted by the FCC to communities in that market, as well as by the FCC's
multiple ownership rules, which regulate the number of stations that may be
owned and controlled by a single entity.

The Company's stations also compete for advertising revenue with other
radio stations and with other electronic and print media. Potential advertisers
can substitute advertising through broadcast television, cable television
systems (which can offer concurrent exposure on a number of cable networks to
enlarge the potential audience), daily, weekly, and free-distribution
newspapers, other print media, direct mail, and on-line computer services for
radio advertising. Competing media commonly target the customers of their
competitors, and advertisers regularly shift dollars from radio to these
competing media and vice versa. Accordingly, there can be no assurance that any
of the Company's stations will be able to maintain or increase its current
audience ratings and advertising revenue share. In addition, the radio
broadcasting industry is subject to competition from new media technologies that
are being developed or introduced, such as the delivery of audio programming by
cable television systems, by satellite and by DAB. The delivery of information
through the Internet also could create a new form of competition. The radio
broadcasting industry historically has grown despite the introduction of new
technologies for the delivery of entertainment and information, such as
broadcast television, cable television, audio tapes and compact discs. A growing
population and greater availability of radios, particularly car and portable
radios, have contributed to this growth. There can be no assurance, however,
that the development or introduction in the future of any new media technology
will not have an adverse effect on the radio broadcasting industry.

The FCC currently has before it proceedings that will permit the use of DAB
to deliver audio programming, and has allocated spectrum for the provision of
satellite DAB service. DAB provides a medium for the delivery by satellite or
terrestrial means of multiple new, high quality audio programming formats to
local and national audiences. This technology also may be used in the future by
radio broadcast stations either on existing or alternate broadcasting
frequencies or on new frequency bands. In addition, the FCC has authorized an
additional 100 kHz of spectrum for the AM band and will soon allocate
frequencies in this new band to certain existing AM station licensees. By the
end of a transition period to be determined by the FCC, those licensees will be
required to return to the FCC either the license for their existing AM band
station or the license for the expanded AM band station.

Cox Radio cannot predict what other matters might be considered in the
future by the FCC, nor can it assess in advance what impact, if any, the
implementation of any of these proposals or changes might have on its business.

FEDERAL REGULATION OF RADIO BROADCASTING

The ownership, operation and sale of radio stations, including those
licensed to Cox Radio, are subject to the jurisdiction of the FCC, which acts
under authority granted by the Communications Act. Among other things, the FCC
assigns frequency bands for broadcasting; determines the particular frequencies,
locations and operating power of stations; issues, renews and modifies station
licenses; determines whether to approve changes in ownership or control of
station licenses; regulates equipment used by stations; adopts and implements
regulations and policies that directly or indirectly affect the ownership,
operation, program content, employment practices, and business of stations; and
has the power to impose penalties, including license revocations, for violations
of its rules or the Communications Act.

The 1996 Act, which significantly amended the Communications Act in
numerous respects, dramatically changed the ground rules for competition and
regulation in virtually all sectors of the telecommunications industry,
including broadcasting, local and long-distance telephone services, cable
television services and telecommunications equipment manufacturing.

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<PAGE> 73

The following is a brief summary of certain provisions of the
Communications Act, as amended by the 1996 Act, and of specific FCC rules and
policies. Reference should be made to the Communications Act, FCC rules and
public notices and rulings of the FCC for further information concerning the
nature and extent of FCC regulation of broadcast stations.

License Renewal. Broadcast station licenses are subject to renewal upon
application to the FCC. Under the Communications Act, radio licenses are granted
by the FCC for maximum terms of seven years. The 1996 Act provides that radio
licenses may be granted for a period not to exceed eight years and authorizes
the FCC to prescribe the period or periods for which licenses shall be granted
and renewed for particular classes of radio stations. In April 1996, the FCC
issued a Notice of Proposed Rulemaking seeking comment on a proposal to extend
broadcast station license terms to eight years and implementation of new license
term rules.

Under the Communications Act, interested parties, including members of the
public, may file petitions to deny a license renewal application, but competing
applications for the license will not be accepted unless the current licensee's
renewal application is denied. If a petition to deny presents information from
which the FCC concludes (or if the FCC concludes on its own) that there is a
"substantial and material" question whether grant of the renewal application
would be in the public interest under applicable rules and policy, the FCC will
conduct a hearing on specified issues to determine whether renewal should be
granted. The FCC is required to grant a license renewal application if (i) the
licensee has served the public interest; (ii) the licensee has not engaged in
any serious violations of the Communications Act or the FCC's rules and
regulations; and (iii) the licensee has not engaged in any other violations that
would indicate a pattern of abuse of FCC rules or the Communications Act. The
FCC may deny a license renewal application only if it finds that a licensee has
failed to meet this three-pronged test and that there are no mitigating
circumstances to warrant grant of the license renewal for a shorter period than
the full license term, or to warrant the grant of a renewal with certain
conditions attached to the grant. Only in the event of such a denial of a
license renewal application will the FCC accept new applications for the
broadcast frequency occupied by the incumbent broadcast licensee. Also, during
certain periods when a renewal application is pending (generally four months
prior to expiration of the license), the transferability of the applicant's
license may be restricted.

Historically, Cox Radio's management has not experienced any material
difficulty in obtaining renewal from the FCC of any of the broadcast licenses of
stations under its control.

The following table sets forth, among other things, the frequency on which
each of the stations owned by Cox Radio and NewCity broadcasts, and the date on
which each station's FCC license expires (a station may continue to operate
beyond the expiration date if a timely filed license renewal application is
pending):

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<PAGE> 74

<TABLE>
<CAPTION>
HEIGHT
ABOVE
EXPIRATION FCC AVERAGE
MARKET(1) STATION FREQUENCY DATE OF LICENSE CLASS TERRAIN POWER
- -------------------------------------- ------------ --------- -------------------- ----- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Orlando............................... WDBO-AM(2) 580 kHz February 1, 2003 B N.A. 5 kw
WWKA-FM(2) 92.3 MHz February 1, 1996(6) C 408 m 98 kw
WCFB-FM(2) 94.5 MHz February 1, 2003 C 448 m 96 kw
WZKD-AM(2) 950 kHz February 1, 2003 B N.A. 5 kw
WHOO-AM(3) 990 kHz February 1, 2003 B N.A. 50 kw day
5 kw night
WHTQ-FM(3) 96.5 MHz February 1, 2003 C 487 m 100 kw
WMMO-FM(3) 98.9 MHz February 1, 2003 C2 134 m 38 kw
San Antonio........................... KCYY-FM(2) 100.3 MHz August 1, 1997 C 300 m 98 kw
KCJZ-FM(2) 106.7 MHz August 1, 1997 C 310 m 100 kw
KKYX-AM(2) 680 kHz August 1, 1997 B N.A. 50 kw day
10 kw night
Louisville............................ WRKA-FM 103.1 MHz August 1, 1996(6) A 95 m 6 kw
WRVI-FM 94.7 MHz August 1, 1996(6) A 100 m 3 kw
WXNU-FM(7) 105.9 MHz August 1, 1996(6) A 100 m 3 kw
Birmingham............................ WZZK-AM(2) 610 kHz April 1, 2003 B N.A. 5 kw day
1 kw night
WZZK-FM(2) 104.7 MHz April 1, 2003 C 396 m 99 kw
WODL-FM(2) 106.9 MHz April 1, 2003 C 351 m 99 kw
Dayton................................ WHIO-AM 1290 KHz October 1, 1996(6) B N.A. 5 kw
WHKO-FM 99.1 MHz October 1, 1996(6) B 325 m 50 kw
Tulsa................................. KRMG-AM(2) 740 kHz June 1, 1997 B N.A. 50 kw day
25 kw night
KWEN-FM(2) 95.5 MHz June 1, 1997 C 405 m 96 kw
KJSR-FM(2) 103.3 MHz June 1, 1997 C 390 m 100 kw
Bridgeport............................ WEZN-FM(2) 99.9 MHz April 1, 1998 B 204 m 27.5 kw
Syracuse.............................. WSYR-AM(2) 570 kHz June 1, 1998 B N.A. 5 kw
WHEN-AM 620 kHz June 1, 1998 B N.A. 5 kw
WYYY-FM(2) 94.5 MHz June 1, 1998 B 198 m 100 kw
WBBS-FM(2) 104.7 MHz June 1, 1998 B 150 m 50 kw
WWHT-FM 107.9 MHz June 1, 1998 B 152 m 50 kw
</TABLE>

- ---------------
(1) Metropolitan market served; city of license may differ.

(2) Station to be acquired by Cox Radio pursuant to the NewCity Acquisition.

(3) Station to be acquired by Cox Radio pursuant to the Orlando Acquisition.

(4) Cox Radio provides programming to this station pursuant to an LMA.

(5) Cox Radio provides sales and related services to this station through a JSA;
station to be acquired pursuant to the Tampa Acquisition.

(6) Cox Radio, NewCity or the current licensee of this station has filed an
application with the FCC to renew such licenses. Such applications are
pending FCC approval as of July 23, 1996.

(7) Station to be acquired by Cox Radio pursuant to the Louisville Acquisition

Ownership Matters. The Communications Act prohibits the assignment of a
license or the transfer of control of a broadcast licensee without the prior
approval of the FCC. In determining whether to grant or renew a broadcast
license, the FCC considers a number of factors pertaining to the licensee,
including compliance with the Communications Act's limitations on alien
ownership, compliance with various rules limiting common ownership of broadcast,
cable and newspaper properties, and the "character" of the licensee and those
persons holding "attributable" interests in the licensee.

Under Section 310 of the Communications Act, broadcast licenses may not be
granted to or held by any foreign government, any representative of a foreign
government or by any non-U.S. citizen or his representative, or by any
corporation organized under the laws of any foreign government, or by any
corporation of which more than one-fifth of the capital stock is owned of record
or voted by non-U.S. citizens or their representatives, by a foreign government
or its representatives or by any corporation organized under the laws of a
foreign country. In addition, broadcast licenses may not be granted to or held
by any corporation directly or indirectly controlled by any other corporation of
which more than one-fourth of the capital stock is owned of

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<PAGE> 75

record or voted by non-U.S. citizens, their representatives, or by a foreign
government or its representatives, or by any corporation organized under the
laws of any foreign government, unless the FCC finds that the public interest
would be served by granting such a license under such circumstances. The FCC has
never to date made such a public interest finding. The foregoing restrictions in
modified form apply to forms of business organizations other than corporations,
including general partnerships and limited partnerships. As a result of these
provisions, Cox Radio, which serves as a holding company for its various radio
station licensee subsidiaries, cannot have more than 25% of its capital stock
owned of record or voted by aliens or their representatives, by a foreign
government or its representative or by any corporation organized under the laws
of any foreign government.

Recent Changes. The FCC's local radio multiple ownership rule (the "Radio
Contour Overlap Rule") provides for certain limits on the number of radio
stations that one entity may own in a local geographic market. These limits are
as follows:

(a) In a radio market with 45 or more commercial radio stations, a
party may own, operate or control up to eight commercial radio stations,
not more than five of which are in the same broadcast service (i.e., AM or
FM);

(b) In a radio market with between 30 and 44 (inclusive) commercial
radio stations, a party may own, operate or control up to seven commercial
radio stations, not more than four of which are in the same broadcast
service (i.e., AM or FM);

(c) In a radio market with between 15 and 29 (inclusive) commercial
radio stations, a party may own, operate or control up to six commercial
radio stations, not more than four of which are in the same broadcast
service (i.e., AM or FM); and

(d) In a radio market with 14 or fewer commercial radio stations, a
party may own, operate or control up to five commercial radio stations, not
more than three of which are in the same broadcast service (i.e., AM or
FM), except that a party may not own, operate or control more than 50
percent of the stations in the market.

The FCC does not regulate the number of radio stations that may be owned or
controlled by one entity nationally.

LMAs between two stations in the same market that involve more than fifteen
percent of the brokered station's broadcast hours per week are treated as if the
brokered station is owned by the brokering station for purposes of the Radio
Contour Overlap Rule.

Notwithstanding the limits contained in the Radio Contour Overlap Rule, the
FCC has the authority to permit any person or entity to own, operate or control,
or have a cognizable interest in, in a number of radio broadcast stations in
excess of the rule's limits if the FCC determines that such ownership,
operation, control or interest will result in an increase in the number of radio
broadcast stations that are in operation. Although the 1996 Act, which granted
the FCC such authority, does not explain the intent or rationale for this
provision, Cox Radio believes that this exception may apply to newly-constructed
stations and/or stations that have been off the air but are resuming broadcast
operations.

FCC rules also generally prohibit or restrict the cross-ownership,
operation or control of a radio broadcast station and a television broadcast
station serving the same geographic market, and of a radio broadcast station and
a daily newspaper serving the same geographic market. Under these rules, absent
waivers, Cox Radio would not be permitted to acquire any radio broadcast station
in a geographic market in which it, or a person with an attributable interest in
Cox Radio, such as CEI, now owns a television station (other than a low power
television station) or a daily newspaper. The FCC's rules provide for the
liberal grant of waivers of the rule prohibiting common ownership of radio and
television stations in the same geographic market (the "one-to-a-market rule")
for stations located in the top 25 television markets. Under the 1996 Act and
upon satisfaction of certain conditions, the FCC must extend its "top-25" waiver
policy to proposed station combinations in any of the top 50 markets, consistent
with a determination that the combination would serve public interest,
convenience and necessity. Additionally, in December 1994, the FCC initiated a
rulemaking proceeding soliciting further public comment on proposals to relax
further or to repeal the FCC's one-to-a-market rule. The FCC's standards for
granting waivers of its radio-newspaper cross-ownership rule are more stringent,
and

68
<PAGE> 76

such standards permit waiver only in those situations where application of the
rule would be unduly harsh. In 1993, Congress authorized the FCC to grant
waivers of the radio-newspaper cross-ownership rule to permit cross-ownership of
a radio station and a daily newspaper in a top 25 market with at least 30
independent media voices, provided the FCC finds the transaction to be in the
public interest. The FCC has not yet proposed any rules to implement its
authority in this regard.

Because of these multiple and cross-ownership rules, a purchaser of Cox
Radio's Common Stock who acquires an attributable interest in Cox Radio may
violate and may cause Cox Radio to violate the FCC's ownership rules if such
purchaser also has an attributable interest in other television or radio
stations, or in daily newspapers, depending on the number and location of those
radio or television stations or daily newspapers. Such a purchaser also may be
restricted in the companies in which it may invest, to the extent that those
investments give rise to an attributable interest. If an attributable
stockholder of Cox Radio violates any of these ownership rules, Cox Radio may be
unable to obtain from the FCC one or more authorizations needed to conduct its
radio station business and may be unable to obtain FCC consents for certain
future acquisitions.

The FCC generally applies its ownership limits to "attributable" interests
held by an individual, corporation, partnership or other association. In the
case of corporations holding broadcast licenses, the interests of officers,
directors and those who, directly or indirectly, have the right to vote 5% or
more of the corporation's voting stock are generally deemed to be attributable,
as are positions of an officer or director of a corporate parent of a broadcast
licensee. Cox Radio's indirect parent, CEI, has attributable ownership interests
in television stations located in Orlando, Florida; Charlotte, North Carolina;
Pittsburgh, Pennsylvania; Dayton, Ohio; Atlanta, Georgia; and Oakland,
California and in daily newspapers located in Scottsdale, Yuma, Tempe, Mesa,
Chandler and Gilbert, Arizona; Grand Junction, Colorado; Palm Beach, Florida;
Atlanta, Georgia; Greenville, North Carolina; Dayton and Springfield, Ohio; and
Austin, Longview, Lufkin, Waco, and Nacogdoches, Texas. The FCC has granted its
consent for CEI to acquire a television station in El Paso, Texas; the
acquisition has not been consummated. CEI has a non-attributable ownership
interest in a daily newspaper located in Daytona Beach, Florida. Currently,
James C. Kennedy and Ben F. Love, directors of CEI, are also directors of Texas
Commerce Bancshares, Inc., the holding company of Texas Commerce Bank, N.A.
which, through a wholly-owned subsidiary, Gordon Holdings, Inc., owns KRZQ-FM,
Tahoe City, California. Mr. Kennedy's and Mr. Love's responsibilities as
directors of Texas Commerce Bancshares, Inc. do not extend to the day-to-day
operations or business of the licensee of KRZQ-FM, which service area is not
located in any market in which Cox Radio owns its radio stations. Paul J. Rizzo,
a director of CEI, is a director of The McGraw-Hill Companies, Inc. which,
through a wholly-owned subsidiary, owns and operates television stations
KMGH-TV, Denver, Colorado; WRTV, Indianapolis, Indiana; KERO-TV, Bakersfield,
California, and KGTV, San Diego, California. Mr. Rizzo has no involvement in the
day-to-day operations and management of any of the McGraw-Hill television
stations, only one of which, KERO-TV, is located in a market (Los Angeles, CA)
in which Cox Radio owns its radio stations. None of the other officers,
directors or 5% or greater shareholders of the voting stock of Cox Radio or of
its subsidiaries has any attributable interest in any broadcast stations other
than through Cox Radio and its subsidiaries.

The FCC treats all partnership interests as attributable, except for those
limited partnership interests that are "insulated" by the terms of the limited
partnership agreement from "material involvement" in the media-related
activities of the partnership under FCC policies. Stock interests held by
insurance companies, mutual funds, bank trust departments and certain other
passive institutional investors that hold stock for investment purposes only
become attributable with the ownership of 10% or more of the stock of a
corporation holding broadcast licenses. To assess whether a voting stock
interest in a direct or indirect parent corporation of a broadcast licensee is
attributable, the FCC uses a "multiplier" analysis in which non-controlling
voting stock interests are deemed proportionally reduced at each non-controlling
link in a multi-corporation ownership chain. For a person or entity with an
attributable interest in a radio broadcast station, an LMA with another station
in the same market creates an attributable interest in the brokered station for
purposes of the FCC's Radio Contour Overlap Rule, if the agreement affects 15%
or more of the brokered station's weekly broadcast hours.

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<PAGE> 77

In March 1992, the FCC initiated an inquiry and rulemaking proceeding in
which it solicited comment on whether it should alter its ownership attribution
rules by (i) raising the basic benchmark for attributing ownership in a
corporate licensee from 5% to 10% of the licensee's voting stock; (ii)
increasing the attribution benchmark for "passive institutional investors" in
corporate licensees from 10% to 20% of the licensee's voting stock; (iii)
broadening the class of investors eligible for "passive institutional investor"
status to include Small Business and Minority Enterprise Small Business
Investment Companies; and (iv) exempting certain widely-held limited partnership
interests from attribution where each individual interest represents an
insignificant percentage of total partnership equity. Cox Radio cannot predict
whether any of these proposals will ultimately be adopted by the FCC. The FCC
initiated a further rulemaking proceeding in December 1994 to solicit additional
public comment on proposed attribution rules. Among the issues being explored in
the proceeding are the following (a) whether the FCC should raise the benchmarks
for determining voting stock interests to be "attributable" from 5% to 10% for
those stockholders other than passive institutional investors, and from 10% to
20% for passive institutional investors; (b) whether to consider non-voting
stock interests to be attributable under the multiple ownership rules (at
present such interests are not attributable); (c) whether to consider generally
attributable voting stock interests which account for a minority of the issued
and outstanding shares of voting stock of a corporate licensee, where the
majority of the corporation's voting stock is held by a single stockholder; (d)
whether to relax, for attribution purposes, the FCC's insulation standards for
business development companies and other widely-held limited partnerships; (e)
whether to adopt an equity threshold for non-insulated limited partnerships
below which a limited partner would not be considered to have an attributable
interest in the partnership, regardless of that partner's insulation from
day-to-day management and operations of the media enterprises of the
partnership; (f) how to treat limited liability companies and other new business
forms for purposes of the FCC's attribution rules; (g) the impact of limited
liability companies on broadcast ownership opportunities for women and
minorities; and (h) whether to adopt a new attribution policy under which the
FCC would scrutinize multiple "cross interests" or other significant business
relationships, which are held in combination among ostensibly arm's-length
competing broadcasters in the same market, to determine whether the combined
interests, which individually would not raise concerns as to potential
diminution of competition and diversity of viewpoints, would nonetheless raise
such concerns in light of the totality of the relationships among the parties
(including, e.g., LMAs, JSAs, debt relationships, holdings of non-attributable
interests, or other relationships among competing broadcasters in the same
market).

Furthermore, the FCC has a "cross-interest" policy that under certain
circumstances could prohibit a person or entity with an attributable interest in
a broadcast station or daily newspaper from having a "meaningful"
non-attributable interest in another broadcast station or daily newspaper in the
same local market. Among other things, "meaningful" interests could include
significant equity interests (including non-voting stock, voting stock, and
limited partnership interests) and significant employment positions. This policy
may limit the permissible acquisitions and investments Cox Radio may make and
the permissible investments a purchaser of Cox Radio's Common Stock may make or
hold. If the FCC determines that a stockholder of Cox Radio has violated this
cross-interest policy, Cox Radio may be unable to obtain from the FCC one or
more authorizations needed to conduct its radio station business and may be
unable to obtain FCC consents for certain future acquisitions. In December 1994,
as part of its rulemaking proceeding soliciting public comment on various
proposals to modify its broadcast attribution policies, the FCC also solicited
public comment on whether to eliminate or codify the remaining aspects of the
cross-interest policy with respect to significant employment positions,
non-attributable equity interests and joint venture arrangements.

Under the 1996 Act, the FCC is required to review all of its broadcast
ownership rules every other year to determine whether the public interest
dictates that such rules be repealed or modified.

The 1996 Act imposes numerous requirements on the FCC to launch new
inquiries and rulemaking proceedings, perhaps 80 in all, involving a multitude
of telecommunications issues, including those described hereinabove that will
directly affect the broadcast industry. The 1996 Act mandates that such
rulemaking proceedings be completed within certain time frames, in some cases as
short as six months.

Programming and Operation. The Communications Act requires broadcasters to
serve the "public interest." Since the late 1970s, the FCC gradually has relaxed
or eliminated many of the more formalized

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procedures it had developed to promote the broadcast of certain types of
programming responsive to the needs of a station's community of license.
However, licensees are still required to present programming that is responsive
to community problems, needs and interests and to maintain certain records
demonstrating such responsiveness. Complaints from listeners concerning a
station's programming often will be considered by the FCC when it evaluates
license renewal applications of a licensee, although such complaints may be
filed at any time and generally may be considered by the FCC at any time.
Stations also must follow various rules promulgated under the Communications Act
that regulate, among other things, political advertising, sponsorship
identifications, the advertisements of contests and lotteries, obscene and
indecent broadcasts and technical operations, including limits on radio
frequency radiation. In addition, broadcast licensees must develop and implement
programs designed to promote equal employment opportunities for minorities and
women and must submit reports to the FCC with respect to these matters annually
and in connection with the station's license renewal application.

Failure to observe these or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures, the grant of
short-term (i.e., less than the full seven-year term) renewals or, for
particularly egregious violations, the denial of a license renewal application
or the revocation of a license.

LMAs and JSAs. Over the past several years, a significant number of radio
broadcast licensees, including certain of Cox Radio's subsidiaries, have entered
into LMAs and JSAs. See "Business -- Local Marketing Agreements." Under a
typical LMA, separately owned and licensed radio stations agree to enter into
cooperative arrangements subject to compliance with the requirements of
antitrust laws and with the FCC's rules and policies. Under these types of
arrangements, separately-owned stations serving a common geographic area agree
to function cooperatively in terms of programming, advertising sales, etc.,
subject to the licensee of each station maintaining independent control over the
programming and station operations of its own station. Such arrangements are an
extension of the concept of "time brokerage," under which a licensee of a
station sells the right to broadcast blocks of time on its station to an entity
or entities which program the blocks of time and sell their own commercial
advertising announcements for their own account during the time periods in
question. Under a typical JSA, two separately owned radio stations serving a
common service area agree to function cooperatively in terms of advertising
sales only. Under such an arrangement, the licensee of one station sells the
advertising time on the other licensee's station, for its own account but does
not provide any programming to the other licensee's station. This arrangement is
also subject to ultimate control by the latter licensee.

The FCC has heretofore determined that issues of joint advertising sales
should be left to antitrust enforcement and has specifically exempted LMAs from
its "cross-interest" policy. Further, the FCC and the staff of the FCC's Mass
Media Bureau have held that LMAs do not per se constitute a transfer of control
and are not contrary to the Communications Act, provided that the licensee of
the brokered station maintains complete responsibility for and control over
operations of its broadcast station (including, specifically, control over
station finances, personnel and programming) and complies with applicable FCC
rules and with antitrust laws. However, in December 1994, as part of its
rulemaking proceeding soliciting public comment on various proposals to modify
its broadcast attribution policies, the FCC also solicited public comment on
whether to adopt a new attribution policy under which the FCC would scrutinize
multiple "cross-interests" or other significant business relationships, which
are held in combination among ostensibly arm's-length competing broadcasters in
the same market, to determine whether the combined interests, which individually
would not raise concerns as to potential diminution of competition and diversity
of viewpoints, would nonetheless raise such concerns in light of the totality of
the relationships among the parties (including, e.g., LMAs, JSAs, debt
relationships, holdings of non-attributable interests, or other relationships
among competing broadcasters in the same market).

Under certain circumstances, the FCC will consider a station brokering time
on another station serving the same market to have an attributable ownership
interest in the brokered station for purposes of the FCC's Radio Contour Overlap
Rule. See "Business -- Regulation of Radio Broadcasting -- Ownership Matters."
In particular, a broadcast station is not permitted to enter into an LMA giving
it the right to program more than 15% of the broadcast time, on a weekly basis,
of another local station which it could not own under the FCC's

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Radio Contour Overlap Rule. A JSA where no programming is provided is not
considered an attributable ownership interest under current FCC rules.

The FCC's rules also prohibit a broadcast licensee from simulcasting more
than 25% of its programming on another station in the same broadcast service
(i.e., AM-AM or FM-FM) whether it owns both stations or operates both through an
LMA where the brokered and brokering stations serve substantially the same
geographic area.

Proposed Changes. The Congress and the FCC have under consideration, and
may in the future consider and adopt, new laws, regulations and policies
regarding a wide variety of matters that could, directly or indirectly: (i)
affect the operation, ownership and profitability of Cox Radio and its radio
broadcast stations; (ii) result in the loss of audience share and advertising
revenue of the Company's radio broadcast stations; and (iii) affect the ability
of Cox Radio to acquire additional radio broadcast stations or finance such
acquisitions. Such matters include, for example, changes to the license renewal
process; proposals to impose spectrum use or other governmentally-imposed fees
upon licensees; proposals to expand the FCC's equal employment opportunity rules
and other matters relating to minority and female involvement in broadcasting;
proposals to repeal or modify some or all of the FCC's multiple ownership rules
and/or policies; proposals to increase the benchmarks or thresholds for
attributing ownership interests in broadcast media; proposals to change rules or
policies relating to political broadcasting; technical and frequency allocation
matters, including those relative to the implementation of DAB on both a
satellite and terrestrial basis and AM stereo broadcasting; proposals to permit
expanded use of FM translator stations; proposals to restrict or prohibit the
advertising of beer, wine and other alcoholic beverages on radio; changes in the
FCC's cross-interest, multiple ownership, alien ownership and cross-ownership
rules and policies; changes to broadcast technical requirements; proposals to
allow telephone companies to deliver audio and video programming to homes
through existing phone lines; proposals to limit the tax deductibility of
advertising expenses by advertisers; and proposals to auction the right to use
the radio broadcast spectrum to the highest bidder, instead of granting
broadcast licenses and subsequent license renewals free of charge.

Digital Audio Broadcasting. The FCC recently has allocated spectrum to a
new technology, DAB, to deliver satellite-based audio programming to a national
or regional audience and is considering regulations for a DAB service. DAB may
provide a medium for the delivery by satellite or terrestrial means of multiple
new audio programming formats with compact disc quality sound to local and
national audiences. It is not known at this time whether this technology also
may be used in the future by existing radio broadcast stations either on
existing or alternate broadcast frequencies. In addition, applications by
several entities currently are pending at the FCC for authority to offer
multiple channels of digital, satellite-delivered S-Band aural services that
could compete with conventional terrestrial radio broadcasting. These satellite
radio services use technology that may permit higher sound quality than is
possible with conventional AM and FM terrestrial radio broadcasting. Thus far,
the FCC has not granted the pending requests for authorizations to offer
satellite radio, nor has it adopted regulations for the proposed satellite radio
service. A rule making proceeding is, however, pending before the FCC to adopt
DAB regulations. The FCC has granted at least one applicant a waiver to begin
satellite construction. Implementation of DAB would provide an additional audio
programming service that could compete with the Company's radio stations for
listeners, but the effect upon Cox Radio cannot be predicted.

In addition, the FCC has authorized an additional 100 kHz of bandwidth for
the AM band and will soon allocate frequencies in this new band to certain
existing AM station licensees which seek to modify their existing AM band
licenses and operate their stations on frequencies in the expanded AM band. At
the end of a transition period to be determined by the FCC, those licensees will
be required to return to the FCC either the license for their existing AM band
station or the license for the expanded AM band station.

In December 1994, the FCC initiated a rulemaking proceeding to solicit
public comment on various proposals to increase minority and female ownership of
mass media facilities. Specifically, the FCC sought comment on ways to refine
its previous proposal to create an "incubator" program, under which existing
mass media operators would share their talent, expertise and financial resources
with minorities seeking to enter the mass media industry in exchange for
regulatory concessions, such as relief from certain restrictions contained

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in the FCC's multiple ownership rules and policies. In addition, the FCC
solicited public comment on the following issues: (a) whether and how to modify
the FCC's multiple ownership rules to encourage increased investment in
minority-controlled and female-controlled properties; (b) whether the FCC should
adopt a proposal under which if a minority or female individual or entity holds
more than 50% of the voting stock of a mass media entity, then no other
ownership interests in the entity would be deemed attributable, provided that
the minority or female individual or entity also owns a certain minimum level of
the total equity in the mass media entity; (c) whether the FCC should propose
legislative changes to Congress that would provide an investment tax credit for
investors in minority -- and, if necessary, female-controlled entities.

The FCC also has instituted a rule making proceeding to set standards for
the imposition of monetary fees on FCC licensees that violate FCC regulations.
The proposed guidelines set base forfeiture amounts with upward and downward
adjustment factors. For broadcast stations, the proposed base forfeitures range
from $625 to $20,000 per violation or per day for a continuing violation. The
Communications Act and FCC regulations limit forfeitures for broadcast stations
to a maximum of $25,000 for a single violation or single day of a continuing
violation, or to a cap of $250,000 for continuing violations involving a single
act or failure to act.

Cox Radio cannot predict what other matters might be considered in the
future, nor can it judge in advance what impact, if any, the implementation of
any of these proposals or changes might have on its business.

SEASONALITY

Seasonal revenue fluctuations are common in the radio broadcasting industry
and are due primarily to fluctuations in advertising expenditures. Cox Radio's
revenues and broadcast cash flows are typically lowest in the first quarter and
higher in the second and fourth quarters.

EMPLOYEES

As of July 15, 1996 and prior to the consummation of the Pending
Transactions, Cox Radio employed 377 full-time and 258 part-time employees. Of
these employees, 52 were represented by American Federation of Television and
Radio Announcers ("AFTRA"), two were represented by National Association of
Broadcasting Employees and Technicians, AFL-CIO ("NABET") and one was
represented by the International Brotherhood of Electrical Workers ("IBEW"). As
of July 15, 1996, NewCity employed 421 full-time and 183 part-time employees,
none of whom were represented by unions. Cox Radio considers its employee
relations to be satisfactory.

Cox Radio employs several on-air personalities with large audiences in
their respective markets. Cox Radio enters into employment agreements with these
personalities to protect its interests in those relationships that it believes
to be valuable. Cox Radio does not believe that any loss of one of these
personalities would have a material adverse effect on Cox Radio's financial
condition or results of operations.

PATENTS AND TRADEMARKS

Cox Radio and NewCity both own numerous domestic trademark registrations
related to the business of the Company's stations. Neither Cox Radio nor NewCity
owns any patents or patent applications. Cox Radio does not believe that any of
its or NewCity's trademarks are material to its business or operations.

PROPERTIES AND FACILITIES

Cox Radio's corporate offices are located in Atlanta, Georgia. The types of
properties required to support each of the Company's radio stations include
offices, studios, transmitter sites and antenna sites. The transmitter sites and
antenna sites generally are located so as to provide maximum market coverage.

Cox Radio owns transmitter and antenna sites in the Tampa, Miami and Los
Angeles markets. Cox Radio also leases transmitter and antenna sites in the Los
Angeles, Atlanta, Miami, Chicago, Tampa, Dayton, Louisville and Syracuse
markets. In the markets in which it does not own transmitter and antenna sites,
Cox

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Radio typically leases studio and office space, although it owns its studio and
office facilities in Los Angeles and Miami. Cox Radio leases studio and office
facilities in Atlanta, Tampa, Dayton, Louisville, Syracuse and Chicago. Cox
Radio generally considers its facilities to be suitable and of adequate sizes
for its current and intended purposes. Cox Radio does not anticipate any
difficulties in renewing any facility leases or in leasing additional space, if
required.

Cox Radio owns substantially all of its other equipment, consisting
principally of transmitting antennae, transmitters, studio equipment and general
office equipment. The towers, antennae and other transmission equipment used by
the Company's stations are generally in good condition, although opportunities
to upgrade facilities are continuously reviewed.

NewCity's corporate offices are located in Bridgeport, Connecticut. The
types of properties required to support each of NewCity's radio stations include
offices, studios, transmitter sites and antenna sites. The transmitter sites and
antenna sites generally are located so as to provide maximum market coverage.

NewCity owns transmitter and antenna sites in the Orlando, San Antonio,
Syracuse, Tulsa, and Atlanta markets. NewCity also leases transmitter and
antenna sites in the Birmingham, Bridgeport, Orlando, San Antonio, Syracuse, and
Tulsa markets. In the markets in which it does not own transmitter and antenna
sites, NewCity typically leases studio and office space, although it owns its
studio and office facilities in the Birmingham and Orlando markets. NewCity
generally considers its facilities to be suitable and of adequate sizes for its
current and intended purposes. NewCity does not anticipate any difficulties in
renewing any facility leases or in leasing additional space, if required.

LITIGATION

Cox Radio is involved in litigation from time to time in the ordinary
course of its business. In management's opinion, the litigation in which Cox
Radio is currently involved, individually and in the aggregate, is not material
to Cox Radio's financial condition or results of operations.

In connection with the negotiation of the NewCity Acquisition, management
of Cox Radio was informed of the litigation in which NewCity is involved. In the
opinion of the management of Cox Radio, on the basis of such information, such
NewCity litigation is not material to NewCity's financial condition or results
of operation.

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THE NEWCITY ACQUISITION

GENERAL

On July 1, 1996, Cox Radio entered into an Agreement and Plan of Merger
(the "Merger Agreement") with NewCity and certain stockholders of NewCity (the
"Stockholders"). Pursuant to the Merger Agreement, New Cox Radio II, Inc., a
wholly-owned subsidiary of Cox Radio, will be merged with and into NewCity (the
"Merger"), with NewCity continuing as the surviving corporation as a
wholly-owned subsidiary of Cox Radio. The aggregate purchase price for NewCity
is approximately $253 million, consisting of approximately $167 million payable
in cash and approximately $86 million of existing NewCity debt. Upon payment of
the consideration described above, Cox Radio will be the sole stockholder of the
surviving corporation. Cox Radio will be required to borrow approximately $165.5
million to consummate the NewCity Acquisition. Cox Radio expects to be able to
obtain the required loan from a syndicate of banks. See "Use of Proceeds."

The Communications Act and FCC rules and policies require the prior consent
of the FCC to any transfer of control of broadcast licensees and assignments of
FCC licenses. There can be no assurance that Cox Radio will obtain such
consents. See "Risk Factors -- Failure to Consummate the Pending Transactions"
and "Business -- Federal Regulation of Radio Broadcasting."

THE MERGER AGREEMENT

Representations and Warranties. In the Merger Agreement, NewCity has made
a number of customary representations and warranties. Such representations
relate to, among other things, the corporate organization and qualifications of
NewCity; the authorization, execution, delivery, performance and enforceability
(subject to stockholder approval of the Merger Agreement) of the Merger
Agreement; the capitalization of NewCity; the accuracy of the historical
financial statements of NewCity; the conduct of the business of NewCity; the
absence of undisclosed material litigation; compliance with applicable law; the
absence of undisclosed liabilities; material contracts and other agreements and
arrangements of NewCity; the employee benefit plans of NewCity; environmental
matters; certain tax matters; certain intellectual property rights; and
compliance with the requirements, rules and regulations of the FCC.

Covenants. NewCity has agreed, among other things, that pending
consummation of the NewCity Acquisition, NewCity will not acquire or agree to
acquire any business or any corporation, partnership, joint venture, association
or other business organization or division thereof, or any properties material
to NewCity, except in the ordinary course of business.

Conditions. The obligation of each party to effect the Merger is
conditioned upon, among other things, the absence of an order or other ruling of
a court of competent jurisdiction preventing the consummation of the Merger; the
expiration of the waiting period applicable to the consummation of the Merger
under the HSR Act; the absence of any material adverse change to the
transactions contemplated by the Merger Agreement required to obtain approval
under the HSR Act; and the receipt of or filing for all consents from the FCC
and other third parties required with respect to the Merger. In addition, the
obligation of Cox Radio to effect the Merger is conditioned upon certain other
customary conditions.

Termination. The Merger Agreement may be terminated at any time prior to
the Merger becoming effective: (i) by mutual consent of Cox Radio and NewCity;
(ii) by either Cox Radio or NewCity if the Merger is not consummated by June 30,
1997, provided that the terminating party is not in material breach of its
obligations under the Merger Agreement; and (iii) by either party if certain
conditions to such party's obligation to effect the Merger have not been waived
and are incapable of being satisfied by June 30, 1997.

Indemnification. After the closing of the Merger, the Stockholders,
jointly and severally, have agreed to indemnify, and hold Cox Radio and the
employees, officers, directors and stockholders of Cox Radio harmless from and
against liabilities arising from, among other things, the breach of any of the
representations and warranties made by NewCity and any of the Stockholders, and
the failure of NewCity or any of the Stockholders to fulfill the obligations of
NewCity or any of the Stockholders. The Merger Agreement provides

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that the indemnification obligations of the Stockholders are limited to $4
million in the aggregate. Cox Radio has also agreed to indemnify and hold the
Stockholders harmless from and against certain matters.

THE GUARANTY

Cox Broadcasting has provided a guaranty (the "Guaranty") of Cox Radio's
obligations to NewCity in connection with the NewCity Acquisition. Cox Radio
will be required to borrow approximately $165.5 million to consummate the
NewCity Acquisition. Cox Radio expects to be able to obtain the required loan
from a syndicate of banks. If such bank financing is not available, the required
funds will be loaned by CEI to Cox Radio at market rates.

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following sets forth certain information with respect to the Directors
and executive officers of Cox Radio (ages as of June 1, 1996):

<TABLE>
<CAPTION>
NAME AGE POSITION WITH COX RADIO
- ------------------------------ --- ---------------------------------------------
<S> <C> <C>
Nicholas D. Trigony........... 55 Chairman of the Board of Directors
Robert F. Neil................ 37 President, Chief Executive Officer, Director
Maritza C. Pichon............. 42 Chief Financial Officer
Marc W. Morgan................ 46 Senior Vice President
Robert B. Green............... 43 Regional Vice President
James C. Kennedy.............. 48 Director
David E. Easterly............. 53 Director
</TABLE>

NICHOLAS D. TRIGONY has served as Chairman of the Cox Radio Board since
July 1996 and has served as President of Cox Broadcasting since March 1990. Mr.
Trigony joined Cox Broadcasting in September 1986 as Executive Vice
President -- Radio and was Executive Vice President -- Broadcast from April 1989
to March 1990. He is also a board member of the National Association of
Television Program Executives and serves on its Executive Committee. Mr. Trigony
is the immediate past chairman and current board member of the Television
Operators Caucus, a member of the TV Board of Directors of the National
Association of Broadcasters ("NAB") and chairman of NAB's Media Convergence Task
Force.

ROBERT F. NEIL has served as President, Chief Executive Officer and a
Director of Cox Radio since July 1996 and was Executive Vice President -- Radio
of Cox Broadcasting from June 1992 to 1996. Previously, he was Vice President
and General Manager of WSB-AM/FM. Mr. Neil joined Cox Broadcasting in November
1986. Previously, Mr. Neil was Operations Manager from December 1984 to November
1986 at WYAY-FM (Gainesville), a former NewCity station. He served as Operations
Manager from October 1983 to December 1984 and as Program Director from March
1983 to October 1983 at WYYY-FM and WSYR-AM, two of NewCity's Syracuse stations.

MARITZA C. PICHON has served as Chief Financial Officer of Cox Radio since
July 1996. She was Assistant Controller of CEI from June 1990 through June 1996.
Previously, she served as manager of accounting, senior accountant and staff
accountant. Ms. Pichon joined CEI in September 1984.

MARC W. MORGAN has served as Senior Vice President of Cox Radio since July
1996 and has been Vice President and General Manager of WSB Radio and Regional
Radio Vice President of Cox Broadcasting since July 1992. Mr. Morgan was Vice
President and General Manager of WCKG-FM (Chicago) from January 1984 to July
1992.

ROBERT B. GREEN has served as Regional Vice President of Cox Radio since
July 1996 and has been Vice President and General Manager of the Company's Miami
radio stations, WIOD-AM, WFLC-FM and WHQT-FM, since September 1992. Mr. Green
was Station Manager of WSB-AM/FM from January 1990 to September 1992.

JAMES C. KENNEDY has served as a Director of Cox Radio since July 1996. He
has served as Chairman of the Board of Directors and Chief Executive Officer of
CEI since January 1988, and prior to that time was CEI's President and Chief
Operating Officer. Mr. Kennedy joined CEI in 1972 and initially worked with
CEI's Atlanta newspapers. Mr. Kennedy serves on the Board of Governors and the
Executive Board of the Newspaper Association of America. He is Chairman of the
Board of Directors of CCI, and a Director of National Service Industries, Inc.
and Flagler Systems, Inc. He is an advisory director of Texas Commerce
Bankshares, Inc.

DAVID E. EASTERLY has served as a Director of Cox Radio since July 1996 and
has served as President and Chief Operating Officer of CEI since October 1994.
He was President of Cox Newspapers, Inc. ("Cox Newspapers"), a subsidiary of
CEI, which prior to 1993 was a division of CEI, from May 1986 through October
1994. Mr. Easterly joined CEI in 1970 at the Dayton Daily News, transferring to
Atlanta in 1981 as Vice President of Operations for Cox Newspapers. He was named
Publisher of The Atlanta Jour-

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nal/Constitution in April 1984. Mr. Easterly is a member of the Board of
Directors of the Associated Press, the American Press Institute and the Southern
Newspapers Publishers Association. He is a Director of CEI and CCI.

Directors and executive officers are elected to serve until they resign or
are removed, or are otherwise disqualified to serve, or until their successors
are elected and qualified. Directors of Cox Radio are elected at the annual
meeting of stockholders. Officers of Cox Radio are elected at the Board of
Director's first meeting after each annual meeting of stockholders.

The Company anticipates that the size of the Cox Radio Board will be
increased to seven directors, and that two additional directors who are not
affiliated with Cox Radio, NewCity or CEI will be elected to the Cox Radio
Board. Cox Radio also anticipates that, upon consummation of the NewCity
Acquisition, Richard A. Ferguson will be elected to serve as a member of the Cox
Radio Board.

RICHARD A. FERGUSON has served as President, Chief Executive Officer and a
Director of NewCity since its organization in 1986. He served as the President
of Katz Broadcasting Company, Inc., a subsidiary of Katz Communications, Inc.,
from 1981 to 1986, when he led a management group in organizing NewCity to
purchase all of the stock of Katz Broadcasting Company, Inc. Prior to 1981, he
served as the President of Park City Communications, Inc. ("Park City"), until
Park City was acquired by Katz Communications, Inc. Mr. Ferguson is Chairman of
the Radio Board of Directors of the NAB and a member of the Radio Operators
Caucus.

In addition, upon consummation of the NewCity Acquisition, certain officers
of NewCity are expected to become executive officers of Cox Radio.

JAMES T. MORLEY has been a Director and Executive Vice President of NewCity
since its organization in 1986. In 1971, he joined RKO General Broadcasting in
Boston, Massachusetts and joined the sales staff of WROR-FM in February 1972. In
October 1975, Mr. Morley became the General Sales Manager for Plough
Broadcasting's Boston radio stations, WCOP-AM/FM. He became General Sales
Manager of WEZN-FM in November 1978, was elected Vice President of Park City in
May 1979 and became Station Manager of WEZN-FM in November 1979. In August 1981,
he became General Manager of WEZN-FM. From 1981 until 1986, he was Senior Vice
President of the Broadcasting Company, then a subsidiary of Katz Broadcasting
Company, Inc. He is a member of the Board of Directors of the New York Marketing
and Radio Association.

RICHARD A. REIS has been a Director and Group Vice President of NewCity
since its organization in 1986. From 1983 to 1984, he served as Vice President
of the Broadcasting Company, then a subsidiary of Katz Broadcasting Company,
Inc, becoming Group Vice President in 1984. He was General Manager of WFTQ-AM
and WAAF-FM in Worcester, Massachusetts from 1981 and 1983, respectively, to
1989. Since 1989, he has served as General Manager of WDBO-AM and WWKA-FM in
Orlando, Florida and of WCFB-FM since 1992. He is a member of the Orlando Radio
Broadcasters Association.

Upon consummation of the NewCity Acquisition, it is expected that the
Company's senior operating management will consist of Mr. Neil, Mr. Ferguson,
Mr. Morgan, Mr. Green, Mr. Morley and Mr. Reis.

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

For the fiscal year ended December 31, 1995, the Compensation Committee of
CEI, which consists of Ben F. Love, Barbara Cox Anthony and Anne Cox Chambers,
determined the compensation of the executive officers of Cox Radio. The
composition of the Compensation Committee of Cox Radio after the effective time
of the Offerings has not yet been determined.

EXECUTIVE COMPENSATION

The following table sets forth certain information for the year ended
December 31, 1995 concerning the cash and non-cash compensation earned by or
awarded to the Chief Executive Officer and the three executive officers of Cox
Radio whose combined salary and bonus exceeded $100,000 in such periods (the
"Named Executive Officers"):

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
UNIT
ANNUAL COMPENSATION APPRECIATION
NAME AND -------------------- PLAN ALL OTHER
PRINCIPAL POSITION SALARY BONUS PAYOUTS(1) COMPENSATION
- ---------------------------------------- -------- ------- ------------ ------------
<S> <C> <C> <C> <C>
Robert F. Neil.......................... $266,890 $93,450 $ 28,478 $6,000(2)
President and Chief Executive Officer
Marc W. Morgan.......................... 225,216 87,565 -- 6,000(3)
Senior Vice President
Robert B. Green......................... 175,770 86,277 -- 6,000(3)
Regional Vice President
</TABLE>

- ---------------
(1) Reflects cash payouts and the value as of the date of issuance of CEI stock
awards under the Cox Enterprises, Inc. Unit Appreciation Plan. See "-- Cox
Enterprises, Inc. Unit Appreciation Plan."

(2) Includes $3,960 contributed to the Cox Enterprises, Inc. Savings and
Investment Plan (the "401(k) Plan") and $2,040 credited under the Cox
Enterprises, Inc. Executive Savings Plus Restoration Plan (the "Restoration
Plan").

(3) Includes $4,620 contributed to the 401(k) Plan and $1,380 credited under the
Restoration Plan.

COX ENTERPRISES, INC. UNIT APPRECIATION PLAN

The Cox Enterprises, Inc. Unit Appreciation Plan (the "UAP") provides
incentive compensation to key employees of CEI and its divisions and
subsidiaries. The UAP is administered by appointed members from the Board of
Directors of CEI (the "CEI Committee"). The CEI Committee, in its discretion,
designates key employees as participants, determines the number of units to be
awarded to the participants and retains the right to award additional units at
any time. No CEI Committee member may vote on any decision to award units to
that member. Upon award, the beginning base price of each unit is equal to the
appraised fair market value of a share of common stock of CEI on the date of the
award, as determined by an independent appraisal firm or firms selected by the
Board of Directors of CEI.

The appreciation period for units awarded under the UAP begins on the date
of award, which is January 1 of the year of the award, and ends on the earlier
of the last day of the fifth calendar year after the award or the December 31
which precedes the date the participant terminates employment with CEI or one of
its subsidiaries. Awarded units are subject to a five-year vesting schedule,
with no vesting rights earned in the first two years after the award, sixty
percent vesting after completion of the third year and twenty percent additional
vesting in each of the next two years. A participant who retires at 65, becomes
disabled or dies becomes fully vested in the awarded units. A special twenty
percent per year vesting schedule applies in the case of participants who elect
early retirement. Participants who are terminated by CEI for cause forfeit all
rights under the UAP.

The measure of benefit payable to any participant is equal to the
appreciated value of units from the award date to the end of the appreciation
period multiplied by the vested percentage (the "Standard

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Benefit"). If the appreciation period ends on the last day of the fifth year
after the award date, the benefit payable to any participants is equal to the
greater of the Standard Benefit or the excess of the average of the appraised
unit values at the end of the last two years in the appreciation period over the
unit value as of the date of award. However, the maximum award per unit shall
not exceed 150% of the beginning unit base price as of the date of award.

The following table sets forth information, valued as of December 31, 1995,
concerning the value of UAP awards issued to each Named Executive Officer:

1995 FISCAL YEAR-END UAP VALUES

<TABLE>
<CAPTION>
NUMBER VALUE
NAME AWARD OF UNITS % VESTED OF UNITS(1)
----------------------------------------- --------- -------- -------- -----------
<S> <C> <C> <C> <C>
Robert F. Neil........................... 1992 UAP 16,500 80% $ 410,685
1994 UAP 23,880 0% $ 387,095
Marc W. Morgan........................... 1992 UAP 12,375 80% $ 308,014
1994 UAP 13,430 0% $ 217,700
Robert B. Green.......................... 1992 UAP 2,250 80% $ 56,003
1994 UAP 9,700 0% $ 157,237
</TABLE>

- ---------------
(1) Values are expressed as fully vested amounts.

No units were awarded under the UAP to the Named Executive Officers for the
fiscal years ended December 31, 1993 and 1995.

LONG-TERM INCENTIVE PLAN

It is anticipated that Cox Radio will adopt the Cox Radio, Inc. Long-Term
Incentive Plan (the "LTIP"). Pursuant to the LTIP, executive officers and
selected employees of Cox Radio who have been selected as participants are
eligible to receive awards of various forms of equity-based incentive
compensation, including stock options, stock appreciation rights, stock bonuses,
restricted stock awards, performance units and phantom stock and awards
consisting of combinations of such incentives. Subsequent to the consummation of
the Pending Transactions, there will be approximately 100 individuals eligible
to be selected to receive awards under the LTIP. Cox Radio has reserved
shares of Class A Common Stock for issuance under the LTIP.

Subject to the maximum shares reserved under the LTIP, no individual may
receive a stock option covering more than 300,000 shares of Class A Common Stock
in any year and be granted more than 100,000 shares of Class A Common Stock, in
any combination of performance awards, restricted stock or other stock-based
awards that are subject to performance criteria in any year. The maximum payout
for any individual for a performance award paid in cash is 100% of his or her
base salary as of the beginning of the year of the performance award payment.

The LTIP is to be administered by the Compensation Committee of the Board
of Directors (the "Compensation Committee"), and no Compensation Committee
member is eligible to participate in the LTIP. Subject to the provisions of the
LTIP, the Compensation Committee is to have sole discretionary authority to
interpret the LTIP and to determine the type of awards to grant, when, if, and
to whom awards are granted, the number of shares covered by each award and the
terms and conditions of the award.

Options granted under the LTIP may be "Incentive Stock Options" ("ISOs"),
within the meaning of Section 422 of the Internal Revenue Code of 1986 (the
"Code"), or Nonqualified Stock Options ("NQSOs"). The exercise price of the
options will be determined by the Committee when the options as granted, subject
to a minimum price of the Fair Market Value (as defined in the LTIP) of the
Class A Common Stock on the date of grant. In the discretion of the Committee,
the option exercise price may be paid in cash or in shares of Class A Common
Stock having a Fair Market Value on the date of exercise equal to the option
exercise price, or by delivering to Cox Radio a copy of irrevocable instructions
to a stockbroker to deliver

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<PAGE> 88

promptly to Cox Radio an amount of sale or loan proceeds sufficient to pay the
exercise price. There is no current intention to grant ISOs to any LTIP
participant.

The LTIP permits the Committee to grant Class A Common Stock appreciation
rights ("SARs"). An SAR granted as an alternative or a supplement to a related
stock option will entitle its holder to be paid an amount equal to the Fair
Market Value of the Class A Common Stock subject to the SAR on the date of
exercise of the SAR less the exercise price of the related stock option, or such
other price as the Committee may determine under the LTIP for such stock option.
There is no current intention to grant SARs to any LTIP participant.

Shares of Class A Common Stock covered by a restricted stock award will be
issued to the recipient at the time the award is granted but will be subject to
forfeiture in the event continued employment and/or other restrictions and
conditions established by the Committee at the time the award is granted are not
satisfied.

A performance award or a deferred stock award will provide for the future
payment of cash or the issuance of shares of Class A Common Stock to the
recipient if continued employment or other performance objectives established by
the Committee at the time of grant are attained. The performance objectives that
must be attained to receive any award subject to performance criteria shall be
selected by the Committee and shall be based on preestablished amounts of annual
net income, operating income, cash flow, return on assets, return on equity,
return on capital or total stockholder return. There is no current intention to
grant performance awards or deferred stock awards to any LTIP participant.

Dividend equivalents may be granted that provide for current or accrued
value of dividends that may be paid in the future. Such dividend equivalents
shall be paid or distributed when accrued or shall be deemed to have been
reinvested in additional shares or awards, or otherwise reinvested. There is no
current intention to grant dividend equivalents to any LTIP participant.

Stock bonus awards, restricted stock awards and performance awards may, in
the discretion of the Committee, be settled in cash, on each date on which
shares of Class A Common Stock covered by the awards would otherwise have been
delivered or become unrestricted, in an amount equal to the Fair Market Value of
such shares on such date.

In general, in the event of a "change in control" and a "qualified
termination:" (i) the performance criteria of all performance awards and
performance-based restricted stock will be deemed fully achieved and all such
awards will become fully earned and vested; (ii) all options and stock
appreciation awards will become fully exercisable and vested; and (iii) the
restrictions, deferral limitations and forfeiture conditions applicable to any
other awards granted under the LTIP will lapse and such awards will become fully
vested. A "change in control" means any transaction that results in CEI's voting
control of Cox Radio falling below 50.1%. In general, a "qualified termination"
means termination of employment for reasons other than "cause," death,
disability, retirement, or the voluntary resignation of a participant without
"good reason" within one year following a change in control.

The LTIP may be amended, suspended or terminated by the Cox Radio Board in
whole or in part at any time, provided that no such amendment, suspension or
termination of the LTIP may adversely affect the rights of or obligations to the
participants without such participants' consent, and any such amendment,
suspension or termination will be subject to the approval of Cox Radio's
stockholders to the extent required by any federal or state law or regulation of
any stock exchange on which Class A Common Stock is listed.

EMPLOYEE STOCK PURCHASE PLAN

It is anticipated that Cox Radio will adopt the Cox Radio, Inc. Employee
Stock Purchase Plan (the "Stock Purchase Plan"). The Cox Radio Board has
authorized a maximum of shares of Class A Common Stock to be issued
under the Stock Purchase Plan. The Stock Purchase Plan is intended to qualify
under Section 423 of the Code. Under the terms of the Stock Purchase Plan,
eligible employees may subscribe to purchase shares of Class A Common Stock in a
designated amount (the "Subscription Amount"). Eligible employees are any
employees who are regularly scheduled to work at least 20 hours per week and who
are employed on December 1, 1996. The price of Class A Common Stock offered to
employees will be 85% of the

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<PAGE> 89

market value of the Class A Common Stock on the grant date. In order to
participate, employees will authorize Cox Radio to withhold from their monthly
pay an amount equal to one twenty-fifth of the Subscription Amount commencing
August 1, 1997. In no case shall an employee subscribe for more than $25,000 in
Class A Common Stock during the entire subscription period. An employee may
elect to withdraw from the Stock Purchase Plan at any time and may request his
or her aggregate contributions to be paid in cash or in Class A Common Stock. In
the event that the aggregate subscriptions exceed the authorized shares,
each participant's subscription will be reduced on a pro rata basis. The Stock
Purchase Plan will be administered by the Cox Radio Board or by its designee.

The Stock Purchase Plan may be amended, suspended or terminated by the Cox
Radio Board in whole or in part at any time, provided that no such amendment,
suspension or termination of the Stock Purchase Plan may adversely affect the
rights of or obligations to the participants without such participants' consent
and any such amendment, suspension or termination will be subject to the
approval of Cox Radio's stockholders to the extent required by any federal or
state law or regulation of any stock exchange on which Class A Common Stock is
listed.

RETIREMENT PLANS

Cox Enterprises, Inc. Pension Plan. The Cox Enterprises, Inc. Pension Plan
(the "Plan") is a tax-qualified defined benefit pension plan. The Plan covers
all eligible employees of CEI and any of its affiliates who have adopted the
Plan (including the Cox Radio Named Executive Officers). The Plan is funded
through a tax-exempt trust, into which contributions are made as necessary based
on an actuarial funding analysis.

The Plan provides for the payment of benefits upon retirement, early
retirement, death, disability and termination of employment. Participants become
vested in their benefits under the Plan after completing five years of vesting
service. The Plan benefit is determined under a formula based on a participant's
compensation and years of benefit accrual service. Participants may elect from
several option forms of benefit distribution.

Cox Executive Supplemental Plan. The Cox Executive Supplemental Plan (the
"CESP") is a non-qualified defined benefit pension plan providing supplemental
retirement benefits to certain CEI management employees (including the Cox Radio
Named Executive Officers). The CESP is administered by the Executive Benefit
Committee whose members are appointed by the CEI Board of Directors. Such
committee designates management employees to participate in the CESP.

The CESP monthly benefit formula, payable at normal retirement, is 2.5% of
a participant's average compensation, as calculated in the CESP multiplied by
the participant's years of benefit service credited under the CESP. The normal
retirement benefit will not exceed 50 percent of a participant's average
compensation at retirement. Benefits payable with respect to early retirement
are reduced to reflect an earlier commencement date. Special disability,
termination of employment and death benefits also are provided. All benefits
payable under the CESP are reduced by benefits payable to the participant under
the Plan. Participants may elect from several optional forms of benefit
distributions.

The CESP is not funded currently by CEI. In the future, Cox Radio will make
annual payments to CEI arising from its employees' participation in this plan.
However, all payments of current and future benefits due to Cox Radio employees
will be made from the general funds of CEI.

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The following table provides estimates of annual retirement income benefits
payable to certain executives under the Plan and the CESP:

PENSION PLAN TABLE

<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL AVERAGE -----------------------------------------------
COMPENSATION 20 OR
(5 YEARS) 5 10 15 MORE
----------------------------------------- -------- --------- --------- ---------
<S> <C> <C> <C> <C>
$150,000................................. $ 18,750 $ 37,500 $ 56,250 $ 75,000
250,000................................. 31,250 62,500 93,750 125,000
350,000................................. 43,750 87,500 131,250 175,000
450,000................................. 56,250 112,500 168,750 225,000
550,000................................. 68,750 137,500 206,250 275,000
650,000................................. 81,250 162,500 243,750 325,000
750,000................................. 93,750 187,500 281,250 375,000
</TABLE>

The Named Executive Officers have been credited with the following years of
benefit service: Mr. Neil, ten years; Mr. Morgan, 12 years; and Mr. Green, six
years.

COMPENSATION OF DIRECTORS

The Directors of Cox Radio currently receive no compensation for serving on
the Cox Radio Board. Cox Radio anticipates that the Directors of Cox Radio who
are not affiliates of CEI will be paid fees and reimbursed for expenses
consistent with industry norms, but the precise amount of such compensation has
not yet been determined.

It is anticipated that Cox Radio will adopt the Cox Radio, Inc. Restricted
Stock Plan for Non-Employee Directors (the "Directors Restricted Stock Plan").
Pursuant to the Directors Restricted Stock Plan, Directors who are not employees
of Cox Radio or any of its subsidiaries or affiliates will receive 50% of any
annual Cox Radio Board retainer fee in the form of Class A Common Stock, subject
to certain restrictions and forfeitures prior to the expiration of the period
ending five years after the date of the grant of the award or, if earlier, the
date of death or disability in certain circumstances. The maximum number of
shares of Class A Common Stock that may be granted pursuant to restricted stock
awards under the Directors Restricted Stock Plan is . The Directors of
Cox Radio who are employees of Cox Radio do not receive any compensation for
serving on the Cox Radio Board.

COMMITTEES OF DIRECTORS

The Company will form an audit committee of the Cox Radio Board which will
consist of independent Directors.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following table provides information as of , 1996 and as
adjusted to reflect the shares of Class A Common Stock to be sold in the
Offerings with respect to the shares of Class A Common Stock and Class B Common
Stock beneficially owned by (i) each person known by Cox Radio to own more than
5% of the outstanding voting securities of Cox Radio; (ii) each of the
Directors; (iii) each of the Named Executive Officers; and (iv) all Directors
and officers as a group:

<TABLE>
<CAPTION>
PERCENT OF VOTE
OF ALL CLASSES OF
CLASS A COMMON STOCK PERCENT OF CLASS COMMON STOCK
--------------------- --------------------- CLASS B ---------------------
NAME OF BEFORE AFTER BEFORE AFTER COMMON PERCENT BEFORE AFTER
BENEFICIAL OWNER OFFERINGS OFFERINGS OFFERINGS OFFERINGS STOCK OF CLASS OFFERINGS OFFERINGS
- ------------------------------- --------- --------- --------- --------- ------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Cox Enterprises,
Inc.(1)(2)(3)................ 0 0 0% 0% 100.0% 100.0% %
Nicholas D. Trigony............
Robert F. Neil.................
Marc W. Morgan.................
Robert B. Green................
James C. Kennedy...............
David E. Easterly..............
All directors and officers as a
group (seven persons,
including those named
above).......................
</TABLE>

The following table provides information regarding the beneficial ownership
of the common stock of CEI by (i) each person known by Cox Radio to own more
than 5% of the outstanding voting securities of Cox Radio; (ii) each of the
Directors; (iii) each of the Named Executive Officers; and (iv) all Directors
and officers as a group:

<TABLE>
<CAPTION>
NUMBER OF SHARES OF
NAME OF CEI
BENEFICIAL OWNER COMMON STOCK OWNED
-------------------------------------------------------------- ----------------------
<S> <C>
Cox Enterprises, Inc.(1)(2)(3)................................ 0
Nicholas D. Trigony........................................... 24,374
Robert F. Neil................................................ 3,068
Marc W. Morgan................................................ 4,350
Robert B. Green............................................... 0
James C. Kennedy.............................................. 0
David E. Easterly............................................. 111,049
----------
All directors and officers as a group (seven persons,
including those named above)................................ 142,841
========================
</TABLE>

- ---------------
(1) The business address for CEI is 1400 Lake Hearn Drive, N.E., Atlanta,
Georgia 30319.

(2) All the shares of Common Stock of Cox Radio that are beneficially owned by
CEI are held of record by Cox Broadcasting. All the shares of outstanding
capital stock of Cox Broadcasting are beneficially owned by Cox Holdings,
Inc., and all of the shares of outstanding capital stock of Cox Holdings,
Inc. are beneficially owned by CEI. The beneficial ownership of the
outstanding capital stock of CEI is described in footnote (3) below.

(3) There are 202,644,870 shares of common stock of CEI outstanding, with
respect to which (i) Barbara Cox Anthony, as trustee of the Anne Cox
Chambers Atlanta Trust, exercises beneficial ownership over 58,316,422
shares (28.8%); (ii) Anne Cox Chambers, as trustee of the Barbara Cox
Anthony Atlanta Trust, exercises beneficial ownership over 58,316,422 shares
(28.8%); (iii) Barbara Cox Anthony, Anne Cox Chambers and Marion H. Allen,
III, as trustees of the Dayton Cox Trust A, exercise beneficial ownership
over 82,745,685 shares (40.8%); and (iv) 226 individuals and trusts exercise
beneficial ownership over the remaining 3,266,341 shares (1.6%). Thus,
Barbara Cox Anthony and Anne Cox Chambers, who are sisters, together
exercise sole or shared beneficial ownership over 199,378,529 shares (98.4%)
of the common stock of CEI. In addition, Garner Anthony, the husband of
Barbara Cox Anthony, holds beneficially and of record 14,578 shares of
common stock of CEI. Barbara Cox Anthony disclaims beneficial ownership of
such shares. Barbara Cox Anthony and Anne Cox Chambers are the mother and
aunt, respectively, of James C. Kennedy, the Chairman of the Board of
Directors and Chief Executive Officer of CEI and a Director of Cox Radio.

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<PAGE> 92

CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS

Cox Radio is currently an indirect, wholly-owned subsidiary of CEI. As of
June 30, 1996, the indirect, wholly-owned subsidiaries of CEI through which the
radio operations of CEI are conducted (the "CEI Radio Subsidiaries") owed to CEI
and one of its other subsidiaries $134.2 million. As of June 30, 1996, CEI
contributed $26.9 million to the capital of certain of the CEI Radio
Subsidiaries. The remaining $107.3 million owed by the CEI Radio Subsidiaries to
CEI is evidenced by the CEI Notes which bear interest at the prime rate (as
reported by Chase Manhattan Bank, N.A.) plus 1.5%. Immediately prior to the
closing of the Offerings, the Cox Radio Consolidation will be effected through
the transfer to Cox Radio of all of CEI's U.S. radio operations and Cox Radio
will assume the CEI Notes. Cox Radio will apply $107.3 million of the net
proceeds of the Offerings to discharge completely all amounts owed under the CEI
Notes. See "Use of Proceeds."

Cox Radio has entered into a revolving credit facility with CEI (the "New
CEI Credit Facility"). Borrowings under the New CEI Credit Facility will not
bear interest until the consummation of the Offerings. Upon consummation of the
Offerings, all existing and future borrowings under the New CEI Credit Facility
will accrue interest at the prime rate (as reported by Chase Manhattan Bank,
N.A.) plus 1.5%.

CEI performs, and after the Offerings will continue to perform, day-to-day
cash management services for Cox Radio, with settlements of debit or credit
balances between Cox Radio and CEI occurring monthly at market interest rates.
Certain other management services have been and will continue to be provided to
Cox Radio by CEI. Such services include legal, tax, treasury, internal audit,
risk management, benefits administration and other support services. Cox Radio
was allocated expenses for years ended December 31, 1993, 1994 and 1995 of $1.6
million, $1.8 million, and $2.2 million, respectively, for such services.
Allocated expenses are based on CEI's estimate of expenses related to the
services provided to Cox Radio in relation to those provided to other divisions
of CEI. Rent and occupancy expense is allocated based on occupied space.
Management believes that these allocations are made on a reasonable basis.
However, the allocations are not necessarily indicative of the level of expenses
that might have been incurred had Cox Radio operated on a stand-alone basis.
Management has not made a study or any attempt to obtain quotes from third
parties to determine what the cost of obtaining such services from third parties
could have been. The fees and expenses to be paid by Cox Radio to CEI are
subject to change.

Cox Broadcasting has provided a guaranty of Cox Radio's payment obligations
to NewCity in connection with the NewCity Acquisition. See "The NewCity
Acquisition -- The Guaranty."

Prior to the Offerings, Cox Radio will enter into leases with subsidiaries
of CEI with respect to properties in Atlanta and Dayton that are used for Cox
Radio's radio operations and CEI's television operations in those markets.

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DESCRIPTION OF CAPITAL STOCK

The following summary description of the capital stock of Cox Radio is
qualified in its entirety by reference to Cox Radio's Amended and Restated
Certificate of Incorporation (the "Cox Radio Certificate") and Cox Radio's
Bylaws, which are filed as exhibits to the Registration Statement of which this
Prospectus is a part and are incorporated herein by reference.

Cox Radio's authorized capital stock consists of: (i) 70,000,000 shares of
Class A Common Stock, $1.00 par value per share; (ii) 45,000,000 shares of Class
B Common Stock, $1.00 par value per share; and (iii) 5,000,000 shares of
Preferred Stock, $1.00 par value per share (the "Preferred Stock").

COMMON STOCK

General. Except with respect to voting and conversion, shares of Class A
Common Stock and Class B Common Stock are identical in all respects. Holders of
shares of Class A Common stock are entitled to one vote per share, and holders
of shares of Class B Common Stock are entitled to ten votes per share.

Voting. Except as set forth below, all actions submitted to a vote of Cox
Radio's stockholders are voted on by holders of Class A Common Stock and Class B
Common Stock voting together as a single class. The affirmative vote of the
holders of a majority of the outstanding shares of Class A Common Stock and/or
Class B Common Stock voting separately as a class is required (i) to approve any
amendment to the Cox Radio Certificate that would alter or change the powers,
preferences, or special rights of such class so as to affect the holders of such
class adversely and (ii) to approve such other matters as may require a class
vote under the Delaware General Corporation Law (the "DGCL").

Dividends and Other Distributions (Including Distributions upon Liquidation
or Sale of Cox Radio). Each share of Class A Common Stock and Class B Common
Stock is equal in respect of dividends and other distributions in cash, stock or
property (including distributions upon liquidation of Cox Radio and
consideration to be received upon a sale of all or substantially all of Cox
Radio's assets); except that in the case of dividends or other distributions
payable on the Class A Common Stock or Class B Common Stock in shares of such
stock, including distributions pursuant to stock splits or dividends, only Class
A Common Stock will be distributed with respect to Class A Common Stock and only
Class B Common Stock will be distributed with respect to Class B Common Stock.
In no event will any of the Class A Common Stock or Class B Common Stock be
split, divided or combined unless each other class is proportionately split,
divided or combined.

Convertibility of Class B Common Stock into Class A Common Stock. All of
the Class B Common Stock outstanding currently is held by Cox Broadcasting. The
Class B Common Stock is convertible at any time, or from time to time, at the
option of the holder of such Class B Common Stock, and without cost to such
holder (except any transfer taxes that may be payable, as in the case of any
transfer of Class A Common Stock, if certificates are to be issued in a name
other than that in which the certificate surrendered is registered), into Class
A Common Stock on a share-for-share basis.

In the event of any such automatic conversion of Class B Common Stock,
certificates formerly representing outstanding shares of Class B Common Stock
will thereafter be deemed to represent a like number of shares of Class A Common
Stock.

In addition to conversions into Class A Common Stock as described above, a
record or beneficial owner of shares of Class B Common Stock may transfer such
shares of Class B Common Stock (whether by sale, assignment, gift, bequest,
appointment or otherwise) to any transferee.

Preemptive Rights. Neither the Class A Common Stock nor the Class B Common
Stock carry any preemptive rights enabling a holder to subscribe for or receive
shares of stock of Cox Radio of any class or any other securities convertible
into shares of stock of Cox Radio. The Cox Radio Board possesses the power to
issue shares of authorized but unissued Class A Common Stock, Class B Common
Stock and Preferred Stock without further stockholder action.

Liquidation, Dissolution or Winding Up. In the event of any liquidation,
dissolution or winding up of Cox Radio, whether voluntarily or involuntarily,
after payment or provision for payment of the debts and other

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liabilities of Cox Radio and the preferential amounts to which the holders of
any stock ranking prior to the Class A Common Stock and the Class B Common Stock
in the distribution of assets shall be entitled upon liquidation, the holders of
the Class A Common Stock and the Class B Common Stock shall be entitled to share
pro rata in the remaining assets of Cox Radio according to their respective
interests.

Transfer Agent and Registrar. The Transfer Agent and Registrar for the
Class A Common Stock is .

PREFERRED STOCK

Shares of preferred stock may be issued by Cox Radio from time to time in
one or more series. Shares of preferred stock which may be redeemed, purchased
or acquired by Cox Radio may be reissued except as otherwise provided by law.
The Cox Radio Board is authorized to fix or alter the designations and powers,
preferences and relative, participating, optional or other rights, if any, and
qualifications, limitations or restrictions thereof, including, without
limitation, the dividend rate (and whether dividends are cumulative), conversion
rights, if any, voting rights, rights and terms of redemption (including sinking
fund provisions, if any), redemption price and liquidation preferences of any
wholly unissued series of preferred stock, and the number of shares constituting
any such series and the designation thereof, or any of them, and to increase or
decrease the number of shares of any series subsequent to the issue of shares of
that series, but not below the number of shares of such series then outstanding.

ANTI-TAKEOVER PROVISIONS

Elimination of Stockholder's Power to Call Special Stockholders Meeting and
Right to Act Without a Meeting. The Cox Radio Certificate provides that a
special meeting of stockholders may be called only by the Cox Radio Board. The
principal effect of this provision is to prevent stockholders from forcing a
special meeting to consider a proposal by the Cox Radio Board. In addition, the
Cox Radio Certificate provides that any action required by the DGCL to be taken
at any annual or special meeting of stockholders, and any action which may be
taken at any annual or special meeting of stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of record of
shares of the outstanding stock of the Company having not less than the minimum
number of votes necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted.

Procedures for Stockholder Proposals. The Cox Radio Certificate provides
that a stockholder must furnish written notice to the Secretary of Cox Radio of
any nomination or business proposal to be brought before a stockholders meeting
not less than 30 nor more than 60 days prior to the meeting as originally
scheduled. In the event that less than 40 days' public notice of a meeting is
given by Cox Radio, a stockholder must furnish notice of a nomination or
business proposal not later than the close of business on the tenth day
following the mailing or the public disclosure of notice of the meeting date.
These procedures prohibit last minute attempts by any stockholder to nominate a
director or present a business proposal at an annual stockholders meeting, even
if such a nomination or proposal might be desired by a majority of the
stockholders.

Amendment of Charter Provisions. The Cox Radio Certificate provides that
any alteration, amendment, repeal or rescission of the provisions contained in
the Cox Radio Certificate must be approved by a majority of the Directors of Cox
Radio then in office and by the affirmative vote of the holders of a majority of
the voting stock.

SECTION 203 OF THE DGCL

Section 203 of the DGCL prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless: (i) prior to such date, the
transaction is approved by the Board of Directors of the corporation; (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owns at least 85% of the

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outstanding voting stock; or (iii) on or after such date, the business
combination is approved by the Board of Directors of the corporation and by
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder. A "business combination" includes
mergers, asset sales and certain other transactions resulting in a financial
benefit to the stockholder. An "interested stockholder" is a person who,
together with affiliates and associates, owns (or within three years, did own)
15% or more of the corporation's voting stock. CEI is an "interested
stockholder" of Cox Radio.

DESCRIPTION OF INDEBTEDNESS

The summaries contained herein of the material provisions of certain
indebtedness of Cox Radio do not purport to be complete and are qualified in
their entirety by reference to the provisions of the various agreements related
thereto, which are filed as exhibits to the Registration Statement of which this
Prospectus is a part and to which exhibits reference is hereby made.

CEI INDEBTEDNESS

The CEI Radio Subsidiaries have entered into the CEI Notes, which bear
interest at the prime rate (as reported by Chase Manhattan Bank, N.A.) plus
1.5%. In addition, Cox Radio has entered into the New CEI Credit Facility.
Borrowings under the New CEI Credit Facility currently bear no interest. Upon
consummation of the Offerings, all existing and future borrowings under the New
CEI Credit Facility will accrue interest at the prime rate (as reported by Chase
Manhattan Bank, N.A.) plus 1.5%. See "Certain Relationships and Related
Transactions." Upon the consummation of the Offerings, Cox Radio will use $107.3
million of the net proceeds of the Offerings to completely discharge all amounts
owed under the CEI Notes.

NEWCITY NOTES

Pursuant to the NewCity Acquisition, Cox Radio will assume certain
indebtedness of NewCity, including NewCity's obligations under an indenture with
Shawmut Bank Connecticut, dated November 2, 1993 (the "Indenture") which governs
the terms and conditions of the NewCity Notes. The NewCity Notes are general
unsecured obligations of NewCity and are subordinated to all existing and future
senior indebtedness of NewCity. The NewCity Notes are redeemable at the option
of NewCity, in whole or in part, at any time on or after November 1, 1998, at an
initial redemption price of 104.266% of the principal amount, plus accrued and
unpaid interest through the date of redemption. The NewCity Acquisition will
trigger an obligation on the part of NewCity to offer to repurchase such NewCity
Notes at 101% of the principal amount thereof plus accrued and unpaid interest
to the date of any such repurchase. If NewCity is required to repurchase any of
the NewCity Notes, the Company expects to fund such repurchase through debt
financing, including bank financing.

The Indenture contains certain covenants that, among other things, limit
the ability of NewCity and its subsidiaries to incur additional indebtedness,
pay dividends and make other restricted payments, issue or sell common stock of
its subsidiaries, enter into sale and leaseback transactions, create liens, or
engage in mergers, consolidations and asset sales. Following consummation of the
NewCity Acquisition, the NewCity Notes will be obligations of NewCity as a
wholly-owned subsidiary of the Company. Accordingly, the covenants in the
Indenture which affect subsidiaries will only limit the actions of NewCity and
its subsidiaries and not the other subsidiaries of the Company.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offerings, Cox Radio will have shares of
Class A Common Stock outstanding, assuming no exercise of the Underwriters'
over-allotment option. Of these shares, shares will be freely
transferable without restriction or further registration under the Securities
Act, except that any shares purchased by "affiliates" of the Company, as that
term is defined in Rule 144 under the Securities Act ("Affiliates"), may
generally only be sold in compliance with the limitations of Rule 144

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described below. The remaining shares (the "Restricted Shares") of
Class A Common Stock outstanding are "restricted securities" within the meaning
of Rule 144 under the Securities Act and may not be sold in the absence of
registration under the Securities Act unless an exemption from registration is
available, including an exemption afforded by Rule 144 under the Securities Act.

The Company, its directors, CEI and certain officers of the Company, who
will own shares of Class A Common Stock and vested options to purchase
shares of Class A Common Stock upon completion of the Offerings, have
agreed not to, directly or indirectly, offer for sale, sell or otherwise dispose
of, or announce the offering of, any shares of Class A Common Stock or any
securities convertible into or exercisable or exchangeable for shares of Class A
Common Stock for a period of 180 days after the date of this Prospectus without
the prior written consent of Lehman Brothers Inc.

In general, under Rule 144 as currently in effect, beginning approximately
90 days after the effective date of the Registration Statement of which this
Prospectus is a part, a stockholder, including an Affiliate, who has
beneficially owned his or her restricted securities (as that term is defined in
Rule 144) for at least two years from the later of the date such securities were
acquired from the Company or (if applicable) the date they were acquired from an
Affiliate is entitled to sell, within any three-month period, a number of such
shares that does not exceed the greater of 1% of the then outstanding shares of
Class A Common Stock (approximately shares immediately after the Offerings)
or the average weekly trading volume in the Class A Common Stock during the four
calendar weeks preceding the date on which notice of such sale was filed under
Rule 144, provided certain requirements concerning availability of public
information, manner of sale and notice of sale are satisfied. In addition, under
Rule 144(k), if a period of at least three years has elapsed between the later
of the date restricted securities were acquired from the Company or (if
applicable) the date they were acquired from an Affiliate of the Company, a
stockholder who is not an Affiliate of the Company at the time of sale and has
not been an Affiliate of the Company for at least three months prior to the sale
is entitled to sell the shares immediately without compliance with the foregoing
requirements under Rule 144.

The Securities and Exchange Commission has proposed an amendment to Rule
144 which would reduce the holding period required for shares subject to Rule
144 to become eligible for sale in the public market from two years to one year,
and from three years to two years in the case of Rule 144(k). If this proposal
is adopted, the shares held by (assuming no exercise of the over-allotment
option) will become eligible for sale to the public pursuant to Rule 144 or
144(k) one year or two years, respectively, from the effective date of the
Offerings.

The Company intends to file registration statements on Form S-8 under the
Securities Act immediately following the consummation of the Offerings to
register all shares of Class A Common Stock issuable under the LTIP and the
Stock Purchase Plan. The registration statements are expected to be filed
shortly after the effective date of the Registration Statement of which this
Prospectus is a part and will be effective upon filing. Shares issued upon the
exercise of stock options after the effective date of the Form S-8 registration
statements will be eligible for resale in the public market without restriction,
subject to Rule 144 limitations applicable to Affiliates and the lock-up
agreements noted above.

Prior to the Offerings, there has been no public market for the Class A
Common Stock. No prediction can be made as to the effect, if any, that market
sales of shares of Class A Common Stock or the availability of shares for sale
will have on the market price of the Class A Common Stock prevailing from time
to time. Nevertheless, sales of significant numbers of shares of Class A Common
Stock in the public market could adversely affect the market price of the Class
A Common Stock and could impair the Company's ability to raise capital through
an offering of its equity securities. See "Shares Eligible for Future Sale" and
"Underwriting."

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UNDERWRITING

Under the terms of and subject to the conditions contained in the U.S.
Underwriting Agreement, the form of which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, the U.S.
Underwriters, for whom Lehman Brothers Inc., Allen & Company Incorporated, CS
First Boston Corporation and Morgan Stanley & Co. Incorporated are acting as
representatives (the "Representatives"), have severally agreed to purchase from
Cox Radio, and Cox Radio has agreed to sell to each U.S. Underwriter, the
aggregate number of shares of Class A Common Stock set forth opposite the name
of such U.S. Underwriter below:

<TABLE>
<CAPTION>
U.S. UNDERWRITERS NUMBER OF SHARES
--------------------------------------------------------------------- ----------------
<S> <C>
Lehman Brothers Inc..................................................
Allen & Company Incorporated.........................................
CS First Boston Corporation..........................................
Morgan Stanley & Co. Incorporated....................................
Total......................................................
</TABLE>

Under the terms of and subject to the conditions contained in the
International Underwriting Agreement, the form of which is filed as an exhibit
to the Registration Statement of which this Prospectus forms a part, the
International Managers, for whom Lehman Brothers International (Europe), Allen &
Company Incorporated, CS First Boston Limited and Morgan Stanley & Co.
International Limited are acting as lead managers (the "Lead Managers"), have
severally agreed to purchase from Cox Radio, and Cox Radio has agreed to sell to
each International Manager, the aggregate number of shares of Class A Common
Stock set forth opposite the name of such Manager below:

<TABLE>
<CAPTION>
MANAGERS NUMBER OF SHARES
--------------------------------------------------------------------- ----------------
<S> <C>
Lehman Brothers International (Europe)...............................
Allen & Company Incorporated.........................................
CS First Boston Limited..............................................
Morgan Stanley & Co. International Limited...........................
Total......................................................
</TABLE>

The U.S. Underwriting Agreement and the International Underwriting
Agreement (collectively, the "Underwriting Agreements") provide that the
obligations of the U.S. Underwriters and the International Managers,
respectively, to purchase shares of Class A Common Stock are subject to the
approval of certain legal matters by counsel and to certain other conditions and
that, if any of the shares of Class A Common Stock are purchased by the U.S.
Underwriters pursuant to the U.S. Underwriting Agreement or by the International
Managers pursuant to the International Underwriting Agreement, all the shares of
Class A Common Stock agreed to be purchased by the U.S. Underwriters or the
International Managers, as the case may be, pursuant to their respective
Underwriting Agreements must be so purchased. The initial public offering price
and underwriting discounts and commissions for each of the U.S. Offering and the
International Offering are identical. The closing of each of the U.S. Offering
and the International Offering is conditioned upon the closing of the other.

Cox Radio has been advised by the Representatives and the Lead Managers
that the U.S. Underwriters and the International Managers propose to offer part
of the shares to the public at the public offering price set forth on the cover
page hereof and part to certain dealers at a price that represents a concession
not in excess of $ per share under the public offering price (the "selling
concession"). The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ per share to certain other Underwriters, or to
certain other brokers or dealers. After the initial offering to the public, the
offering price and other selling terms may be changed by the Representatives and
the Lead Managers.

Cox Radio has granted to the U.S. Underwriters and the International
Managers an option to purchase up to an additional shares and
shares of Class A Common Stock, respectively, exercisable solely to
cover over-allotments, at the initial offering price to the public, less the
underwriting discounts and

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commissions, shown on the cover page of this Prospectus. Any or all of such
options may be exercised at any time until 30 days after the date of the U.S.
Underwriting Agreement and the International Underwriting Agreement, as the case
may be. To the extent that an option is exercised, each U.S. Underwriter or
International Manager, as the case may be, will be committed, subject to certain
conditions, to purchase a number of the additional shares of Class A Common
Stock proportionate to such Underwriter's initial commitment as indicated in the
preceding tables.

The U.S. Underwriters and the International Managers have entered into an
Agreement Between U.S. Underwriters and International Managers (the "Agreement
Between") pursuant to which each U.S. Underwriter has agreed that, as part of
the distribution of the shares of Class A Common Stock offered in the United
States and Canada, (a) it is not purchasing any of such shares for the account
of anyone other than a U.S. or Canadian Person (as defined below) and (b) it has
not offered or sold, and will not offer, sell, resell or deliver, directly or
indirectly, any of such shares or distribute any prospectus relating to such
shares to anyone other than a U.S. or Canadian Person. In addition, pursuant to
the Agreement Between, each International Manager has agreed that, as part of
the distribution of the shares of Class A Common Stock offered outside the
United States and Canada, (a) it is not purchasing any of such shares for the
account of any U.S. or Canadian Person and (b) it has not offered or sold, and
will not offer, sell, resell or deliver, directly or indirectly, any of such
shares or distribute any prospectus relating to such shares to any U.S. or
Canadian Person.

The foregoing limitations do not apply to stabilization transactions or to
certain other transactions specified in the Underwriting Agreements and the
Agreement Between, including (i) certain purchases and sales between the U.S.
Underwriters and the International Managers; (ii) certain offers, sales,
resales, deliveries or distributions to or through investment advisors or other
persons exercising investment discretion; (iii) purchases, offers or sales by a
U.S. Underwriter who is also acting as an International Manager for the account
of a Person other than a U.S. or Canadian Person and by an International Manager
who is also acting as a U.S. Underwriter for the account of a U.S. or Canadian
Person; and (iv) other transactions specifically approved by the U.S.
Underwriters and International Managers. As used herein, "U.S. or Canadian
Person" means any resident or citizen of the United States or Canada, any
corporation, partnership or other entity created or organized in or under the
laws of the United States or Canada or any political subdivision thereof or any
estate or trust the income of which is subject to United States federal income
taxation or Canadian income taxation regardless of the source (other than the
foreign branch of any U.S. or Canadian Person), and includes any United States
or Canadian branch of a person other than a U.S. or Canadian Person. The term
"United States" means the United States of America (including the states thereof
and the District of Columbia) and its territories, its possessions and other
areas subject to its jurisdiction and the term "Canada" means Canada, its
provinces, territories, possessions and other areas subject to its jurisdiction.

Pursuant to the Agreement Between, sales may be made between the U.S.
Underwriters and the International Managers of such number of shares of Class A
Common Stock as may be mutually agreed. The price of any shares so sold shall be
the public offering price as then in effect for Class A Common Stock being sold
by the U.S. Underwriters and International Managers, less an amount not greater
than the selling concession unless otherwise determined by mutual agreement. To
the extent that there are sales pursuant to the Agreement Between, the number of
shares initially available for sale by the U.S. Underwriters or by the
International Managers may be more or less than the amount specified on the
cover page of this Prospectus.

The Representatives and the Lead Managers have informed the Company that
the Underwriters do not intend to confirm sales to accounts over which they
exercise discretionary authority.

This Prospectus is not, and under no circumstances is to be construed as,
an advertisement or a public offering of the Class A Common Stock in Canada or
any province or territory thereof. Any offer or sale of the shares of Class A
Common Stock in Canada may only be made pursuant to an exemption from the
requirement to file a prospectus in the province or territory of Canada in which
such offer or sale is made.

Each International Manager has represented and agreed that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
shares of Class A Common Stock will not offer or sell any shares of Class A
Common Stock to persons in the United Kingdom except to persons whose ordinary
activities

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involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 (the "1986 Act") with
respect to anything done by it in relation to the shares of Class A Common Stock
in, from or otherwise involving the United Kingdom; and (iii) it has only issued
or passed on, and will only issue and pass on to any person in the United
Kingdom, any investment advertisement (within the meaning of the 1986 Act)
relating to the shares of Class A Common Stock if that person falls within
Article 11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1995.

The shares of Class A Common Stock may not be offered or sold directly or
indirectly in Hong Kong by means of this document or any other offering material
or document other than to persons whose ordinary business it is to buy or sell
shares or debentures, whether as principal or as agent. Unless permitted to do
so by the securities laws of Hong Kong, no person may issue or cause to be
issued in Hong Kong this document or any amendment or supplement thereto or any
other information, advertisement or document relating to the shares of Class A
Common Stock other than with respect to shares of Class A Common Stock intended
to be disposed of to persons outside Hong Kong or to persons whose business
involves the acquisition, disposal or holding of securities, whether as
principal or as agent.

The shares of Class A Common Stock have not been registered under the
Securities and Exchange Law of Japan and are not being offered and may not be
offered or sold directly or indirectly in Japan or to residents of Japan, except
pursuant to applicable Japanese laws and regulations.

No action has been taken or will be taken in any jurisdiction by Cox Radio
or the International Managers that would permit a public offering of the shares
offered pursuant to the Offerings in any jurisdiction where action for that
purpose is required, other than the United States. Persons into whose possession
this Prospectus comes are required by Cox Radio and the International Managers
to inform themselves about, and to observe any restrictions as to, the offering
of the shares offered pursuant to the Offerings and the distribution of this
Prospectus.

Purchasers of the shares of Class A Common Stock offered hereby may be
required to pay stamp taxes and other charges in accordance with the laws and
practices of the country of purchase in addition to the offering price set forth
on the cover page hereof.

Cox Radio has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act. The Company has
agreed to reimburse certain expenses of the Underwriters.

At the request of Cox Radio, the Underwriters intend to reserve
approximately shares of Class A Common Stock (approximately % of
the Offerings assuming the Underwriters' over-allotment option is not exercised)
for sale at the initial public offering price to certain of Cox Radio's
employees and certain other persons. The number of shares available for sale to
the general public will be reduced to the extent such individuals purchase such
reserved shares. Any reserved shares of Class A Common Stock that are not so
purchased by such persons at the closing of the Offerings will be offered to the
general public on the same terms as the other shares of Class A Common Stock
offered by this Prospectus.

Cox Radio, its Directors, CEI and certain officers of Cox Radio, subject to
certain exceptions, have agreed not to, directly or indirectly, offer for sale,
sell or otherwise dispose of or announce the offering of, any shares of Class A
Common Stock or any securities convertible into or exercisable or exchangeable
for Class A Common Stock for a period of 180 days after the date of this
Prospectus without the prior written consent of Lehman Brothers Inc.

The Underwriters have from time to time rendered investment banking and
financial advisory services to CEI, its subsidiaries and its affiliates for
which they have received customary fees.

DETERMINATION OF THE OFFERING PRICE

Prior to the Offerings, there has been no public market for the Class A
Common Stock. The initial public offering price for the Class A Common Stock
will be determined by negotiations among the Company, the Representatives and
the Lead Managers. Among the factors considered in such negotiations will be
prevailing market conditions, the market values of publicly traded companies
that the Underwriters believed to be

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somewhat comparable to the Company, the demand for the Class A Common Stock and
for similar securities of companies comparable to Cox Radio, the current state
of Cox Radio's development and other factors deemed relevant. There can,
however, be no assurance that the prices at which the Class A Common Stock will
sell in the public market after the Offerings will not be lower than the price
at which they will be sold in the Offerings.

CERTAIN UNITED STATES TAX CONSEQUENCES TO
NON-UNITED STATES HOLDERS OF CLASS A COMMON STOCK

The following is a general discussion of certain United States federal
income and estate and gift tax consequences of the ownership and sale or other
disposition of Class A Common Stock by a holder that, for United States federal
income tax purposes, is not a "United States person" (a "Non-United States
Holder"). For purposes of this discussion, a "United States person" means a
citizen or resident (as determined for U.S. federal income tax purposes) of the
United States; a corporation created or organized in the United States or under
the laws of the United States or of any political subdivision thereof; or a
person or entity the income of which is includible in gross income for United
States federal income tax purposes regardless of its source. Resident alien
individuals will be subject to United States federal income tax with respect to
the Class A Common Stock as if they were United States citizens.

THIS DISCUSSION IS BASED ON THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), AND THE ADMINISTRATIVE INTERPRETATIONS AS OF THE DATE HEREOF, ALL
OF WHICH MAY BE CHANGED EITHER RETROACTIVELY OR PROSPECTIVELY. THIS DISCUSSION
IS FOR GENERAL INFORMATION ONLY, DOES NOT CONSIDER ANY SPECIFIC FACTS OR
CIRCUMSTANCES THAT MAY APPLY TO A PARTICULAR NON-UNITED STATES HOLDER AND DOES
NOT ADDRESS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, MUNICIPALITY, FOREIGN
COUNTRY OR OTHER TAXING JURISDICTION. PROSPECTIVE INVESTORS ARE URGED TO CONSULT
THEIR TAX ADVISORS REGARDING THE UNITED STATES FEDERAL TAX CONSEQUENCES OF
OWNING AND DISPOSING OF CLASS A COMMON STOCK (INCLUDING THE INVESTOR'S STATUS AS
A UNITED STATES PERSON OR NON-UNITED STATES HOLDER), AS WELL AS ANY TAX
CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY STATE, MUNICIPALITY, FOREIGN
COUNTRY OR OTHER TAXING JURISDICTION.

DIVIDENDS

Dividends paid to a Non-United States Holder will generally be subject to
the withholding of United States federal income tax at the rate of 30%, unless
the dividend is effectively connected with the conduct of a trade or business
(or, if an income tax treaty applies, is attributable to a "permanent
establishment", as defined therein) within the United States of the Non-United
States Holder, in which case the dividend will be subject to the rules described
in the next paragraph. Non-United States Holders should consult any applicable
income tax treaties, which may provide for reduced withholding or other rules
different from those described above. For purposes of determining whether tax is
to be withheld at a 30% rate or a reduced rate as specified by an income tax
treaty, current law permits Cox Radio to presume that dividends paid to an
address in a foreign country are paid to a resident of such country absent
definite knowledge that such presumption is not warranted. However, under
proposed U.S. Treasury regulations, which have not yet been put into effect, in
the case of dividends paid after December 31, 1997 (December 31, 1999 in the
case of dividends paid to accounts in existence on or before the date that is 60
days after the proposed regulations are published as final regulations), a
Non-United States Holder generally would be subject to United States withholding
tax at a 31% rate under the backup withholding rules described below, rather
than at a 30% rate or a reduced rate under an income tax treaty, unless certain
certification procedures (or, in the case of payments made outside the United
States with respect to an offshore account, certain documentary evidence
procedures) are satisfied, directly or through an intermediary. A Non-United
States Holder who is eligible for a reduced withholding

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rate may obtain a refund of any excess amounts withheld by filing a tax return
with the Internal Revenue Service (the "Service").

Cox Radio will not withhold federal income tax upon dividends paid to a
Non-United States Holder if the company receives the appropriate form of the
Service (currently Form 4224) from that Non-United States Holder, establishing
that such income is effectively connected with the conduct of a trade or
business (or, if an income tax treaty applies, is attributable to a "permanent
establishment", as defined therein) within the United States of the Non-United
States Holder, unless Cox Radio has knowledge to the contrary. Dividends paid to
a Non-United States Holder of Class A Common Stock that are effectively
connected with the conduct of a trade or business (or, if an income tax treaty
applies, are attributable to a "permanent establishment", as defined therein)
within the United States of the Non-United States Holder are generally taxed on
a net income basis (that is, after allowance for applicable deductions) at the
graduated rates that are applicable to United States persons. In the case of a
Non-United States Holder that is a corporation, such income may also be subject
to the United States federal branch profits tax (which is generally imposed on a
foreign corporation upon the deemed repatriation from the United States of
effectively connected earnings and profits) at a 30% rate, unless the rate is
reduced or eliminated by an applicable income tax treaty and the Non-United
States Holder is a qualified resident of the treaty country.

GAIN ON SALE OR OTHER DISPOSITION

Subject to special rules applicable to individuals as described below, a
Non-United States Holder will generally not be subject to regular United States
federal income or withholding tax on gain recognized on a sale or other
disposition of Class A Common Stock unless (i) the gain is effectively connected
with the conduct of a trade or business (or, if an income tax treaty applies, is
attributable to a "permanent establishment", as defined therein) within the
United States of the Non-United States Holder or of a partnership, trust or
estate in which the Non-United States Holder is a partner or beneficiary, or
(ii) Cox Radio has been, is or becomes a "United States real property holding
corporation" within the meaning of Section 897(c)(2) of the Code at any time
within the shorter of the five-year period preceding such sale or other
disposition or such Non-United States Holder's holding period for the Class A
Common Stock.

A corporation is generally considered to be a United States real property
holding corporation if the fair market value of its "United States real property
interests" within the meaning of Section 897(c)(1) of the Code equals or exceeds
50% of the sum of the fair market value of its worldwide real property interests
plus the fair market value of any other of its assets used or held for use in a
trade or business. Cox Radio believes that it has not been, is not currently and
is not likely to become a United States real property holding corporation.
Further, even if Cox Radio were to become a United States real property holding
corporation, any gain recognized by a Non-United States Holder still would not
be subject to U.S. federal income tax if the Class A Common Stock were
considered to be "regularly traded" (within the meaning of applicable U.S.
Treasury regulations) on an established securities market (e.g., the
, on which the Class A Common Stock will be listed), and
the Non-United States Holder did not own, directly or indirectly, at any time
during the five-year period ending on the date of the sale or other disposition,
more than 5% of the Class A Common Stock.

Gains realized by a Non-United States Holder of Class A Common Stock that
are effectively connected with the conduct of a trade or business (or, if an
income tax treaty applies, are attributable to a "permanent establishment," as
defined therein) within the United States of the Non-United States Holder are
generally taxed on a net income basis (that is, after allowance for applicable
deductions) at the graduated rates that are applicable to United States persons.
In the case of a Non-United States Holder that is a corporation, such income may
also be subject to the United States federal branch profits tax (which is
generally imposed on a foreign corporation upon the deemed repatriation from the
United States of effectively connected earnings and profits) at a 30% rate,
unless the rate is reduced or eliminated by an applicable income tax treaty and
the Non-United States Holder is a qualified resident of the treaty country.

In addition to being subject to the rules described above, an individual
Non-United States Holder who holds Class A Common Stock as a capital asset will
generally be subject to tax at a 30% rate on any gain

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recognized on the sale or other disposition of such stock if (i) such gain is
not effectively connected with the conduct of a trade or business (or, if an
income tax treaty applies, is not attributable to a "permanent establishment,"
as defined therein) within the United States of the Non-United States Holder,
and (ii) such individual is present in the United States for 183 days or more in
the taxable year of the sale or other disposition and either (A) has a "tax
home" in the United States (as specially defined for purposes of the United
States federal income tax), or (B) maintains an office or other fixed place of
business in the United States and the income from the sale of the stock is
attributable to such office or other fixed place of business.

Individual Non-United States Holders may also be subject to tax pursuant to
provisions of United States federal income tax law applicable to certain United
States expatriates. Furthermore, under a recent legislative proposal of the
Clinton Administration, U.S. citizens and residents who expatriate on or after
February 6, 1995 would be deemed to have sold their Class A Common Stock at fair
market value immediately prior to their expatriation. Accordingly, gain would be
recognized and subject to tax at the graduated rates applicable to United States
persons. The Clinton Administration proposal or some similar legislative
proposal may or may not be enacted.

In past years, legislation has been introduced that, if enacted, would
under certain circumstances have imposed United States federal income tax on
gain realized from the sale or other disposition of Class A Common Stock by
certain Non-United States Holders who owned, at or prior to the time of sale or
other disposition, 10% or more of the Class A Common Stock. There can be no
assurance that similar legislation will not again be proposed in the future and,
if proposed, enacted.

FEDERAL ESTATE AND GIFT TAXES

Class A Common Stock owned or treated as owned by an individual (regardless
of whether such an individual is a citizen or a resident of the United States)
at the date of death will be included in such individual's estate for United
States federal estate tax purposes, unless an applicable estate tax treaty
provides otherwise. A Non-United States Holder will not be subject to United
States federal gift tax on a transfer of Class A Common Stock, unless such
person is a domiciliary of the United States.

INFORMATION REPORTING AND BACKUP WITHHOLDING

Cox Radio must report annually to the Service and to each Non-United States
Holder the amount of dividends paid to, and the tax withheld with respect to,
such Non-United States Holder, regardless of whether tax was actually withheld
and whether withholding was reduced or eliminated by an applicable income tax
treaty. Pursuant to certain income tax treaties and other agreements, that
information may also be made available to the tax authorities of the country in
which the Non-United States Holder resides.

United States federal backup withholding (which generally is withholding
imposed at the rate of 31% on certain payments to persons not otherwise exempt
who fail to furnish certain identifying information) will generally not apply to
(i) dividends paid to a Non-United States Holder that is subject to withholding
at the 30% rate (or that is subject to withholding at a reduced rate under an
applicable income tax treaty), or (ii) under current law, dividends paid to a
Non-United States Holder at an address outside of the United States (unless the
payor has knowledge that the payee is a United States person). However, under
proposed U.S. Treasury regulations, which have not yet been put into effect, in
the case of dividends paid after December 31, 1997 (December 31, 1999 in the
case of dividends paid to accounts in existence on or before the date that is 60
days after the proposed regulations are published as final regulations), a
Non-United States Holder generally would be subject to United States withholding
tax at a 31% rate, unless certain certification procedures (or, in the case of
payments made outside the United States with respect to an offshore account,
certain documentary evidence procedures) are satisfied, directly or through an
intermediary.

The backup withholding and information reporting requirements also apply to
the gross proceeds paid to a Non-United States Holder upon the sale or other
disposition of Class A Common Stock by or through a United States office of a
United States or foreign broker, unless the Non-United States Holder certifies
to the broker under penalties of perjury as to, among other things, its name,
address and status as a Non-United States Holder by filing the Service's Form
W-8 with the broker, or unless the Non-United States Holder

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otherwise establishes an exemption. Information reporting requirements (but not
backup withholding) will apply to a payment of the proceeds of a sale or other
disposition of Class A Common Stock effected at a foreign office of (i) a United
States broker; (ii) a foreign broker 50% or more of whose gross income for
certain periods is effectively connected with the conduct of a trade or business
within the United States; or (iii) a foreign broker that is a "controlled
foreign corporation" for United States federal income tax purposes, unless the
broker has documentary evidence in its records that the Non-United States Holder
is a Non-United States Holder (and the broker has no knowledge to the contrary)
and certain other conditions are met, or unless the Non-United States Holder
otherwise establishes an exemption. Neither backup withholding nor information
reporting will generally apply to a payment of the proceeds of a sale or other
disposition of Class A Common Stock effected at a foreign office of a foreign
broker not subject to the preceding sentence.

Any amounts withheld under the backup withholding rules will be refunded or
credited against the Non-United States Holder's United States federal income tax
liability, provided that the Non-United States Holder files a tax return with
the Service.

These backup withholding and information reporting requirements are under
review by the Service, and their application to the Class A Common Stock could
be changed by future regulations.

LEGAL MATTERS

The validity of the Class A Common Stock offered hereby will be passed upon
for Cox Radio by Dow, Lohnes & Albertson, PLLC, Washington, D.C. The
Underwriters have been represented by Cravath, Swaine & Moore, New York, New
York.

EXPERTS

The consolidated financial statements of Cox Radio at December 31, 1994 and
1995 and for each of the three years in the period ending December 31, 1995
included in this Prospectus and Registration Statement and the related
consolidated financial statement schedule included elsewhere in the Registration
Statement have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports appearing herein and elsewhere in the Registration
Statement (which reports express an unqualified opinion and include an
explanatory paragraph referring to changes in the methods of accounting for
postretirement benefits other than pensions, income taxes, and postemployment
benefits), and have been so included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.

The consolidated financial statements of NewCity at December 31, 1994 and
1995, and for each of the three years in the period ending December 31, 1995,
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
appearing elsewhere herein and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.

The consolidated financial statements of Infinity Holdings Corp. of Orlando
at December 31, 1995 and for the year then ended included in this Prospectus and
Registration Statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein and elsewhere in the
Registration Statement, and have been so included in reliance upon the report
given upon their authority as experts in accounting and auditing.

AVAILABLE INFORMATION

Cox Radio has filed with the Securities and Exchange Commission ("the
Commission"), Washington, D.C. 20549, a Registration Statement (which term shall
include all amendments, exhibits and schedules thereto) on Form S-1 under the
Securities Act with respect to the shares of Class A Common Stock offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
omits certain of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement for further information
with respect to Cox Radio and the Class A Common Stock offered hereby. Any

96
<PAGE> 104

statements contained herein concerning the provisions of any contract or other
document are not necessarily complete, and where such contract or other document
is an exhibit to the Registration Statement, each such statement is qualified in
all respects by the provisions in such exhibit, to which reference is hereby
made. Copies of the Registration Statement may be examined or copied at the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the regional offices of the Commission
located at 7 World Trade Center, Suite 1300, New York, New York 10048 and at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies can also be obtained by mail at prescribed rates. Requests
should be directed to the Commission's Public Reference Section, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.

97
<PAGE> 105

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
COX RADIO, INC.
Independent Auditors' Report.......................................................... F-2
Consolidated Balance Sheets, December 31, 1994 and 1995 and (Unaudited) March 31,
1996................................................................................ F-3
Consolidated Statements of Operations, Years Ended December 31, 1993, 1994 and 1995
and (Unaudited) Three Months Ended March 31, 1995 and 1996.......................... F-4
Consolidated Statements of Shareholder's Equity, Years Ended December 31, 1993, 1994
and 1995 and (Unaudited) Three Months Ended March 31, 1996.......................... F-5
Consolidated Statements of Cash Flows, Years Ended December 31, 1993, 1994 and 1995
and (Unaudited) Three Months Ended March 31, 1995 and 1996.......................... F-6
Notes to Consolidated Financial Statements............................................ F-7
NEWCITY COMMUNICATIONS, INC.
Report of Independent Auditors........................................................ F-17
Consolidated Balance Sheets, December 31, 1994 and 1995............................... F-18
Consolidated Statements of Operations, Years Ended December 31, 1993, 1994 and 1995... F-19
Consolidated Statements of Stockholders' Deficiency, Years Ended December 31, 1993,
1994 and 1995....................................................................... F-20
Consolidated Statements of Cash Flows, Years Ended December 31, 1993, 1994 and 1995... F-21
Notes to Consolidated Financial Statements............................................ F-22
Consolidated Balance Sheets (Unaudited) March 31, 1996 and December 31, 1995.......... F-33
Consolidated Statements of Operations, (Unaudited) Three Months Ended March 31, 1996
and 1995............................................................................ F-34
Consolidated Statements of Cash Flows, (Unaudited) Three Months Ended March 31, 1996
and 1995............................................................................ F-35
Notes to Consolidated Interim Financial Statements (Unaudited)........................ F-36
INFINITY HOLDINGS CORP. OF ORLANDO
Independent Auditors' Report.......................................................... F-37
Consolidated Balance Sheets, December 31, 1995 and (Unaudited) March 31, 1996......... F-38
Consolidated Statements of Operations, Year Ended December 31, 1995 and (Unaudited)
Three Months Ended March 31, 1995 and 1996.......................................... F-39
Consolidated Statements of Cash Flows, Year Ended December 31, 1995 and (Unaudited)
Three Months Ended March 31, 1995 and 1996.......................................... F-40
Notes to Consolidated Financial Statements............................................ F-41
</TABLE>

F-1
<PAGE> 106

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder of
Cox Radio, Inc.

We have audited the accompanying consolidated balance sheets of Cox Radio,
Inc. ("Cox Radio") as of December 31, 1994 and 1995, and the related
consolidated statements of operations, shareholder's equity and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of Cox Radio's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Cox Radio,
Inc. at December 31, 1994 and 1995, and the consolidated 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.

As discussed in Notes 2, 7 and 8 to the consolidated financial statements,
during 1993 Cox Radio changed its methods of accounting for postretirement
benefits other than pensions, income taxes, and postemployment benefits to
conform with Statements of Financial Accounting Standards No. 106, 109 and 112,
respectively.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
July 18, 1996

F-2
<PAGE> 107

COX RADIO, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
------------------- MARCH 31,
1994 1995 1996
-------- -------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................... $ 1,897 $ 1,691 $ 2,052
Accounts and notes receivable, less allowance for doubtful
accounts of $760, $774 and $779.......................... 28,446 30,667 25,105
Prepaid expenses and other current assets................... 3,152 3,289 5,296
-------- -------- -----------
Total current assets................................ 33,495 35,647 32,453
Plant and equipment, net...................................... 26,255 28,020 29,087
Intangible assets, net........................................ 120,053 126,798 132,965
Other assets.................................................. 220 1,302 1,175
-------- -------- -----------
Total assets........................................ $180,023 $191,767 $ 195,680
======== ======== =========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses....................... $ 11,455 $ 10,924 $ 10,740
Income taxes payable........................................ 315 278 1,694
Other current liabilities................................... 518 873 1,021
-------- -------- -----------
Total current liabilities........................... 12,288 12,075 13,455
Amounts due to Cox Enterprises, Inc........................... 120,495 126,052 126,936
Deferred income taxes......................................... 6,833 6,470 6,307
-------- -------- -----------
Total liabilities................................... 139,616 144,597 146,698
-------- -------- -----------
Commitments and contingencies (Note 12)
SHAREHOLDER'S EQUITY:
Common stock, $1.00 par value; 6,000 shares authorized and
600 shares outstanding................................... 1 1 1
Additional paid-in capital.................................. 90,947 90,947 90,947
Deficit in retained earnings................................ (50,541) (43,778) (41,966)
-------- -------- -----------
Total shareholder's equity.......................... 40,407 47,170 48,982
-------- -------- -----------
Total liabilities and shareholder's equity.......... $180,023 $191,767 $ 195,680
======== ======== =========
</TABLE>

See notes to consolidated financial statements.

F-3
<PAGE> 108

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------- -----------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net revenues:
Local.......................................... $68,018 $80,484 $93,465 $18,727 $22,562
National....................................... 26,202 30,193 29,385 6,987 6,841
Other.......................................... 730 858 722 142 165
------- ------- ------- ------- -------
Total net revenues..................... 94,950 111,535 123,572 25,856 29,568
Costs and expenses:
Operating...................................... 29,903 32,218 41,831 8,150 9,440
Selling, general and administrative............ 38,045 44,096 48,131 11,130 12,343
Corporate general and administrative........... 2,522 2,667 5,853 879 1,103
Depreciation and amortization.................. 7,224 6,995 7,247 1,841 1,982
------- ------- ------- ------- -------
Operating income................................. 17,256 25,559 20,510 3,856 4,700
Other income (expense):
Interest expense............................... (5,590) (5,229) (5,974) (1,427) (1,467)
Other -- net................................... 873 (260) (147) (45) (96)
------- ------- ------- ------- -------
Income before income taxes and cumulative effect
of accounting changes.......................... 12,539 20,070 14,389 2,384 3,137
Income taxes..................................... 6,048 8,863 6,226 1,120 1,325
------- ------- ------- ------- -------
Income before cumulative effect of accounting
changes........................................ 6,491 11,207 8,163 1,264 1,812
Cumulative effect of accounting changes.......... (7,592) -- -- -- --
------- ------- ------- ------- -------
Net income (loss)................................ $(1,101) $11,207 $ 8,163 $ 1,264 $ 1,812
======= ======= ======= ======= =======
</TABLE>

See notes to consolidated financial statements.

F-4
<PAGE> 109

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------- PAID-IN DEFICIT IN
SHARES AMOUNT CAPITAL RETAINED EARNINGS TOTAL
------ ------ ---------- ----------------- --------
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1993 (UNAUDITED)...... 1 $1 $ 106,335 $ (36,055) $ 70,281
Net loss.................................. -- -- (1,101) (1,101)
Dividends to CEI.......................... -- (4,114) (886) (5,000)
- -- ---------- ----------------- --------
BALANCE AT DECEMBER 31, 1993................ 1 1 102,221 (38,042) 64,180
Net income................................ -- -- 11,207 11,207
Dividends to CEI.......................... -- (11,274) (23,706) (34,980)
- -- ---------- ----------------- --------
BALANCE AT DECEMBER 31, 1994................ 1 1 90,947 (50,541) 40,407
Net income................................ -- -- 8,163 8,163
Dividends to CEI.......................... -- -- (1,400) (1,400)
- -- ---------- ----------------- --------
BALANCE AT DECEMBER 31, 1995................ 1 1 90,947 (43,778) 47,170
Net income (unaudited).................... -- -- 1,812 1,812
- -- ---------- ----------------- --------
BALANCE AT MARCH 31, 1996 (UNAUDITED)....... 1 $1 $ 90,947 $ (41,966) $ 48,982
===== ====== ======== ============= ========
</TABLE>

See notes to consolidated financial statements.

F-5
<PAGE> 110

COX RADIO, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------- -----------------
1993 1994 1995 1995 1996
------- -------- -------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)............................ $(1,101) $ 11,207 $ 8,163 $ 1,264 $ 1,812
Items not requiring cash:
Cumulative effect of accounting changes... 7,592 -- -- -- --
Depreciation.............................. 2,273 2,216 2,382 589 637
Amortization.............................. 4,951 4,779 4,865 1,252 1,345
Deferred income taxes..................... (28) 34 (441) (161) (160)
(Increase) decrease in accounts receivable... (2,385) (6,109) (2,221) 5,980 5,562
Increase (decrease) in accounts payable and
accrued expenses.......................... 808 1,902 (299) (222) 601
Increase (decrease) in taxes payable......... 672 (257) (37) 1,403 1,416
Other, net................................... (1,353) 109 799 (1,422) (1,766)
------- -------- -------- ------- -------
Net cash provided by operating
activities......................... 11,429 13,881 13,211 8,683 9,447
------- -------- -------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures......................... (1,065) (2,705) (4,073) (680) (442)
Acquisitions................................. (9,390) (9,954) (11,697) -- (8,680)
(Increase) decrease in other long-term
assets.................................... (301) 337 (1,580) (8) (83)
Proceeds from sale of business............... 4,688 -- -- -- --
Other, net................................... 15 30 8 -- 20
------- -------- -------- ------- -------
Net cash used in investing
activities......................... (6,053) (12,292) (17,342) (688) (9,185)
------- -------- -------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in amounts due to CEI.... 3,762 30,845 5,557 (5,199) 884
Repayment of debt............................ (3,000) -- -- -- --
Dividends paid............................... (5,000) (34,980) (1,400) -- --
Increase (decrease) in book overdrafts....... (538) 2,715 (232) (2,629) (785)
------- -------- -------- ------- -------
Net cash provided by (used in)
financing activities............... (4,776) (1,420) 3,925 (7,828) 99
------- -------- -------- ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................... 600 169 (206) 167 361
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD.................................... 1,128 1,728 1,897 1,897 1,691
------- -------- -------- ------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD... $ 1,728 $ 1,897 $ 1,691 $ 2,064 $ 2,052
======= ======== ======== ======= =======
</TABLE>

See notes to consolidated financial statements.

F-6
<PAGE> 111

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

Cox Radio, Inc. ("Cox Radio" or "the Company"), a wholly-owned indirect
subsidiary of Cox Enterprises, Inc. ("CEI"), is a leading national radio
broadcasting company whose business is devoted exclusively to operating,
acquiring and developing radio stations located throughout the United States.
Prior to the Offerings, CEI and certain of its subsidiaries will transfer
ownership of their radio broadcast properties to Cox Radio. CEI's historical
basis in the assets and liabilities of the operations will be carried over to
Cox Radio. The Consolidated Financial Statements of Cox Radio represent the
operations of the radio stations currently owned or operated by CEI or its other
subsidiaries or to which sales and marketing services were provided in
connection with CEI's radio broadcasting operations. The consolidated historical
financial statements do not necessarily reflect the results of operations or
financial position that would have existed had Cox Radio been an independent
company. All significant intercompany accounts (other than amounts due to CEI)
have been eliminated in the consolidated financial statements of Cox Radio.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Fair value
approximates carrying value.

Revenue Recognition

Revenue is recognized as advertising air time is broadcast and is net of
advertising agency commissions.

Corporate General and Administrative Expenses

Corporate general and administrative expenses consist of corporate overhead
costs not specifically allocable to any of the Company's individual stations and
expenses related to the CEI Unit Appreciation Plan. In 1995, corporate general
and administrative expenses included a nonrecurring corporate charge.

Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using principally the straight-line method at rates
based upon estimated useful lives of 5 to 40 years for buildings and building
improvements and 5 to 20 years for broadcast equipment.

Expenditures for maintenance and repairs are charged to operating expense
as incurred. At the time of retirements, sales or other dispositions of
property, the original cost and related accumulated depreciation are written
off.

Intangible Assets

Intangible assets consist primarily of goodwill/FCC broadcast licenses, an
option to purchase WJZF-FM (Atlanta) and non-compete agreements. Goodwill/FCC
broadcast licenses recorded in business combinations and the purchase option
related to WJZF-FM generally are amortized on a straight-line basis over 30 to
40 years. Non-compete agreements are amortized on a straight-line basis over the
contractual lives of the agreements, generally 3 to 5 years. Cox Radio assesses,
on an on-going basis, the recoverability of intangible assets based on estimates
of future undiscounted cash flows for the applicable business acquired compared
to net book value of the related intangible asset. If the future undiscounted
cash flow estimate is less than net book value, net book value is then reduced
to the estimated fair value. Cox Radio also evaluates the amortization periods
of intangible assets to determine whether events or circumstances warrant
revised estimates of useful lives.

F-7
<PAGE> 112

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes

The accounts of Cox Radio are included in the consolidated federal income
tax return and certain state income tax returns of CEI. Current federal and
state income tax expenses and benefits are allocated on a separate return basis
to Cox Radio based on (i) the current year tax effects of the inclusion of its
income, expenses and credits in the consolidated federal income tax returns of
CEI or (ii) separate state income tax returns.

Deferred income taxes arise from temporary differences between income taxes
and financial reporting and principally relate to depreciation, amortization and
employee benefits.

On January 1, 1993, Cox Radio adopted Statement of Financial Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes," which requires, among
other things, that deferred taxes, including those previously recorded, be
adjusted to current rates. Cox Radio reported as the cumulative effect of an
accounting change an expense related to the adoption of SFAS No. 109 of $4.9
million.

Pension, Postretirement and Postemployment Benefits

CEI generally provides defined pension benefits to all employees based on
years of service and compensation during those years. CEI also provides certain
health care and life insurance benefits to substantially all retirees and
employees. For employees and retirees of Cox Radio, these benefits are provided
through the CEI benefit plans. Expenses related to these plans are allocated to
Cox Radio through intercompany transfers. The amount of the allocations is
generally based on actuarial determinations of the effects of Cox Radio
employees' participation in the plans.

On January 1, 1993, Cox Radio adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions," which requires accrual of
postretirement benefits during the years an employee provides services. Cox
Radio also adopted, as of January 1, 1993, SFAS No. 112, "Employers' Accounting
for Postemployment Benefits." This statement requires an accrual method of
recognizing postemployment benefits such as disability-related benefits. Cox
Radio elected to immediately recognize the obligation for both of these new
statements. The adoption of SFAS No. 106 resulted in a $4.1 million ($2.6
million net-of-tax) charge to income and SFAS No. 112 resulted in a $0.2 million
($0.1 million net-of-tax) charge. These one-time, net-of-tax charges were
reported as the cumulative effect of accounting changes.

Use of 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.

Concentration of Risk

A significant portion of the Company's business is conducted in Los
Angeles, Atlanta and Miami. Revenues earned from radio stations located in Los
Angeles, Atlanta, and Miami represent 40%, 18% and 20%, respectively, of total
revenues for the year ended December 31, 1993, 37%, 19% and 18%, respectively,
of total revenues for the year ended December 31, 1994, and 35%, 25% and 17%,
respectively, of total revenues for the year ended December 31, 1995. As
discussed in Note 13, in April 1996, Cox Radio agreed to sell WIOD-AM (Miami),
which, upon closing of the transaction, will reduce the Company's concentration
of risk in Miami.

F-8
<PAGE> 113

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Recently Issued Accounting Pronouncements

In March 1995, SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of," was issued. This statement
requires that long-lived assets and certain intangibles be reviewed for
impairment when events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable, with any impairment losses being
reported in the period in which the recognition criteria are first applied based
on the fair value of the asset. Long-lived assets and certain intangibles to be
disposed of are required to be reported at the lower of carrying amount or fair
value less cost to sell. Cox Radio adopted SFAS No. 121 in the first quarter of
1996. The adoption of SFAS No. 121 did not have a material impact on Cox Radio's
financial statements.

In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation,"
was issued. The adoption of the new recognition provisions for stock-based
compensation expense included in SFAS No. 123 is optional; however, the pro
forma effects on net income and earnings per share had the new recognition
provisions been elected is required to be disclosed in the financial statements.
Cox Radio will continue to follow the requirements of APB No. 25, "Accounting
for Stock Issued to Employees," in its accounting for employee stock options;
therefore, no impact on the Company's financial position and results of
operations is expected. Cox Radio will provide the required disclosures under
SFAS No. 123 in the annual financial statements for the year ended December 31,
1996.

Unaudited Interim Financial Statements

The consolidated financial statements as of March 31, 1996 and for the
three months ended March 31, 1995 and 1996 include all adjustments, consisting
of normal recurring adjustments, necessary for a fair presentation of the
financial position and results of operations for these periods. Operating
results for the three months ended March 31, 1996 are not necessarily indicative
of the results that may be expected for the entire year.

3. CASH MANAGEMENT SYSTEM

Cox Radio participates in CEI's cash management system, whereby the bank
sends daily notification of Cox Radio's checks presented for payment. CEI
transfers funds from other sources to cover Cox Radio's checks presented for
payment. Book overdrafts of $1.1 million, $3.8 million and $3.6 million existed
at December 31, 1993, 1994 and 1995, respectively, as a result of Cox Radio's
checks outstanding. These book overdrafts were reclassified as accounts payable
on Cox Radio's financial statements.

4. ACQUISITIONS AND DISPOSITIONS OF BUSINESSES

In December 1993, Cox Radio acquired WYSY-FM (Chicago) for $9.4 million.
Also in December 1993, Cox Radio exchanged KLRX-FM (Dallas) for WYNF-FM (Tampa),
and approximately $4.7 million. Given the significant monetary consideration
received, this transaction was accounted for as a monetary transaction.
Accordingly, the "sale" of KLRX-FM and the "purchase" of WYNF-FM were recorded
at fair value. The "sale" of KLRX-FM resulted in a pre-tax gain of $1.1 million.
Subsequent to the exchange, the Company switched the dial position of WYNF-FM
with its existing Tampa station, WWRM-FM, and changed WYNF-FM's call letters to
WCOF-FM.

In January 1994, Cox Radio entered into a local marketing agreement ("LMA")
to operate WJZF-FM (Atlanta). In September 1994, the Company paid $9.4 million
(including legal fees) for an option to purchase, pending FCC approval,
substantially all of the station's assets.

In August 1994, the Company began operating KACE-FM in Inglewood,
California, a suburb of Los Angeles, as an LMA until it acquired the station in
August 1995 for $11.7 million. In April 1995, Cox Radio

F-9
<PAGE> 114

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

entered into an LMA to operate WCNN-AM (Atlanta). In June 1995, Cox Radio
entered into a joint sales agreement ("JSA") with WFNS-AM (Tampa).

Under an LMA or a JSA, Cox Radio provides a combination of programming,
sales, marketing and similar services for WJZF-FM, KACE-FM, WCNN-AM and WFNS-AM.
The broadcast revenues and operating expenses of stations operated under LMAs
and JSAs have been included in the Company's operations since the respective
dates of such agreements.

The acquisitions were accounted for by the purchase method, and
accordingly, the purchase price has been allocated to the assets acquired based
on their estimated fair values at the date of the acquisition. A substantial
portion of each purchase price was allocated to intangible assets to reflect the
FCC broadcasting licenses acquired. The excess of the purchase price over the
fair value of the net assets acquired has been recorded as goodwill and is being
amortized over 30 to 40 years using the straight-line basis. No liabilities were
assumed by Cox Radio as a result of the acquisitions.

Operations of each of the such acquired radio stations have been included
in the consolidated results of Cox Radio since the acquisition date of such
stations. These acquisitions are not considered to be significant and thus, pro
forma results of operations are not presented.

5. PLANT AND EQUIPMENT

Plant and equipment is summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1995
-------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Land and land improvements....................................... $ 14,845 $ 14,845
Buildings and building improvements.............................. 5,769 5,782
Broadcast equipment.............................................. 25,154 27,461
Construction in progress......................................... 222 1,629
-------- --------
Plant and equipment, at cost................................... 45,990 49,717
Less accumulated depreciation.................................... (19,735) (21,697)
-------- --------
Net plant and equipment................................ $ 26,255 $ 28,020
======== ========
</TABLE>

6. INTANGIBLE ASSETS

Intangible assets are summarized as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1994 1995
-------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Goodwill/FCC broadcast licenses.................................. $151,416 $162,433
WJZF-FM purchase option.......................................... 9,381 9,381
Non-compete agreements........................................... 5,207 5,707
Other............................................................ 1,418 1,511
-------- --------
Total.................................................. 167,422 179,032
Less accumulated amortization.................................... (47,369) (52,234)
-------- --------
Net intangible assets.................................. $120,053 $126,798
======== ========
</TABLE>

F-10
<PAGE> 115

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES

Effective January 1, 1993, Cox Radio adopted SFAS No. 109, "Accounting for
Income Taxes," which requires the use of the liability method of accounting for
deferred income taxes. Financial statements for prior years were not restated to
apply the provisions of SFAS No. 109. The cumulative effect of this accounting
change was a decrease in net income of $4.9 million.

Income tax expense (benefit) is summarized as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1993 1994 1995
------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal.................................................... $4,890 $7,439 $5,226
State...................................................... 1,186 1,390 1,441
------ ------ ------
Total current...................................... 6,076 8,829 6,667
------ ------ ------
Deferred:
Federal.................................................... 56 137 (589)
State...................................................... (84) (103) 148
------ ------ ------
Total deferred..................................... (28) 34 (441)
------ ------ ------
Total income taxes................................. $6,048 $8,863 $6,226
====== ====== ======
</TABLE>

The tax effects of significant temporary differences which comprise the net
deferred tax liability are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1994 1995
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Current deferred tax asset:
Provision for doubtful accounts.............................. $ 221 $ 301
------- -------
Noncurrent deferred tax assets (liabilities):
Plant and equipment.......................................... (2,339) (2,463)
Intangibles.................................................. (5,516) (5,550)
Net operating loss carryforwards............................. 1,055 1,056
Employee benefits............................................ 428 1,028
State taxes.................................................. (379) (473)
Other........................................................ (82) (68)
------- -------
Total net noncurrent liability....................... (6,833) (6,470)
------- -------
Net deferred tax liability........................... $(6,612) $(6,169)
======= =======
</TABLE>

F-11
<PAGE> 116

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Income tax expense computed using the United States federal statutory rate
is reconciled to the reported income tax provisions as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1993 1994 1995
------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
U.S. federal statutory income tax rate..................... 35% 35% 35%
Computed tax expense at federal statutory rates on income
before income taxes..................................... $4,389 $7,025 $5,036
State income taxes (net of federal tax benefit)............ 717 836 1,033
Non-deductible amortization of intangibles................. 1,102 1,028 811
1% increase in enacted tax rate............................ 65 -- --
Benefit arising from low income housing credits............ -- (125) (555)
Other, net................................................. (225) 99 (99)
------ ------ ------
Income tax provision............................... $6,048 $8,863 $6,226
====== ====== ======
</TABLE>

The consolidated federal income tax returns of CEI for 1986 through 1994
and the combined California franchise tax returns of CEI for 1984 through 1990
are presently under audit. Management believes that any additional liabilities
arising from current tax-related audits are sufficiently provided for at
December 31, 1995.

8. RETIREMENT PLANS

Substantially all of Cox Radio's employees participate in the funded,
non-contributory defined benefit pension plan of CEI and certain key employees
participate in an unfunded, non-qualified supplemental pension plan. The plans
call for benefits to be paid to eligible employees at retirement based primarily
upon years of service with Cox Radio and compensation rates during those years.
Pension expense allocated to Cox Radio by CEI was $431,000, $412,000, and
$636,000 for the years ended December 31, 1993, 1994 and 1995, respectively.

The following table sets forth certain information attributable to the Cox
Radio employees' participation in the CEI pension plans:

<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1994 1995
------------------ ------------------
FUNDED UNFUNDED FUNDED UNFUNDED
PLANS PLANS PLANS PLANS
------- -------- ------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Actuarial present value of benefit obligations:
Vested benefits................................ $ 7,916 $ 786 $10,276 $1,233
Nonvested benefits............................. 672 96 1,012 199
------- -------- ------- --------
Accumulated benefit obligation................... $ 8,588 $ 882 $11,288 $1,432
======= ======= ======= =======
Projected benefit obligation..................... $11,081 $1,242 $13,965 $1,879
======= ======= ======= =======
</TABLE>

Assumptions used in the actuarial computations were:

<TABLE>
<CAPTION>
DECEMBER 31,
-------------
1994 1995
---- ----
<S> <C> <C>
Discount rate.......................................................... 8.50% 7.25%
Rate of increase in compensation levels................................ 6.25% 5.00%
Expected long-term rate of return on assets............................ 9.00% 9.00%
</TABLE>

F-12
<PAGE> 117

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Upon completion of the Offerings, CEI may establish a defined benefit
pension plan and segregate plan assets for Cox Radio. The amount of the assets
that would be segregated would have an estimated fair value equal to the
projected benefit obligation of the CEI defined benefit pension plan
attributable to Cox Radio employees as of December 31, 1995, or $13,965,000. The
segregated assets would be used to fund payments to retirees. Any non-qualified
supplemental pension plan payments due to Cox Radio employees will be made by
CEI. However, Cox Radio will continue to recognize the annual expense associated
with this plan.

CEI provides certain health care and life insurance benefits to
substantially all retirees of CEI and its subsidiaries. In January 1993, Cox
Radio, along with CEI, adopted SFAS No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." SFAS No. 106 requires companies to
accrue the cost of postretirement health care and life insurance benefits within
the period the employee provides services. Cox Radio, along with CEI, elected to
immediately recognize the cumulative effect of a change in accounting for
postretirement benefits. Cox Radio's allocated portion of this cumulative effect
was $4,061,000 ($2,597,000 net of related tax benefits) which represented the
accumulated postretirement benefit obligation ("APBO") existing at January 1,
1993, net of previously recorded liabilities. Prior to the adoption of SFAS No.
106, health benefits for eligible retirees were generally expensed as the claims
were incurred. Postretirement expense allocated to Cox Radio by CEI was
$331,000, $298,000 and $218,000 for the years ended December 31, 1993, 1994 and
1995, respectively. Cox Radio's APBO at December 31, 1995 was $4,239,000.

The funded status of the portion of the postretirement plan covering the
employees of Cox Radio is not determinable. The APBO for the postretirement plan
of CEI substantially exceeded the fair value of assets held in the plan at
December 31, 1995.

Actuarial assumptions used to determine the APBO include a discount rate of
7.25% and an expected long-term rate of return on plan assets of 9%. The assumed
health care cost trend rate for retirees is 11.5%. For participants under the
age of 65, the trend rate gradually decreases to 5.5% by year 2007 and remains
level thereafter. For retirees at age 65 or older, this rate decreases to 5.0%
by year 2008. Increasing the assumed health care cost trend rate by one
percentage point would have resulted in an increase in the CEI plan's APBO of
approximately 7.5% and an increase in the aggregate of the service cost and
interest cost components of the net periodic postretirement benefit cost of
approximately 5.9% for 1995.

In addition, substantially all of Cox Radio's employees are eligible to
participate in the savings and investment plan of CEI. Under the terms of the
plan, Cox Radio matches 50% of employee contributions up to a maximum of 6% of
the employee's base salary. Cox Radio's expense under the plan was $448,000,
$471,000 and $523,000 for the years ended December 31, 1993, 1994 and 1995,
respectively.

Cox Radio employees whose savings and investment plan contributions are at
the Internal Revenue Service ("IRS") maximum or are restricted in order to pass
the nondiscrimination test required by the IRS are eligible to participate in
CEI's non-qualified savings restoration plan, which began in 1995. Under the
terms of this plan, Cox Radio matches 50% of employee contributions to both the
savings and investment and restoration plans up to a maximum percentage of the
employee's eligible compensation. Cox Radio's expense under the non-qualified
savings restoration plan was $23,000 for the year ended December 31, 1995.

9. UNIT APPRECIATION PLANS

Certain of the executives and key employees of Cox Radio participate in
certain CEI Unit Appreciation Plans ("UAP") that provide for payment of benefits
in the form of shares of CEI common stock, cash, or both, generally five years
after the date of award. Unit benefits are based on the excess, if any, over a
base amount (value of award), of the fair value of a share of CEI common stock
five years after the effective date of award. Fair values are determined by
independent appraisal. The plans provide for a maximum unit benefit of 150% of
the base amount and benefits vest over the five year period following the date
of award. The cost of awards made under the plans was allocated to Cox Radio by
CEI over the applicable vesting periods and was

F-13
<PAGE> 118

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

charged to corporate general and administrative expenses. Amounts charged to
expense for Cox Radio employees for the years ended December 31, 1993, 1994 and
1995 were $880,000, $833,000 and $1,646,000, respectively. Amounts accrued under
the plans were $1,257,000 and $2,838,000 as of December 31, 1994 and 1995,
respectively, and are included in Amounts due to CEI in the accompanying
Consolidated Balance Sheets.

10. TRANSACTIONS WITH AFFILIATED COMPANIES

Cox Radio borrows funds for working capital and other needs from CEI.
Certain management services are provided to Cox Radio by CEI. Such services
include rent, legal, corporate secretarial, tax, treasury, internal audit, risk
management, benefits administration and other support services and are included
in corporate general and administrative expenses in the Consolidated Statements
of Operations. Cox Radio was allocated expenses for the years ended December 31,
1993, 1994 and 1995 of approximately $1,642,000, $1,834,000 and $2,207,000,
respectively, related to these services. Cox Radio pays rent and certain other
occupancy costs to CEI for office facilities. Related rent and occupancy expense
was approximately $395,000 for each of the years ended December 31, 1993 and
1994 and approximately $378,000 for the year ended December 31, 1995. Corporate
general and administrative expense allocations are based on a specified
percentage of expenses related to the services provided to Cox Radio in relation
to those provided to CEI's other subsidiaries. Rent and occupancy expense is
allocated based on occupied space. Management believes that these allocations
were made on a reasonable basis. However, the allocations are not necessarily
indicative of the level of expenses that might have been incurred had Cox Radio
contracted directly with third parties. Management has not made a study or any
attempt to obtain quotes from third parties to determine what the cost of
obtaining such services from third parties would have been. The fees and
expenses to be paid by Cox Radio to CEI are subject to change.

The amounts due to CEI represent the net of various transactions, including
those described above. The amounts due to CEI are classified as long-term
because the Company has the ability and the intent to refinance these
obligations on a long-term basis. The amounts due to CEI are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1993 1994 1995
------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Notes payable to CEI.................................... $63,498 $ 58,918 $ 58,918
Other intercompany amounts due to CEI................... 26,152 61,577 67,134
------- -------- --------
Total......................................... $89,650 $120,495 $126,052
======= ======== ========
</TABLE>

Notes payable to CEI bear interest at the prime rate plus 1.5%. These
interest rates are established at the beginning of each quarter and are as
follows:

<TABLE>
<CAPTION>
1993 1994 1995
---- ---- -----
<S> <C> <C> <C>
First quarter.................................................. 7.50% 7.50% 10.00%
Second quarter................................................. 7.50 7.75 10.50
Third quarter.................................................. 7.50 8.75 10.50
Fourth quarter................................................. 7.50 9.25 10.25
</TABLE>

Interest is not charged by CEI on other intercompany balances except for
amounts related to reserves for possible tax contingencies. Interest on those
amounts is accrued based on the applicable federal rates for the years to which
the contingencies relate. The rates used for the interest charges ranged from 7%
to 13% in 1993, from 7% to 13% in 1994, and from 7% to 12% in 1995.

F-14
<PAGE> 119

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Included in the other intercompany amounts due to CEI are the following
transactions (in thousands):

<TABLE>
<S> <C>
Intercompany due to CEI, December 31, 1992............................... $ 11,577
Dividends to CEI....................................................... 5,000
Cash transferred to CEI................................................ (85,537)
Acquisitions........................................................... 9,390
Net operating expense allocations and reimbursements................... 85,722
---------
Intercompany due to CEI, December 31, 1993............................... 26,152
Dividends to CEI....................................................... 34,980
Cash transferred to CEI................................................ (96,501)
Acquisitions........................................................... 9,954
Net operating expense allocations and reimbursements................... 86,992
---------
Intercompany due to CEI, December 31, 1994............................... 61,577
Dividends to CEI....................................................... 1,400
Cash transferred to CEI................................................ (110,617)
Acquisitions........................................................... 11,697
Net operating expense allocations and reimbursements................... 103,077
---------
Intercompany due to CEI, December 31, 1995............................... $ 67,134
=========
</TABLE>

In accordance with the requirements of SFAS No. 107, "Disclosures About
Fair Value of Financial Instruments," Cox Radio has estimated the fair value of
its intercompany advances and notes payable. Given the short-term nature of
these advances, the carrying amounts reported in the balance sheets approximate
fair value.

11. SUPPLEMENTAL CASH FLOW INFORMATION

<TABLE>
<CAPTION>
1993 1994 1995
------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Additional cash flow information:
Cash paid for interest............................................. $5,285 $5,354 $6,071
Cash paid for income taxes......................................... 5,184 9,943 7,844
</TABLE>

12. COMMITMENTS AND CONTINGENCIES

Cox Radio leases land, office facilities, and various items of equipment
under noncancellable operating leases. Rental expense under operating leases
amounted to $1,405,000 in 1993, $1,676,000 in 1994 and $1,735,000 in 1995.
Future minimum lease payments as of December 31, 1995 for all noncancellable
operating leases are as follows (in thousands):

<TABLE>
<S> <C>
1996........................................................................ $ 885
1997........................................................................ 721
1998........................................................................ 665
1999........................................................................ 668
2000........................................................................ 678
Thereafter.................................................................. 3,321
------
Total............................................................. $6,938
======
</TABLE>

Cox Radio has contracts for sports programming and on-air personalities
with future minimum payments for 1996, 1997, 1998 and 1999 of $9.2 million, $9.7
million, $10.1 million and $9.0 million, respectively.

Cox Radio is a party to various legal proceedings which are ordinary and
incidental to its business. Management does not expect that any legal
proceedings currently pending will have a material adverse impact on Cox Radio's
consolidated financial position or consolidated results of operations.

F-15
<PAGE> 120

COX RADIO, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUBSEQUENT EVENTS

In January 1996, Cox Radio completed the acquisition of Louisville stations
WRKA-FM and WRVI-FM for $8.7 million. In June 1996, the Company agreed to
acquire WXNU-FM (Louisville) for $2.5 million (the "Louisville Acquisition").
The Company expects to consummate the Louisville Acquisition during the last
quarter of 1996.

In April 1996, the Company agreed to sell WIOD-AM (Miami) for $13.0 million
( the "Miami Disposition"). This transaction is expected to close during the
last quarter of 1996.

In June 1996, the Company agreed to exchange WCKG-FM (Chicago) and WYSY-FM
(Chicago) for WHOO-AM, WHTQ-FM and WMMO-FM (Orlando) (the "Orlando
Acquisition"). In addition to receiving the three Orlando stations, Cox Radio
will also receive approximately $20 million in cash, subject to certain
adjustments. The Company expects to consummate the Orlando Acquisition in the
first half of 1997.

For tax purposes, the Company will account for the Orlando Acquisition and
Miami Disposition as like-kind exchanges. Tax rules will allow the Company to
defer the related tax gains on these transactions upon the reinvestment of the
$32.5 million in net proceeds in qualifying future acquisitions. The Company has
not yet identified the properties to be acquired.

In June 1996, the Company acquired WHEN-AM and WWHT-FM (Syracuse) for $4.5
million.

In June 1996, the Company and its subsidiaries which operated the Company's
radio operations owed to CEI and one of its subsidiaries $134.2 million. In June
1996, CEI contributed to the capital of the Company and its subsidiaries $26.9
million. The remaining $107.3 million owed by the Company and its subsidiaries
to CEI is evidenced by interest bearing notes accruing interest at Chase
Manhattan Bank's prime rate plus 1.5%. The amount of such contribution and of
such remaining indebtedness is subject to adjustments under certain
circumstances.

In July 1996, the Company entered into an agreement to acquire NewCity
Communications, Inc. for approximately $253 million, subject to certain working
capital adjustments, of which $167 million is to be paid in cash and $86 million
in assumption of debt (the "NewCity Acquisition"). The NewCity Acquisition is
expected to be financed with proceeds from a new bank credit facility to be
negotiated prior to the consummation of the acquisition. The consummation of the
NewCity Acquisition, which is anticipated to occur in early 1997, is subject to
certain closing conditions, including receipt of FCC approval.

In July 1996, the Company decided to exercise its option to purchase
WFNS-AM (Tampa) for an aggregate consideration of $1.5 million.

F-16
<PAGE> 121

REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders
NewCity Communications, Inc.

We have audited the accompanying consolidated balance sheet of NewCity
Communications, Inc. as of December 31, 1995 and 1994, and the related
consolidated statements of operations, stockholders' deficiency, and cash flows
for each of the three years in the period ended December 31, 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
NewCity Communications, Inc. at December 31, 1995 and 1994, and the consolidated
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.

ERNST & YOUNG LLP

Stamford, Connecticut
March 1, 1996

F-17
<PAGE> 122

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1995
-------- --------
(DOLLARS IN
THOUSANDS, EXCEPT
FOR SHARE DATA)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents................................................... $ 168 $ 206
Accounts receivable, less allowances of $989 and $678....................... 10,654 10,709
Prepaid expenses and other current assets................................... 749 608
Deferred barter expenses.................................................... 1,051 1,104
-------- --------
Total current assets................................................. 12,622 12,627
Property and equipment:
Land........................................................................ 1,312 2,237
Buildings................................................................... 2,232 2,269
Equipment................................................................... 14,149 16,800
Leasehold improvements...................................................... 350 559
Construction in progress.................................................... 62 --
-------- --------
18,105 21,865
Less accumulated depreciation and amortization................................ 11,439 12,828
-------- --------
6,666 9,037
Other assets:
Cash in escrow.............................................................. 1,175 --
Intangibles, primarily cost in excess of net assets of businesses acquired,
less accumulated amortization of $11,372 and $13,195...................... 51,840 60,064
Other....................................................................... 141 212
-------- --------
53,156 60,276
-------- --------
Total assets......................................................... $ 72,444 $ 81,940
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable............................................................ $ 1,145 $ 933
Accrued expenses............................................................ 2,296 927
Salaries, wages and commissions payable..................................... 688 733
Accrued interest payable.................................................... 1,422 1,671
State income taxes payable.................................................. 907 898
Deferred barter revenue..................................................... 1,546 1,736
Current portion of long-term debt........................................... -- 1,200
-------- --------
Total current liabilities............................................ 8,004 8,098
Long-term debt, less current portion.......................................... 76,000 85,800
$166.67 Cumulative redeemable preferred stock held by certain Investors
(preference in liquidation, redemption value in 2005 -- $14,000) Authorized,
issued and outstanding shares -- 6,000...................................... 10,348 11,348
Commitments and Contingencies (Notes 9 and 12)
Stockholders' deficiency:
Preferred Stock, par value $.05:
Authorized shares -- 5,000
Issued shares -- none..................................................... -- --
9% Convertible Preferred Stock held by certain Investors (preference in
liquidation), par value $.05:
Authorized, issued and outstanding shares -- 8,000........................ -- --
Class A Common Stock, par value $.01:
Authorized shares -- 500,000
Issued and outstanding shares -- 262,000.................................. 3 3
Class B Common Stock, par value $.01:
Authorized shares -- 700,000
Issued and outstanding shares -- 168,317.................................. 2 2
Additional paid-in capital.................................................. 292 --
Accumulated deficit......................................................... (21,565) (22,671)
8% Notes receivable from officers and shareholders for Class A Common
Stock..................................................................... (640) (640)
-------- --------
(21,908) (23,306)
-------- --------
Total liabilities and stockholders' deficiency....................... $ 72,444 $ 81,940
========= =========
</TABLE>

See accompanying notes.

F-18
<PAGE> 123

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1993 1994 1995
-------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Broadcasting revenues:
Local......................................................... $ 39,854 $ 39,572 $42,774
National and regional......................................... 18,395 17,781 17,335
Other......................................................... 2,066 2,193 2,571
-------- -------- -------
60,315 59,546 62,680
Less advertising agency commissions........................... 7,025 6,878 7,044
-------- -------- -------
Net revenues.......................................... 53,290 52,668 55,636
Station operating costs and expenses:
Broadcasting operations....................................... 17,096 17,226 20,059
Selling, general and administrative........................... 19,654 19,694 20,654
Depreciation and amortization................................. 3,871 3,070 3,510
Corporate general and administrative expenses................... 1,918 1,802 1,745
-------- -------- -------
Total operating costs................................. 42,539 41,792 45,968
-------- -------- -------
Operating income................................................ 10,751 10,876 9,668
Interest expense................................................ (11,645) (10,050) (9,817)
Gain on sale of broadcasting property assets.................... 15,038 1,585 --
-------- -------- -------
Income (loss) before income taxes and extraordinary
item................................................ 14,144 2,411 (149)
Income taxes.................................................... 1,058 165 249
-------- -------- -------
Income (loss) before extraordinary item............... 13,086 2,246 (398)
Extraordinary item, loss on extinguishment of debt.............. (2,048) (182) --
-------- -------- -------
Net income (loss)..................................... $ 11,038 $ 2,064 $ (398)
======== ======== =======
</TABLE>

See accompanying notes.

F-19
<PAGE> 124

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
<TABLE>
<CAPTION>
COMMON STOCK
-----------------------------------
9% CONVERTIBLE
PREFERRED STOCK CLASS A CLASS B ADDITIONAL
--------------- ---------------- ---------------- PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
------ ------ ------- ------ ------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS, EXCEPT FOR SHARE DATA)
Balance at December 31, 1992................................. 8,000 $-0- 262,000 $3 168,317 $2 $ 3,494
Redeemable Preferred Stock cash dividends (Series A)....... (987)
Cash dividends accrued on $166.67 Redeemable Preferred
Stock.................................................... (1,000)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series B)............................................... (27)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series C)............................................... (12)
Net income.................................................
-- --
------ ------ ------- ------- ----------
Balance at December 31, 1993................................. 8,000 -0- 262,000 3 168,317 2 1,468
Cash dividends accrued on $166.67 Redeemable Preferred
Stock.................................................... (1,000)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series B)............................................... (121)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series C)............................................... (55)
Net Income.................................................
-- --
------ ------ ------- ------- ----------
Balance at December 31, 1994................................. 8,000 -0- 262,000 3 168,317 2 292
Cash dividends accrued on $166.67 Redeemable Preferred
Stock.................................................... (292)
Net loss...................................................
-- --
------ ------ ------- ------- ----------
Balance at December 31, 1995................................. 8,000 $-0- 262,000 $3 168,317 $2 $ 0
====== ======= ======= ======= ======= ======= =========

NOTES RECEIVABLE
ACCUMULATED FROM OFFICERS
DEFICIT AND SHAREHOLDERS TOTAL
----------- ---------------- --------
<S> <C> <C> <C>

Balance at December 31, 1992................................. $ (34,667) $ (640) $(31,808)
Redeemable Preferred Stock cash dividends (Series A)....... (987)
Cash dividends accrued on $166.67 Redeemable Preferred
Stock.................................................... (1,000)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series B)............................................... (27)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series C)............................................... (12)
Net income................................................. 11,038 11,038
----------- ------ --------
Balance at December 31, 1993................................. (23,629) (640) (22,796)
Cash dividends accrued on $166.67 Redeemable Preferred
Stock.................................................... (1,000)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series B)............................................... (121)
Cash dividends accrued on $50 Redeemable Preferred Stock
(Series C)............................................... (55)
Net Income................................................. 2,064 2,064
----------- ------ --------
Balance at December 31, 1994................................. (21,565) (640) (21,908)
Cash dividends accrued on $166.67 Redeemable Preferred
Stock.................................................... (708) (1,000)
Net loss................................................... (398) (398)
----------- ------ --------
Balance at December 31, 1995................................. $ (22,671) $ (640) $(23,306)
=========== =============== ========
</TABLE>

See accompanying notes.

F-20
<PAGE> 125

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1993 1994 1995
-------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Operating activities:
Net income (loss)............................................ $ 11,038 $ 2,064 $ (398)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization of intangibles and deferred
interest expense........................................ 7,383 4,168 3,892
Provision for losses on accounts receivable............... 497 538 434
Gain on sale of broadcasting property assets.............. (15,038) (1,585) --
Extraordinary item........................................ 2,048 182 --
Other..................................................... 21 64 (71)
Net changes in operating assets and liabilities........... 956 (1,256) (1,507)
-------- -------- --------
Net cash provided by operating activities............ 6,905 4,175 2,350
Investing activities:
Purchases of property and equipment.......................... (1,545) (1,307) (1,514)
Cash in escrow............................................... -- (175) 1,175
Purchase of Birmingham Communications, Inc................... (10) -- --
Purchase of radio station assets:
Property and equipment.................................... (148) -- (2,608)
Intangibles............................................... (3,602) -- (9,844)
Increase in intangibles...................................... (67) (267) (521)
Net proceeds from sale of broadcasting property assets....... 18,222 8,895 --
-------- -------- --------
Net cash provided (used) by investing activities..... 12,850 7,146 (13,312)
Financing activities:
Long-term debt borrowings.................................... 86,950 3,000 17,200
Extinguishment of debt....................................... (67,383) (3,360) --
Redemption of Cumulative Preferred Stock:
Series A.................................................. (6,790) -- --
Series B.................................................. -- (842) --
Series C.................................................. -- (374) --
Deferred financing and other costs........................... (3,809) -- --
Prepayment penalties on long-term debt extinguishment........ (1,000) -- --
Payments of deferred interest to Investors................... (6,412) (1,457) --
Proceeds from sale of preferred stock to Investors........... 290 -- --
Payments on long-term debt borrowings........................ (21,988) (10,527) (6,200)
-------- -------- --------
Net cash provided (used) by financing activities..... (20,142) (13,560) 11,000
-------- -------- --------
Increase (decrease) in cash and cash equivalents............... (387) (2,239) 38
Cash and cash equivalents at beginning of year................. 2,794 2,407 168
-------- -------- --------
Cash and cash equivalents at end of year....................... $ 2,407 $ 168 $ 206
======== ======== ========
</TABLE>

See accompanying notes.

F-21
<PAGE> 126

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995

1. BUSINESS DATA AND SIGNIFICANT ACCOUNTING POLICIES

Business

NewCity Communications, Inc. (the "Company") operates exclusively in the
radio broadcasting industry. Through its subsidiaries, the Company is the owner
and operator of seventeen radio stations that are located in six geographical
markets in the Southeastern, Southwestern and Northeastern regions of the United
States.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiary, NewCity Broadcasting Company, Inc.,
which itself has various wholly-owned subsidiaries. Upon consolidation, all
significant intercompany accounts and transactions are eliminated.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts and disclosures reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.

Property and Equipment

Property and equipment is stated on the basis of cost. Depreciation of
equipment is computed by the straight-line method over the estimated useful
lives of the assets. Leasehold improvements are amortized by the straight-line
method over the lesser of the useful lives of the improvements or the lease
term.

Intangibles

The excess of cost over the net assets of broadcasting properties acquired
(attributable primarily to FCC licenses) is being amortized over a forty year
period by the straight-line method. Other intangible assets are amortized over
the economic useful lives of such assets. Upon the determination by management
that any impairment has occurred in the carrying value of an intangible, based
on economic events or circumstances, an adjustment is recorded reducing such
intangible during such determination period. The valuation method used to
determine if any impairment has occurred is based on fair value measurements
provided by independent sources or undiscounted future cash flows. Such cash
flows are defined by management as earnings before interest, income taxes,
depreciation and amortization expenses. There were no impairment adjustments to
goodwill during 1995, 1994 or 1993.

Barter Transactions

The Company records barter transactions at the fair value of goods and/or
services received. Expenses from barter transactions are recognized when goods
and/or services received have been used. Revenue from barter transactions is
recognized when advertising time is provided.

Cash Equivalents

The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Fair value
approximates carrying value.

F-22
<PAGE> 127

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Defined Contribution Plan

The Company sponsors a defined contribution plan (the "Plan") that covers
all employees who meet the eligibility conditions of the Plan, as defined.
Contributions to the Plan by the Company are determined annually by its Board of
Directors in accordance with the terms of the Plan. During the years ended
December 31, 1995, 1994 and 1993, the Company contribution to the Plan was
approximately $10,000 each year. Employee contributions to the Plan are
voluntary and are based on eligible compensation, as defined.

Radio Station Format Costs

The Company considers all costs incurred in connection with changing the
programming format of its radio stations to be period costs expensed as
incurred.

Impairment of Long-Lived Assets

In March 1995, the FASB issued Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. Statement 121 also addresses the accounting for long-lived
assets that are expected to be disposed of. The Company will adopt Statement 121
in the first quarter of 1996 and, based on current circumstances, does not
believe the effect of adoption will be material.

2. DEBT

Long-term debt is comprised of the following (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
----------------- 1995
1994 1995 FAIR VALUE
------- ------- ----------
<S> <C> <C> <C>
Borrowings under Senior Credit Facility:
Line of Credit due in 2000..................................... $ 1,000 $ 6,000 $ 6,000
Term Loan due in 1999.......................................... 4,000 4,000
------- -------
1,000 10,000
16.33% promissory note......................................... 2,000 2,000
11.375% senior subordinated notes due November 1, 2003......... 75,000 75,000 69,375
------- -------
76,000 87,000
Less current portion............................................. 1,200
------- -------
$76,000 $85,800
======= =======
</TABLE>

The fair value of the Company's 11.375% subordinated notes is based on
published market prices.

On November 1, 1993 in connection with a refinancing, the Company entered
into a loan agreement with Fleet National Bank ("Fleet") (the "Fleet Agreement")
that provided for an aggregate senior credit facility of $15,000,000. One
portion of the senior credit facility provided an $11,000,000 reducing revolving
line of credit maturing on March 31, 2000 (the "Line of Credit"). Beginning on
March 31, 1996, the Line of Credit is subject to permanent quarterly reductions
that continue until maturity on March 31, 2000, when a final aggregate reduction
of $2,000,000 occurs. As of December 31, 1995, the Line of Credit availability
was $8,510,000 as the result of an open standby letter of credit of $2,490,000
issued by Fleet in May 1995 in connection with the Company's issuance of the
16.33% promissory note due May 16, 1997. The Line of Credit availability will
continue to be reduced by any outstanding standby letter of credit issued, or to
be issued, in connection with the 16.33% promissory note. The Fleet Agreement
also provided for a separate revolving line

F-23
<PAGE> 128

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of credit of $4,000,000 to be used for future acquisitions of radio stations, as
defined, that will convert to a term loan on March 31, 1996 and mature on
December 31, 1999 (the "Term Loan"). Principal payments for any borrowings
outstanding on the conversion date will commence on June 30, 1996 and continue
on a quarterly basis until maturity in amounts ranging from $66,666 to $400,000.
Collectively, the Line of Credit and the Term Loan represent the Company's
aggregate senior credit facility (the "Senior Credit Facility").

Interest on any borrowings under the Fleet Agreement is payable at the
prime interest rate maintained by Fleet plus 1.5% or, at the Company's option,
the London Interbank Offered Rate ("LIBOR") plus 2.75% (the "LIBOR Option"). At
December 31, 1994 and 1995, the Company had exercised its LIBOR Option for the
entire principal balances outstanding with Fleet, thereby setting its interest
rates on such borrowings at approximately 8.9% through May 1995, and 8.4%
through November 1996, respectively. The effective interest rate for the Fleet
borrowings, including amortization of deferred financing costs, was 7.7% for the
period from November 1, 1993 through December 31, 1993 and 9.4% and 10% for the
years ended December 31, 1994 and 1995, respectively. The Company has pledged
all assets to Fleet. In addition, the terms of the Fleet Agreement, among other
conditions, restrict the Company's ability to pay dividends and incur additional
indebtedness; require the Company to maintain an annual minimum level of cash
flow, as defined; and restrict annual capital expenditures.

The 16.33% promissory note was issued on May 17, 1995 in connection with
the acquisition of substantially all the assets of radio station KJSR-FM in
Tulsa, (see Note 3). Such promissory note, which will be constantly secured by a
standby letter of credit for all future debt service payments, requires annual
principal payments of $1,000,000, plus interest, on May 16, 1996 and 1997,
respectively.

On November 2, 1993, the Company entered into an agreement with Shawmut
Bank Connecticut, National Association (the "Trustee") that governs the terms
and conditions of the 11.375% Senior Subordinated Notes (the "Notes") (the
"Indenture"). Among the conditions of the Indenture are limitations on the
Company's ability to incur additional indebtedness and make restricted payments,
as defined. Interest on the Notes is payable each May 1 and November 1 to the
Trustee. For the period from November 2, 1993 through December 31, 1993 and for
the years ended December 31, 1994 and 1995, the effective interest rate for the
Notes, including amortization of deferred financing costs, approximated 12%,
respectively.

The Company also entered into an Amended and Restated Note and Stock
Purchase Agreement on November 2, 1993 with its Investors, as defined in Note 6,
(the "Amended Investor Agreement") in connection with its refinancing. The
Amended Investor Agreement provides for limitations on additional indebtedness
and restricted payments, as defined, among other conditions. In addition, the
Amended Investor Agreement provides for limitations, as defined, on any
distributions related to, or redemptions of, its capital stock and grants
certain registration rights, as defined, to the Investors in connection with
certain future events affecting the Common Stock of the Company. The Company has
also agreed to indemnify the Investors for any future incremental income taxes
incurred by the Investors arising as a result of the refinancing of certain
Investor indebtedness in 1993 that was paid in 1994.

The Company recorded an extraordinary loss related to its refinancing of
$2,048,000 during the year ended December 31, 1993. The components of the
extraordinary loss include prepayment penalties of $1,000,000 related to the
early retirement of certain indebtedness. In addition, the extraordinary loss
includes $644,000 related to the write-off of unamortized deferred financing
costs and $404,000 due to the recognition of a liability in an amount equal to
the present value of future payments due on existing interest rate swap
agreements that expired in April and June 1994.

During the year ended December 31, 1994, the Company also recorded an
extraordinary loss of $182,000 related to its early retirement of certain
indebtedness to Investors. Such loss represents the write-off of unamortized
deferred financing costs.

F-24
<PAGE> 129

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Annual principal maturities of long-term debt through the year 2000 at
December 31, 1995 are as follow (in thousands):

3. SALE OF BROADCASTING PROPERTY AND AGREEMENT TO SELL AND LEASE BROADCASTING
PROPERTY

On August 17, 1993, the Company sold substantially all the assets of
WYAY-FM, a radio broadcasting property located in Atlanta, for a gross selling
price of $19,000,000. The net proceeds received on such date, approximately
$18,222,000 after deducting direct selling expenses, plus working capital, were
entirely used to concurrently reduce certain indebtedness outstanding at that
time by $18,500,000.

As a result of the sale of the assets of WYAY-FM, the Company recorded a
gain of $15,038,000 for financial reporting purposes equal to the difference
between the contract selling price less all related selling expenses, and the
net carrying value of the assets sold on August 17, 1993. A substantial portion
of the assets sold was comprised of intangibles and equipment.

In a separate transaction, on June 18, 1993 the Company entered into a
contract for the sale of substantially all the assets of WJZF-FM (formerly
WYAI-FM), a radio broadcasting property also located in Atlanta, for $8,000,000.
A challenge to such contract was filed with the Federal Communications
Commission ("FCC") which significantly delayed the completion of the contract
closing. On May 5, 1995, the FCC dismissed the application for consent to the
sale of WJZF-FM. The prospective buyer has appealed the FCC ruling. The FCC's
decision and the ultimate outcome of any appeal related to WJZF-FM should not
have a material financial impact on the Company.

The company that is appealing the FCC's decision to allow the purchase of
WJZF-FM also entered into an agreement effective January 1, 1994 to begin
leasing substantially all the assets of such radio station. The lease may be
terminated at the option of either party, as defined.

On September 20, 1994, the Company amended the existing leasing arrangement
for radio station WJZF-FM (the "Amendment"). Among other items, the Amendment
provided for the extension of the lease term through December 31, 1999 and the
issuance by the Company to the lessee of an exclusive option to purchase
substantially all the assets of radio station WJZF-FM during the lease term (the
"Option"). In consideration for the Option, the Company received a cash payment
of $9,123,000 that is nonrefundable (the "Option Payment"). Upon the exercise of
the Option, the Company will receive additional cash consideration of $100. In
addition, upon the exercise of the option, the Company is obligated to execute a
new definitive agreement for the sale of substantially all the assets of
WJZF-FM. Of the total cash proceeds received, $6,033,000 was immediately paid to
the Investors to retire certain indebtedness, plus deferred interest, and all
the outstanding shares of certain redeemable preferred stock, plus accrued
dividends (see Note 6). An additional $3,000,000 was concurrently used to reduce
outstanding borrowings under the Company's Senior Credit Facility. Because the
cash proceeds received from the Option Payment are nonrefundable and such
proceeds, in the opinion of management, approximated the fair market value of
the assets of WJZF-FM, the Company accounted for the economic substance of this
transaction as if a sale of substantially all the assets of WJZF-FM had
occurred. Accordingly, a gain of $1,585,000 was recorded for financial reporting
purposes equal to the difference between the Option Payment received, less all
related selling expenses, and the net carrying value of the assets of WJZF-FM,
including all intangibles and equipment. For income tax purposes, the Company
recognized a loss related to the WJZF-FM transaction.

F-25
<PAGE> 130

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Net broadcasting revenues and operating costs and expenses for the
broadcasting properties sold or held for sale or lease were as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER
31,
--------------------
1993 1994 1995
------ ---- ----
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
Net broadcasting revenues....................................... $3,714 $270 $349
Operating costs and expenses.................................... 3,556 485 270
</TABLE>

4. ACQUISITIONS

During the three year period ended December 31, 1995, the Company acquired
substantially all the assets of the following radio broadcasting properties:

<TABLE>
<CAPTION>
PURCHASE RADIO BROADCASTING
ACQUISITION DATE PRICE PROPERTY AND LOCATION
------------------------------------------- ---------- ------------------------
<S> <C> <C>
May 31, 1995............................... $6,000,000 WCFB-FM (Orlando)
May 17, 1995............................... 3,500,000 KJSR-FM (Tulsa)
March 17, 1995............................. 3,206,000 KCJZ-FM (San Antonio)
March 3, 1995.............................. 500,000 WZKD-AM (Orlando)
August 3, 1993............................. 3,750,000 WBBS-FM (Syracuse)
</TABLE>

Each of these acquisitions was financed with a combination of borrowings
under the Senior Credit Facility (see Note 2), promissory notes to seller,
certain indebtedness to Investors, cash in escrow or cash on hand. One
promissory note to seller and certain indebtedness to Investors issued in
connection with the purchase of WBBS-FM was repaid in 1993 and 1994,
respectively.

On March 1, 1993, the Company acquired 100% of the voting common stock of
Birmingham Communications, Inc. (BCI), a corporation originally established by
certain Investors with a capitalization of subordinated debt borrowings from
such Investors of $2,160,000 bearing 25% deferred interest and proceeds of
$540,000 from the issuance of preferred stock, bearing cumulative $25 per share
annual cash dividends to such Investors. The total BCI purchase price was
$2,991,000 consisting of $10,000 in cash and the assumption of BCI's
subordinated debt and preferred stock obligations having a carrying amount of
$2,385,000 and $596,000, respectively. In a separate transaction, in February
1993, BCI also entered into an asset purchase agreement to purchase the FM radio
station being leased by the Company in Birmingham, WODL-FM. On May 19, 1993, the
FCC approved the purchase of such FM radio station by BCI. All BCI indebtedness
to Investors was repaid in 1994 (see Note 6).

The purchase method of accounting for business combinations was used to
record all acquisitions and, accordingly, the accompanying consolidated
financial statements reflect the operating results of the radio stations from
the respective dates of acquisition. A substantial portion of each purchase
price was allocated to intangibles to reflect the FCC broadcasting licenses
acquired.

The unaudited consolidated results of operations of the Company on a pro
forma basis for the years ended December 31, 1993, 1994 and 1995, assuming all
acquisitions occurred on January 1 of each respective year, are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1993 1994 1995
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net broadcasting revenues................................. $54,577 $53,995 $55,636
Loss before extraordinary item............................ (3,079) (34) (675)
Net income (loss)......................................... 9,911 1,369 (675)
</TABLE>

F-26
<PAGE> 131

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. LEASING ARRANGEMENTS FOR BROADCASTING PROPERTIES

During the three year period ended December 31, 1995, the Company leased
substantially all the assets of certain radio broadcasting properties under
separate leasing arrangements, including two such leasing arrangements for
KCJZ-FM and WODL-FM with its Investors. As of December 31, 1995, the Company had
acquired each of the radio broadcasting properties that had been leased.

The Company has treated all leasing arrangements for radio stations as
operating leases. It has included the broadcasting revenues and operating costs
and expenses of each radio station from the respective initial lease dates in
its consolidated statement of operations.

6. TRANSACTIONS WITH INVESTORS

During 1990, the Company entered into a Note and Stock Purchase Agreement
("Investor Agreement") with an association of investment partnerships and
individual investors (collectively, the "Investors") that provided for an
aggregate cash investment in the Company by the Investors of $20,000,000. As
consideration for such investment, the Investors received 6,000 shares of newly
created $166.67 Redeemable Preferred Stock, 8,000 shares of newly created 9%
Convertible Preferred Stock and $6,000,000 of 25% subordinated promissory notes.
Each share of these two new classes of preferred stock was sold to the Investors
at $1,000 per share.

On November 2, 1993, as a result of a refinancing of the Company's
long-term indebtedness, the 25% $6,000,000 subordinated promissory notes, plus
deferred interest through such date and a prepayment penalty of $600,000, were
paid in full. As part of the Refinancing, the Company entered into an Amended
Investor Agreement that provided for the Company to issue two new series of
Redeemable Preferred Stock to the Investors in exchange for certain outstanding
shares of Preferred Stock held by the Investors prior to the refinancing which
had been issued by two subsidiaries to assist in financing certain acquisitions.
As a result, the Company issued to its Investors 2,700 shares of newly created
Series B Redeemable Preferred Stock and 1,450 shares of newly created Series C
Redeemable Preferred Stock. The Preferred Stock shares returned to the Company
by the Investors were retired. Both the Series B and C shares were subject to a
mandatory redemption on December 31, 2005. However, on September 20, 1994, the
Company redeemed all shares of its Series B and C Preferred Stock for $830,000
and paid aggregate accrued cumulative dividends thereon of $385,700 to its
Investors (see Note 3 for additional details). In addition, on September 20,
1994, the Company retired certain indebtedness due to the Investors of
$3,360,000, plus deferred interest through such date. The Company had borrowed
such indebtedness from the Investors to assist in financing the acquisitions of
certain radio broadcasting properties. As part of the Amended Investor
Agreement, the Company amended its certificate of incorporation on November 2,
1993 to provide for the extension of the mandatory redemption date for the
$166.67 Redeemable Preferred Stock to December 31, 2005. Also, such amendment
provides that dividends on the $166.67 Preferred Stock cease to accrue after
July 31, 1998 and that the aggregate maximum redemption value is $14,000,000.

On March 17, 1995, the Company acquired substantially all the assets of
KCJZ-FM, located in San Antonio, from its Investors for a cash payment of
$3,206,000 (see Note 3). Previously, such radio station had been leased from the
Investors (see Note 9).

The $166.67 Redeemable Preferred Stock shareholders are entitled to a
cumulative cash dividend each year on July 31. However, the declaration and
payment date for such dividends is subject to the approval of the Board of
Directors. Since the date of issuance, the Company has not paid a cash dividend
on this stock. Convertible Preferred Stock dividends are payable only if and
when declared by the Board of Directors.

The $166.67 Redeemable Preferred Stock has a mandatory redemption value of
$1,000 per share plus any unpaid cumulative dividends. Also, the $166.67
Redeemable Preferred Stock is subject to a mandatory redemption and,
accordingly, dividends are accrued ratably over the period by increasing the
carrying amount

F-27
<PAGE> 132

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

of the Redeemable Preferred Stock obligation with a corresponding charge to
additional paid-in capital or accumulated deficit. At December 31, 1995,
aggregate cumulative accrued dividends amounted to $5,348,000 on such stock. In
the event of the Company's liquidation or similar circumstances, as defined in
the Investor Agreement, the Redeemable Preferred Stock shareholders are entitled
to receive $1,000 per share plus any unpaid cumulative dividends while the
Convertible Preferred Stock shareholders are entitled to receive $1,000 per
share before any payments can be made to Common Stock shareholders.

However, the liquidation value per share for the Convertible Preferred
Stock reduces annually by $125 each August 1. The Convertible Preferred Stock
provides the option, at any time, to convert each share into 44.26 shares of the
Company's Class B Common Stock, subject to certain adjustments, and to exercise
registration rights in certain circumstances. The $166.67 Redeemable Preferred
Stock and Convertible Preferred Stock provide for shareholder voting approval of
certain transactions, as defined. The Investor Agreement also provides that no
more than 7,111 shares of such stock may be converted into Class B Common Stock
prior to March 15, 1996. The Company has reserved 354,080 shares of Class B
stock for such conversion.

The amendment to the certificate of incorporation on November 2, 1993
required by the Amended Investor Agreement also provided that the approval of a
majority in interest of the holders of the $166.67 Redeemable Preferred Stock is
required for any future changes to the Company's existing capital stock
structure.

Because the Series B and C Preferred Stock shares redeemed in 1994 were
subject to a mandatory redemption, dividends were accrued ratably over the
period by increasing the carrying amount of the respective obligations with a
corresponding charge to additional paid-in capital due to the absence of
accumulated earnings.

All shares outstanding for the $166.67 Redeemable Preferred Stock are
nonvoting except as required by law or agreement.

7. CAPITAL STOCK

The $.05 Preferred Stock is issuable in designated series at the discretion
of the Board of Directors. The Board of Directors also has the authority to
determine all rights and restrictions associated with any designated series to
be issued including redemption and liquidation values, and dividend and
conversion rights. All series of Preferred Stock are nonvoting, except as
required by law or agreement.

The Board of Directors designated 25,000 shares of Preferred Stock as
Cumulative Preferred Stock, Series A, with a redemption value of $1,000 per
share and an annual dividend rate of $200 per share in cash or additional shares
of Series A Preferred Stock payable on each December 31. The Series A Preferred
Stock was subject to a mandatory redemption on July 31, 1998 and accordingly
dividends were accrued ratably over the period by increasing the carrying amount
of the Series A Preferred Stock obligation with a corresponding charge to
additional paid-in capital.

During 1993, the Company redeemed all outstanding shares of Series A
Preferred Stock as part of a refinancing and paid cash dividends related to such
shares of $474,000. As a result of the redemption of all Series A shares plus
cash dividends thereon, cash payments made to Series A shareholders included
$2,889,000 in aggregate to officers and directors of the Company and $567,000 to
an Investor.

The shareholders of Class A and Class B Common Stock have the right to
vote, with Class A shares having ten times the voting rights of Class B shares.
Under the terms of its loan agreements, the Company cannot pay cash dividends on
its Class A and Class B Common Stock until minimum annual cash flow and
operating income requirements, as defined in the respective loan agreements,
have been attained.

F-28
<PAGE> 133

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Additionally, all holders of currently outstanding Common Stock have
entered into, and anyone purchasing Common Stock shall be required to enter
into, a "Purchase Agreement" containing restrictions on the resale or transfer
of that stock. Any sale, assignment, transfer or other disposition of Common
Stock is subject to the Company's right of first refusal and upon the other
terms and conditions as offered by a third party.

In total, the Company had reserved 515,994 shares of Class B Common Stock
for future issuance at December 31, 1995.

All repurchases of Common Stock are subject to compliance with covenants
contained in the Company's loan agreements as well as restrictions imposed by
applicable legal requirements regarding sufficiency of capital surplus. The
Purchase Agreement provides that the Company may purchase shares of Common Stock
with either cash or, if not permitted by its loan agreements to pay cash, a
noninterest bearing promissory note which will be subordinated to the Company's
other debt instruments. The promissory notes will have no stated maturity,
permitting the Company to defer payment of such notes until it is permitted to
do so under its various loan agreements.

See Notes 6 and 8 for additional information concerning the Company's
capital stock.

8. STOCK OPTION PLAN AND EMPLOYEE STOCK PURCHASE PLAN

The Company has an Incentive Stock Option Plan (the "Plan") and has
authorized 100,000 shares of Class B Common Stock for issuance thereunder, of
which 53,070 are available for grant at December 31, 1995. Under terms of the
Plan, the exercise price of any options will not be less than the fair market
value of such shares at the date such options are granted. The Company accounts
for stock option grants in accordance with APB Opinion No. 25, "Accounting for
Stock Issued to Employees." At December 31, 1995, there were no options
outstanding under such plan. During 1995, 1994 and 1993, there were no such
options exercised.

On February 1, 1996, the Company granted an option to an officer that
permits the purchase of up to 3,534 shares of Class B Common Stock at an
exercise price of $20 per share. Such option expires in 2001.

The Company also has an Employee Stock Purchase Plan and has reserved
158,500 shares of Class B Common Stock and 694 shares of Series A Redeemable
Preferred Stock for issuance thereunder, of which 108,883 shares and 62 shares,
respectively, are available for purchase at December 31, 1995. The purchase
price per share for both the Class B Common Stock and the Series A Redeemable
Preferred Stock shall be determined by the Board of Directors on the date such
shares are authorized to be granted. During 1995, 1994 and 1993, respectively,
no shares of Class B Common Stock or Series A Stock were sold under the Plan.

9. LEASE COMMITMENTS

The Company conducts a substantial portion of its operations from leased
premises and also leases various equipment. The leases, classified as operating
leases, extend through 2010 and provide for options to extend lease terms in
certain instances.

F-29
<PAGE> 134

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Future annual minimum payments under noncancellable office space and
equipment operating leases are as follows at December 31, 1995 (in thousands):

<TABLE>
<S> <C>
1996............................................................. $1,319
1997............................................................. 1,055
1998............................................................. 951
1999............................................................. 689
2000............................................................. 338
Thereafter....................................................... 933
-------
$5,285
=================
</TABLE>

Rent expense attributable to all operating leases was $1,893,000,
$1,805,000 and $1,693,000 for the years ended December 31, 1993, 1994 and 1995,
respectively.

Included in such rental expense is $600,000, $618,000 and $380,000 in 1993,
1994 and 1995, respectively, for operating lease arrangements related to
broadcasting properties of which $179,000, $171,000 and $43,000 was paid to an
Investor, respectively.

10. BARTER TRANSACTIONS

Excluding barter transactions related to its broadcasting properties sold
the accompanying consolidated statement of operations includes revenue from
barter transactions of $3,493,000, $3,180,000 and $4,346,000, and expenses from
barter transactions of $3,595,000, $3,230,000 and $4,292,000 for the years ended
December 31, 1993, 1994 and 1995, respectively.

11. INCOME TAXES

Significant components of the Company's deferred income tax liability and
assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1994 1995
------- --------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Deferred income tax liability -- property and equipment......... $ 3 $ --
======= ========
Deferred income tax assets:
FCC broadcast licenses........................................ $ -- $ 7,796
Allowance for bad debts....................................... 336 264
Net operating loss carryforwards.............................. 1,058 3,407
All others.................................................... 268 289
------- --------
Total deferred income tax assets...................... 1,662 11,756
Valuation allowance for deferred income tax assets.............. (1,659) (11,756)
------- --------
Net deferred income tax assets........................ $ 3 $ --
======= ========
</TABLE>

The valuation allowance for deferred income tax assets was $3,329,000 at
January 1, 1994.

F-30
<PAGE> 135

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The reconciliation of income tax attributable to income before
extraordinary item computed at the U.S. federal statutory tax rates to income
tax expense follows:

<TABLE>
<CAPTION>
LIABILITY METHOD
---------------------------------------------------------
1993 1994 1995
----------------- ----------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------- ------- ------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Tax at U.S. federal statutory
rates.............................. $ 4,850 34.3% $ 820 34.0% $(51) (34)%
State income taxes, net of federal
tax benefit........................ 500 3.5 109 4.5 164 110
Amortization of goodwill............. 524 3.7 440 18.2 188 126
Gain on sale of broadcasting
property........................... -- -- (663) (27.5) -- --
Use of net operating loss
carryforwards...................... (4,079) (28.8) (718) (29.8) -- --
Effect of extraordinary item......... (696) (4.9) (61) (2.6) -- --
Other................................ (41) (.3) 238 10.0 (52) (35)
------- ------- ------ ------- ------ -------
$ 1,058 7.5% $ 165 6.8% $249 167%
======= ===== ====== ===== ====== =====
</TABLE>

At December 31, 1995, the Company had a federal net operating loss
carryforward of approximately $10,400,000 that expires in various amounts in
years through 2010. Pursuant to the Internal Revenue Code, the Company's loss
carryforwards could be limited under certain circumstances.

During 1995, the Company obtained the approval of the Internal Revenue
Service ("IRS") to begin amortizing, for federal income tax reporting purposes,
the costs attributable to the Federal Communications Commission ("FCC")
broadcasting licenses acquired in 1986. The total of such costs of $33,317,000
will be included as additional amortization expense in the Company's income tax
returns through 2000.

The Company reported the following current provisions for income taxes:

<TABLE>
<CAPTION>
1993 1994 1995
------ ---- ----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Federal..................................................... $ 300 -- --
State....................................................... 758 $165 $249
------ ---- ----
$1,058 $165 $249
====== ==== ====
</TABLE>

For the year ended December 31, 1993, the federal provision is attributable
to the alternative minimum tax arising from the limitation on the use of net
operating loss carryforwards in calculating such tax. For the years ended
December 31, 1993, 1994 and 1995, the Company also recorded provisions for state
franchise taxes. However, such amounts, which are immaterial to consolidated
results of operations, are included in selling, general and administrative
expenses.

On April 17, 1993, the Department of Revenue of the Commonwealth of
Massachusetts made an assessment against the Company of approximately $451,000
relating to the tax years 1987 to 1989. The Company intends to defend this
assessment vigorously through the administrative process and, if necessary, in
the courts. In the opinion of management, the outcome of the matter described in
this paragraph will not have a material adverse effect on the Company's
financial condition or results of operations.

12. CONTINGENCIES

The Company is party to certain litigation arising in the ordinary course
of business. Management believes, based upon discussion with counsel, that such
litigation will not have any material adverse effect on the financial condition
or results of operations of the Company.

F-31
<PAGE> 136

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. SUPPLEMENTAL CASH FLOW INFORMATION

Net changes in operating assets and liabilities include:

<TABLE>
<CAPTION>
1993 1994 1995
------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Accounts receivable....................................... $(1,185) $ (575) $ (489)
Prepaid expenses and other assets......................... (127) 246 141
Deferred barter expenses.................................. 227 165 (53)
Accounts payable.......................................... 542 (158) (212)
Accrued expenses.......................................... 503 (527) (1,369)
Salaries, wages and commissions payable................... (195) 21 45
Accrued interest payable.................................. 1,175 (402) 249
State taxes payable....................................... 411 107 (9)
Deferred barter revenue................................... (395) (133) 190
------- ------- -------
$ 956 $(1,256) $(1,507)
======= ======= =======
</TABLE>

The components of depreciation, amortization and deferred interest expense
are as follows:

<TABLE>
<CAPTION>
1993 1994 1995
------ ------ ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Depreciation and amortization of property and equipment...... $1,997 $1,282 $1,751
Amortization of intangibles.................................. 3,059 1,788 1,759
Deferred interest expense.................................... 2,327 1,098 382
------ ------ ------
$7,383 $4,168 $3,892
====== ====== ======
</TABLE>

Income tax payments were $670,000, $190,000 and $267,000 in 1993, 1994 and
1995, respectively.

During the years ended December 31, 1993, 1994 and 1995, interest payments
amounted to $7,473,000, $9,425,000 and $9,125,000, respectively, excluding
aggregate deferred interest payments to Investors of $6,412,000, $1,457,000 and
none, respectively.

See Notes 2, 4, 6 and 10 for description of noncash transactions.

14. SUBSEQUENT EVENT

On February 22, 1996, the Company acquired an office building in
Birmingham, Alabama for $900,000 that will eventually become the operating site
for the Company's radio broadcasting properties presently located in Birmingham.
The funds to finance such acquisition were provided by a mortgage loan from a
local bank. The mortgage loan bears interest at prime plus one-half percent and
has escalating annual principal payments ranging from $32,400 in the first year
to $423,000 in 2006.

F-32
<PAGE> 137

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS,
EXCEPT FOR SHARE DATA)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................................... $ 292 $ 206
Accounts receivable, less allowances of $659 and $678....................... 9,816 10,709
Prepaid expenses and other current assets................................... 1,480 608
Deferred barter expenses.................................................... 1,478 1,104
----------- ------------
Total current assets................................................. 13,066 12,627
Property and equipment:
Land........................................................................ 2,467 2,237
Buildings................................................................... 3,022 2,269
Equipment................................................................... 17,143 16,800
Leasehold improvements...................................................... 563 559
----------- ------------
23,195 21,865
Less accumulated depreciation and amortization................................ 13,203 12,828
----------- ------------
9,992 9,037
Other assets:
Intangibles, primarily cost in excess of net assets of businesses acquired,
less accumulated amortization of $13,731 and $13,195...................... 59,540 60,064
Other....................................................................... 178 212
----------- ------------
59,718 60,276
----------- ------------
Total assets......................................................... $ 82,776 $ 81,940
=========== ============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Accounts payable............................................................ $ 928 $ 933
Accrued expenses............................................................ 947 927
Salaries, wages and commissions payable..................................... 650 733
Accrued interest payable.................................................... 3,847 1,671
State income taxes payable.................................................. 954 898
Deferred barter revenue..................................................... 1,930 1,736
Current portion of long-term debt........................................... 1,450 1,200
----------- ------------
Total current liabilities............................................ 10,706 8,098
Long-term debt, less current portion.......................................... 84,347 85,800
$166.67 Cumulative redeemable preferred stock held by certain Investors
(preference in liquidation, redemption value in 2005 -- $14,000):
Authorized, issued and outstanding shares -- 6,000.......................... 11,598 11,348
Stockholders' deficiency:
Preferred Stock, par value $.05
Authorized shares -- 5,000
Issued shares -- none..................................................... -- --
9% Convertible Preferred Stock held by certain Investors (preference in
liquidation), par value $.05:
Authorized, issued and outstanding shares -- 8,000........................ -- --
Class A Common Stock, par value $.01:
Authorized shares -- 500,000
Issued and outstanding shares -- 262,000.................................. 3 3
Class B Common Stock, par value $.01:
Authorized shares -- 700,000
Issued and outstanding shares -- 166,817.................................. 2 2
Accumulated deficit......................................................... (23,240) (22,671)
8% Notes receivable from certain officers and shareholders for Class A
Common Stock.............................................................. (640) (640)
----------- ------------
(23,875) (23,306)
----------- ------------
Total liabilities and stockholders' deficiency....................... $ 82,776 $ 81,940
=========== ============
</TABLE>

See accompanying notes.

F-33
<PAGE> 138

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Broadcasting revenues:
Local................................................................ $10,032 $ 9,408
National and regional................................................ 4,018 4,127
Other................................................................ 701 688
------- -------
14,751 14,223
Less advertising agency commissions.................................... (1,594) (1,578)
------- -------
Net revenues................................................. 13,157 12,645
Station operating costs and expenses:
Broadcasting operations.............................................. 4,163 4,193
Selling, general and administrative.................................. 5,303 5,446
Depreciation and amortization........................................ 817 724
Corporate general and administrative expenses.......................... 487 531
------- -------
Total operating costs........................................ 10,770 10,894
------- -------
Operating income....................................................... 2,387 1,751
Interest expense....................................................... 2,564 2,288
------- -------
Loss before income taxes............................................... (177) (537)
Income tax expense..................................................... 112 124
------- -------
Net loss..................................................... $ (289) $ (661)
======= =======
</TABLE>

See accompanying notes.

F-34
<PAGE> 139

NEWCITY COMMUNICATIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1996 1995
------- -------
(DOLLARS IN
THOUSANDS)
<S> <C> <C>
Operating activities:
Net loss..................................................... $ (289) $ (661)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization............................. 914 814
Provision for losses on accounts receivable............... 128 146
Changes in operating assets and liabilities:
Decrease in accounts receivable........................... 765 793
Increase in prepaid expenses and other current assets..... (872) (734)
Increase in deferred barter expenses...................... (374) (450)
Increase (decrease) in accounts payable................... (5) 352
Increase (decrease) in accrued expenses................... 20 (90)
Decrease in salaries, wages and commissions payable....... (83) (94)
Increase in state income taxes payable.................... 56 29
Increase in accrued interest payable...................... 2,176 2,172
Increase in deferred barter revenue....................... 194 300
(Increase) decrease in other assets....................... 34 (85)
------- -------
Net cash provided by operating activities............ 2,664 2,492
Investing activities:
Purchase of property, plant and equipment.................... (1,347) (596)
Purchases of radio station assets:
Intangibles............................................... -- (3,164)
Property and equipment.................................... -- (542)
Increase in intangibles...................................... (28) (199)
------- -------
Net cash used by investing activities................ (1,375) (4,501)
Financing activities:
Principal payments on long-term borrowings................... (2,103) (1,000)
Proceeds from long-term borrowings........................... 900 3,500
------- -------
Net cash provided (used) by financing activities..... (1,203) 2,500
------- -------
Increase in cash and cash equivalents.......................... 86 491
Cash and cash equivalents at beginning of period............... 206 168
------- -------
Cash and cash equivalents at end of period..................... $ 292 $ 659
======= =======
</TABLE>

See accompanying notes.

F-35
<PAGE> 140

NEWCITY COMMUNICATIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1996

1. BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements of NewCity
Communications, Inc. ("the Company") have been prepared in accordance with
generally accepted accounting principles for interim financial information.
Accordingly, certain information and footnote disclosures required by generally
accepted accounting principles for complete financial statements have been
excluded. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 1996 are
not necessarily indicative of the results that may be expected for the year
ended December 31, 1996.

The balance sheet data at December 31, 1995 was derived from the audited
consolidated financial statements included in the Form 10-K Annual Report filed
by the Company for the year ended December 31, 1995. The accompanying unaudited
consolidated financial statements should be read in conjunction with such
audited consolidated financial statements.

2. SUBSEQUENT EVENT

On May 10, 1996, the Company signed a letter of intent related to the
potential sale of all outstanding common stock shares. Such transaction is
subject to the execution of a definitive agreement and obtaining the approval of
necessary Federal regulatory authorities.

F-36
<PAGE> 141

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of
Cox Radio, Inc.:

We have audited the accompanying consolidated balance sheet of Infinity
Holdings Corp. of Orlando (the "Company") as of December 31, 1995, and the
related consolidated statements of operations and cash flows for the year then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these 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 the 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Infinity
Holdings Corp. of Orlando at December 31, 1995 and the consolidated results of
its operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
July 19, 1996

F-37
<PAGE> 142

INFINITY HOLDINGS CORP. OF ORLANDO

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1995 1996
------------ -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................................... $ 164 $ 758
Accounts receivable, less allowance for doubtful accounts of $47 and
$54.............................................................. 1,756 1,471
Prepaid expenses and other current assets........................... 39 84
------------ -----------
Total current assets........................................ 1,959 2,313
Plant and equipment, net.............................................. 3,635 3,551
Intangible assets, net................................................ 11,948 11,728
Other assets.......................................................... 20 20
------------ -----------
Total assets................................................ $ 17,562 $17,612
========== =========
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses............................... $ 514 $ 573
Other current liabilities........................................... 145 38
------------ -----------
Total current liabilities................................... 659 611
Amounts due to Affiliate.............................................. 11,802 12,582
Other long-term liability............................................. 300 200
------------ -----------
Total liabilities........................................... 12,761 13,393
------------ -----------
Commitments and contingencies (Note 9)
SHAREHOLDER'S EQUITY:
Common Stock, $.01 par value; 50,000 shares authorized; 9,800 shares
issued and outstanding........................................... 1 1
Additional paid-in capital.......................................... 9,458 9,458
Deficit in retained earnings........................................ (4,658) (5,240)
------------ -----------
Total shareholder's equity.................................. 4,801 4,219
------------ -----------
Total liabilities and shareholder's equity.................. $ 17,562 $17,612
========== =========
</TABLE>

See notes to consolidated financial statements.

F-38
<PAGE> 143

INFINITY HOLDINGS CORP. OF ORLANDO

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED MARCH 31,
DECEMBER 31, ---------------------------
1995 1995 1996
------------ ------------ ------------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net revenues:
Local and regional..................................... $ 3,602 $ 672 $1,132
National............................................... 1,863 362 435
Other.................................................. 167 16 3
------------ ------------ ------------
Total net revenues............................. 5,632 1,050 1,570
Costs and expenses:
Operating.............................................. 1,488 390 448
Selling, general and administrative.................... 3,281 810 931
Corporate general and administrative................... 418 104 166
Depreciation and amortization.......................... 1,216 174 344
------------ ------------ ------------
Operating loss........................................... (771) (428) (319)
Other expense:
Interest expense....................................... (902) (90) (263)
Other -- net........................................... (39) -- --
------------ ------------ ------------
Loss before extraordinary item........................... (1,712) (518) (582)
Extraordinary item....................................... (36) (36) --
------------ ------------ ------------
Net loss................................................. $ (1,748) $ (554) $ (582)
========== ========== ==========
</TABLE>

See notes to consolidated financial statements.

F-39
<PAGE> 144

INFINITY HOLDINGS CORP. OF ORLANDO

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDING MARCH
YEAR ENDED 31,
DECEMBER 31, -------------------------
1995 1995 1996
------------ ----------- -----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss................................................... $ (1,748) $(554) $(582)
Items not requiring cash:
Depreciation and amortization............................ 1,216 174 344
Extraordinary item....................................... 36 36 --
(Increase) decrease in accounts receivable................. (1,055) (200) 278
Increase (decrease) in accounts payable and accrued
expenses................................................. 341 246 (149)
Other, net................................................. (290) (48) (25)
------------ ----------- -----------
Net cash used in operating activities............ (1,500) (346) (134)
------------ ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures....................................... (588) (184) (52)
------------ ----------- -----------
Net cash used in investing activities............ (588) (184) (52)
------------ ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in amounts due to Affiliate....................... 1,684 286 780
------------ ----------- -----------
Net cash provided by financing activities........ 1,684 286 780
------------ ----------- -----------
Net increase (decrease) in cash and cash equivalents....... (404) (244) 594
Cash and cash equivalents at beginning of period........... 568 568 164
------------ ----------- -----------
Cash and cash equivalents at end of period................. $ 164 $ 324 $ 758
========== ========= =========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest..................................... $ 764 $ 31 $ 371
========== ========= =========
</TABLE>

See notes to consolidated financial statements.

F-40
<PAGE> 145

INFINITY HOLDINGS CORP. OF ORLANDO

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

Infinity Holdings Corp. of Orlando, formerly GCI Orlando Holding, Inc.,
("the Company"), is a wholly-owned subsidiary of Infinity Broadcasting
Corporation ("Infinity"), which purchased the Company from Granum Holdings, L.P.
("Granum") in June 1996. Subsequently in June 1996, Cox Radio entered into an
agreement with Infinity to purchase the Company. The Company operates three
radio stations, WHOO-AM, WHTQ-FM and WMMO-FM, located and broadcast in Orlando.

The historical financial statements do not necessarily reflect the results
of operations or financial position that would have existed had the Company been
an independent company. The consolidated financial statements include the
accounts of the Company and its subsidiaries. All significant intercompany
accounts have been eliminated in the consolidated financial statements of GCI.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition

Revenue is recognized as advertising air time is broadcast and is net of
advertising agency commissions.

Corporate General and Administrative Expenses

Corporate general and administrative expenses consist of corporate overhead
costs not specifically allocable to any of the Company's individual stations and
primarily includes management fees charged by Granum.

Plant and Equipment

Plant and equipment is stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method at rates based upon
estimated useful lives of 8 to 15 years for building, tower, antennae and
broadcast equipment, 5 to 7 years or term of the lease for leasehold
improvements and 5 years for furniture, fixtures and other assets.

Intangible Assets

Intangible assets consist primarily of goodwill/FCC broadcast licenses and
covenants not to compete. Goodwill/FCC broadcast licenses recorded in business
combinations are amortized on a straight-line basis over 25 years. Non-compete
agreements are amortized on a straight-line basis over the contractual lives of
the agreements, generally 3 to 5 years. Other intangibles associated with the
business combinations are amortized on a straight-line basis over 5 years. The
Company assesses the recoverability of intangible assets based on estimates of
future undiscounted cash flows from operations for the applicable business
acquired compared to net book value. Such assessment is made whenever events or
changes in circumstances indicate that the net book value of an asset may not be
recoverable. If the future undiscounted cash flow estimate is less than net book
value, net book value is then reduced to the estimated fair value. The Company
also evaluates the amortization periods of intangible assets to determine
whether events or circumstances warrant revised estimates of useful lives.

Income Taxes

The Company files its federal, state and local tax returns on a
consolidated basis. The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes," which requires, among other things, the recognition of deferred
income taxes which arise from temporary differences in the basis of the assets
between income taxes and financial reporting. Deferred tax assets relate
principally to net operating loss carryforwards ("NOLs") while deferred tax

F-41
<PAGE> 146

INFINITY HOLDINGS CORP. OF ORLANDO

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

liabilities relate to depreciation and amortization. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of management, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized.

Use of Estimates

Recently Issued Accounting Pronouncements

In March 1995, SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed Of," was issued. This Statement
requires that long-lived assets and certain intangibles be reviewed for
impairment when events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable, with any impairment losses being
reported in the period in which the recognition criteria are first applied based
on the fair value of the asset. Long-lived assets and certain intangibles to be
disposed of are required to be reported at the lower of carrying amount or fair
value less cost to sell. The Company adopted SFAS No. 121 in the first quarter
of 1996. The effect on the financial statements upon adoption of SFAS No. 121
was not material.

Unaudited Interim Financial Statements

The consolidated financial statements as of March 31, 1996 and for the
three months ended March 31, 1995 and 1996 include all adjustments, consisting
of normal recurring adjustments, necessary for a fair presentation of the
financial position and results of operations. Operating results for the three
months ended March 31, 1996 are not necessarily indicative of the results that
may be expected for the entire year.

3. ACQUISITION OF BUSINESS

In November 1994, Granum entered into an agreement to purchase certain
assets of Orlando radio stations WHTQ-FM and WHOO-AM from TK Communications,
Inc. ("TK") for $11.5 million. Concurrently, Granum entered into a local
marketing agreement ("LMA") with TK to operate WHTQ-FM and WHOO-AM beginning on
December 1, 1994. Operations of the radio stations have been included in the
consolidated results of the Company since the effective date of the LMA. Granum
consummated the asset purchase on March 31, 1995. The stations' assets were
contributed by Granum to the Company at the time of acquisition together with a
capital contribution of approximately $3.2 million and intercompany debt of
approximately $8.3 million. Subsequently, an additional $1.8 million capital
contribution was made by Granum to the Company in the form of forgiveness of
intercompany debt.

This acquisition was accounted for by the purchase method, and accordingly,
the purchase price has been allocated to the assets acquired based on their
estimated fair values at the date of the acquisition. No liabilities were
assumed by the Company as a result of the acquisition.

Amounts allocated to goodwill/FCC licenses in connection with this
acquisition are being amortized over 25 years using the straight-line basis.

F-42
<PAGE> 147

INFINITY HOLDINGS CORP. OF ORLANDO

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. PLANT AND EQUIPMENT

Plant and equipment at December 31, 1995 is summarized as follows (in
thousands):

<TABLE>
<S> <C>
Land and land improvements.................................................. $ 788
Buildings and building improvements......................................... 644
Broadcast equipment......................................................... 2,494
Furniture and fixtures, other............................................... 507
------
Plant and equipment, at cost...................................... 4,433
Less accumulated depreciation............................................... (798)
------
Net plant and equipment........................................... $3,635
======
</TABLE>

5. INTANGIBLE ASSETS

Intangible assets at December 31, 1995 are summarized as follows (in
thousands):

<TABLE>
<S> <C>
Goodwill/FCC broadcast licenses............................................ $11,533
Non-compete agreements..................................................... 500
Other...................................................................... 1,358
-------
Total............................................................ 13,391
Less accumulated amortization.............................................. (1,443)
-------
Net intangible assets............................................ $11,948
=======
</TABLE>

6. INCOME TAXES

The Company recorded no income tax expense or benefit in 1995. The tax
effects of temporary differences that give rise to significant portions of the
deferred tax assets and liabilities at December 31, 1995 are as follows (in
thousands):

<TABLE>
<S> <C>
Deferred tax assets:
Net operating loss carryforwards......................................... $ 1,670
Provision for doubtful accounts.......................................... 18
-------
Total deferred tax assets........................................ 1,688
Valuation allowance...................................................... (1,428)
-------
Net deferred tax assets.......................................... 260
-------
Deferred tax liabilities:
Plant and equipment...................................................... (90)
Intangibles.............................................................. (170)
-------
Total deferred tax liabilities................................... (260)
-------
Net deferred tax asset (liability)............................... $ --
=======
</TABLE>

The provision for income taxes is different than the amount computed using
the applicable statutory federal income tax rate with the differences summarized
below (in thousands):

<TABLE>
<S> <C>
Computed tax benefit at statutory rate....................................... $(594)
Non-deductible amortization of intangibles................................... (40)
Increase in valuation allowance.............................................. 631
Other........................................................................ 3
-----
Net tax expense (benefit).......................................... $ --
=====
</TABLE>

F-43
<PAGE> 148

INFINITY HOLDINGS CORP. OF ORLANDO

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has approximately $4,400,000 of NOLs that expire from 2007 to
2010. The utilization of such NOLs is subject to certain limitations under
federal, state and local income tax laws. Therefore, realization is dependent on
generating sufficient taxable income prior to expiration of the loss
carryforwards. The NOLs have a full valuation allowance against them to the
extent they will not be realized through the reversal of deferred tax
liabilities.

7. RETIREMENT PLANS

The Company sponsors a defined contribution 401(k) savings plan for its
full-time employees through Granum. Neither the Company nor Granum match
employees' contributions nor do they provide any other retirement benefits to
its employees.

8. TRANSACTIONS WITH AFFILIATED COMPANIES

In 1995, the Company was allocated fees of $417,714 from Granum for certain
management activities and corporate overhead. The amounts due Granum and its
affiliates represent the net of various transactions and the allocation of
interest expense on Granum's long-term debt. The allocated long-term debt bears
interest consistent with Granum's credit facility which provides for interest
based on various rate alternatives.

9. COMMITMENTS AND CONTINGENCIES

The Company leases office facilities and various items of equipment under
noncancellable operating leases. Rental expense under operating leases amounted
to $212,635 in 1995. Future minimum lease payments as of December 31, 1995 for
all noncancellable operating leases are as follows (in thousands):

<TABLE>
<S> <C>
1996................................................................ $ 218
1997................................................................ 218
1998................................................................ 218
1999................................................................ 218
2000................................................................ 155
Thereafter.......................................................... 776
------
Total..................................................... $1,803
------
</TABLE>

10. SHAREHOLDER'S EQUITY

The following reflects the changes in shareholder's equity for the year
ended December 31, 1995 and the three months ended March 31, 1996 (in thousands,
except share data):

<TABLE>
<CAPTION>
TOTAL
SHARES COMMON ADDITIONAL DEFICIT IN SHAREHOLDER'S
OUTSTANDING STOCK PAID-IN-CAPITAL RETAINED EARNINGS EQUITY
----------- ------ --------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1995.......... 9,800 $ 1 $ 4,400 $(2,910) $ 1,491
Capital contributions............. -- -- 5,058 -- 5,058
Net loss.......................... -- -- -- (1,748) (1,748)
----------- ------ ------- ----------------- -------------
Balance, December 31, 1995........ 9,800 1 9,458 (4,658) 4,801
Net loss (unaudited).............. -- -- -- (582) (582)
----------- ------ ------- ----------------- -------------
Balance, March 31, 1996
(unaudited)..................... 9,800 $ 1 $ 9,458 $(5,240) $ 4,219
========= ====== =========== ============= ==========
</TABLE>

F-44
<PAGE> 149

INFINITY HOLDINGS CORP. OF ORLANDO

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. EXTRAORDINARY ITEMS

During March 1995, Granum negotiated a new loan facility and repaid its
then outstanding borrowings resulting in an extraordinary loss on the
extinguishment of debt. The Company's allocable portion of that extraordinary
loss was $36,031.

F-45
<PAGE> 150

COX RADIO, INC.

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNT

<TABLE>
<CAPTION>
COLUMN C
---------------------------
ADDITIONS
COLUMN B ---------------------------
------------ CHARGED TO COLUMN D COLUMN E
COLUMN A BALANCE AT CHARGED TO OTHER ----------- -------------
------------------ BEGINNING OF COSTS AND ACCOUNTS -- DEDUCTIONS -- BALANCE AT
DESCRIPTION PERIOD EXPENSES DESCRIBE DESCRIBE(1) END OF PERIOD
------------------ ------------ -------------- ---------- ----------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Year Ended
December 31,
1993......... Allowance for
doubtful accounts
receivable $697 $496 $ -- $ 647 $ 546
========= =========== ======== ========== ==========
Year Ended
December 31,
1994......... Allowance for
doubtful accounts
receivable $546 $620 $ -- $ 406 $ 760
========= =========== ======== ========== ==========
Year Ended
December 31,
1995............ Allowance for
doubtful accounts
receivable $760 $558 $ -- $ 540 $ 774
========= =========== ======== ========== ==========
</TABLE>

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

(1) Represents the net of accounts written off and accounts recovered.

S-1
<PAGE> 151

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OF THE U.S. UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF
ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION WHERE SUCH AN
OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Certain Definitions and Market and
Industry Data.........................
Prospectus Summary......................
Risk Factors............................
Use of Proceeds.........................
Dividend Policy.........................
Dilution................................
Capitalization..........................
Unaudited Pro Forma Combined Financial
Data..................................
Unaudited Pro Forma Combined Balance
Sheet.................................
Unaudited Pro Forma Combined Statements
of Operations.........................
Selected Historical Consolidated
Financial
Data..................................
Management's Discussion and Analysis of
the Pro Forma Combined Results of
Operations............................
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of Cox Radio...............
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of NewCity.................
Business................................
The NewCity Acquisition.................
Management..............................
Security Ownership of Certain Beneficial
Owners................................
Certain Relationships and Related
Transactions..........................
Description of Capital Stock............
Description of Indebtedness.............
Shares Eligible for Future Sale.........
Underwriting............................
Certain United States Federal Tax
Consequences to Non-United States
Holders of Class A Common Stock.......
Legal Matters...........................
Experts.................................
Available Information...................
Index to Financial Statements...........
</TABLE>

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

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS U.S. UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

[COX RADIO LOGO]

COX RADIO, INC.
CLASS A COMMON STOCK
---------------------------

PROSPECTUS
, 1996

---------------------------
LEHMAN BROTHERS

ALLEN & COMPANY
INCORPORATED

CS FIRST BOSTON

MORGAN STANLEY & CO.
INCORPORATED

------------------------------------------------------
------------------------------------------------------
<PAGE> 152

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following are the expenses of issuance and distribution of the shares
of Class A Common Stock registered hereunder on Form S-1, other than
underwriting discounts and commissions. All amounts except the Registration fee
are estimated.

<TABLE>
<S> <C>
Registration fee........................................................... $47,587
NASD Registration fees..................................................... 14,300
fees............................................................. *
Blue Sky fees and expenses................................................. *
Legal fees and expenses.................................................... *
Accounting fees and expenses............................................... *
Printing and engraving expenses............................................ *
Registrar and Transfer Agent's fees........................................ *
Miscellaneous.............................................................. *
-----
Total............................................................ $ *
=====
</TABLE>

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

* To be supplied by amendment.

All of the above expenses have been or will be paid by the Company.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Reference is made to Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), which enables a corporation in its original certificate of
incorporation or an amendment thereto to eliminate or limit the personal
liability of a director for violations of the director's fiduciary duty, except
(i) for any breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant to Section
174 of the DGCL (providing for liability of directors for unlawful payment of
dividends or unlawful stock purchases or redemptions), or (iv) for any
transaction from which a director derived an improper personal benefit. The
Company's Amended and Restated Certificate of Incorporation contains a provision
which eliminates the liability of directors to the extent permitted by Section
102(b)(7) of the DGCL.

Reference is made to Section 145 of the DGCL, which provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation (a "derivative action")),
if they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement or otherwise. The
Amended and Restated Certificate of Incorporation of the Company provides that
the Company shall indemnify its directors and officers to the fullest extent
permitted by Delaware law.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

There have been no sales of unregistered securities of the Company in the
last three years.

II-1
<PAGE> 153

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ----------------------------------------------------------------------------------
<C> <C> <S>
*1.1 -- Form of Underwriting Agreement, dated as of , 1996, by and among Cox
Radio, Inc. and Lehman Brothers Inc., Allen & Company Incorporated, CS First
Boston Corporation and Morgan Stanley & Co. Incorporated.
*1.2 -- Form of International Underwriting Agreement, dated as of , 1996, by
and among Cox Radio, Inc. and Lehman Brothers International (Europe), Allen &
Company Incorporated, CS First Boston Limited and Morgan Stanley & Co.
International Limited.
2.1 -- Agreement and Plan of Merger, dated as of July 1, 1996, by and among Cox Radio,
Inc., New Cox Radio II, Inc., NewCity Communications, Inc. and certain
stockholders of NewCity Communications, Inc.
2.2 -- Guaranty by Cox Broadcasting, Inc., dated as of July 1, 1996, in favor of NewCity
Communications, Inc.
*3.1 -- Amended and Restated Certificate of Incorporation of Cox Radio, Inc.
*3.2 -- Bylaws of Cox Radio, Inc.
4.1 -- Indenture between NewCity Communications, Inc. and Shawmut Bank Connecticut,
National Association, as Trustee, relating to the 11 3/8% Notes due 2003 of
NewCity Communications, Inc.
*4.2 -- Specimen of Class A Common Stock Certificate.
*5.1 -- Opinion of Dow, Lohnes & Albertson, PLLC (including consent).
*10.1 -- Form of CEI Note.
*10.3 -- Form of New CEI Credit Facility.
21 -- Subsidiaries of the Registrant.
23.1 -- Consent and Report on Schedule of Deloitte & Touche LLP.
23.2 -- Consent of Ernst & Young LLP.
23.3 -- Consent of Deloitte & Touche LLP.
*23.4 -- Consent of Dow, Lohnes & Albertson, PLLC (contained in their opinion filed as
Exhibit 5.1).
24.1 -- Power of Attorney (included on page II-4).
27.1 -- Financial Data Schedule (for SEC use only).
</TABLE>

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

* To be filed by amendment.

(b) Financial Statement Schedules

II. Valuation and Qualifying Account

All other schedules for which provisions are made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore have
been omitted.

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question

II-2
<PAGE> 154

whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

The Company hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of Prospectus filed by the Company pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act of 1933 shall br deemed to be part of
this Registration Statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

The undersigned Registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.

II-3
<PAGE> 155

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Atlanta, State of
Georgia, on July 24, 1996.

COX RADIO, INC.

By: /s/ ROBERT F. NEIL
------------------------------------
Robert F. Neil
President and Chief Executive
Officer

POWER OF ATTORNEY

Cox Radio, Inc., a Delaware corporation, and each person whose signature
appears below, constitutes and appoints Robert F. Neil and Maritza C. Pichon,
and either of them, with full power to act without the other, such person's true
and lawful attorneys-in-fact, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign this Registration Statement, any subsequent related
registration statement filed pursuant to Rule 462(b) promulgated under the
Securities Act of 1933, and any and all amendments to such registration
statements and other documents in connection therewith, and to file the same,
and all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact, and
each of them, full power and authority to do and perform each and every act and
thing necessary or desirable to be done in and about the premises, as fully to
all intents and purposes as he or she might or could do in person, thereby
ratifying and confirming all that said attorneys-in-fact, or any of them, or
their or his or her substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- --------------
<C> <S> <C>
/s/ NICHOLAS D. TRIGONY Chairman of the Board of July 24, 1996
- --------------------------------------------- Directors
Nicholas D. Trigony

/s/ ROBERT F. NEIL President and Chief Executive July 24, 1996
- --------------------------------------------- Officer, Director
Robert F. Neil

/s/ MARITZA C. PICHON Chief Financial Officer July 24, 1996
- --------------------------------------------- (Principal Financial Officer
Maritza C. Pichon and Principal Accounting
Officer)

/s/ JAMES C. KENNEDY Director July 24, 1996
- ---------------------------------------------
James C. Kennedy

/s/ DAVID E. EASTERLY Director July 24, 1996
- ---------------------------------------------
David E. Easterly
</TABLE>

II-4
<PAGE> 156

ALTERNATE PAGE FOR INTERNATIONAL PROSPECTUS
Subject to Completion, dated , 1996

PROSPECTUS

COX RADIO, INC. [COX RADIO LOGO]

CLASS A COMMON STOCK
---------------------------
All of the shares of Class A Common Stock, par value $1.00 per share (the
"Class A Common Stock"), offered hereby are being sold by Cox Radio, Inc. ("Cox
Radio" or the "Company"). Of the shares of Class A Common Stock being
offered, shares are being offered initially outside the United States and
Canada (the "International Offering") by the International Managers and shares
are being concurrently offered in the United States and Canada (the "U.S.
Offering") by the U.S. Underwriters (together with the International Managers,
the "Underwriters"). The International Offering and the U.S. Offering are
collectively referred to as the "Offerings."

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1. COMPANY(2.
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................................. $ $ $
- ----------------------------------------------------------------------------------------------------------
Total(3).................................................. $ $ $
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Cox Radio has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933 (the
"Securities Act"). See "Underwriting."

(2) Before deducting expenses payable by Cox Radio estimated to be $ .

The shares of Class A Common Stock offered by this Prospectus are offered
by the International Managers subject to prior sale, to withdrawal,
cancellation, or modification of the offer without notice, to delivery to and
acceptance by the International Managers and to certain further conditions. It
is expected that delivery of the shares will be made at the offices of Lehman
Brothers Inc., New York, New York, on or about , 1996.
---------------------------
LEHMAN BROTHERS
ALLEN & COMPANY
INCORPORATED
CS FIRST BOSTON
MORGAN STANLEY & CO.
INTERNATIONAL
, 1996
<PAGE> 157

ALTERNATE PAGE FOR
INTERNATIONAL PROSPECTUS

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

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OF THE INTERNATIONAL MANAGERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, TO ANY PERSON IN ANY JURISDICTION
WHERE SUCH AN OFFER OR SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Certain Definitions and Market and Industry
Data.....................................
Prospectus Summary.........................
Risk Factors...............................
Use of Proceeds............................
Dividend Policy............................
Dilution...................................
Capitalization.............................
Unaudited Pro Forma Combined Financial
Data.....................................
Unaudited Pro Forma Combined Balance
Sheet....................................
Unaudited Pro Forma Combined Statements of
Operations...............................
Selected Historical Consolidated Financial
Data.....................................
Management's Discussion and Analysis of the
Pro Forma Combined Results of
Operations...............................
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of Cox Radio..................
Management's Discussion and Analysis of
Financial Condition and Results of
Operations of NewCity....................
Business...................................
The NewCity Acquisition....................
Management.................................
Security Ownership of Certain Beneficial
Owners...................................
Certain Relationships and Related
Transactions.............................
Description of Capital Stock...............
Description of Indebtedness................
Shares Eligible for Future Sale............
Underwriting...............................
Certain United States Federal Tax
Consequences to Non-United States Holders
of Class A Common Stock..................
Legal Matters..............................
Experts....................................
Available Information......................
Index to Financial Statements..............
</TABLE>

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

UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE CLASS A COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS INTERNATIONAL MANAGERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

[COX RADIO LOGO]

COX RADIO, INC.
CLASS A COMMON STOCK
---------------------------

PROSPECTUS
, 1996

---------------------------
LEHMAN BROTHERS

ALLEN & COMPANY
INCORPORATED

CS FIRST BOSTON

MORGAN STANLEY & CO.
INTERNATIONAL

------------------------------------------------------
------------------------------------------------------
<PAGE> 158

EXHIBIT INDEX

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

* To be filed by amendment.

<PAGE> 1

EXHIBIT 2.1

EXECUTION

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

COX RADIO, INC.,
NEW COX RADIO II, INC.,
NEWCITY COMMUNICATIONS, INC.,
CERTAIN STOCKHOLDERS OF NEWCITY COMMUNICATIONS, INC.

AND

THE STOCKHOLDERS' AGENT

DATED AS OF JULY 1, 1996
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----

ARTICLE I
THE MERGER
<S> <C> <C>
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time of the Merger . . . . . . . . . . . . . . 2
1.4 Effect of the Merger . . . . . . . . . . . . . . . . . . 2

ARTICLE II
THE SURVIVING CORPORATION

2.1 Certificate of Incorporation . . . . . . . . . . . . . . 2
2.2 By-laws . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Board of Directors; Officers . . . . . . . . . . . . . . 3

ARTICLE III
MERGER CONSIDERATION AND REDEMPTION OF SHARES

3.1 Merger Consideration . . . . . . . . . . . . . . . . . . 3
3.2 Redemption of Shares . . . . . . . . . . . . . . . . . . 3
3.3 Adjustment to Merger Consideration as of Closing Date . 4
3.4 Dissenting Shares . . . . . . . . . . . . . . . . . . . 5
3.5 Payment . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 No Further Rights . . . . . . . . . . . . . . . . . . . 7
3.7 Closing of the Company's Transfer Books . . . . . . . . 7
3.8 Final Adjustment of Merger Consideration . . . . . . . . 8
3.9 Escrow Agreement . . . . . . . . . . . . . . . . . . . . 9

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

4.1 Organization and Qualification . . . . . . . . . . . . 10
4.2 Capitalization . . . . . . . . . . . . . . . . . . . . 11
4.3 Authority Relative to This Merger Agreement . . . . . 11
4.4 No Conflicts, Required Filings and Consents . . . . . 12
4.5 Reports and Financial Statements . . . . . . . . . . . 13
4.6 Litigation . . . . . . . . . . . . . . . . . . . . . . 14
4.7 Absence of Certain Changes or Events . . . . . . . . . 14
4.8 Employee Matters . . . . . . . . . . . . . . . . . . . 15
4.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 18
4.11 State Takeover Statutes . . . . . . . . . . . . . . . 20
4.12 Brokers . . . . . . . . . . . . . . . . . . . . . . . 20
4.13 Environmental Matters . . . . . . . . . . . . . . . . 20
4.14 Contracts . . . . . . . . . . . . . . . . . . . . . . 22
4.15 Tangible Personal Property . . . . . . . . . . . . . . 23
4.16 Intangible Property . . . . . . . . . . . . . . . . . 24
4.17 Real Property . . . . . . . . . . . . . . . . . . . . 24
4.18 Undisclosed Liabilities . . . . . . . . . . . . . . . 26
4.19 Governmental Authorizations . . . . . . . . . . . . . 26
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----

<S> <C> <C>
4.20 Compliance with FCC Requirements . . . . . . . . . . . 27
4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . 28
4.22 Powers of Attorney . . . . . . . . . . . . . . . . . . 28
4.23 Payment of Indebtedness . . . . . . . . . . . . . . . 28
4.24 Disclosure . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

5.1 Ownership of Class A Common Stock . . . . . . . . . . 28
5.2 Authority; Binding Effect . . . . . . . . . . . . . . 29
5.3 No Conflicts, Required Filings and Consents . . . . . 29

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

6.1 Organization and Qualification . . . . . . . . . . . . 29
6.2 Ownership of Sub . . . . . . . . . . . . . . . . . . . 30
6.3 Authority Relative to This Merger Agreement . . . . . 30
6.4 No Conflicts; Required Filings and Consents . . . . . 30
6.5 Litigation . . . . . . . . . . . . . . . . . . . . . . 31
6.6 Voting Requirements . . . . . . . . . . . . . . . . . 31
6.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . 31
6.8 Financing . . . . . . . . . . . . . . . . . . . . . . 31
6.9 FCC Applications . . . . . . . . . . . . . . . . . . . 31
6.10 State Takeover Statutes . . . . . . . . . . . . . . . 31
6.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER

7.1 Conduct of Business by the Company Pending the Merger 32
7.2 Control of the Stations . . . . . . . . . . . . . . . 34
7.3 Intentionally Omitted . . . . . . . . . . . . . . . . 35
7.4 Massachusetts Income Tax Assessment . . . . . . . . . 35

ARTICLE VIII
ADDITIONAL AGREEMENTS

8.1 Access to Information . . . . . . . . . . . . . . . . 35
8.2 Filings . . . . . . . . . . . . . . . . . . . . . . . 35
8.3 Employee and Other Arrangements . . . . . . . . . . . 36
8.4 Public Announcements . . . . . . . . . . . . . . . . . 36
8.5 Efforts; Consents . . . . . . . . . . . . . . . . . . 36
8.6 Notice of Breaches . . . . . . . . . . . . . . . . . . 38
8.7 Transfer and Certain Other Taxes and Expenses . . . . 38
8.8 Financial and FCC Reports . . . . . . . . . . . . . . 38
8.9 Updating of Information . . . . . . . . . . . . . . . 38
8.10 Release of Liens . . . . . . . . . . . . . . . . . . . 39
8.11 Environmental Audit . . . . . . . . . . . . . . . . . 39
8.12 Agreement to Vote . . . . . . . . . . . . . . . . . . 39
8.13 Tax Matters. . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
8.14 Event of Loss . . . . . . . . . . . . . . . . . . . . 43
8.15 Further Assurances . . . . . . . . . . . . . . . . . . 44
8.16 Solicitation of Employees . . . . . . . . . . . . . . 44
8.17 Capital Expenditures . . . . . . . . . . . . . . . . . 44
8.18 Exercise of Stock Options . . . . . . . . . . . . . . 44

ARTICLE IX
CONDITIONS PRECEDENT

9.1 Conditions to Each Party's Obligation to
Effect the Merger. . . . . . . . . . . . . . . . . . . 44
9.2 Conditions to Obligation of the Company and the
Stockholders to Effect the Merger . . . . . . . . . . 45
9.3 Conditions to Obligations of Parent and Sub to
Effect the Merger. . . . . . . . . . . . . . . . . . . 46

ARTICLE X
TERMINATION, AMENDMENT AND WAIVER

10.1 Termination . . . . . . . . . . . . . . . . . . . . . 49
10.2 Effect of Termination . . . . . . . . . . . . . . . . 49
10.3 Fees and Expenses . . . . . . . . . . . . . . . . . . 50
10.4 No Solicitation . . . . . . . . . . . . . . . . . . . 50
10.5 Amendment . . . . . . . . . . . . . . . . . . . . . . 50
10.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . 50

ARTICLE XI
INDEMNIFICATION

11.1 Indemnification Out of Closing Escrow. . . . . . . . . 50
11.2 Indemnification By Parent . . . . . . . . . . . . . . 51
11.3 Notification of Claims. . . . . . . . . . . . . . . . 52

ARTICLE XII
GENERAL PROVISIONS

12.1 Stockholders' Agent . . . . . . . . . . . . . . . . . 53
12.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 53
12.3 Specific Performance . . . . . . . . . . . . . . . . . 55
12.4 Entire Agreement . . . . . . . . . . . . . . . . . . . 55
12.5 Assignments; Parties in Interest . . . . . . . . . . . 55
12.6 Governing Law . . . . . . . . . . . . . . . . . . . . 55
12.7 Headings . . . . . . . . . . . . . . . . . . . . . . . 56
12.8 Remedies . . . . . . . . . . . . . . . . . . . . . . . 56
12.9 Certain Definitions . . . . . . . . . . . . . . . . . 56
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . 58
12.11 Severability . . . . . . . . . . . . . . . . . . . . . 58
12.12 Gender and Number . . . . . . . . . . . . . . . . . . 58
12.13 List of Definitions . . . . . . . . . . . . . . . . . 58
</TABLE>
<PAGE> 5

EXHIBITS

Exhibit A Surviving Corporation Certificate of
Incorporation
Exhibit B Selling Stockholders
Exhibit C Form of Estimated Closing Statement
Exhibit D Form of Closing Escrow Agreement
Exhibit E Form of Opinion of Dow, Lohnes &
Albertson, PLLC
Exhibit F Form of Opinions of Tyler Cooper &
Alcorn, LLP and Kaye, Scholer, Fierman,
Hays & Handler, LLP

SCHEDULES

Schedule 3.2 Redemption of Shares
Schedule 4.1 Company Subsidiaries
Schedule 4.2 Capitalization
Schedule 4.4 Conflicts, Required Filings and Consents
Schedule 4.5 Reports and Financial Statements
Schedule 4.6 Litigation
Schedule 4.7 Absence of Certain Changes or Events
Schedule 4.8 Employee Matters
Schedule 4.9 ERISA
Schedule 4.10 Taxes
Schedule 4.13 Environmental Matters
Schedule 4.14 Contracts and Third Party Consents
Schedule 4.15 Tangible Personal Property
Schedule 4.16 Intangible Property
Schedule 4.17 Real Property
Schedule 4.18 Undisclosed Liabilities
Schedule 4.19 Governmental Authorizations
Schedule 4.20 Compliance with FCC Requirements
Schedule 4.21 Insurance
Schedule 4.22 Powers of Attorney
Schedule 4.23 Payment of Indebtedness
Schedule 5.1 Ownership of Company Capital Stock
Schedule 6.9 FCC Applications
Schedule 7.1 Conduct of Business Pending the Merger
<PAGE> 6

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement"), is dated
as of July 1, 1996, by and among COX RADIO, INC., a Delaware corporation
("Parent"), NEW COX RADIO II, INC., a Delaware corporation ("Sub"), NEWCITY
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), the holders of
shares of the Company's Class A Common Stock (as defined below) and listed on
the signature pages hereof (each, a "Stockholder" and collectively, the
"Stockholders"), and the Chief Financial Officer of the Company, currently John
Riccardi, as agent (the "Stockholders' Agent") for all of the holders of the
issued and outstanding capital stock of the Company (the "Selling
Stockholders").

WHEREAS, Parent is engaged in the business of owning and operating
radio broadcast stations;

WHEREAS, the Company, through wholly-owned subsidiaries, owns and
operates, pursuant to licenses issued by the Federal Communications Commission
("FCC"), Radio Stations WODL(FM), Birmingham, Alabama; WZZK(AM), Birmingham,
Alabama; WZZK-FM, Birmingham, Alabama; WEZN(FM), Bridgeport, Connecticut;
WDBO(AM), Orlando, Florida; WWKA(FM), Orlando, Florida; WZKD(AM), Orlando,
Florida; WCFB(FM), Daytona Beach, Florida; WJZF(FM), La Grange, Georgia;
WBBS(FM), Fulton, New York; WSYR(AM), Syracuse, New York; WYYY(FM), Syracuse,
New York; KRMG(AM), Tulsa, Oklahoma; KWEN(FM), Tulsa, Oklahoma; KJSR(FM),
Tulsa, Oklahoma; KKYX(AM), San Antonio, Texas; KCYY(FM), San Antonio, Texas;
and KCJZ(FM), Terrell Hills, Texas (each a "Station" and collectively, the
"Stations"); and

WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties hereto
agree as follows:

ARTICLE I
THE MERGER

1.1 The Merger. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in SECTION 1.3), Sub shall be merged
with and into the Company and the separate existence of Sub shall thereupon
cease, and the Company shall continue as the surviving corporation in the
Merger (the "Surviving Corporation") under the laws of the State of Delaware
under the name set forth in the Certificate of Incorporation of the Surviving
Corporation.

<PAGE> 7

1.2 Closing. Unless this Merger Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to SECTION 10.1, and subject to the satisfaction or waiver of the
conditions set forth in Article IX, the closing of the Merger (the "Closing")
will take place as promptly as practicable (and in any event within two
Business Days) after satisfaction or waiver of the conditions set forth in
SECTIONS 9.1(A) and (C) and 9.3(P), at the offices of Dow, Lohnes & Albertson,
PLLC, 1200 New Hampshire Avenue, N.W., Suite 800, Washington, D.C. 20036,
unless another date, time or place is agreed to in writing by the parties
hereto (the "Closing Date").

1.3 Effective Time of the Merger. The Merger shall become
effective upon the filing of a Certificate of Merger (the "Certificate of
Merger") with the Secretary of State of Delaware in accordance with the
provisions of the Delaware General Corporation Law (the "DGCL"), or at such
other time as Sub and the Company shall agree should be specified in the
Certificate of Merger, which filing shall be made as soon as practicable on the
Closing Date. When used in this Merger Agreement, the term "Effective Time"
shall mean the time at which the Certificate of Merger is accepted for filing
by the Secretary of State of Delaware or such time as otherwise specified in
the Certificate of Merger.

1.4 Effect of the Merger. The Merger shall, from and after the
Effective Time, have all the effects provided by the DGCL. If at any time after
the Effective Time the Surviving Corporation shall consider or be advised that
any further deeds, conveyances, assignments or assurances in law or any other
acts are necessary, desirable or proper to vest, perfect or confirm, of record
or otherwise, in the Surviving Corporation, the title to any property or rights
of Sub or the Company (the "Constituent Corporations") to be vested in the
Surviving Corporation, by reason of, or as a result of, the Merger, or
otherwise to carry out the purposes of this Merger Agreement, the Constituent
Corporations agree that the Surviving Corporation and its proper officers and
directors shall execute and deliver all such deeds, conveyances, assignments
and assurances in law and do all things necessary, desirable or proper to vest,
perfect or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the purposes of this Merger Agreement,
and that the proper officers and directors of the Surviving Corporation are
fully authorized in the name of each of the Constituent Corporations or
otherwise to take any and all such action.

ARTICLE II
THE SURVIVING CORPORATION

2.1 Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation after the Effective Time shall be in
the form set forth in EXHIBIT A hereto, until thereafter changed or amended as
provided therein or by applicable law.

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<PAGE> 8

2.2 By-laws. The By-laws of the Sub as in effect immediately
prior to the Effective Time shall be the By-laws of the Surviving Corporation,
until thereafter changed or amended as provided therein or by applicable law.

2.3 Board of Directors; Officers. The directors of Sub
immediately prior to the Effective Time and Richard A. Ferguson shall be the
directors of the Surviving Corporation, and the officers of Sub immediately
prior to the Effective Time and Richard A. Ferguson and James T. Morley shall
be the officers of the Surviving Corporation, in each case until the earlier of
their respective resignations or the time that their respective successors are
duly elected or appointed and qualified.

ARTICLE III
MERGER CONSIDERATION AND REDEMPTION OF SHARES

3.1 Merger Consideration. The total consideration for the
capital stock of the Company shall be One Hundred and Sixty-Five Million
Dollars ($165,000,000) (the "Merger Consideration") as adjusted pursuant to the
provisions of SECTIONS 3.3 and 3.8 hereof, and shall be paid in cash at Closing
in accordance with the procedures set forth in SECTION 3.5.

3.2 Redemption of Shares. As of the Effective Time, by virtue
of the Merger:

(a) Each issued and outstanding share of Class A
Common Stock, $.01 par value, of the Company ("Class A Common Stock"), other
than any Dissenting Shares (as defined in SECTION 3.3), shall be redeemed in
exchange for cash in the amount per share set forth on SCHEDULE 3.2 (such
amount of cash being referred to herein as the "Class A Common Merger
Consideration").

(b) Each issued and outstanding share of the Class B
Common Stock, $.01 par value, of the Company ("Class B Common Stock"), other
than any Dissenting Shares, shall be redeemed in exchange for cash in the
amount per share set forth on SCHEDULE 3.2 (the "Class B Common Merger
Consideration").

(c) Each issued and outstanding share of 9%
Convertible Preferred Stock, $.05 par value, of the Company ("Convertible
Preferred Stock") shall be redeemed in exchange for cash in the amount per
share set forth on SCHEDULE 3.2 (the "Convertible Preferred Merger
Consideration").

(d) Each issued and outstanding share of the $166.67
Redeemable Preferred Stock, par value $.05, of the Company ("Redeemable
Preferred Stock") shall be redeemed by the Company in accordance with the
requirements of the Certificate of Incorporation of the Company.

(e) All shares of Class A Common Stock, Class B Common
Stock and all shares of Preferred Stock, par value $.05, of the Company
("Preferred Stock") unissued or which are held in

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<PAGE> 9

treasury by the Company shall be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.

(f) Set forth on EXHIBIT B is a true and complete list
of the Selling Stockholders and the holders of any Stock Options, as defined
below, and, for each such Selling Stockholder and Stock Option holder, the
number of shares of such Stock or such Options held.

3.3 Adjustment to Merger Consideration as of Closing Date.

(a) Working Capital Adjustment. The Merger
Consideration shall be (i) increased by the amount by which the Working Capital
as of the Closing Date (as defined below) of the Company exceeds the Target
Working Capital (as defined below); or (ii) decreased by the amount by which
the Working Capital as of the Closing Date is less than the Target Working
Capital. "Working Capital" as of any date shall mean on a consolidated basis,
current assets less current liabilities determined in accordance with generally
accepted accounting principles ("GAAP") consistently applied. "Target Working
Capital" shall mean Six Million Dollars ($6,000,000). Current assets shall
include cash, accounts receivable and prepaid expenses, and other current
assets consistently reported in accordance with past practices, excluding
deferred expenses incurred under trade and barter agreements. Current
liabilities shall include accounts payable, accrued expenses and, until
resolved at which time the Working Capital computation shall reflect the amount
of such resolution, a reserve of Two Hundred Thousand Dollars ($200,000)
representing the Company's best estimate of the contingent tax liability of the
Company to the Commonwealth of Massachusetts for calendar years 1987 through
1989, excluding deferred revenue under trade and barter agreements, accrued
interest payable, the current portion of the Company's long-term indebtedness
and excess income tax reserves.

(b) Indebtedness Adjustment. The Merger Consideration
shall be (i) decreased by the amount by which the aggregate amount of the
Company's outstanding long-term indebtedness for money borrowed plus interest
accrued thereon determined in accordance with GAAP (the "Indebtedness") as of
the Closing Date exceeds the Target Debt Amount; or (ii) increased by the
amount by which the Indebtedness of the Company as of the Closing Date is less
than the Target Debt Amount. The "Target Debt Amount" shall mean the amount of
Eighty-Five Million Dollars ($85,000,000). Notwithstanding the foregoing, for
purposes of this SECTION 3.3 and SECTION 3.8 only, the Indebtedness shall not
include any amounts owing to AmSouth Bank of Alabama pursuant to that certain
Loan Agreement dated as of February 22, 1996 between NewCity Communications of
Alabama, Inc. and AmSouth Bank of Alabama (the "Birmingham Loan Agreement").

- 4 -
<PAGE> 10

(c) The Merger Consideration, as adjusted pursuant to
paragraphs (a) and (b) shall be the "Adjusted Merger Consideration." To the
extent that the Adjusted Merger Consideration exceeds or is less than the
Merger Consideration taking into account the adjustments described in
paragraphs (a) and (b) of this SECTION 3.3, the payment per share described in
SECTION 3.2(A), (B) and (C) shall be adjusted accordingly.

(d) Adjustment Procedures.

(i) Not later than five (5) Business Days
before the Closing Date, the Company shall prepare and deliver to Parent a
closing statement of the Company (the "Estimated Closing Statement"), in the
form attached as EXHIBIT C, which shall set forth (A) the Company's best
estimate of the Working Capital of the Company as of the Closing Date
(including without limitation an estimate of those adjustments set forth in
SECTION 3.8(B)(5), (6) AND (7)), and (B) the Company's best estimate of the
Indebtedness as of the Closing Date. Subject to the provisions of this SECTION
3.3(D), the Estimated Closing Statement shall be prepared in accordance with
GAAP and shall fairly present the Company's best estimate of the current assets
and current liabilities (as described in SECTION 3.3(A)) of the Company as of
the Closing Date. Accounts receivable shall be valued consistent with the
Company's past practices.

(ii) Parent may object to such Estimated Closing
Statement by written notice provided to the Company within three Business Days
after receipt thereof. In the event of a dispute between the Company and
Parent as to any matter set forth in this SECTION 3.3(D), as of the Closing,
any amounts in dispute in respect of the Estimated Closing Statement shall be
deposited in the Adjustment Escrow Fund (as defined below) in addition to the
amount required to be deposited in such Fund under SECTION 3.9(B), to be held
by the Closing Escrow Agent until the resolution of such dispute in accordance
with SECTION 3.8.

3.4 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding share of Class A Common
Stock, Class B Common Stock, or Convertible Preferred Stock held by a Selling
Stockholder who objects to the Merger and complies with all of the provisions
of the DGCL concerning the right of holders of Class A Common Stock, Class B
Common Stock and Convertible Preferred Stock to dissent from the Merger and
require appraisal of his shares of Class A Common Stock, Class B Common Stock
and Convertible Preferred Stock ("Dissenting Shareholder") shall not be
redeemed as described in SECTION 3.2, but instead shall become the right to
receive such consideration as may be determined to be due to such Dissenting
Shareholder pursuant to the DGCL; provided, however, that each share of Class A
Common Stock, Class B Common Stock, and Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time of the Merger and held by a
Dissenting Shareholder ("Dissenting Shares") who shall, after the

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<PAGE> 11

Effective Time of the Merger, withdraw his demand for appraisal or lose his
right of appraisal, in either case pursuant to the DGCL, shall be deemed to be
redeemed as of the Effective Time of the Merger in exchange for the Class A
Common Merger Consideration, the Class B Common Merger Consideration, or the
Convertible Preferred Merger Consideration as the case may be. The Company
shall give Parent (i) prompt notice of any written demands for appraisal of
shares of Class A Common Stock, Class B Common Stock, or Convertible Preferred
Stock received by the Company, and (ii) the opportunity to direct all
negotiations and proceedings with respect to any such demands. The Company
shall not, without the prior written consent of Parent, voluntarily make any
payment with respect to, or settle, or offer to settle or otherwise negotiate,
any such demands.

3.5 Payment.

(a) Pursuant to an agreement in form and substance
reasonably acceptable to the Company to be entered into prior to the Effective
Time between Parent and The Bank of New York (the "Disbursing Agent"), one day
prior to the Effective Time, Parent or Sub shall make available to the
Disbursing Agent the aggregate amount in cash of the Adjusted Merger
Consideration. Immediately after Parent or Sub makes available to the
Disbursing Agent the cash referred to in the preceding sentence, the Sub and
the Company shall file the Certificate of Merger with the Secretary of State of
the State of Delaware in accordance with the provisions of the DGCL.

(b) Seven days prior to the Closing Date, the Company
shall cause the Disbursing Agent to send a notice and a letter of transmittal
to each holder of certificates representing shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock advising such holder of the
anticipated Closing Date of the Merger and the procedure for surrendering to
the Disbursing Agent such certificates for redemption and that delivery shall
be effected, and risk of loss and title to the shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock shall pass, only upon
proper delivery to the Disbursing Agent of the certificates for the shares of
Class A Common Stock, Class B Common Stock or Convertible Preferred Stock and a
duly executed letter of transmittal and any other required documents of
transfer. Each holder of certificates theretofore evidencing shares of Class A
Common Stock, Class B Common Stock, or Convertible Preferred Stock upon
surrender thereof to the Disbursing Agent together with such letter of
transmittal (duly executed) and any other required documents of transfer, shall
be entitled to receive as of the Effective Time in exchange therefor the
amounts payable with respect to such stock pursuant to SECTION 3.2 hereof.
Upon such surrender, the Disbursing Agent shall promptly pay such amounts (less
any amount required to be withheld under applicable law) in accordance with the
instructions set forth in the related letter of transmittal, and the
certificates so surrendered shall promptly be canceled. After the Effective
Time and until

- 6 -
<PAGE> 12

surrendered, certificates formerly evidencing shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock (other than Dissenting
Shares) shall be deemed for all purposes to evidence only the right to receive
payment pursuant to SECTION 3.2 hereof or, in the case of Dissenting Shares,
the fair value of such Dissenting Shares. No interest shall accrue or be paid
on any cash payable upon the surrender of certificates which immediately prior
to the Effective Time represented outstanding shares of Class A Common Stock,
Class B Common Stock, or Convertible Preferred Stock (other than Dissenting
Shares in accordance with the DGCL).

(c) If the amount payable to a Selling Stockholder
pursuant to SECTION 3.2 hereof is to be delivered to a Person other than the
Person in whose name the certificates surrendered in exchange therefor are
registered, it shall be a condition to the payment of such amount that the
certificates so surrendered shall be properly endorsed or accompanied by
appropriate stock powers and otherwise in proper form for transfer, that such
transfer otherwise be proper and that the Person requesting such transfer pay
to the Disbursing Agent any transfer or other taxes payable by reason of the
foregoing or establish to the satisfaction of the Disbursing Agent that such
taxes have been paid or are not required to be paid.

(d) Unless required otherwise by applicable law, any
portion of the amount payable under SECTION 3.2 and SECTION 3.8 hereof which
remains undistributed to holders of shares of Class A Common Stock, Class B
Common Stock or Convertible Preferred Stock six (6) months after the Effective
Time shall be delivered by the Disbursing Agent to the party who provided such
funds to the Disbursing Agent and any holders of such stock who have not
theretofore complied with the provisions of this Article III shall thereafter
look only to Parent for payment of any amounts to which they are entitled
pursuant to this Article III. Neither Parent nor the Disbursing Agent shall be
liable to any holder of shares of Class A Common Stock, Class B Common Stock or
Convertible Preferred Stock for any cash held by Parent or the Disbursing Agent
for payment pursuant to this Article III delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.

3.6 No Further Rights. From and after the Effective Time,
holders of certificates theretofore evidencing shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock shall cease to have any
rights as stockholders of the Company, except as provided herein or by law.

3.7 Closing of the Company's Transfer Books. At the Effective
Time, the stock transfer books of the Company shall be closed and no transfer
of any shares of Class A Common Stock, Class B Common Stock or Convertible
Preferred Stock shall be made thereafter. If after the Effective Time,
certificates for shares of the Class A Common Stock, Class B Common Stock or
Convertible Preferred Stock are presented to Parent or the Surviving

- 7 -

<PAGE> 13

Corporation, they shall be canceled and exchanged for Class A Common Merger
Consideration, Class B Common Merger Consideration or Convertible Preferred
Merger Consideration, as the case may be, subject to applicable law in the case
of Dissenting Shares.

3.8 Final Adjustment of Merger Consideration. The Adjusted
Merger Consideration shall be subject to further adjustment after the Closing
as provided in this SECTION 3.8:

(a) No more than ninety (90) days after the Closing
Date, Parent shall prepare and deliver to Stockholders' Agent a final closing
statement of the Company, prepared on a basis consistent with the accounting
standards used for the preparation of the Estimated Closing Statement, and in
the form of the Estimated Closing Statement (the "Final Closing Statement")
which shall, based upon the books and records of the Company, set forth (i) the
actual Working Capital of the Company as of the Closing Date (the "Final
Working Capital"), and (ii) the actual Indebtedness of the Company as of the
Closing Date (the "Final Debt Amount").

(b) The Adjusted Merger Consideration shall be
adjusted dollar for dollar as follows:

(1) increased if and to the extent the
Indebtedness as estimated in accordance with SECTIONS 3.3(B) and 3.3(D) exceeds
the Final Debt Amount; and

(2) decreased if and to the extent the Final
Debt Amount exceeds the Indebtedness as estimated in accordance with SECTIONS
3.3(B) and 3.3(D); and

(3) increased if and to the extent the Final
Working Capital exceeds the Working Capital estimated in accordance with
SECTIONS 3.3(A) and 3.3(D); and

(4) decreased if and to the extent the Working
Capital estimated in accordance with SECTIONS 3.3(A) and 3.3(D) exceeds the
Final Working Capital; and

(5) decreased by the sum of the adjustments
set forth in SECTIONS 3.8(E), 8.7 AND 10.3;

(6) increased by the amount owed by Parent to
the Company pursuant to SECTION 8.17(B); and

(7) increased or decreased, as appropriate, by
the amount set forth in SECTION 8.3.

(c) In the event that the Adjusted Merger
Consideration shall have been increased, Parent shall pay the amount of such
adjustment at the direction of the Stockholders' Agent by wire transfer of same
day funds within two Business Days of the final determination of the Final
Closing Statement as described in SECTION 3.8(E).

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<PAGE> 14

(d) In the event that the Adjusted Merger
Consideration shall have been decreased, Parent shall deliver written notice to
the Closing Escrow Agent (as defined below) and the Stockholders' Agent,
specifying the amount of such decrease of the Adjusted Merger Consideration,
and the Closing Escrow Agent shall, within two Business Days of its receipt of
such notice and in accordance with the terms of the Closing Escrow Agreement,
pay such amount to Parent out of the Adjustment Escrow Fund (as defined in the
Closing Escrow Agreement) by wire transfer in same day funds. In the event
that the Adjustment Escrow Fund is insufficient to cover the amount of such
decrease, then the Closing Escrow Agent shall distribute the entire Adjustment
Escrow Fund to Parent as provided above and the Closing Escrow Agent shall, in
accordance with the terms of the Closing Escrow Agreement, pay any shortfall to
Parent out of the Indemnity Escrow Fund (as defined in the Closing Escrow
Agreement) by wire transfer in same day funds. In the event that the amount of
funds in the Adjustment Escrow Fund exceeds the amount of the decrease of the
Adjusted Merger Consideration, the Closing Escrow Agent shall, after paying the
amount of such decrease to Parent, pay the remaining amount of funds in the
Adjustment Escrow Fund to the Selling Stockholders in accordance with the
Closing Escrow Agreement.

(e) The Stockholders' Agent may object to the Final
Closing Statement by written notice provided to Parent within four Business
Days after receipt thereof. In the event of a dispute between the Selling
Stockholders and Parent, as to any matter set forth in SECTION 3.8(A), the
Selling Stockholders and Parent shall use all reasonable efforts to resolve any
such dispute, and shall provide the other party with access to and the right to
copy any books and records in its possession relating to determination of the
final adjustments. If a final resolution is not obtained within thirty (30)
days after the Final Closing Statement is delivered to the Stockholders' Agent,
any remaining dispute shall be resolved by a nationally recognized firm of
independent public accountants, as shall be mutually agreed upon by the
Stockholders' Agent and Parent. Such accounting firm may use such auditing
procedures as it may deem appropriate and the decision of such accounting firm
shall be binding and conclusive upon the parties. The fees and expenses of
such accounting firm shall be borne one-half by the Selling Stockholders (by a
decrease to the Adjusted Merger Consideration in accordance with SECTION
3.8(B)) and one-half by Parent.

(f) Any payments required to be made pursuant to
SECTIONS 3.8(C) or (D) shall bear interest from the Closing Date through the
date of payment at the rate publicly announced by The Bank of New York or any
successor thereto from time to time as its base rate.

3.9 Escrow Agreement.

(a) On the Closing Date, the Stockholders' Agent,
Parent and The Bank of New York as escrow agent (the "Closing

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<PAGE> 15

Escrow Agent") shall enter into a Closing Escrow Agreement substantially in the
form of EXHIBIT D hereto.

(b) In accordance with the terms of the Closing Escrow
Agreement, and if the Closing occurs on the last day of a calendar month, at
the Closing Parent shall deposit as a credit to the Merger Consideration an
amount equal to Two Hundred Fifty Thousand Dollars ($250,000). If the Closing
occurs on any other day of a calendar month, at the Closing Parent shall
deposit with the Closing Escrow Agent as a credit to the Merger Consideration
an amount equal to Five Hundred Thousand Dollars ($500,000). In either case,
the amount of $250,000 or $500,000 is referred to herein as the "Adjustment
Escrow Amount."

(c) In accordance with the terms of the Closing Escrow
Agreement, at the Closing, Parent shall deposit with the Closing Escrow Agent
an amount equal to Four Million Dollars ($4,000,000) (the "Indemnity Escrow
Amount" and together with the "Adjustment Escrow Amount" the "Closing Escrow
Amount").

(d) The Closing Escrow Agent shall maintain the
Adjustment Escrow Amount and the Indemnity Escrow Amount in two separate
accounts to be managed and paid out by the Closing Escrow Agent in accordance
with the terms of the Closing Escrow Agreement.

3.10 Conversion of the Shares of Sub. On the Closing Date, each
share of the Common Stock of Sub held by Parent shall be converted into and
represent 100 shares of the Common Stock of the Surviving Corporation.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Parent and Sub that:

4.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and each Subsidiary of the Company is a
corporation duly organized, validly existing and in good standing under the
laws of the States of Delaware, Connecticut or Oklahoma. The Company and each
of its Subsidiaries has the requisite corporate power and authority to carry on
its business as it is now being conducted and is duly qualified or licensed to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect. SCHEDULE 4.1 includes a list of the
Company's Subsidiaries. At the Closing, the Company shall deliver to Parent
and Sub a complete and correct copy of the Certificates of Incorporation and
By-laws or comparable organizational documents, each as amended to the Closing
Date, of the Company and each of its Subsidiaries.

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<PAGE> 16

4.2 Capitalization.

(a) The authorized capital stock of the Company
consists of 500,000 shares of Class A Common Stock, 700,000 shares of Class B
Common Stock, 8,000 shares of Convertible Preferred Stock, 6,000 shares of
Redeemable Preferred Stock and 30,000 shares of Preferred Stock. As of the
date hereof, 262,000 shares of Class A Common Stock, 166,817 shares of Class B
Common Stock, 8,000 shares of Convertible Preferred Stock and 6,000 shares of
Redeemable Preferred Stock are validly issued and outstanding, fully paid and
nonassessable. As of the date hereof, there are no bonds, debentures, notes or
other indebtedness issued or outstanding having general voting rights under
ordinary circumstances. As of the date hereof, except as disclosed on SCHEDULE
4.2, and except for (i) stock options to acquire 3,534 shares of Class B Common
Stock (the "Stock Options"), (ii) the conversion rights of holders of the
Convertible Preferred Stock, and (iii) as contemplated by this Merger
Agreement, there are no options, warrants, calls or other rights, agreements or
commitments presently outstanding obligating the Company to issue, deliver or
sell shares of its capital stock, or obligating the Company to grant, extend or
enter into any such option, warrant, call or other such right, agreement or
commitment.

(b) Except as disclosed on SCHEDULE 4.2, all the
outstanding shares of capital stock of each Subsidiary of the Company are
validly issued, fully paid and nonassessable and owned by the Company or by a
wholly-owned Subsidiary of the Company, free and clear of any lien, charge,
security interest, pledge, or encumbrance of any kind or nature (any of the
foregoing being a "Lien"). There are no existing options, warrants, calls or
other rights, agreements or commitments of any character relating to the sale,
issuance or voting of any shares of the issued or unissued capital stock of any
of the Subsidiaries of the Company which have been issued, granted or entered
into by the Company or any of its Subsidiaries.

(c) Except for the capital stock of its Subsidiaries
and except for the ownership interests set forth on SCHEDULE 4.2, the Company
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, joint venture or other entity.

4.3 Authority Relative to This Merger Agreement. The Company
has the necessary corporate power and authority to execute and deliver this
Merger Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Merger Agreement and the consummation of the
transactions contemplated hereby by the Company have been duly and validly
authorized and approved by the Company's Board of Directors and except for the
approval of the holders of the Redeemable Preferred Stock, the Convertible
Preferred Stock, the Class A Common Stock and the Class B Common Stock, no
other corporate or stockholder proceedings on the part of the Company are
necessary to authorize or approve this Merger Agreement or to consummate

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<PAGE> 17

the transactions contemplated hereby. This Merger Agreement has been duly
executed and delivered by the Company, and assuming its due authorization,
execution and delivery by Parent and Sub, constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms except as such enforceability may be limited by general principles of
equity or principles applicable to creditors' rights generally. The Company
has delivered to Parent and Sub a certified copy of the minutes of the meetings
of the Board of Directors of the Company at which the execution and delivery of
this Merger Agreement and the transactions contemplated hereby were authorized
and approved.

4.4 No Conflicts, Required Filings and Consents.

(a) Except as disclosed on SCHEDULE 4.4, none of the
execution and delivery of this Merger Agreement by the Company, the
consummation by the Company of the transactions contemplated hereby, or
compliance by the Company with any of the provisions hereof, will (i) conflict
with or violate the Certificate of Incorporation or By-laws of the Company or
the comparable organizational documents of any of the Company's Subsidiaries,
(ii) subject to receipt or filing of the required Consents referred to in
SECTION 4.4(B), result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to the Company or any of its
Subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iii) result in a violation or breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Lien on any of the property or assets of the Company or any of the Company's
Subsidiaries, any of the foregoing referred to in clause (ii) or this clause
(iii) being a "Violation" pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties or assets is bound or affected that involves a payment by the
Company or any of its Subsidiaries of Fifty Thousand Dollars ($50,000) or more
on an annual basis, except in the case of the foregoing clauses (ii) and (iii)
for any such Violation which would not have a Material Adverse Effect.

(b) None of the execution and delivery of this Merger
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will require any consent, waiver, license, approval, authorization,
order or permit of, or registration or filing with, or notification to (any of
the foregoing being a "Consent"), any government or subdivision thereof,
domestic, foreign, multinational, or any administrative, governmental, or
regulatory authority, agency, commission, court, tribunal or body, domestic,
foreign or

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<PAGE> 18

multinational (a "Governmental Entity"), except for (i) the filing of the
Certificate of Merger pursuant to the DGCL, (ii) compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) such filings as may be required in connection with the taxes
described in SECTION 8.7, and (iv) Consents from the FCC in connection with the
transfer of control of the FCC licenses applicable to the Company's radio
broadcast operations (such licenses being referred to herein collectively as
the "FCC Licenses," and such consents, without the requirement of obtaining a
Final Order, being referred to herein collectively as the "FCC Consents"), and
(v) Consents the failure of which to obtain would not have a Material Adverse
Effect.

4.5 Reports and Financial Statements.

(a) The audited consolidated balance sheets as of
December 31, 1995 and 1994 and the related consolidated statements of
operations, stockholders' deficiency and cash flows for each of the years ended
December 31, 1995 and 1994 (including the related notes and schedules thereto)
of the Company, true and complete copies of which have previously been
delivered to Parent (the "Audited Financial Statements"), present fairly, in
all material respects, the consolidated financial position, and the
consolidated results of operations and cash flows of the Company and its
consolidated Subsidiaries as of the dates or for the periods presented therein
in conformity with GAAP applied on a consistent basis during the periods
involved except as otherwise noted therein, including in the related notes.

(b) The unaudited consolidating and consolidated
balance sheets and the related consolidating and consolidated statements of
operations and consolidated cash flows of the Company for the period ended May
31, 1996 (the "Interim Financial Statements"), true and complete copies of
which have previously been delivered to Parent, have been prepared in
accordance with GAAP consistently applied as to both the consolidated and
separate operating entities for Interim Financial Statements and on a basis
consistent with the Audited Financial Statements except for year-end
adjustments for interest, general, administrative and overhead expenses of the
Company and the allocation thereof among its Subsidiaries. The Interim
Financial Statements present fairly, in condensed or summary form in all
material respects, the consolidated financial position, results of operations
and cash flows of the Company and its consolidated Subsidiaries as of the dates
and for the periods presented therein; subject, however, to the absence of
footnotes which otherwise would be required under GAAP. All appropriate
adjustments are reflected in the Interim Financial Statements.

(c) Except as disclosed in the Company's Audited
Financial Statements or in the Interim Financial Statements or as otherwise
disclosed on SCHEDULE 4.5 as of the date hereof, neither the Company nor any of
its Subsidiaries has any liabilities or any obligations of any nature whether
accrued,

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<PAGE> 19

contingent or otherwise, that would be required by GAAP to be reflected on a
consolidated balance sheet of the Company and its Subsidiaries (including the
notes thereto), except for liabilities or obligations incurred in the ordinary
course of business since December 31, 1995. The accounting methods, practices
and procedures employed at each of the Subsidiaries of the Company in the
preparation of the Audited Financial Statements and the Interim Financial
Statements have been applied on a basis consistent with the Company's past
practices.

4.6 Litigation. Except as disclosed on SCHEDULE 4.6, there is
no suit, action or proceeding pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, nor is there any judgment, decree, injunction or order
of any Governmental Entity or arbitrator outstanding against the Company or any
of its Subsidiaries, having, or which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

4.7 Absence of Certain Changes or Events. Except as disclosed
on SCHEDULE 4.7, since December 31, 1995, the Company has conducted its
business only in the ordinary course, and there has not been

(i) any change that could reasonably be expected to have a
Material Adverse Effect, as defined below, other than changes relating to or
arising from general economic, market or financial conditions or generally
affecting the industries in which the Company operates,

(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with
respect to any of the Company's capital stock, or, except in connection with
the Stock Options, any redemption, purchase or other acquisition of its capital
stock,

(iii) any split, combination or reclassification of any of
the Company's capital stock or, except with respect to the Stock Options or
with respect to the conversion of the Convertible Preferred Stock, any
issuance, or the authorization of any other securities in respect of, in lieu
of or in substitution for shares of the Company's capital stock,

(iv) except as previously disclosed to Parent and Sub, any
granting by the Company or any of its Subsidiaries to any employee of the
Company of any increase in compensation, except in the ordinary course of
business or as required under employment agreements in effect as of or prior to
the date of this Merger Agreement,

(v) any granting by the Company or any of its Subsidiaries
to any such employee of any increase in severance or

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<PAGE> 20

termination pay, except as required under employment agreements in effect as of
or prior to the date of this Merger Agreement,

(vi) any entry by the Company or any of its Subsidiaries
into any employment, severance or termination agreement with any such employee,
except in the ordinary course of business,

(vii) any damage, destruction or loss, whether or not
covered by insurance, that could reasonably be expected to have a Material
Adverse Effect, or

(viii) any change in accounting methods, principles or
practices by the Company or any of its Subsidiaries materially affecting their
respective assets, liabilities or business, except insofar as may have been
required by a change in GAAP.

4.8 Employee Matters. SCHEDULE 4.8 lists the names and current
annual salary or hourly rates of pay of all employees of the Company and its
Subsidiaries, which list includes for each such person the amounts paid or
payable as base salary and such list identifies each Company Benefit Plan or
Compensation Arrangement, as defined below, which provides benefits to such
employees. SCHEDULE 4.8 lists each Company Benefit Plan and each Compensation
Arrangement. The Company has provided to Parent true and complete copies of
all written, and descriptions of any unwritten Company Benefit Plans and
Compensation Arrangements (or related insurance policies) and any amendments
thereto, along with copies of any employee handbooks or similar documents
describing such Company Benefit Plans and Compensation Arrangements and copies
of any employment agreements. Except as set forth on SCHEDULE 4.8, neither the
Company nor any Subsidiary is a party to any written or oral contract of
employment with any employee, other than oral employment agreements terminable
at will without penalty. The Company and its Subsidiaries are not subject to
or bound by any labor agreement or collective bargaining agreement (other than
employment contracts disclosed on SCHEDULE 4.8). There is no labor dispute,
grievance, controversy, strike or request for union representation pending or
threatened against the Company or its Subsidiaries relating to or materially
affecting the business or operations of the Company or any of its Subsidiaries
and, to the knowledge of the Company or any of its Subsidiaries, there has been
no occurrence of any events which would give rise to any material labor
dispute, controversy, strike or request for representation. Except as
disclosed on SCHEDULE 4.8, neither the Company nor any Subsidiary is a party to
or has in effect any Company Benefit Plan or Compensation Arrangement, and
there are no Company Benefit Plans or Compensation Arrangements which shall
become effective after the date of this Merger Agreement.

For purposes of this Merger Agreement:

(i) the term "Company Benefit Plan" shall mean
any plan, program or arrangement, whether or not written, that is

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<PAGE> 21

or was an "employee benefit plan" as such term is defined in Section 3 (3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
(a) which was or is established or maintained by the Company or any ERISA
Affiliate; (b) to which either the Company or any ERISA Affiliate contributed
or were obligated to contribute or to fund or provide benefits; or (c) which
provides or promises benefits to any person who performs or who has performed
services for the Company or any ERISA Affiliate and because of those services
is or has been (A) a participant therein or (B) entitled to benefits
thereunder;

(ii) the term "Compensation Arrangement" shall
mean any plan or compensation arrangement other than a Company Benefit Plan,
whether written or unwritten, which provides to employees, former employees,
officers, directors or shareholders of the Company or any ERISA Affiliate any
compensation or other benefits, whether deferred or not, in excess of base
salary or wages (excluding overtime pay), including, but not limited to, any
bonus or incentive plan, stock rights plan, employee stock ownership plan,
deferred compensation arrangement, life insurance, stock purchase plan,
severance pay plan and any other perquisites and employee fringe benefit plan;

(iii) the term "ERISA Affiliate" shall mean any
corporation, partnership, sole proprietorship or other entity related to the
Company or any Subsidiary within the meaning of Sections 414(b), (c), (m) or
(o) of the Code.

4.9 ERISA.

(a) All Company Benefit Plans have been administered
without material exception in accordance with their terms and with the
applicable provisions of ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"). Each of the Company Benefit Plans which is intended to
meet the requirements of Section 401(a) of the Code, and each amendment
thereto, is the subject of a favorable determination letter, and no plan
amendment that is not the subject of a favorable determination letter would
adversely affect the validity of any Company Benefit Plan's letter. No Company
Benefit Plan is a "multiemployer plan" within the meaning of Section 3(37) of
ERISA. No Company Benefit Plan is subject to Title IV of ERISA or Section 412
of the Code. Neither the Company nor any of its Subsidiaries has engaged in
any non-exempt "prohibited transactions," as such term is defined in Section
4975 of the Code or Section 406 of ERISA, involving the Company Benefit Plans
which would subject the Company or its Subsidiaries to any material penalty or
tax imposed under Section 502(i) of ERISA or Section 4975 of the Code. Neither
the Company nor any of its Subsidiaries has made a complete or partial
withdrawal, within the meaning of Section 4201 of ERISA, from any multiemployer
plan which has resulted in, or is reasonably expected to result in, any
withdrawal liability to the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has engaged in any transaction described in
Section 4069 of ERISA within the last five years. Except as disclosed on

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<PAGE> 22

SCHEDULE 4.9, neither the execution and delivery of this Merger Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation or golden parachute) becoming due to any director or employee of
the Company, (ii) materially increase any benefits otherwise payable under any
Company Benefit Plan or Compensation Agreement or (iii) result in the
acceleration of the time of payment or vesting of any such benefits to any
material extent. No Company Benefit Plan is a multiple employer welfare
arrangement as defined in ERISA Section 3(40).

(b) Except as disclosed on SCHEDULE 4.9, the Company
and its Subsidiaries, as applicable, have: (i) filed or caused to be filed all
returns and reports on the Company Benefit Plans that they are required to
file; and (ii) paid or made adequate provision for all fees, interest,
penalties, assessments or deficiencies that have become due pursuant to those
returns or reports or pursuant to any assessment or adjustment that has been
made relating to those returns or reports. All other material fees, interest,
penalties and assessments that are payable by or for the Company or any of its
Subsidiaries have been timely reported, fully paid and discharged. There are
no material unpaid fees, penalties, interest or assessments due from the
Company or any of its Subsidiaries with respect to any Company Benefit Plan.

(c) The Company and its Subsidiaries are not aware of
the existence of any governmental audit or examination of any Company Benefit
Plan or Compensation Arrangement or of any facts which would lead the Company
and its Subsidiaries to believe that any such audit or examination is pending
or threatened. There exists no action, suit or claim (other than routine
claims for benefits) with respect to any Company Benefit Plan or Compensation
Arrangement pending or, to the knowledge of the Company and its Subsidiaries,
threatened against any of such plans or arrangements, and the Company and its
Subsidiaries do not have knowledge of any facts which could give rise to any
such action, suit or claim.

(d) Except as disclosed on SCHEDULE 4.9, neither the
Company nor any ERISA Affiliate sponsors, maintains or contributes to any
Company Benefit Plan or Compensation Arrangement that provides medical or life
insurance coverage to retirees or other former employees of the Company or any
of its Subsidiaries.

(e) SCHEDULE 4.9 contains a complete and accurate list
of all qualified beneficiaries, as defined under Section 4980B of the Code, who
currently are covered by the Company's or any Subsidiary's group health plan,
and the Company and each of its Subsidiaries agrees to provide to Parent, at
the Closing, an updated list of qualified beneficiaries as of the Closing Date.

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<PAGE> 23

(f) SCHEDULE 4.9 contains a complete and accurate list
of all qualified domestic relations orders, as defined in Section 414(p) of the
Code, which affect benefits under any Company Benefit Plan.

(g) Neither the Company nor any of its Subsidiaries is
a party to any agreement, contract, arrangement or plan that has resulted or
would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code.

(h) Fewer than fifty full-time employees are employed
by the Company and its Subsidiaries at the Company's corporate headquarters in
the Bridgeport, Connecticut metropolitan area.

4.10 Taxes. Except as set forth in SCHEDULE 4.10:

(a) For purposes of this Agreement, "Tax" (and, with
correlative meaning, "Taxes") means all federal, state, local or foreign
income, gross receipts, windfall profits, severance, property, production,
sales, use, license, excise, franchise, capital, transfer, employment,
withholding and other taxes and assessments, together with any interest,
additions or penalties with respect thereto and any interest in respect of such
additions or penalties; and "Tax Returns" means all federal, state, local and
foreign income and franchise Tax returns and Tax reports (including any
attached schedules) and other Tax statements and other similar filings required
to be filed, including any information return, claim for refund, amended
return, extension or declaration of estimated Tax.

(b) The Company and each of its Subsidiaries have duly
and timely filed all Tax Returns required to be filed by them, either on a
separate, combined or consolidated basis, and the Company has delivered to
Parent true and complete copies of all of the Tax Returns of the Company and
its Subsidiaries.

(c) The Company and its Subsidiaries have paid or,
prior to the Effective Time will pay, all Taxes that are due and payable or
required to be withheld by them, including Taxes for which no Tax Return was
required to be filed, and all Taxes claimed to be due by any federal or state
taxing authority (except to the extent such Taxes are being contested in good
faith by appropriate proceedings and a reserve or other appropriate provision
as required in conformity with GAAP has been made in the Audited Financial
Statements). The Company and its Subsidiaries have paid or made adequate
reserve or other appropriate provision as required in accordance with GAAP in
the Audited Financial Statements of the Company for all material Taxes payable
in respect of all periods ending on or prior to December 31, 1995. Any unpaid
Taxes of the Company and its Subsidiaries relating to all periods ending on or
prior to the Closing Date and not reflected on the Audited Financial Statements
of the Company will be included or recorded as a

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<PAGE> 24

current liability or properly reserved against in the Estimated Closing
Statement.

(d) Neither the Company nor any of its Subsidiaries
has waived or been requested to waive any statute of limitations in respect of
Taxes.

(e) Except as disclosed on SCHEDULE 4.10, no material
issues have been raised (and are currently pending) by any taxing authority in
connection with any of the Tax Returns referred to in SECTION 4.10(B) and all
material deficiencies asserted or assessments made as a result of any
examinations by taxing authorities have been paid in full.

(f) The Company and each of its Subsidiaries have
filed their federal income tax returns as a member of an affiliated group (as
defined in Section 1504(a) of the Code) of which the Company is the common
parent (the "Company Consolidated Group"). Neither the Company nor any of its
Subsidiaries has been a member of any other affiliated group.

(g) Except as disclosed on SCHEDULE 4.10, neither the
Company nor any of its Subsidiaries has any liability for Taxes, whether
currently due or deferred, of any entity or person (i) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state or local law),
(ii) as a transferee or successor, (iii) by contract, or (iv) otherwise.

(h) No consent under Section 341(f) of the Code has
ever been filed with respect to any of the Company Consolidated Group. Neither
the Company nor any of its Subsidiaries will be required to include any amount
in its income or exclude any amount from its deductions in any taxable period
ending after the Closing Date by reason of a change in method of accounting or
use of the installment method of accounting in any period ending on or prior to
the Closing Date.

(i) Neither the Company nor any of its Subsidiaries
is, and for the five years preceding the Closing Date has not been, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.

(j) SCHEDULE 4.10 includes a summary setting forth:
(i) the tax basis of the assets of the Company and its Subsidiaries as of
December 31, 1995 and estimated as of December 31, 1996; (ii) the net operating
loss carryover, general business credit carryover, alternative minimum tax
carryover and capital loss carryover of the Company Consolidated Group
available for federal, state and local income tax purposes as of December 31,
1995 and estimated as of December 31, 1996; (iii) all federal, state and local
tax elections in effect for the Company Consolidated Group as of December 31,
1995 and (iv) the Company's basis including the earnings and profits (and any
adjustment required by Section 1503(e) of the Code) and excess loss

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<PAGE> 25

accounts, if any, in the stock of each Subsidiary as of December 31, 1995 and
estimated as of December 31, 1996.

(k) The aggregate basis of "3-year property," "5-year
property," "7-year property,", "10-year property," "15-year property," and
"nonresidential real property" (each as defined in Section 168 of the Code) of
the Company and its Subsidiaries for their taxable year ending on December 31,
1996 is estimated to be not less than the following:

3-year property $__________
5-year property $__________
7-year property $__________
10-year property $__________
15-year property $__________
Nonresidential real property $__________

(l) The aggregate net operating loss carryover under
Section 172 of the Internal Revenue Code of the Company Consolidated Group for
the taxable year ending on December 31, 1996 is estimated to be not less than
$__________.

(m) Within 60 days of the date of this Merger
Agreement, the Company shall deliver to Parent an updated SCHEDULE 4.10
including the information set forth in paragraphs (j), (k) and (l) above.

4.11 State Takeover Statutes. The Board of Directors of the
Company has approved the Merger and this Merger Agreement, and such approval is
sufficient to render inapplicable to the Merger, this Merger Agreement, and the
transactions contemplated by this Merger Agreement, the provisions of Section
203 of DGCL. To the Company's knowledge, no other state takeover statute or
similar statute or regulation, applies or purports to apply to the Merger, this
Merger Agreement, or any of the transactions contemplated by this Merger
Agreement.

4.12 Brokers. No broker or finder is entitled to any broker's
or finder's fee in connection with the transactions contemplated by this Merger
Agreement based upon arrangements made by or on behalf of the Company.

4.13 Environmental Matters. Except as set forth on SCHEDULE

(a) To the best knowledge of the Company and its
Subsidiaries, the Company and each of its Subsidiaries have materially complied
and are in material compliance with, and the Real Property is in material
compliance with, all rules and regulations of the FCC, the Environmental
Protection Agency and any other federal, state or local government authority
pertaining to human exposure to RF radiation and all applicable rules and
regulations of federal, state and local laws, including statutes, regulations,
ordinances, codes, rules, as amended, relating to the discharge of air
pollutants, water pollutants or process

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<PAGE> 26

waste water or otherwise relating to the environment or Hazardous Materials or
toxic substances including, but not limited to, the Federal Solid Waste
Disposal Act, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
regulations of the Environmental Protection Agency, the Toxic Substance Control
Act, regulations of the Nuclear Regulatory Agency, and regulations of any state
department of natural resources or state environmental protection agency now in
effect (the "Environmental Laws").

(b) None of the Company or its Subsidiaries is a party
to any material litigation or administrative proceeding nor, to the knowledge
of the Company and its Subsidiaries, is any material litigation or
administrative proceeding threatened against the Company or any of its
Subsidiaries, which in either case: (i) asserts or alleges that the Company or
any of its Subsidiaries has violated any Environmental Laws; (ii) asserts or
alleges that the Company or any of its Subsidiaries is required to clean up,
remove or take remedial or other responsive action due to the disposal,
depositing, discharge, leaking or other release of any wastes, substances, or
materials (whether solids, liquids or gases) that under Environmental Laws are
deemed hazardous, toxic, pollutants, or contaminants, including, without
limitation, substances defined as "hazardous wastes," "hazardous substances,"
"toxic substances," "radioactive materials," or other similar designations in
any Environmental Laws, including, but not limited to polychlorinated biphenyls
(PCBs), asbestos, lead-based paints, infectious wastes, radioactive materials
and wastes and petroleum and petroleum products (including, without limitation,
crude oil or any fraction thereof) ("Hazardous Materials"); or (iii) asserts or
alleges that the Company or any of its Subsidiaries is required to pay all or a
portion of the cost of any past, present or future cleanup, removal or remedial
or other responsive action which arises out of or is related to the disposal,
depositing, discharge, leaking or other release of any Hazardous Materials by
the Company or any of its Subsidiaries.

(c) Except as set forth in the following sentence, to
the best knowledge of the Company and its Subsidiaries, with respect to the
time before the Company and its Subsidiaries owned or occupied any Real
Property, no Person has caused or permitted Hazardous Materials to be stored,
deposited, treated, recycled or disposed of on, under or at any Real Property
owned, leased, used or occupied by the Company or any of its Subsidiaries,
except in accordance with applicable Environmental Laws and except for such
matters as have not had, and are not reasonably anticipated by any of the
Company or its Subsidiaries to have a Material Adverse Effect. To the best
knowledge of the Company and its Subsidiaries, if any Person owning or
occupying the Real Property before the Company and its Subsidiaries caused or
permitted Hazardous Materials to be stored, treated, recycled or disposed

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<PAGE> 27

of on, under or at any Real Property, such condition has been remedied in
compliance with Environmental Laws.

(d) There are not now, nor to the knowledge of the
Company and its Subsidiaries have there previously been, tanks or other
facilities on, under, or at the Real Property which contained any Hazardous
Materials which, if known to be present in soils or ground water, would require
cleanup, removal or some other remedial action under Environmental Laws.

(e) None of the Company or its Subsidiaries has
received notice that it is subject to any judgment, order or citation related
to or arising under any Environmental Laws or that it is named or listed as a
potentially responsible party by any governmental body or agency in a matter
related to or arising under any Environmental Laws.

(f) The operation of the Stations does not exceed the
permissible levels of exposure to RF radiation specified in the FCC's
applicable rules, regulations and policies concerning RF radiation.

(g) The Company and each of its Subsidiaries have been
duly issued, and currently have and will maintain through the Closing Date, all
permits, licenses, certificates and approvals required under any Environmental
Law ("Environmental Permits"), except where the failure to have such
Environmental Permits would not have a Material Adverse Effect. Except in
accordance with the Environmental Permits, or as otherwise permitted by
applicable laws, there has been no discharge by any of the Company or its
Subsidiaries of any Hazardous Materials or any other material regulated by such
permits, licenses, certificates or approvals, which would require remediation
under the Environmental Laws.

4.14 Contracts.

(a) SCHEDULE 4.14 lists all contracts, agreements,
leases, arrangements, commitments or understandings, written or oral, expressed
or implied to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their properties or
assets is bound (the "Contracts") other than contracts for the sale of
advertising time for cash at standard rates.

(b) Except as set forth in SCHEDULE 4.14:

(1) The Company and each of its Subsidiaries
have performed each material term, covenant and condition of each of the
Contracts, and no material default on the part of the Company or any of its
Subsidiaries, and to the knowledge of the Company and its Subsidiaries, any
other party thereto, exists under any of the Contracts;

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<PAGE> 28

(2) No event has occurred under any of the
Contracts which would constitute a material default thereunder on the part of
the Company or any of its Subsidiaries and, to the knowledge of the Company and
its Subsidiaries, any other party thereto but for the requirement that notice
be given or time elapse or both;

(3) Each of the Contracts: (i) is in full
force and effect, unimpaired by any acts or omissions of the Company or its
Subsidiaries; (ii) constitutes the legal and binding obligation of, and is
legally enforceable against, the Company and its Subsidiaries as applicable;
and (iii) constitutes the legal and binding obligations of any other party
thereto in accordance with its terms, except as enforcement of such Contracts
may be limited by general principles of equity or principles applicable to
creditors' rights generally;

(4) The Company and its Subsidiaries have
furnished to Parent and Sub true and complete copies of all Contracts,
including all amendments, modifications and supplements thereto; and

(5) Set forth on SCHEDULE 4.14 is a list of
third party consents (other than Consents of Governmental Entities) required
for the consummation of the Merger with consents marked with an asterisk
designating consents that the Company shall be required to have obtained in
order to satisfy the condition precedent to the Merger referred to in SECTION
9.3(F) (the "Required Consents"). Except to the extent that any such third
party consents are not obtained, each Contract shall, on and after the
Effective Time, continue in full force and without penalty or other adverse
consequence.

For purposes of this SECTION 4.14 only, the term "material default"
shall mean any default which would allow the other party to such Contract to
terminate such contract or accelerate any material amounts due thereunder.

4.15 Tangible Personal Property. SCHEDULE 4.15 lists all items
of tangible personal property used or useful in the business or operations of
the Company and its Subsidiaries, other than property acquired or leased
pursuant to trade and barter agreements with a value at the time of the
acquisition thereof of at least Two Thousand Dollars ($2,000) (the "Personal
Property"). All items of leased Personal Property listed in SCHEDULE 4.15 are
marked with an asterisk. Except as disclosed on SCHEDULE 4.15, the Company or
its Subsidiaries, as the case may be, have good title to, or valid leasehold
interests in, all items of Personal Property free and clear of all Liens and
all Personal Property is in working condition, ordinary wear and tear excepted,
and is not in need of imminent repair or replacement.

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<PAGE> 29

4.16 Intangible Property.

(a) SCHEDULE 4.16 lists (i) all copyrights and
copyright applications owned by the Company or any of its Subsidiaries related
to the Stations (the "Copyrights"); (ii) all trade names, trademarks, service
marks, jingles, slogans, logos, trademark and service mark registrations and
trademark and service mark applications owned, used, held for use, licensed by
or leased by the Company or any of its Subsidiaries (the "Trademarks"),
together with all of the rights of each of the Company and its Subsidiaries in
and to the call letters for each Station, all rights to and goodwill in the
name "NewCity Communications" or any logo, variation or derivation thereof, and
all goodwill associated with any of such items (the "Intangible Property").

(b) Except as set forth on SCHEDULE 4.16:

(1) there are no claims, demands or
proceedings instituted, pending or, to the knowledge of any of the Company and
its Subsidiaries, threatened by any third party pertaining to or challenging
the right of the Company or any of its Subsidiaries to use any of the
Intangible Property;

(2) there are no facts which would render any
of the Intangible Property invalid or unenforceable;

(3) there is no trademark, trade name, patent
or copyright owned by a third party which any of the Company and its
Subsidiaries are using without license or other legal right to do so (which
licenses, if any, constitute part of the Contracts); and

(4) there are no royalty agreements (which
royalty agreements, if any, constitute part of the Contracts) between any of
the Company or any of its Subsidiaries and any third party relating to any of
the Intangible Property which provide for annual payments or receipts by any of
the Company or any of its Subsidiaries of more than Five Thousand Dollars
($5,000) in the case of any single agreement and One Hundred Thousand Dollars
($100,000) in the aggregate.

4.17 Real Property.

(a) SCHEDULE 4.17 lists all fee simple and leasehold
interests in real property of the Company and its Subsidiaries including all
buildings, improvements and fixtures thereon, together with all strips and
gores, rights of way, easements, privileges and appurtenances pertaining
thereto along with any right, title and interest of any of the Company or any
of its Subsidiaries in and to any street adjoining any portion of the Real
Property (the "Real Property").

(b) Except as disclosed on SCHEDULE 4.17:

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<PAGE> 30

(1) The Company or its Subsidiaries, as the
case may be, has good, valid and insurable fee simple absolute or leasehold
interest in the Real Property. Attached to SCHEDULE 4.17 are all policies of
title insurance currently existing in favor of each of the Company and its
Subsidiaries, as applicable, with respect to the Real Property. Except for
Permitted Liens and the items set forth on SCHEDULE 4.17, there are no material
Liens, restrictions or encumbrances to title to any portion of the Real
Property. The Company and its Subsidiaries have not subjected the Real
Property to any material easements, rights, duties, obligations, covenants,
conditions, restrictions, limitations or agreements not of record.

(2) There is no pending condemnation or
similar proceeding affecting the Real Property or any portion thereof, and to
the knowledge of any of the Company and its Subsidiaries, no such action is
presently contemplated or threatened.

(3) None of the Company or any of its
Subsidiaries has received any notice from any insurance company of any material
defects or inadequacies in the Real Property or any part thereof which would
materially and adversely affect the insurability of all or any portion of the
Real Property or the premiums for the insurance thereof. None of the Company
or any of its Subsidiaries has received any notice from any insurance company
which has issued or refused to issue a policy with respect to any portion of
the Real Property or by any board of fire underwriters (or other body
exercising similar functions) requesting the performance of any material
repairs, alterations or other work with which compliance has not been made.

(4) There are no parties in possession of any
portion of the Real Property other than the Company or its Subsidiaries, as
applicable, whether as lessees, tenants at will, trespassers or otherwise,
except for lessees of transmission towers which do not impair the ability of
the Company and its Subsidiaries to use such towers and which are disclosed on
SCHEDULE 4.17.

(5) No zoning, building, environmental,
land-use, fire or other federal, state or municipal law, ordinance, regulation
or restriction is violated by the continued maintenance, operation or use of
the Real Property or any tract or portion thereof or interest therein in its
present manner except for such violations which would not have a Material
Adverse Effect. The current use of the Real Property and all parts thereof as
aforesaid does not violate any restrictive covenants affecting the Real
Property the violation of which would have a Material Adverse Effect.

(6) There is no law, ordinance, order,
regulation or requirement now in existence, including, without limitation, any
Environmental Law which would require any material expenditure to modify or
improve any of the Real Property in order to bring it into compliance
therewith.

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<PAGE> 31

(7) The Real Property has adequate access to
dedicated and accepted public roads either directly or pursuant to perpetual
easements, and there is no pending or, to the knowledge of any of the Company
and its Subsidiaries, threatened governmental or other proceeding which would
impair or curtail such access.

(8) There are presently in existence water,
sewer, gas and/or electrical lines or private systems on the Real Property
which are sufficient to serve adequately the current operations of each
building or other facility located on the Real Property.

(9) There are no material structural,
electrical, mechanical, plumbing, air conditioning, heating or other defects in
the buildings located on the Real Property and the roofs of the building
located on the Real Property are free from material leaks and in good
condition.

4.18 Undisclosed Liabilities. The Company and its Subsidiaries
have no debt, liability or obligation whether accrued, absolute, contingent or
otherwise, including, without limitation, any liability or obligation on
account of Taxes or any governmental charges or penalty, interest or fines,
except: (i) those liabilities reflected or disclosed in the Audited Financial
Statements and the Interim Financial Statements; (ii) liabilities disclosed in
SCHEDULE 4.18 including any contingent liabilities; (iii) liabilities incurred
in the ordinary course of business (other than contingent liabilities) since
December 31, 1995; and (iv) liabilities incurred in connection with the
transactions provided for in this Merger Agreement.

4.19 Governmental Authorizations.

(a) Each of the Company and its Subsidiaries holds,
and on the Closing Date each of the Company and its Subsidiaries will hold,
regular and valid Licenses from the FCC to operate the Stations as currently
operated in accordance with the terms of the FCC License for each main Station
disclosed on SCHEDULE 4.19. Applications are pending at the FCC for the
renewal of the FCC Licenses for Radio Station WWKA(FM), licensed to Orlando,
Florida and Radio Station WCFB(FM), licensed to Daytona Beach, Florida. Each
of the Company and its Subsidiaries has obtained all material qualifications,
registrations, privileges, franchises, licenses, permits, approvals and
authorizations required for each of the Company and each of its Subsidiaries to
own and lease its properties and assets, to operate the Stations in the manner
operated on the date hereof and to carry on the businesses of the Stations
substantially as they are now conducted (the "Company Permits"). Except as
listed on SCHEDULE 4.19, no action or proceeding is pending or, to the
knowledge of the Company and its Subsidiaries, threatened before the FCC or any
other governmental body to revoke, refuse to renew or modify such Licenses or
other authorizations of any Station other than those requests for modification
initiated and submitted by the Company or any of its

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<PAGE> 32

Subsidiaries, none of which is adverse. To the best knowledge of the Company
and its Subsidiaries, the Company and its Subsidiaries are in compliance in all
material respects with applicable laws and the terms of the Company Permits.
To the best knowledge of the Company and its Subsidiaries, except as disclosed
on SCHEDULE 4.19, the business operations of the Company and its Subsidiaries
are being conducted in compliance in all material respects with any applicable
law, ordinance or regulation of any Governmental Entity.

(b) To the best knowledge of the Company and its
Subsidiaries, except as disclosed on SCHEDULE 4.19, there are no facts or
circumstances which would disqualify the Company or any of its Subsidiaries
under the Communications Act of 1934, as amended (the "Communications Act"),
from transferring control of the Company's radio broadcast operations. Except
as disclosed on SCHEDULE 4.19, there are no FCC notices of violations or
adverse orders against the Company or its Subsidiaries and, as of the date
hereof, there are no actions, suits or proceedings pending or, to the knowledge
of the Company and its Subsidiaries, threatened before the FCC for the
cancellation, material involuntary modification or non-renewal of any FCC
Licenses, except for any such notice of violation, adverse order, action, suit
or proceeding generally affecting the industries in which the Company operates
or which would not, individually or in the aggregate, have a Material Adverse
Effect and except for FCC License renewal proceedings which the Company
reasonably expects will result in renewals of the FCC Licenses.

4.20 Compliance with FCC Requirements. Except as set forth on
SCHEDULE 4.20, the Company and each of its Stations, their physical facilities,
electrical and mechanical systems and transmitting and studio equipment are
being and have been operated in all material respects in accordance with the
specifications of the applicable FCC Licenses, and the Company, its
Subsidiaries and the Stations are in substantial compliance with all material
requirements, rules and regulations of the FCC. The Company and its Stations
have complied in all material respects with all requirements of the FCC and the
Federal Aviation Administration with respect to the construction and/or
alteration of the Company's and the Stations' antenna structures, and "no
hazard" determinations for each antenna structure have been obtained, where
required. Except as set forth in SCHEDULE 4.20, all reports and other filings
required by the FCC with respect to the Company, its Subsidiaries and the
Stations, including, without limitation, material required to be placed in the
public inspection files of each of the Stations, have been duly filed by the
Company and its Subsidiaries as of the date hereof, and are true and complete
in all material respects. Except as set forth on SCHEDULE 4.20, there is
currently pending no proceeding before the FCC relating to the Company, its
Subsidiaries or the Stations, other than regularly scheduled license renewal
proceedings, or proceedings relating to the radio industry in general.

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<PAGE> 33

4.21 Insurance. The Company and its Subsidiaries have in full
force and effect property, liability and casualty insurance and broadcasters'
insurance insuring the business, properties and assets of the Stations.
SCHEDULE 4.21 lists all such insurance policies held by the Company and each of
its Subsidiaries.

4.22 Powers of Attorney. Except as set forth on SCHEDULE 4.22,
there are no Persons holding a power of attorney on behalf of the Company or
any of its Subsidiaries.

4.23 Payment of Indebtedness. Except as set forth on SCHEDULE
4.23, the only Indebtedness of the Company or any of its Subsidiaries of any
kind is (i) that owed by the Company to the lenders under the Loan Agreement
between Fleet National Bank and the Company dated as of November 1, 1993, as
amended (the "Loan Agreement"), (ii) that owed under the 11 3/8 Senior
Subordinated Notes of the Company (the "Senior Subordinated Notes") issued
pursuant to the Indenture dated as of November 2, 1993, as amended, by and
among the Company, certain guarantors and Shawmut Bank National Association,
(iii) that owed under the Term Note made by the Company on May 16, 1995 to
Central Broadcast Company in connection with its acquisition of KJSR (the "KJSR
Promissory Note"), and (iv) that owed under the Birmingham Loan Agreement. On
the Closing Date, the Parent will be permitted to repay, without any further
notice by Parent or Sub or any other required action by Parent or Sub or any
premium, penalty or other charge (other than filing fees to release any Liens)
of any kind, all principal and interest then owed by the Company under the Loan
Agreement and the Birmingham Loan Agreement.

4.24 Disclosure. No statement of material fact by the Company
contained in this Agreement, and all agreements and documents related thereto
and all EXHIBITS and SCHEDULES related hereto and thereto contains or will
contain any untrue statement of a material fact or omits or will omit to state
a material fact necessary in order to make the statements herein or therein
contained not misleading. There is no significant fact presently known to any
Stockholder, the Company or its Subsidiaries (other than matters of a general
economic or political nature which do not affect the Company, or its
Subsidiaries or the Stations uniquely), which has, or will have, a Material
Adverse Effect, which has not been set forth in this Merger Agreement.

ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS

Each Stockholder with respect to himself only represents and warrants
to Parent and Sub as follows:

5.1 Ownership of Class A Common Stock. Such Stockholder is the
lawful owner of the number of shares of Class A Common Stock listed opposite
the name of such Stockholder in EXHIBIT B attached hereto, free and clear of
all Liens. Except as disclosed on SCHEDULE 5.1, such Stockholder has full
legal right, power and authority to enter into this Merger Agreement and to

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<PAGE> 34

sell, assign, transfer and convey his shares of Class A Common Stock.

5.2 Authority; Binding Effect. All necessary action required
to have been taken by or on behalf of such Stockholder by applicable law or
otherwise to authorize (a) the approval, execution, and delivery on behalf of
such Stockholder of this Merger Agreement and (b) the performance by such
Stockholder of his obligations under this Merger Agreement and the consummation
of the transactions contemplated by this Merger Agreement has been taken.
Assuming that this Merger Agreement constitutes a valid, binding, and
enforceable agreement of Parent and Sub, this Merger Agreement constitutes a
valid and binding agreement of such Stockholder, enforceable against him in
accordance with its terms, except as enforcement of this Agreement may be
limited by general principles of equity or principles applicable to creditors'
rights generally.

5.3 No Conflicts, Required Filings and Consents.

(a) None of the execution and delivery of this Merger
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof will (i) conflict with or violate any organizational
documents of any such Stockholder (to the extent applicable), (ii) subject to
receipt or filing of the required Consents referred to in SECTION 4.4(B),
result in a violation of any statute, ordinance, rule, regulation, order,
judgment or decree applicable to such Stockholder, or by which he or any of his
properties or assets may be bound or affected, or (iii) result in a Violation
of any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which he is a party or
by which such Stockholder or any of his properties or assets is bound or
affected.

(b) None of the execution and delivery of this Merger
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof will require any Consent of any Governmental Entity,
except for (i) the filing of the Certificate of Merger pursuant to the DGCL,
(ii) compliance with the HSR Act, (iii) such filings as may be required in
connection with the taxes described in SECTION 8.7, and (IV) the FCC Consents.

ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB

Parent and Sub jointly and severally represent and warrant to the
Company as follows:

6.1 Organization and Qualification. Each of Parent and Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of Parent

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<PAGE> 35

and Sub has the requisite corporate power and authority to carry on its
business as it is now being conducted and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified will
not, individually or in the aggregate, have a material adverse effect on the
business, operations or financial condition of Parent and Sub taken as a whole,
or have a material adverse effect on Parent's proposed arrangements for
financing the transactions contemplated by this Merger Agreement or on Parent's
ability to consummate such financing arrangements (a "Parent Material Adverse
Effect").

6.2 Ownership of Sub. Sub is a direct wholly-owned subsidiary
of Parent.

6.3 Authority Relative to This Merger Agreement. Each of
Parent and Sub has the necessary corporate power and authority to execute and
deliver this Merger Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Merger Agreement and the
consummation of the transactions contemplated hereby by Parent and Sub have
been duly and validly authorized and approved by the respective Boards of
Directors of Parent and Sub, by Parent as the sole stockholder of Sub, and by
Cox Enterprises, Inc., as the ultimate parent of Parent, and no other corporate
proceedings on the part of Parent, Sub or Cox Enterprises, Inc. are necessary
to authorize and approve this Merger Agreement or to consummate the
transactions contemplated hereby. This Merger Agreement has been duly executed
and delivered by each of Parent and Sub, and assuming due authorization,
execution and delivery by the Company and the Stockholders, constitutes the
valid and binding obligation of Parent and Sub enforceable against each of them
in accordance with its terms except as such enforceability may be limited by
general principles of equity or principles applicable to creditors' rights
generally.

6.4 No Conflicts; Required Filings and Consents.

(a) None of the execution and delivery of this Merger
Agreement by Parent or Sub, the consummation by Parent or Sub of the
transactions contemplated hereby or compliance by Parent or Sub with any of the
provisions hereof will (i) conflict with or violate the Certificate of
Incorporation or By-laws of Parent or Sub, (ii) subject to receipt or filing of
the required Consents referred to in SECTION 6.4(B), result in a violation of
any statute, ordinance, rule, regulation, order, judgment or decree applicable
to Parent or Sub, or by which any of them or any of their respective properties
or assets may be bound or affected, or (iii) result in a Violation of any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Sub is a party
or by which Parent or Sub or any of their respective properties may be bound or
affected that involves a

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<PAGE> 36

payment by Parent or Sub of Fifty Thousand Dollars ($50,000) or more on an
annual basis, except in the case of the foregoing clauses (ii) and (iii) for
any such Violations which would not have a Parent Material Adverse Effect.

(b) None of the execution and delivery of this Merger
Agreement by Parent or Sub, the consummation by Parent or Sub of the
transactions contemplated hereby or compliance by Parent or Sub with any of the
provisions hereof will require any Consent of any Governmental Entity, except
for (i) the filing of the Certificate of Merger pursuant to the DGCL, (ii)
compliance with the HSR Act, (iii) such filings as may be required in
connection with the taxes described in SECTION 8.7, (iv) the FCC Consents in
connection with the transfer of control of the FCC Licenses, and (v) Consents
the failure of which to obtain would not have a Parent Material Adverse Effect.

6.5 Litigation. There is no suit, action or proceeding pending
or, to the knowledge of Parent or Sub, threatened against or affecting Parent
or Sub that, individually or in the aggregate, could reasonably be expected to
have a Parent Material Adverse Effect, nor is there any judgment, decree,
injunction or order of any Governmental Entity or arbitrator outstanding
against Parent or Sub having, or which could reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.

6.6 Voting Requirements. No vote of the holders of any class
or series of the capital stock of Parent is necessary to approve this Merger
Agreement or the transactions contemplated hereby.

6.7 Brokers. No broker or finder is entitled to any broker's
or finder's fee in connection with the transactions contemplated by this Merger
Agreement based upon arrangements made by or on behalf of Parent or Sub.

6.8 Financing. Parent has delivered the Guaranty to the
Company and the Selling Stockholders.

6.9 FCC Applications. Except as disclosed on SCHEDULE 6.9,
Parent and Sub are and will as of the Closing Date be legally, financially and
otherwise qualified to hold or control the entities which hold and will hold,
the FCC Licenses and are not aware of any facts or circumstances (other than
facts or circumstances relating solely to the Company or its Subsidiaries) that
could reasonably be expected to prevent or delay consent to the FCC
Applications, and Parent and Sub further represent and warrant that no waiver
of the FCC's rules is necessary to obtain the FCC Consents.

6.10 State Takeover Statutes. The Board of Directors of each of
the Parent and Sub has approved the Merger and this Merger Agreement, and such
approval is sufficient to render inapplicable to the Merger, this Merger
Agreement, and the

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<PAGE> 37

transactions contemplated by this Merger Agreement, the provisions of Section
203 of DGCL. To each of the Parent's and Sub's knowledge, no other state
takeover statute or similar statute or regulation, applies or purports to apply
to the Merger, this Merger Agreement, or any of the transactions contemplated
by this Merger Agreement.

6.11 Disclosure. No statement of material fact by either the
Parent or Sub contained in this Agreement, and all agreements and documents
related thereto and all EXHIBITS and SCHEDULES related hereto and thereto
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
herein or therein contained not misleading.

ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER

7.1 Conduct of Business by the Company Pending the Merger.
From and after the date hereof, prior to the Effective Time, except as
contemplated by this Merger Agreement (including SECTION 7.2) and except for
the matters set forth on SCHEDULE 7.1 or unless Parent shall otherwise agree in
writing, the Company shall, and shall cause its Subsidiaries to:

(a) not (i) declare, set aside, or pay any dividends
on, or make any other distributions in respect of, any of its capital stock,
other than dividends and distributions by any direct or indirect Subsidiary of
the Company to its parent, (ii) split, combine or reclassify any of its capital
stock or issue or, other than pursuant to the exercise of the Stock Options or
upon the conversion of the Convertible Preferred Stock, authorize the issuance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock, or (iii) purchase, redeem or otherwise acquire, other
than pursuant to the exercise of the Stock Options, any shares of capital stock
of the Company or any of its Subsidiaries or any other equity securities
thereof or any rights, warrants, or options to acquire any such shares or other
securities;

(b) not, except for issuances of capital stock of the
Company's Subsidiaries to the Company or a wholly-owned Subsidiary of the
Company, issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities issued by the Company or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares or voting securities (other than the issuance of Class B Common
Stock upon the exercise of the Stock Options outstanding on the date of this
Merger Agreement);

(d) not acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of

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<PAGE> 38

the assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization or
division thereof, or (ii) any properties or assets with a cost in excess of
$100,000 or that are otherwise material, individually or in the aggregate, to
the Company or any of its Subsidiaries, except, in any such case, in the
ordinary course of business, and except transactions between a wholly-owned
Subsidiary of the Company and the Company or another wholly-owned Subsidiary of
the Company;

(e) not subject to a Lien or sell, lease or otherwise
dispose of any properties or assets with a net book value in excess of $100,000
or that are otherwise material, individually or in the aggregate to the Company
or any of its Subsidiaries, except in the ordinary course of business and
except transactions between a wholly-owned Subsidiary of the Company and the
Company or another wholly-owned Subsidiary of the Company;

(f) not (i) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another Person or issue or sell any debt
securities of the Company or any of its Subsidiaries, guarantee any debt
securities of another Person (other than indebtedness to, guarantees of, or
issuances or sales to the Company or a wholly-owned Subsidiary of the Company)
or enter into any "keep well" or other agreement to maintain any financial
condition of another Person, except, in any such case, for borrowings or other
transactions incurred in the ordinary course of business, including to repay
existing indebtedness pursuant to the terms thereof, or (ii) except in the
ordinary course of business, make any loans, advances or capital contributions
to, or investments in, any other Person, other than to the Company or any
direct or indirect Subsidiary of the Company or settle or compromise any
material claim or litigation;

(g) not increase or otherwise change the rate or
nature of the compensation (including wages, salaries and bonuses) which is
paid or payable to any employee or independent contractor of the Company or any
Subsidiary, except pursuant to existing Company Benefit Plans, Compensation
Arrangements, and practices which have been disclosed to Parent;

(h) not adopt, or commit to adopt, any employee
benefit plan, compensation arrangement, and not to make material amendments to
any Company Benefit Plan or Compensation Arrangement except to the extent
required by law or necessary to preserve the nature of the benefits provided
under such plan or arrangement;

(i) not enter into, renew or allow the renewal of, any
employment or consulting agreement or other contract or arrangement with
respect to the performance of personal services for a term of more than one
year or requiring the payment of more than $75,000 in annual compensation,
except in the ordinary course of business consistent with past practices;

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<PAGE> 39

(j) not voluntarily agree to enter into any collective
bargaining agreement applicable to any employees of the Company or its
Subsidiaries or otherwise recognize any union as the bargaining representative
of any such employees, and will promptly notify Parent of any attempt or actual
collective bargaining organizing activity with respect to any such employees;

(k) not amend, modify or consent to the termination of
any Contract or the rights of the Company or any of its Subsidiaries
thereunder;

(l) not promote any corporate or executive officers of
the Company;

(m) not authorize any of, or commit or agree to take
any of, the foregoing actions (a) through (l);

(n) carry on their respective businesses in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted;

(o) use all reasonable efforts to preserve intact
their present business organizations, keep available the services of their
employees and preserve their relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with
them to the end that their goodwill and on-going businesses shall not be
impaired in any material respect at the Effective Time; provided, however, that
the resignation of one or more officers of the Company or any of its
Subsidiaries or the loss of one or more customers of the Company or any of its
Subsidiaries shall not be deemed a breach of the foregoing requirement unless
such resignation or loss could reasonably be expected to have a Material
Adverse Effect;

(p) operate the Stations in accordance with applicable
FCC requirements, rules and regulations in all material respects;

(q) maintain all Personal Property in good operating
condition, ordinary wear and tear and usage excepted, and replace any of the
Personal Property which is material to the operation of the Company, a Station
or a Subsidiary which shall be worn out; and

(r) maintain in full force and effect policies of
property, liability and casualty insurance and errors and omissions insurance
of the same type, character and coverage as the policies currently carried with
respect to the business, operations and assets of the Company, the Stations and
its Subsidiaries.

7.2 Control of the Stations. Prior to the Effective Time,
control of the Company's radio broadcast operations along with all of the
Company's other operations (including without

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<PAGE> 40

limitation control over the finances, personnel and programming of each
Station), shall remain with the Company. The Company, Parent and Sub
acknowledge and agree that neither Parent nor Sub nor any of their respective
employees, agents or representatives, directly or indirectly, shall, or have
any right to, control, direct or otherwise supervise, or attempt to control,
direct or otherwise supervise, such broadcast and other operations, it being
understood that supervision of all programs, equipment, operations and other
activities of such broadcast and other operations shall be the sole
responsibility, and at all times prior to the Effective Time remain with the
complete control and discretion, of the Company, subject to the terms of
SECTION 7.1 above.

7.3 Intentionally Omitted.

7.4 Massachusetts Income Tax Assessment. The Company shall
continue to defend vigorously the proceedings before the Commonwealth of
Massachusetts Department of Revenue pertaining to the Company's income tax
liability for calendar years 1987 through 1989, and shall promptly inform
Parent of all material developments arising with respect to such proceeding.

ARTICLE VIII
ADDITIONAL AGREEMENTS

8.1 Access to Information. From the date hereof through the
Effective Time, the Company and its Subsidiaries shall afford to Parent and
Parent's accountants, counsel, agents and other representatives (collectively,
"Parent's Agents") reasonable access during normal business hours (and at such
other times as the parties may mutually agree) upon reasonable prior notice to
and approval of the Company, which shall not be unreasonably withheld, to its
properties, books, contracts, commitments, records and personnel and, during
such period, shall furnish promptly to Parent all information concerning its
business, properties and personnel as Parent may reasonably request ("Company
Information"). Parent shall hold, and shall cause its employees and Parent's
Agents to hold, in strict confidence all Company Information including, without
limitation, in the event of termination of this Merger Agreement. In the event
of termination of this Merger Agreement, Parent shall promptly return, and
Parent shall cause Parent's Agents to promptly return, all Company Information
or copies or summaries of Company Information that Parent or Parent's Agents
may have made either on paper or electronic format, to the Company. Parent and
Parent's Agents shall, in the exercise of the rights described in this SECTION
8.1, not unduly interfere with the operation of the business of the Company or
its Subsidiaries.

8.2 Filings. The Company shall promptly provide Parent, and
Parent and Sub shall promptly provide the Company, copies of all filings made
by the Company or Parent and Sub, as the case may be, with any Governmental
Entity in connection with this Merger Agreement and the transactions
contemplated hereby.

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<PAGE> 41

8.3 Employee and Other Arrangements. No later than six (6)
months after the date hereof, Parent shall provide the Company with a list of
those corporate employees of the Company or its Subsidiaries whose services
will not be required by the Surviving Corporation subsequent to the Closing.
To the extent that severance payments are owed to such employees, Parent and
the Company shall cooperate in establishing appropriate levels of severance
payments to such employees. Parent shall be responsible for Eighty Thousand
Dollars ($80,000) of such severance payments, and the Company shall be
responsible for any severance and related expenses exceeding Eighty Thousand
Dollars ($80,000).

8.4 Public Announcements. So long as this Merger Agreement is
in effect, Parent, Sub and the Company agree to use their respective reasonable
efforts to consult with each other before issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Merger Agreement except as may be required by any
applicable law, rule or regulation.

8.5 Efforts; Consents.

(a) Subject to the terms and conditions herein
provided and, in the case of the Company, fiduciary duties under applicable
law, each of the parties hereto agrees to use all reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Merger Agreement and the
Merger and to cooperate with each other in connection with the foregoing.
Without limiting the generality of the foregoing, each of the Company, Sub and
Parent shall make or cause to be made all required filings with or applications
to Governmental Entities (including under the HSR Act and applicable
requirements of the FCC, and the Communications Act), and use all reasonable
efforts to (i) obtain all necessary waivers of any Violations and other
Consents of all Governmental Entities and other third parties, necessary for
the parties to consummate the transactions contemplated hereby, (ii) oppose,
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions
contemplated hereby, and (iii) fulfill all conditions to this Merger Agreement.

(b) Without limiting the foregoing, the Company and
Parent shall use all reasonable efforts and cooperate in promptly preparing and
filing (i) within twenty Business Days of executing this Merger Agreement,
notifications under the HSR Act, and (ii) within seven Business Days of
executing this Merger Agreement, the FCC applications in connection with the
Merger and the other transactions contemplated hereby ("FCC Applications"), and
to respond as promptly as practicable to any inquiries or requests received
from the Federal Trade Commission (the "FTC"), the Antitrust Division of the
United States Department of Justice

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<PAGE> 42

(the "Antitrust Division"), and the FCC for additional information or
documentation and to respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other Governmental Entity
in connection with antitrust matters or matters relating to the FCC
Applications. Each of Parent, Sub and the Company, to the extent applicable,
further agrees to file contemporaneously with the filing of the FCC
Applications any requests for waivers of applicable FCC rules as may be
required to prosecute expeditiously such waiver requests and to diligently
submit any additional information or amendments for which the FCC may ask with
respect to such waiver requests. Parent and Sub further covenant to prosecute
each such waiver request in good faith and to supply any information requested
by the FCC in connection with such waiver in a timely and complete manner. In
the event Parent becomes aware of any facts or circumstances which might cause
the FCC to determine that Parent is not qualified to acquire the Stations,
Parent shall promptly notify the Company in writing thereof and shall use its
best efforts to prevent or cure such disqualification. All fees to be paid to
the FTC and the Antitrust Division in respect of the notifications under the
HSR Act shall be divided equally between the Company on the one hand and Parent
and Sub on the other hand.

(c) In furtherance and not in limitation of the
foregoing, the Company, Parent and Sub shall use all reasonable efforts to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by this Merger Agreement under any antitrust,
competition or trade regulatory laws, rules or regulations of any Governmental
Entity ("Antitrust Laws") or any laws, rules or regulations of the FCC or other
Governmental Entities relating to the broadcast, cable, newspaper, mass media
or communications industries (collectively, "Communications Laws") and will use
all reasonable efforts (such efforts not to include agreeing to hold separate,
to place in trust or to divest any of the businesses or assets of Parent or any
of its Subsidiaries or Affiliates) as may be required (i) for securing the
expeditious termination of any applicable waiting period or the expeditious
grant of the FCC Applications and for resolving any objections to the
transactions contemplated hereby of any Governmental Entities under the
Antitrust Laws or Communications Laws or (ii) by any domestic or foreign court
or similar tribunal, in any suit brought by a private party or Governmental
Entity challenging the transactions contemplated by this Merger Agreement as
violative of any Antitrust Law or Communications Law, in order to avoid the
entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order that has the effect of preventing the
consummation of any of such transactions.

(d) Each of Parent and the Company shall promptly
provide the other with a copy of any inquiry or request for information
(including notice of any oral request for information), pleading, order or
other document either party

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<PAGE> 43

receives from any Governmental Entities with respect to the matters referred to
in this SECTION 8.5.

8.6 Notice of Breaches. Each Stockholder and the Company shall
give prompt notice to Parent, and Parent or Sub shall give prompt notice to the
Company and the Stockholders, of (i) any representation or warranty made by it
contained in this Merger Agreement which has become untrue or inaccurate in any
material respect, or (ii) the failure by it to comply with or satisfy in any
material respect any covenant, condition, or agreement to be complied with or
satisfied by it under this Merger Agreement; provided, however, that such
notification shall not excuse or otherwise affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Merger Agreement.

8.7 Transfer and Certain Other Taxes and Expenses. Payment of
all real property transfer taxes and all documentary stamps, filing fees,
recording fees and sales and use taxes, if any, and any penalties or interest
with respect thereto, payable in connection with consummation of the Merger
shall be divided equally between the Company on the one hand and Parent and Sub
on the other hand; provided that any such taxes and expenses that are allocable
to the Selling Stockholders shall constitute a decrease to the Adjusted Merger
Consideration as provided in SECTION 3.8(B).

8.8 Financial and FCC Reports. Within twenty (20) days after
the end of each month ending after May 31, 1996 through the Closing Date, the
Company will furnish Parent and Sub with copies of the Company's monthly
financial reports for each Station prepared after the date hereof (including a
balance sheet and operating statement) for each such month and the fiscal year
to the end of such month, and the Company will furnish to Parent and Sub,
within five (5) days after filing, all material reports filed with the FCC with
respect to the Stations after the date hereof. All of the foregoing financial
statements shall comply with the requirements concerning financial statements
set forth in SECTION 4.5(B).

8.9 Updating of Information. Not more than ten (10) Business
Days prior to the Closing Date, the Company will deliver to Parent and Sub, and
Parent will deliver to the Company, updated SCHEDULES including (a) information
necessary to update the SCHEDULES and the lists, documents and other
information furnished by the Company or Parent and Sub, as the case may be, as
contemplated by this Merger Agreement, and (b) updated copies of documents
relating to or included as a part of the SCHEDULES, in order that all such
SCHEDULES, lists, documents and other information shall be complete and
accurate in all material respects as of the Closing Date. No such updating of
the SCHEDULES shall be deemed to cure any breach of a representation or
warranty made hereunder which was not true and correct as of the time made.

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<PAGE> 44

8.10 Release of Liens. At or prior to the Closing, the Company
shall obtain the release of all Liens on the property or assets of the Company,
its Subsidiaries and the Stations disclosed in the SCHEDULES hereto and any
other Liens on the property or assets of the Company, its Subsidiaries or the
Stations, other than (a) Permitted Liens, (b) Liens pursuant to the Loan
Agreement, and (c) Liens against the Company or any of its Subsidiaries with
respect to leased Personal Property having a value of no more than Twenty-Five
Thousand Dollars ($25,000), and either shall file such releases of Liens in
each governmental agency or office in which any such Lien or evidence thereof
shall have been previously filed, or deliver the release to Parent and Sub to
file or obtain payoff letters from such Lien holder, which shall include a
statement that upon receipt of certain funds, the Lien holder will release its
Lien.

8.11 Environmental Audit. The Company shall permit Parent and
Sub and their agents, as soon as practical after the date hereof, access to the
Real Property and improvements thereon for the purpose of conducting Phase I
and Phase II environmental audits or updating existing environmental audits.
The cost of such audits shall be split evenly between Parent and Sub, on the
one hand, and the Company, on the other hand. Any such environmental audits
shall be conducted by a reputable environmental investigatory firm of the
Parent's and Sub's choice. Such audits shall be conducted in a manner as will
not unreasonably interfere with the normal business and operations of any of
the Stations. The Company shall take all action reasonably necessary and
required under any applicable Environmental Law or Environmental Permit to
clean up, remove or treat any Hazardous Materials located on, at or under the
Real Property prior to the Closing Date.

8.12 Agreement to Vote. At any shareholders meeting of the
Company subsequent to the date hereof at which a vote is taken regarding this
Merger Agreement and the transactions contemplated hereby, each Stockholder
shall vote all of his shares of Class A Common Stock in support of the
consummation of this Merger Agreement and the transactions contemplated hereby.
The Company shall take such actions, as necessary, immediately following the
execution of this Merger Agreement to secure the approval of all of the holders
of shares of the Class A Common Stock, Class B Common Stock, the Convertible
Preferred Stock and the Redeemable Preferred Stock to the transactions
contemplated by this Merger Agreement.

8.13 Tax Matters.

(a) "Booked Taxes" means Taxes of the Company and its
Subsidiaries payable with respect to a Reporting Period (as defined below)
ending on or before the Effective Time, or with respect to a Short Period (as
defined below), that are reflected on the Final Closing Statement with respect
to such Taxes and that are taken into account in computing the Final Working
Capital under SECTION 3.8 hereof.

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<PAGE> 45
(b) Taxes of the Company and its Subsidiaries with
respect to the period ending on (and including) the Effective Time, other than
the Booked Taxes, shall be the responsibility of the Selling Stockholders,
subject to the terms, conditions and limitations set forth in the Closing
Escrow Agreement. Taxes of the Company and its Subsidiaries with respect to
the period after the Effective Time shall be the responsibility of Parent (and
the Company and its Subsidiaries).

(i) In accordance with the terms of this
SECTION 8.13, and subject to the terms, conditions and limitations set forth in
the Closing Escrow Agreement, the Selling Stockholders agree to pay and,
notwithstanding any disclosure of potential Tax liabilities made by the Company
and its Subsidiaries, to indemnify, reimburse, and hold harmless Parent, its
Affiliates, and the Company and its Subsidiaries, and their respective
successors, and their respective officers, directors, employees, agents, and
representatives, from and against any and all Taxes of the Company and its
Subsidiaries payable with respect to, and any and all claims, liabilities,
losses, damages, costs and expenses (including without limitation court costs
and reasonable professional fees incurred in the investigation, defense or
settlement of any claims covered by this indemnity) (herein referred to as
"Indemnifiable Tax Damages"), arising out of or in any manner incident,
relating or attributable to Taxes of the Company and its Subsidiaries payable
with respect to, or Tax Returns required to be filed by the Company and its
Subsidiaries with respect to, (i) any taxable year (or other applicable
reporting period) ("Reporting Period") of the Company and its Subsidiaries
ending on or before the Effective Time, and (ii) any period beginning on the
first day of any Reporting Period that is not completed as of the Effective
Time and ending as of the Effective Time (a "Short Period"), to the extent that
such Taxes exceed the amount of the Booked Taxes.

(ii) Parent agrees to pay and to indemnify,
reimburse and hold harmless the Selling Stockholders, their agents and
representatives, from and against (i) any and all Booked Taxes and (ii) any and
all Taxes of the Company and its Subsidiaries payable with respect to, and any
and all Indemnifiable Tax Damages, arising out of or in any manner incident,
relating or attributable to, Taxes of the Company and its Subsidiaries payable
with respect to, or Tax Returns required to be filed by the Company and its
Subsidiaries with respect to, (A) any Reporting Period of the Company and its
Subsidiaries beginning after the Effective Time; and (B) that portion of any
Reporting Period that includes the Effective Time which commences the day after
the Effective Time.

(iii) If an item claimed as a deduction or credit
in a period prior to the Effective Time subsequently is adjusted by a Tax
authority into a period after the Effective Time, or an item of income in a
period after the Effective Time is accelerated into a period prior to the
Effective Time, then the amount of any reduction in Taxes to the Company and
its

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<PAGE> 46

Subsidiaries for periods after the Effective Time resulting from such
adjustment shall offset the payment obligations of the Selling Stockholders
pursuant to SECTION 8.13(B)(I); provided, however, that if the only benefit
available to the Company and its Subsidiaries is recovery of basis through a
sale, such benefit shall not be taken into account hereunder unless an actual
sale occurs prior to the date such payment is required to be made by the
Selling Stockholders thereunder. The amount of any offset shall take into
account the difference between the time the payment would otherwise be made
pursuant to SECTION 8.13(B)(I) and the time a benefit is derived by the Company
and its Subsidiaries (using a discount rate equal to the "overpayment rate"
under section 6221(a) of the Code, compounded semi-annually). Any offset
pursuant to this paragraph shall be reduced to the extent, if any, that items
claimed as a deduction or credit for periods after the Effective Time are
adjusted by a Tax authority to periods prior to the Effective Time or items of
income are moved from a period prior to the Effective Time to a period after
the Effective Time.

(c) Parent shall be responsible for preparing and
filing on behalf of the Company and its Subsidiaries all Tax Returns for the
Company and its Subsidiaries which have not been filed as of the Effective
Time, including (i) all Tax Returns for Reporting Periods of the Company and
its Subsidiaries ending on or before the Effective Time which have not been
filed on or before the Effective Time; (ii) all Tax Returns of the Company and
its Subsidiaries for Reporting Periods beginning before and ending after the
Effective Time; and (iii) all Tax Returns for Reporting Periods of the Company
and its Subsidiaries beginning on or after the Effective Time; provided,
however, that with respect to Tax Returns described in clauses (i) and (ii),
Parent shall consult with the Stockholders' Agent in preparing such returns,
and such Tax Returns shall not report any item in a manner that is inconsistent
with the manner in which any corresponding item has been previously reported in
any such Tax Return already filed, unless such inconsistent treatment is (x)
required due to a change in law or circumstances, or (y) if permitted by law,
Parent elects to make such change in treatment, and such change would not be
prejudicial to the Selling Stockholders or to the Company. Parent shall
furnish the Stockholders' Agent with copies of Tax Returns described in
clauses (i) and (ii) of this paragraph (c) within 30 days
following the filing date.

(d) Any tax sharing agreement, practice, or other
similar arrangement between the Company and its Subsidiaries and corporations
or other entities related to the Company or any of its Subsidiaries shall be
terminated as of the Effective Time.

(e) Except as otherwise provided in this SECTION 8.13,
any amounts owed by the Selling Stockholders to any party under this SECTION
8.13 shall be paid within ten business days of notice from such party; provided
that if such party has not paid such amounts and such amounts are being
contested before the

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<PAGE> 47

appropriate governmental authorities in good faith, the Selling Stockholders
shall not be required to make payment until it is determined finally by an
appropriate governmental authority or court that payment is due, provided that
the Selling Stockholders post appropriate security as necessary to protect such
party from (i) the immediate imposition of a lien that arises or attaches from
nonpayment after assessment and demand of such amounts, or (ii) seizures of
assets. Except as otherwise provided in this SECTION 8.13, any amounts owed by
Parent to any party under this SECTION 8.13 shall be paid within ten business
days of notice from such party; provided that if such party has not paid such
amounts and such amounts are being contested before the appropriate
governmental authorities in good faith, Parent shall not be required to make
payment until it is determined finally by an appropriate governmental authority
or court that payment is due if Parent posts appropriate security as necessary
to protect such party from (A) the immediate imposition of a lien that arises
or attaches from nonpayment after assessment and demand of such amounts, or (B)
seizures of assets. Any amounts that are not paid within the period provided
in this SECTION 8.13(D) shall accrue interest at the "Underpayment Rate" under
Section 6621 of the Code for the underpayment of taxes by corporations.

(f) The Tax liabilities for each Short Period for the
Company and its Subsidiaries shall be determined by closing the books and
records of the Company and its Subsidiaries as of the Effective Time, by
treating each such Short Period as if it were a separate Reporting Period, and
by employing accounting methods which are consistent with those employed in
preparing the Tax Returns for the Company and its Subsidiaries in prior
Reporting Periods and which do not have the effect of distorting income or
expenses (taking into account the transactions contemplated by this Merger
Agreement), except that Taxes based on items other than income or sales shall
be computed for the Reporting Period beginning on the first day of the
applicable Short Period and prorated on a time basis between the Short Period
and the period beginning on the first day after the Effective Time and ending
on the last day of the Reporting Period which includes the Effective Time;
provided that with respect to any Tax which is not in effect during the entire
Short Period, the proration of such Tax shall be based on the period during the
Short Period that such Tax was in effect.

(g) Parent shall promptly notify the Stockholders'
Agent in writing of any notice, letter, correspondence, claim, determination,
decision or decree ("Tax Claim") received by the Parent or the Company and its
Subsidiaries or their successors for any Reporting Period ending on or before
the Effective Time or any Short Period that might raise a claim for
indemnification hereunder. Parent shall have the sole right to handle, answer,
defend, compromise or settle any such Tax Claim; provided, however, that the
Stockholders' Agent, at the cost and expense of the Selling Stockholders, shall
have the right to (and shall promptly notify Parent as to whether or not he
will) participate in any Tax examination, audit, contest or litigation in

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<PAGE> 48

connection with such Tax Claim. Parent shall cause the Company and its
Subsidiaries and their successors to give promptly to the Stockholders' Agent
any relevant information relating to such Tax Claim which may be particularly
within the knowledge of the Company and its Subsidiaries or their successors
and otherwise to cooperate fully with the Stockholders' Agent in good faith
with respect to such Tax Claim. If the Stockholders' Agent fails within a
reasonable time after notice to participate in any Tax Claim or any
examination, audit, contest or litigation as provided herein, the Selling
Stockholders shall be bound by the results obtained by Parent, or its
successors or assigns, in connection with such Tax Claim and such examination,
audit, contest or litigation. Notwithstanding the foregoing, the Parent shall
not agree, without the consent of the Stockholders' Agent (which consent shall
not be unreasonably withheld or delayed), to any adjustment for any period
ending on or prior to the Effective Time which will require a payment by the
Selling Stockholders hereunder in excess of One Hundred Thousand Dollars
($100,000) for any Reporting Period (or for any Short Period).

(h) Each of the parties hereto will provide the other
with such assistance as may reasonably be requested by any of them in
connection with the preparation of any Tax Return (including amended Tax
Returns and claims for Tax refunds), any audit or other examination by any
taxing authority, or any judicial or administrative proceedings relating to
liability for Taxes, and each will retain until the expiration of any relevant
statutes of limitations (and, to the extent notified by the other party, any
extension thereof) and provide the other, at all reasonable times, with any
work papers, records or other information which may be relevant to such return,
audit or examination, proceeding or determination (including, but not limited
to, determinations under this SECTION 8.13). The party requesting assistance
or documents hereunder shall reimburse the other parties for reasonable
expenses incurred in providing such assistance or documents.

(i) Parent shall not make any election under Section
338 of the Code with respect to the Merger.

(j) The obligations of the Selling Stockholders under
this SECTION 8.13 are subject to the terms, conditions and limitations set
forth in the Closing Escrow Agreement.

8.14 Event of Loss. Upon the occurrence of any loss, taking,
condemnation, damage or destruction of or to any of the Stations (an "Event of
Loss") after the date hereof in excess of $100,000 prior to the Closing, the
Company or its Subsidiaries, as applicable, shall take steps to repair, replace
and restore the damaged, destroyed or lost property to the condition existing
prior to having been damaged. The condition set forth in the preceding
sentence shall be satisfied if at the Closing neither Parent, the Surviving
Corporation nor Sub can bring a claim pursuant to SECTION 11.1 with respect to
such matter. If such condition has not been satisfied at or prior to Closing,
the

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<PAGE> 49
Company or its Subsidiaries, as applicable, shall assign (or deliver any cash
received, if not assignable) to the Surviving Corporation all of their rights
under any insurance and all proceeds of insurance (excluding business
interruption proceeds for periods prior to the Closing Date) covering the
property damage, destruction or loss not so repaired, replaced or restored
prior to the Closing Date.

8.15 Further Assurances. Subject to the terms and conditions of
this Merger Agreement, each of the parties hereto will use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Merger contemplated by this
Merger Agreement.

8.16 Solicitation of Employees. From the date of this Merger
Agreement through the second anniversary of the Closing Date, each Stockholder
agrees that it will not, directly or indirectly, persuade or attempt to
persuade any employee of the Company or any of its Subsidiaries, or any
individual who was its employee at any time during the two years prior to the
date of this Merger Agreement, to become employed by any Stockholder or any
Affiliate of any Stockholder.

8.17 Capital Expenditures.

(a) In cooperation with Parent and Sub, the Company
shall establish a budget for capital expenditures to be made in 1996, taking
into account actual capital expenditures made by the Company or any Subsidiary
prior to the date hereof.

(b) Parent agrees to reimburse the Company for
expenses incurred by the Company prior to the Closing Date in making capital
improvements, to be mutually agreed upon by Parent and the Company, to the
office building or property site owned by NewCity Communications of Alabama,
Inc. in Birmingham, Alabama and any equipment or furnishings contained therein.
The Company and Parent agree to develop an appropriate budget for such capital
expenditures.

8.18 Exercise of Stock Options. The Company shall take such
actions, as necessary, to ensure that the holders of any Stock Options exercise
such Stock Options prior to the Closing.

ARTICLE IX
CONDITIONS PRECEDENT

9.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:

(a) The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired

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<PAGE> 50
or been terminated and there shall have been no material adverse change to the
transactions contemplated by this Merger Agreement required in order to obtain
approval under the HSR Act, and any other Consents from Governmental Entities
(including specifically the FCC Consents) and other third parties required
prior to the Effective Time with respect to the transactions contemplated
hereby shall have been either filed or received.

(b) The consummation of the Merger shall not be
restrained, enjoined or prohibited by any order, judgment, decree, injunction
or ruling of a court of competent jurisdiction; provided, however, that the
parties shall comply with the provisions of SECTION 8.5 and shall further use
all reasonable efforts to cause any such order, judgment, decree, injunction or
ruling to be vacated or lifted.

(c) Each of the FCC Consents shall have been obtained
without conditions materially adverse to the Company, Parent or Sub, and each
party shall have satisfied any such conditions that are not materially adverse
to such party.

9.2 Conditions to Obligation of the Company and the
Stockholders to Effect the Merger. The obligation of the Company and the
Stockholders to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the additional following conditions, unless
waived by the Company:

(a) Parent and Sub shall have performed in all
material respects their respective agreements contained in this Merger
Agreement required to be performed at or prior to the Effective Time and the
representations and warranties of Parent and Sub contained in this Merger
Agreement shall be true in all material respects when made and (except for
representations and warranties made as of a specified date, which need only be
true in all material respects as of such date) at and as of the Effective Time
as if made at and as of such time, except as contemplated by this Merger
Agreement; and the Company shall have received a certificate of the Chief
Executive Officer or a Vice President of Parent and Sub to that effect.

(b) All material proceedings, corporate or other, to
be taken by Parent and Sub in connection with the performance of this Merger
Agreement, and all material documents incident thereto, shall be complete in
all material respects and Parent and Sub shall have made available to the
Company for examination the originals or true and correct copies of all
documents which the Company and Stockholders' Agent may reasonably request in
connection with the transactions contemplated by this Merger Agreement.

(c) Parent and Sub shall have delivered or caused to
be delivered to the Company the documents, each properly executed and dated as
of the Closing Date, as required pursuant to this Merger Agreement.

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<PAGE> 51

(d) The Company shall have received an opinion of Dow,
Lohnes & Albertson, PLLC, counsel to Parent and Sub, dated the Closing Date, in
substantially the form attached hereto as EXHIBIT E.

(e) Parent and Sub shall have delivered to the Company
such documents and certificates of officers of Parent and Sub and public
officials as shall be reasonably requested by the Company's counsel to
establish the existence of Parent and Sub and good standing of Parent and Sub
and the due authorization of this Merger Agreement and the transactions
contemplated hereby by Parent and Sub.

9.3 Conditions to Obligations of Parent and Sub to Effect the
Merger. The obligations of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the additional
following conditions, unless waived by Parent, that:

(a) The Stockholders and the Company shall have
performed in all material respects their respective agreements contained in
this Merger Agreement required to be performed at or prior to the Effective
Time and the representations and warranties of the Company and the Stockholders
contained in this Merger Agreement shall be true in all material respects when
made and (except for representations and warranties made as of a specified
date, which need only be true in all material respects as of such date) at and
as of the Effective Time as if made at and as of such time; and Parent and Sub
shall have received a certificate of the Chief Executive Officer or a Vice
President of the Company and from each Stockholder to that effect.

(b) Intentionally omitted.

(c) All material proceedings, corporate or other, to
be taken by the Company in connection with the performance of this Merger
Agreement, and all material documents incident thereto, shall be complete in
all material respects and the Company shall have made available to Parent and
Sub for examination the originals or true and correct copies of all documents
which Parent and Sub may reasonably request in connection with the transactions
contemplated by this Merger Agreement.

(d) Between the date of this Merger Agreement and the
Closing, there shall not have occurred any Material Adverse Effect.

(e) The Company shall have delivered or caused to be
delivered to Parent and Sub the documents, each properly executed and dated as
of the Closing Date, as required pursuant to this Merger Agreement.

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<PAGE> 52

(f) There shall have been secured all Consents
required by any Governmental Entity and all Required Consents as set forth in
SCHEDULE 4.14.

(g) The Company or its Subsidiaries shall be the
holders of the FCC Licenses and there shall not have been any adverse material
modification of any of the FCC Licenses since the date hereof.

(h) Between the date of this Merger Agreement and the
Closing, none of the Company, any of its Subsidiaries or any of the Stations
shall have sustained any loss, taking, condemnation, damage or destruction to
any property or asset which individually or in the aggregate would cost in
excess of $500,000 to repair, unless such repair has been completed on or prior
to the Closing Date to the condition existing prior to having been damaged or
sufficient insurance proceeds are available to effect such repair; provided,
however, that the Company may elect to extend the Closing Date for a reasonable
period not to exceed ninety (90) days necessary to complete such repairs; and
provided, further if Parent and Sub waive this condition, the provisions of
SECTION 8.14 shall be applicable.

(i) Parent and Sub shall have received the opinions of
Tyler Cooper & Alcorn, LLP, corporate counsel to the Company, and Kaye,
Scholer, Fierman, Hays & Handler, LLP, communications counsel to the Company,
both dated the Closing Date, in substantially the forms attached hereto as
EXHIBIT F.

(j) The Company shall have delivered to Parent and Sub
such documents and certificates of officers of the Company and public officials
as shall be reasonably requested by the Parent's counsel to establish the
existence and good standing of the Company and the due authorization of this
Merger Agreement and the transactions contemplated hereby by the Company.

(k) The Parent and Sub shall have received the
resignations effective as of the Closing Date of all the directors and officers
of the Company except for such persons as shall have been designated in writing
prior to the Closing Date by Parent and Sub to the Company, the employment
agreements in respect of all such persons shall have been terminated and all
such persons shall have executed and delivered to Parent a full release
releasing the Company and Parent, their respective Subsidiaries, all related
entities and all of their representatives from any and all claims of such
persons.

(l) The Company shall have effected the cancellation
or exercise of all Stock Options.

(m) The only FCC Licenses for which a license renewal
proceeding is pending shall be the FCC Licenses for KRMG(AM), KWEN(FM), and
KJSR(FM), Tulsa, Oklahoma (the "Renewal Stations"), and Parent and Sub shall be
satisfied with the status thereof. The status of the renewals for the Renewal
Stations

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<PAGE> 53
shall be deemed satisfactory to Parent and Sub if (i) no petition to deny or
other objection shall have been filed against the applications for renewal of
the Renewal Stations; (ii) the applications for renewal of license of each of
the Renewal Stations shall have demonstrated compliance with the FCC's rules
with respect to each of those matters required to be addressed in the renewal
application; (iii) the Company shall have responded on behalf of each of the
Renewal Stations to each inquiry of the FCC relating to the renewal
applications of the Renewal Stations; and (iv) the Company shall have certified
to Parent and Sub that it is not aware of any reason why the FCC would not
grant an unconditional renewal to the Renewal Stations in the normal course.

(n) The Phase I and Phase II environmental audits
referred to in SECTION 8.11 shall have been obtained and shall report the
absence of any environmental conditions or circumstances that could materially
and adversely affect the Real Property or the value thereof or result in
material liability or material costs if cleaned up or removed from the Real
Property pursuant to the requirements of applicable Environmental Laws.

(o) The Company shall have furnished to the Parent and
Sub (i) an extended coverage owner's policy of title insurance from a reputable
title insurance company for each parcel of Real Property designated with an
asterisk on SCHEDULE 4.17 subject only to Permitted Liens (and without a survey
exception) and for an amount equal to the fair market value for each such
parcel, and (ii) a current and complete survey of each such parcel of land made
by a competent registered surveyor in accordance with the American Land Title
Association guidelines.

(p) Each of the FCC Consents shall have become a Final
Order (as defined in SECTION 12.9) without conditions materially adverse to
Parent or Sub.

(q) The Closing Escrow Agreement shall have been
executed by all parties thereto and the Adjustment Escrow Amount and the
Indemnity Escrow Amount shall have been fully funded.

(r) No action or proceeding shall be pending before
any court or Governmental Entity in which it is sought to restrain or prohibit
or obtain damages or other relief in connection with this Merger or the
consummation of the transactions contemplated hereby.

(s) The Company shall have taken all necessary steps
and given all necessary notices to enable Parent to repay immediately, without
premium, penalty or other charge of any kind, all principal and interest owed
by the Company in respect of the Loan Agreement and the Birmingham Loan
Agreement.

ARTICLE X
TERMINATION, AMENDMENT AND WAIVER

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<PAGE> 54
10.1 Termination. This Merger Agreement may be terminated at
any time prior to the Effective Time:

(a) by mutual written consent of Parent and the
Company;

(b) by the Company, upon a material breach of this
Merger Agreement on the part of Parent or Sub or upon a material breach of the
Guaranty by Cox Broadcasting, Inc., which has not been cured and which would
cause the conditions set forth in SECTION 9.2 to be incapable of being
satisfied by June 30, 1997;

(c) by Parent, upon a material breach of this Merger
Agreement on the part of the Stockholders or the Company which has not been
cured and which would cause the conditions set forth in SECTION 9.3 to be
incapable of being satisfied by June 30, 1997;

(d) subject to SECTION 8.15 hereof, by either Parent
or the Company if any court of competent jurisdiction shall have issued,
enacted, entered, promulgated or enforced any order, judgment, decree,
injunction or ruling which restrains, enjoins or otherwise prohibits the Merger
and such order, judgment, decree, injunction or ruling shall have become final
and nonappealable; or

(e) by either Parent or the Company if the Merger
shall not have been consummated on or before June 30, 1997 (provided the
terminating party is not otherwise in material breach of its representations,
warranties or obligations under this Merger Agreement).

10.2 Effect of Termination.

(a) In the event of termination of this Merger
Agreement by either Parent or the Company as provided in SECTION 10.1, this
Merger Agreement shall forthwith become void and there shall be no liability
hereunder on the part of any of the Stockholders, the Company, Parent or Sub or
their respective officers or directors; provided that SECTIONs 10.2, 10.3,
12.3, and 12.6 and the second and third sentences of SECTION 8.1 shall survive
the termination.

(b) If the Merger is not consummated because of a
material breach of this Merger Agreement by any party and this Merger Agreement
is terminated pursuant to SECTION 10.1(B) or SECTION 10.1(C), and subject to
the terms of this SECTION 10.2 and SECTION 12.3 the nonbreaching party shall be
entitled to pursue all legal and equitable remedies against the breaching party
for such breach, including in the case of Parent and Sub specific performance,
and all fees and expenses incurred by the nonbreaching party or parties in
connection with enforcing its rights under this Merger Agreement with respect
to such breach shall be paid by the party breaching this Merger Agreement.

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<PAGE> 55

10.3 Fees and Expenses. Except as otherwise specified
in this Agreement, all costs and expenses, including, without limitation, fees
and disbursements of counsel, financial advisors and accountants, incurred in
connection with this Merger Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses; provided that any
such costs and expenses incurred by the Company or by the Selling Stockholders
that are to be paid by the Company which remain unpaid as of the Closing Date
shall to the extent they are so unpaid constitute a decrease to the Adjusted
Merger Consideration as provided in SECTION 3.8(B).

10.4 No Solicitation. Neither the Company, any of its
Subsidiaries, officers, directors, representatives or agents nor any
Stockholder shall, directly or indirectly, knowingly encourage, solicit,
initiate or, except as otherwise provided in this SECTION 10.4, participate in
any way in discussions or negotiations with, or knowingly provide any
confidential information to, any corporation, partnership, person or other
entity or group (other than Parent or any affiliate or associate of Parent and
their respective directors, officers, employees, representatives and agents)
concerning any merger of the Company, or any of its Subsidiaries, the sale of
any substantial part of the assets of the Company, sale of shares of capital
stock of the Company, or any of its Subsidiaries or similar transactions
involving the Company.

10.5 Amendment. This Merger Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.

10.6 Waiver. At any time prior to the Effective Time, the
parties hereto may, to the extent permitted by applicable law, (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto, (ii) waive any inaccuracies in the representations and warranties
by any other party contained herein or in any documents delivered by any other
party pursuant hereto and (iii) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations contained herein.
Any agreement on the part of a party hereto to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf
of such party.

ARTICLE XI
INDEMNIFICATION

11.1 Indemnification Out of Closing Escrow.

(a) After the Closing, the Selling Stockholders
jointly and severally, in accordance with the terms of this Article XI and
subject to the terms and conditions of the Closing Escrow Agreement, agree to
indemnify, and hold Parent and Sub and the employees, officers, directors and
stockholders of Parent and Sub (collectively, the "Buyer Indemnified Parties")
harmless from

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<PAGE> 56
and against, and agree to promptly defend the Buyer Indemnified Parties from
and reimburse the Buyer Indemnified Parties for any and all actual damages,
out-of-pocket costs and expenses, liabilities, obligations and claims of third
persons of any kind, including, without limitation, reasonable attorneys' fees,
other legal costs and expenses (hereinafter, collectively, "Claims" and,
individually, a "Claim") which the Buyer Indemnified Parties may suffer or
incur, or become subject to, as a result of or in connection with:

(1) the breach of any of the representations
and warranties made by the Company and any of the Stockholders in this Merger
Agreement or in any instrument, document, certificate or affidavit delivered at
the Closing by the Company or any of the Selling Stockholders in accordance
with the provisions of this Merger Agreement;

(2) the failure of the Company or any of the
Stockholders to carry out, perform, satisfy and discharge any of the covenants,
agreements, undertakings, liabilities or obligations to be performed by the
Company or any of the Stockholders pursuant to this Merger Agreement or under
any of the documents and materials delivered at the Closing by the Company or
any of the Selling Stockholders pursuant to this Merger Agreement;

(3) any breach of the representations and
warranties of the Company or any of its Subsidiaries contained in SECTION 4.10;

(4) liabilities or obligations of the Company
or any of its Subsidiaries arising from or relating to any litigation or
proceeding listed on the SCHEDULES hereto and any litigation or proceeding
initiated, filed, established or threatened against the Company or any of its
Subsidiaries after the execution of this Merger Agreement and relating to
matters before the Closing; and

(5) any suit, action or other proceeding
brought by any governmental authority or Person arising out of, or in any way
related to any of the matters referred to in SECTION 11.1.

(b) Intentionally omitted.

11.2 Indemnification By Parent. After the Closing, Parent, in
accordance with the terms of this Article XI, agrees to indemnify, and hold all
of the Selling Stockholders (collectively, the "Seller Indemnified Parties")
harmless from and against, and agree to promptly defend the Seller Indemnified
Parties from and reimburse the Seller Indemnified Parties for any Claim which
the Seller Indemnified Parties may suffer or incur, or become subject to, as a
result of or in connection with:

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<PAGE> 57
(a) the breach of any of the representations and
warranties made by Parent or Sub in this Merger Agreement or in any instrument,
document, certificate or affidavit delivered at the Closing by Parent or Sub in
accordance with the provisions of this Merger Agreement;

(b) the failure of Parent or Sub to carry out,
perform, satisfy and discharge any of the covenants, agreements, undertakings,
liabilities or obligations to be performed by Parent or Sub pursuant to this
Merger Agreement or under any of the documents and materials delivered at the
Closing by Parent or Sub pursuant to this Merger Agreement;

(c) liabilities or obligations of the Company or any
of its Subsidiaries arising from or relating to the business of the Company or
its Subsidiaries after the Closing or to any litigation or proceeding
initiated, filed, established or threatened against the Company or any of its
Subsidiaries after the Closing and relating to matters after the Closing;

(d) any suit, action or other proceeding brought by any
governmental authority or Person arising out of, or in any way related to any
of the matters referred to in this SECTION 11.2.

11.3 Notification of Claims.

(a) A party believing itself entitled to be
indemnified pursuant to SECTION 11.1(A) or 11.2 above (the "Indemnified Party")
shall give the party liable for such indemnification (the "Indemnifying Party")
notice in writing of a specific Claim which the Indemnified Party believes has
given rise to a right of indemnification under this Merger Agreement (the
"Notice of Claim"). Notwithstanding anything to the contrary contained herein,
no Claim shall be considered as a valid Claim under SECTION 11.1(A)(1), (2),
(4), OR (5) to the extent such Claim relates to SECTION 11.1(A)(1), (2), (4),
or (5), or under Section 11.2 to the extent such Claim relates to SECTION
11.2(A), (B), (C), OR (D) above unless the Indemnified Party shall have given
the Indemnifying Party a Notice of Claim regarding such Claim within three (3)
years and sixty (60) days after the Closing Date and with respect to a Claim
arising from a dispute, controversy or claim of a third Person, such third
Person must have asserted the dispute, controversy or claim within three (3)
years and sixty (60) days of the Closing Date. Subject to the Indemnifying
Party's right to dispute Claims asserted by the Indemnified Party or to defend
in good faith Claims by third parties as hereinafter provided, the Indemnifying
Party shall satisfy its obligations under SECTION 11.1(A) or 11.2 above within
thirty (30) days after the receipt of the Notice of Claim.

(b) If the Indemnified Party shall give the
Indemnifying Party a Notice of Claim pursuant to SECTION 11.3(A) above, and if
such Claim relates to a Claim asserted by a third

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party against the Indemnified Party (excluding a Claim by the Internal Revenue
Service or any other tax authority pursuant to SECTION 11.1(A)(3) hereof), the
Indemnifying Party shall have the right to employ counsel reasonably acceptable
to the Indemnified Party to defend such Claim. The Indemnified Party shall
have the right, at its own expense, to participate in the defense of any such
Claim. The Indemnifying Party shall notify the Indemnified Party in writing,
as promptly as possible after its receipt of a Notice of Claim given by the
Indemnified Party pursuant to SECTION 11.3(A) above (but in any case before the
due date for the answer or response to a Claim if the Indemnifying Party has
been given a Notice of Claim within a reasonable time prior to such due date),
of its election to defend any Claim raised by a third party. So long as the
Indemnifying Party is defending in any such Claim or demand asserted by a third
party against the Indemnified Party, the Indemnified Party shall not settle or
compromise such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its agents all records and other materials in the
Indemnified Party's possession reasonably required by it for its use in
contesting any Claim asserted by a third party. Whether or not the
Indemnifying Party elects to defend any such Claim asserted by a third party,
the Indemnified Party shall have no obligation to do so.

(c) The provisions of SECTION 11.3(B) shall not apply to
any Claim asserted by the Internal Revenue Service or any other tax authority,
which claim shall be subject to the provisions of SECTION 8.13.

ARTICLE XII
GENERAL PROVISIONS

12.1 Stockholders' Agent. The Company has appointed the
Company's Chief Financial Officer, currently John Riccardi, as the
Stockholders' Agent and each Selling Stockholder's attorney-in-fact and
representative, to do any and all things and to execute any and all documents
or other papers, in such Selling Stockholder's name, place and stead, in any
way which such Selling Stockholder could do if personally present, in
connection with this Merger Agreement and the transactions contemplated hereby,
including, without limitation, to resolve issues relating to the adjustment of
the Adjusted Merger Consideration on such Selling Stockholder's behalf, or to
amend, cancel or extend, or waive the terms of, this Merger Agreement and
Parent and Sub shall be entitled to rely, as being binding upon such Selling
Stockholder, upon any document or other paper believed by them to be genuine
and correct and to have been signed or sent by the Stockholders' Agent, and
Parent and Sub shall not be liable to any Selling Stockholder for any action
taken or omitted to be taken by it in such reliance.

12.2 Notices. All notices or other communications under this
Merger Agreement shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by telecopy (with
confirmation of receipt), by

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commercial delivery service or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:

If to the Company: NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604
Attention: Mr. Richard A. Ferguson
Telecopy : (203) 367-9346

With copies (which shall not Tyler Cooper & Alcorn
constitute notice) to: 205 Church Street
P.O. Box 1936
New Haven, Connecticut 06510
Attention: Irving S. Schloss, Esq.
Telecopy : (203) 789-2133

and

Kaye, Scholer, Fierman, Hays & Handler
901 15th Street, N.W.
Washington, D.C. 20005
Attention: Irving Gastfreund, Esq.
Telecopy : (202) 682-3580

and

Mr. John Riccardi
Chief Financial Officer
NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604
Telecopy : (203) 367-9346

If to the Stockholders' Agent:

Mr. John Riccardi
Chief Financial Officer
NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604
Telecopy : (203) 367-9346

If to Parent or Sub:
Cox Radio, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention: Mr. Nicholas D. Trigony
Telecopy : (404) 843-5280

and

Cox Radio, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention: Mr. Robert F. Neil
Telecopy : (404) 843-5686

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<PAGE> 60
With a copy (which shall not Dow, Lohnes & Albertson, PLLC
constitute notice) to: 1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Attention: Kevin F. Reed, Esq.
Telecopy : (202) 776-2222

or to such other address as any party may have furnished to the other parties
in writing in accordance with this SECTION.

12.3 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Merger Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that Parent shall be entitled
to an injunction or injunctions to prevent breaches of this Merger Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which Parent is entitled at law or in equity.

12.4 Entire Agreement. This Merger Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof (other than as provided in the second sentence of SECTION 8.1). There
are no other representations or warranties, whether written or oral, between
the parties in connection with the subject matter hereof, except as expressly
set forth herein.

12.5 Assignments; Parties in Interest. Neither this Merger
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject to
the preceding sentence, this Merger Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Merger
Agreement, express or implied, is intended to or shall confer upon any Person
not a party hereto any right, benefit or remedy of any nature whatsoever under
or by reason of this Merger Agreement, including to confer third party
beneficiary rights.

12.6 Governing Law. This Merger Agreement, except to the extent
that the DGCL is mandatorily applicable to the Merger and the rights of the
Selling Stockholders, shall be governed in all respects by the laws of the
State of Delaware (without giving effect to the provisions thereof relating to
conflicts of law). The exclusive venue for the adjudication of any dispute or
proceeding arising out of this Merger Agreement or the performance thereof
shall be the courts located in the City of Wilmington, Delaware, and the
parties hereto and their Affiliates hereby consent to and submit to the
jurisdiction of any court located in the City of Wilmington, Delaware.

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12.7 Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Merger Agreement.

12.8 Remedies. The remedies of the parties hereto are
cumulative and not intended to be limited by the doctrine of election of
remedies. Without limiting the generality of the foregoing, neither Parent and
Sub nor the Company and the Selling Stockholders may rely on the failure of any
condition precedent set forth in Article IX, as applicable, to be satisfied if
such failure was caused by such other party's (or parties') failure to act in
good faith, or a breach of or failure to perform its representations,
warranties, covenants or other obligations in accordance with the terms of this
Merger Agreement.

12.9 Certain Definitions. As used in this Merger Agreement:

(a) the term "Affiliate," as applied to any Person,
shall mean any other Person directly or indirectly controlling, controlled by,
or under common control with, that Person; for purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities, by contract or otherwise;

(b) "Business Day" means a day that is not a Saturday,
a Sunday or other day on which banks are required or authorized by law to be
closed in the City of Wilmington, Delaware;

(c) the term "Final Order" means an action or order by
the FCC (a) that has not been reversed, stayed, enjoined, set aside, annulled
or suspended, and (b) with respect to which (i) no requests have been timely
filed for administrative or judicial review, reconsideration, appeal or stay
and the FCC has not initiated a review of such action or order on its own
motion and the periods provided by statute or FCC regulations for filing any
such requests and for the FCC to set aside the action on its own motion have
expired, or (ii) in the event of review, reconsideration or appeal, the period
provided by statute or FCC regulations for further review, reconsideration or
appeal has expired without any such request for further review, reconsideration
or appeal having been filed;

(d) the term "Guaranty" shall mean the Guaranty of Cox
Broadcasting, Inc. of even date herewith, guaranteeing the obligations of
Parent and Sub under this Merger Agreement;

(e) the terms "knowledge," "best knowledge," or any
similar formulation of knowledge shall mean, with respect to any

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<PAGE> 62
Subsidiary of the Company, the actual knowledge of its senior executive
officers, and with respect to the Company, the actual knowledge of the Chief
Executive Officer, the Chief Operating Officer and the Chief Financial Officer
of the Company and the general managers of the Stations;

(f) "Material Adverse Effect" shall mean any of (i) a
Company Material Adverse Effect; and (ii) a Significant Station Material
Adverse Effect. For purposes of this definition, a "Company Material Adverse
Effect" shall mean a material adverse effect on the aggregate operations,
assets, prospects or financial condition of the Company, taken as a whole,
other than matters affecting the radio industry generally (including without
limitation legislative, regulatory or litigation matters) and matters relating
to or arising from national economic conditions (including financial and
capital markets); a "Significant Station Material Adverse Effect" shall mean a
material adverse effect on the operations, assets, prospects or financial
condition of any Station other than matters affecting the radio industry
generally (including without limitation legislative, regulatory or litigation
matters) and matters relating to or arising from national economic conditions
(including financial and capital markets);

(g) "Permitted Liens" means such of the following as
to which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies not yet due and payable; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's liens and other
similar liens arising in the ordinary course of business securing obligations
that (i) are not overdue for a period of more than 30 days and (ii) are not in
excess of $5,000 in the case of a single property or $50,000 in the aggregate
at any time; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or statutory
obligations; (d) minor survey exceptions, reciprocal easement agreements and
other customary encumbrances on title to real property that (i) were not
incurred in connection with any Indebtedness, (ii) do not render title to the
property encumbered thereby unmarketable and (iii) do not, individually or in
the aggregate, materially adversely affect the value or use of such property
for its current and anticipated purposes; and (e) Liens pursuant to the Loan
Agreement;

(h) the term "Person" shall include individuals,
corporations, partnerships, limited liability companies, trusts, other entities
and groups (which term shall include a "group" as such term is defined in
Section 13(d)(3) of the Exchange Act);

(i) the term "Subsidiary" or "Subsidiaries" means,
with respect to Parent, the Company or any other Person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company
or such other Person, as the case may be (either alone or through or together
with any other

- 57 -
<PAGE> 63
Subsidiary) owns, directly or indirectly, stock or other equity interests the
holders of which are generally entitled to more than 50% of the vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.

12.10 Counterparts. This Merger Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which taken together shall constitute a single agreement.

12.11 Severability. If any term or other provision of this
Merger Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Merger
Agreement shall nevertheless remain in full force and effect so long as the
economics or legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. Upon determination that
any term or other provision hereof is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Merger Agreement so as to effect the original intent of the parties as closely
as possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the extent possible.

12.12 Gender and Number. Words used herein, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.

12.13 List of Definitions. The following is a list of certain
terms used in this Agreement and a reference to the Section hereof in which
such term is defined.

Terms Section

Adjusted Merger Consideration 3.3(c)
Adjustment Escrow Amount 3.9(b)
Affiliate 12.9(a)
Antitrust Division 8.5(b)
Antitrust Laws 8.5(c)
Audited Financial Statements 4.5(a)
Birmingham Loan Agreement 3.3(b)
Booked Taxes 8.13(a)
Business Day 12.9(b)
Buyer Indemnified Parties 11.1(a)
Certificate of Merger 1.3
Claims 11.1(a)
Class A Common Merger Consideration 3.2(a)
Class A Common Stock 3.2(a)
Class B Common Merger Consideration 3.2(b)
Class B Common Stock 3.2(b)
Closing 1.2

- 58 -
<PAGE> 64
Closing Date 1.2
Closing Escrow Agent 3.9(a)
Closing Escrow Agreement 3.9(a)
Closing Escrow Amount 3.9(c)
Code 4.9(a)
Communications Act 4.19(b)
Communications Laws 8.5(c)
Company Preamble
Company Benefit Plan 4.8(i)
Company Consolidated Group 4.10(f)
Company Information 8.1
Company Material Adverse Effect 12.9(f)
Company Permits 4.19(a)
Compensation Arrangement 4.8(ii)
Consent 4.4(b)
Constituent Corporations 1.4
Contracts 4.14(a)
Control 12.9(a)
Convertible Preferred Merger
Consideration 3.2(c)
Convertible Preferred Stock 3.2(c)
Copyrights 4.16(a)
DGCL 1.3
Disbursing Agent 3.5(a)
Dissenting Shares 3.4
Dissenting Shareholder 3.4
Effective Time 1.3
Environmental Permits 4.13(g)
Environmental Laws 4.13(a)
ERISA 4.8(i)
ERISA Affiliate 4.8(iii)
Estimated Closing Statement 3.3(d)(i)
Event of Loss 8.14
FCC Preamble
FCC Applications 8.5(b)
FCC Consents 4.4(b)
FCC Licenses 4.4(b)
Final Closing Statement 3.8(a)
Final Debt Amount 3.8(a)
Final Order 12.9(c)
Final Working Capital 3.8(a)
FTC 8.5(b)
GAAP 3.3(a)
Governmental Entity 4.4(b)
Guaranty 12.9(d)
Hazardous Materials 4.13(b)
HSR Act 4.4(b)
Indebtedness 3.3(b)
Indemnifiable Tax Damages 8.13(b)(i)
Indemnified Party 11.3(a)
Indemnifying Party 11.3(a)
Indemnity Escrow Amount 3.9(c)
Intangible Property 4.16(a)
Interim Financial Statements 4.5(b)
KJSR Promissory Note 4.23

- 59 -
<PAGE> 65
Knowledge 12.9(e)
Lien 4.2(b)
Loan Agreement 4.23
Material Adverse Effect 12.9(f)
Material Default 4.14
Merger Preamble
Merger Agreement Preamble
Merger Consideration 3.1
Notice of Claim 11.3(a)
Parent Material Adverse Effect 6.1
Parent Preamble
Parent's Agents 8.1
Permitted Liens 12.9(g)
Person 12.9(h)
Personal Property 4.15
Preferred Stock 3.2(e)
Real Property 4.17(a)
Redeemable Preferred Stock 3.2(d)
Renewal Stations 9.3(m)
Reporting Period 8.13(b)(i)
Required Consents 4.14(b)(5)
Seller Indemnified Parties 11.2
Selling Stockholders Preamble
Senior Subordinated Notes 4.23
Short Period 8.13(b)(i)
Significant Station
Material Adverse Effect 12.9(f)
Stations Preamble
Stock Options 4.2(a)
Stockholders Preamble
Stockholders' Agent Preamble
Sub Preamble
Subsidiary 12.9(i)
Surviving Corporation 1.1
Target Debt Amount 3.3(b)
Target Working Capital 3.3(a)
Tax Claim 8.13(g)
Tax Returns 4.10(a)
Taxes 4.10(a)
Trademarks 4.16(a)
Violation 4.4(a)
Working Capital 3.3(a)

- 60 -
<PAGE> 66
IN WITNESS WHEREOF, Parent, Sub, the Company and the Stockholders have
caused this Merger Agreement to be signed all as of the date first written
above.

COX RADIO, INC.

By: /s/ John J. Rouse, Jr.
----------------------------------
Title: Treasurer
-----------------------------

NEW COX RADIO II, INC.

By: /s/ John J. Rouse, Jr.
----------------------------------
Title: Vice President and Treasurer
----------------------------

NEWCITY COMMUNICATIONS, INC.

By: /s/ Richard A. Ferguson
----------------------------------
Title: President and CEO
---------------------------

STOCKHOLDERS, FOR THE LIMITED
PURPOSES STATED ABOVE:

/s/ Richard A. Ferguson
-------------------------------------
Richard A. Ferguson

/s/ James T. Morley
-------------------------------------
James T. Morley

/s/ Richard A. Reis
-------------------------------------
Richard A. Reis

STOCKHOLDERS' AGENT

/s/ John Riccardi
-------------------------------------
John Riccardi

- 61 -

<PAGE> 1
EXHIBIT 2.2

EXECUTION

GUARANTY

This GUARANTY is dated as of July 1, 1996, by COX BROADCASTING, INC.,
a Delaware corporation ("Guarantor"), in favor of NEWCITY COMMUNICATIONS, INC.,
a Delaware corporation (the "Company"), and all of the holders of the capital
stock of the Company (the "Selling Stockholders").

PRELIMINARY STATEMENT

A. Guarantor owns 100% of the issued and outstanding capital
stock of COX RADIO, INC., a Delaware corporation, and Cox Radio, Inc. owns 100%
of the issued and outstanding capital stock of NEW COX RADIO II, INC., a
Delaware corporation (Cox Radio, Inc. and New Cox Radio II, Inc. are referred
to collectively herein as the "Cox Subsidiaries").

B. The Company, the Cox Subsidiaries, certain Selling
Stockholders and the Stockholders' Agent have entered into an Agreement and
Plan of Merger, dated as of the date of this Guaranty (the "Merger Agreement"),
relating to the merger of New Cox Radio II, Inc. into the Company. The
agreement of Guarantor to deliver this Guaranty was a material inducement to
the Company and such Selling Stockholders in entering into the Merger
Agreement.

AGREEMENTS

In consideration of the above recitals, Guarantor, intending to be
bound legally, agrees as follows:

1. Guaranty. Guarantor hereby guarantees the full, complete, and
timely performance by the Cox Subsidiaries of each and every obligation of the
Cox Subsidiaries under the Merger Agreement, including the obligation to pay,
satisfy or assume the Company's Indebtedness and to pay and deliver the Merger
Consideration as provided in the Merger Agreement. If any default shall be
made by the Cox Subsidiaries in the performance of any of such obligations,
then Guarantor will itself perform or cause to be performed such obligation
immediately upon notice from the Company or the Stockholders' Agent specifying
in summary form the default. The Company or the Selling Stockholders may
proceed to enforce their rights against Guarantor from time to time prior to,
contemporaneously with, or after any enforcement against the Cox Subsidiaries,
or without any enforcement against the Cox Subsidiaries. The obligations of
Guarantor under this Guaranty shall be absolute and unconditional and shall
remain in full force and effect without regard to and shall not be released,
discharged, or in any way affected by (a) any amendment
<PAGE> 2

or modification of or supplement to the Merger Agreement, (b) any exercise or
non-exercise of or delay in exercising any right, remedy, power, or privilege
under or in respect of the Merger Agreement, (c) any bankruptcy, insolvency,
arrangement, composition, assignment for the benefit of creditors, or similar
proceeding commenced by or against the Cox Subsidiaries or Guarantor, (d) the
dissolution (voluntarily or involuntarily) of the Cox Subsidiaries, (e) the
genuineness, validity, or enforceability of the Merger Agreement, (f) any other
circumstances that might otherwise constitute a legal or equitable discharge of
a guarantor or surety, or (g) termination of the Merger Agreement by the Cox
Subsidiaries.

2. Waivers. Guarantor waives presentment, protest, demand, or
action or delinquency in respect of any obligations of the Cox Subsidiaries
under the Merger Agreement. Guarantor waives all set-offs and counterclaims
and all notices of nonperformance, notices of protest, notices of dishonor, and
notices of acceptance of this Guaranty.

3. Continuing Guaranty. This guaranty shall be deemed a
continuing guaranty, and the above consents and waivers of Guarantor shall
remain in full force and effect until the satisfaction in full of all
obligations of the Cox Subsidiaries under the Merger Agreement.

4. Subordination. Guarantor agrees that any and all claims in
its favor against the Cox Subsidiaries, any endorser or any other guarantor of
all or any part of the obligations of the Cox Subsidiaries under the Merger
Agreement, or against any of their respective properties, arising by reason of
any payment by Guarantor to the Company or the Selling Stockholders pursuant to
the provisions hereof or otherwise, shall be subordinate and subject in right
of payment to the prior payment, in full, of all obligations of the Cox
Subsidiaries under the Merger Agreement and Guarantor under this Guaranty.

5. Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective in the event any petition is filed by or
against the Cox Subsidiaries or Guarantor for liquidation or reorganization, in
the event the Cox Subsidiaries or Guarantor becomes insolvent or makes an
assignment for the benefit of creditors, or in the event a receiver or trustee
be appointed for all or any significant part of the Cox Subsidiaries' or
Guarantor's assets, and shall continue to be effective or shall be reinstated,
as the case may be, if at any time payment and performance of the obligations
of the Cox Subsidiaries under the Merger Agreement, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be restored or returned by the Company or the Selling Stockholders, whether as
a "voidable preference",

- 2 -

<PAGE> 3

"fraudulent conveyance", or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the obligations of the
Cox Subsidiaries shall be reinstated and deemed reduced only by such amount
paid and not so rescinded, reduced, restored or returned.

6. Representations and Warranties. Guarantor hereby represents
and warrants to the Company and the Selling Stockholders as follows:

a. Ownership of Cox Subsidiaries. Guarantor owns all the
issued and outstanding capital stock of Cox Radio, Inc., and Cox Radio, Inc.
owns all the issued and outstanding capital stock of New Cox Radio II, Inc.
Guarantor therefore will benefit from the execution, delivery, and performance
by the Company and certain Selling Stockholders of the Merger Agreement.

b. Organization and Qualification. Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Guarantor has the requisite corporate power and
authority to carry on its business as it is now being conducted.

c. Authority Relative to this Guaranty. Guarantor has
the necessary corporate power and authority to execute and deliver this
Guaranty and to consummate the transactions contemplated hereby. The execution
and delivery of this Guaranty and the consummation of the transactions
contemplated hereby by Guarantor have been duly and validly authorized and
approved by the Board of Directors of Guarantor and by Cox Enterprises, Inc.,
as the ultimate parent of Guarantor, and no other corporate proceedings on the
part of Guarantor or Cox Enterprises, Inc. are necessary to authorize and
approve this Guaranty or to consummate the transactions contemplated hereby.
This Guaranty has been duly executed and delivered by Guarantor and constitutes
the valid and binding obligation of Guarantor enforceable against Guarantor in
accordance with its terms except as such enforceability may be limited by
general principles of equity or principles applicable to creditors' rights
generally.

d. No Conflicts. None of the execution and delivery of
this Guaranty by Guarantor, the consummation by Guarantor of the transactions
contemplated hereby or compliance by Guarantor with any of the provisions
hereof will (i) conflict with or violate the Certificate of Incorporation or
By-laws of Guarantor, or (ii) conflict with or result in a violation or breach
of or constitute a default (or an event which with notice or the lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of any note, bond,
mortgage, indenture, contract,

- 3 -
<PAGE> 4

agreement, lease, license, permit, franchise or other agreement to which
Guarantor is a party or by which Guarantor may be bound or affected, except
where such violation, breach or default would not have a material adverse
effect on the business, operations or financial condition of Guarantor or have
a material adverse effect on Guarantor's ability to perform its obligations
under this Guaranty.

e. Financing. Guarantor has sufficient immediately
available bank lines of credit or other binding, committed and immediately
available sources of financing (including internally generated cash, funding
from its parent, Cox Enterprises, Inc., or binding commitments from other
financial institutions) to perform, the obligations of the Cox Subsidiaries in
a timely manner under the Merger Agreement at any time between the date hereof
and the Closing, whenever that may occur.

f. Opinion of Counsel. Guarantor has delivered to the
Company the opinion of Dow, Lohnes & Albertson, PLLC attached hereto.

7. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).

8. Defined Terms. Unless otherwise defined herein, all
capitalized terms used in this Guaranty shall have the respective meanings
assigned to them in the Merger Agreement.

- 4 -
<PAGE> 5

IN WITNESS WHEREOF, this Guaranty has been executed as of the date
first written above.

COX BROADCASTING, INC.

By: /s/ John J. Rouse, Jr.
-----------------------------------
Name: John J. Rouse, Jr.
Title: Vice President and Treasurer

- 5 -

<PAGE> 1
EXHIBIT 4.1

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

NEWCITY COMMUNICATIONS, INC., as Issuer,

$75,000,000

11 3/8% Senior Subordinated Notes due 2003

INDENTURE

Dated as of November 2, 1993

SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, as Trustee

================================================================================
<PAGE> 2
CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
TIA Indenture
Section Section
<S> <C>
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08; 7.10; 12.02
(c) N.A.

311(a) 7.11
(b) 7.11
(c) N.A.

312(a) 2.05
(b) 12.03
(c) 12.03

313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06; 12.02
(c) 7.06; 12.02
(d) 7.06

314(a) 4.03; 4.18; 12.02
(b) N.A.
(c)(1) 12.04
(c)(2) 12.04
(c)(3) N.A.
(d) N.A.
(e) 12.05
(f) N.A.

315(a) 7.01(b)
(b) 7.05; 12.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
</TABLE>
<PAGE> 3

<TABLE>
<S> <C>
316(a)(last sentence) 12.06
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07

317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04

318(a) 12.01
</TABLE>

N.A. means Not Applicable

Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE> 4
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C> <C>
I DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.03 Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.04 Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

II THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.01 Dating; Incorporation of Form in Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.02 Execution and Authentication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.03 Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.04 Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.05 Noteholder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.06 Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
2.07 Replacement Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.08 Outstanding Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.09 Temporary Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.10 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.11 Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

III REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.01 Right to Redeem; Notices to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.02 Selection of Notes to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.03 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.04 Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.05 Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.06 Notes Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

IV COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.01 Payment of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.02 Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.03 Provision of Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.04 Limitation on Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.05 Limitation on Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . . . . . . . . 29
4.06 Limitation on Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.07 Limitation on Incurrence of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.08 Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.09 Limitation on Use of Proceeds from Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

</TABLE>
<PAGE> 5

<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C> <C>
4.10 Compliance with Securities Laws upon Purchase of Notes . . . . . . . . . . . . . . . . . . . . . . . 36
4.11 Limitation on Liens Securing Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 37
4.12 Limitation on Other Senior Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . 38
4.13 Limitation on Capital Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.14 Limitation on Sale and Lease-Back
Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.15 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.16 Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.17 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.18 Compliance Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.19 Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.20 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.22 Payments for Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

V MERGER AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.01 When Company or Guarantor May Merge, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.02 Successor Entity Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

VI DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.01 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.02 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.03 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.04 Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.05 Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.07 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.08 Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.09 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.10 Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.11 Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51

VII TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.01 Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.02 Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.03 Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.04 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.05 Notice of Defaults or Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.06 Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.07 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>

ii
<PAGE> 6

<TABLE>
<CAPTION>
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<S> <C> <C>
7.08 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.09 Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.10 Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.11 Preferential Collection of Claims against Company . . . . . . . . . . . . . . . . . . . . . . . . . 56

VIII SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.01 Termination of Company's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.02 Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.03 Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.04 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

IX AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.01 Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.02 With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
9.03 Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.04 Revocation and Effect of Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.05 Notation on or Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.06 Trustee to Sign Amendments, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

X SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.01 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.02 Liquidation; Dissolution; Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
10.03 Default on Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.04 Acceleration of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.05 When Distribution Must Be Paid Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.06 Notice by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.07 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.08 Relative Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.09 Subordination May Not Be Impaired by the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 70
10.10 Distribution or Notice to Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.11 Rights of Trustee and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.12 Authorization to Effect Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.13 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

XI GUARANTEE OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.01 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
11.02 Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
11.03 Release of Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.04 Limitation on Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.05 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

XII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
</TABLE>

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<PAGE> 7

<TABLE>
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12.01 Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
12.03 Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.04 Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.05 Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.06 When Treasury Notes Disregarded . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.07 Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
12.08 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.09 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.10 No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.11 No Recourse against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.12 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
12.13 Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.14 Table of Contents, Headings, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
12.15 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
</TABLE>

iv
<PAGE> 8
INDENTURE dated as of November 2, 1993 among NEWCITY
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), as Issuer, the
Guarantors named herein and SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association (the "Trustee").

The parties agree as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Company's
11 3/8% Senior Subordinated Notes due 2003 ("Notes"):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 101 Definitions.

"Acquired Indebtedness" of the Company means Indebtedness of
any Person existing at the time such Person merged with or into or became a
Subsidiary of the Company or assumed by the Company in connection with the
acquisition of assets from such Person.

"Affiliate" of any Person means (i) any Person who, directly
or indirectly, is in control of, is controlled by or is under common control
with such Person or (ii) any Person who is a director or officer of such
Person. For purposes of this definition, control of a Person means the power,
direct or indirect, to direct or cause the direction of the management or
policies of such Person whether by contract or otherwise; and the terms
"controlling," "controlled by" and "under common control" have meanings
correlative to the foregoing. For purposes of this definition, beneficial
ownership of 10% or more of the Common Equity of a Person (on a fully diluted
basis) or securities convertible into such Common Equity (whether or not
currently exercisable) shall be deemed to be control of such Person.

"Agent" means any Registrar, Paying Agent, co-registrar or
agent for service of notice and demands. See Section 2.03.

"Asset Sale" means, with respect to any Person, (1) the sale,
lease, conveyance, disposition or other transfer by the referent Person of any
of its
<PAGE> 9

assets (including by way of a Sale and Lease-Back Transaction and including the
sale or other transfer of any of the Capital Stock of any Subsidiary of the
referent Person) and (ii) the issuance, sale, conveyance, disposition or other
transfer by the referent Person of any Capital Stock of the referent Person;
provided, however, that notwithstanding the foregoing, the term "Asset Sale"
shall not include (A) the sale, lease, conveyance, disposition or other
transfer of any assets in the ordinary course of business and consistent with
past practice or to a wholly owned Subsidiary of the referent Person or to a
Person of whom the referent Person is a wholly owned Subsidiary, and (B) the
issuance by the Company of shares of its Capital Stock.

"Attributable Debt" means, as of any particular time, the then
present value (computed by discounting at the rate of interest per annum borne
by the Notes compounded semi-annually) of the obligation of a lessee for Net
Rental Payments during the remaining term of any lease (including any period
for which such lease has been extended or may, at the option of the lessor, be
extended). "Net Rental Payments" means, under any lease for any period, the
sum of the rental and other payments required to be paid in such period by the
lessee thereunder, not including, however, any amounts required to be paid by
such lessee (whether or not therein designated as rental or additional rental)
on account of sales, maintenance and repairs, insurance, taxes, assessments,
water rates or similar charges required to be paid by such lessee thereunder or
any amounts required to be paid by such lessee thereunder contingent upon the
amount of sales, maintenance and repairs, insurance, taxes, assessments, water
rates or similar charges.

"Average Life to Stated Maturity" means, as of the date of
determination, with respect to any Indebtedness, the quotient obtained by
dividing (i) the sum of the products of (a) the number of years from the date
of determination to the date or dates of each successive scheduled principal
payment of such Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.

"Board of Directors" means the Board of Directors of the
Company or any committee of the Board of Directors.

2
<PAGE> 10

"Board Resolution" means a resolution duly adopted by the
Board of Directors of any Person and which is in full force and effect.

"Business Day" means any day other than a Legal Holiday.

"Capital Lease Obligation" means, at any time determination
thereof is to be made, the amount of liability in respect of a capital lease
that would at such time be so required to be capitalized on the balance sheet
in accordance with GAAP.

"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents of interests in (however
designated) the equity (which includes, but is not limited to, common stock,
preferred stock and partnership and joint venture interests) of such Person.

A "Change of Control" of the Company will be deemed to have
occurred at such time as (i) any Person (including a Person's Affiliates and
associates), other than a Permitted Holder, becomes the beneficial owner (as
defined under Rule 13d-3 or any successor rule or regulation promulgated under
the Exchange Act) of 50% or more of the total voting power of the Company's
Common Equity, (ii) any Person (including a Person's Affiliates and
associates), other than a Permitted Holder, becomes the beneficial owner of
more than 30% of the total voting power of the Company's Common Equity, and the
Permitted Holders beneficially own, in the aggregate, a lesser percentage of
the total voting power of the Common Equity of the Company than such other
Person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors, (iii) prior to an Initial Public Offering, Permitted Holders shall
cease to own beneficially at least 30% of the total voting power of the
Company's Common Equity, (iv) there shall be consummated any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation or pursuant to which the Common Equity of the Company would be
converted into cash, securities or other property, other than a merger or
consolidation of the Company in which the holders of the Common Equity of the
Company immediately prior to the consolidation or merger hold,

3
<PAGE> 11

directly or indirectly, at least a majority of Common Equity of the surviving
corporation immediately after such consolidation or merger or (v) during any
period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors (together with any new directors
whose election by the Board of Directors or whose nomination for election by
the shareholder of the Company has been approved by 66-2/3% of the directors
then still in office who were either directors at the beginning of such period
or whose election or recommendation for election was previously so approved)
cease to constitute a majority of the Board of Directors.

"Common Equity" of any Person means all Capital Stock of such
Person that is generally entitled to (i) vote in the election of directors of
such Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or
others that will control the management and policies of such Person.

"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to the Indenture and thereafter means
the successor.

"Consolidated Interest Expense" means, with respect to any
Person, for any period, the aggregate amount of interest which, in conformity
with GAAP, would be set forth opposite the caption "interest expense" or any
like caption on an income statement for such Person and its Subsidiaries on a
consolidated basis (including, but not limited to, dividends, whether paid or
accrued, on Subsidiary Preferred Stock, imputed interest included on Capital
Lease Obligations, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing, the net
costs associated with hedging obligations, amortization of other financing fees
and expenses, the interest portion of any deferred payment obligation,
amortization of discount or premium, if any, and all other non-cash interest
expense (other than interest amortized to cost of sales)) plus, without
duplication, all net capitalized interest for such period and all interest
incurred or paid under any guarantee of Indebtedness (including a guarantee of
principal, interest or any combination thereof) of any Person, plus the amount
of all dividends

4
<PAGE> 12

or distributions paid on Redeemable Stock (other than dividends paid or payable
in shares of Capital Stock or Equity Interests in the Company or its
Subsidiaries).

"Consolidated Net Income" means, with respect to any Person,
for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, provided that (i) the Net Income of any Person which is not a
Subsidiary or is accounted for by such Person by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid to such Person or a Subsidiary, (ii) the Net Income of any
Person acquired in a pooling of interests transaction for any period prior to
the date of such acquisition shall be excluded and (iii) the Net Income of any
Subsidiary that is subject to restrictions, direct or indirect, on the payment
of dividends or the making of distributions to such Person shall be excluded,
except to the extent dividends or distributions are actually received by such
Person.

"Consolidated Net Worth" means, at any date of determination,
the sum of the Capital Stock and additional paid-in capital plus retained
earnings (or minus accumulated deficit) of any Person and its Subsidiaries on a
consolidated basis, excluding amounts attributable to Redeemable Stock, each
item to be determined in conformity with GAAP.

"Corporate Trust Office" means the office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is
located at 777 Main Street, Hartford, Connecticut 06115.

"Default" means any event which after notice or passage of
time would be an Event of Default as described in Section 6.01.

"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person for such period plus (a) provision for
taxes based on income or profits to the extent such provision for taxes was
deducted in computing Consolidated Net Income, plus (b) Consolidated Interest
Expense, to the extent such expense was deducted in computing Consolidated Net

5
<PAGE> 13

Income, plus (c) depreciation expense, plus (d) amortization expense, plus (e)
other non-cash items reducing Consolidated Net Income, minus (f) non-cash items
increasing Consolidated Net Income.

"Equity Interests" means Capital Stock, warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).

"Exchange Act" means the Securities Exchange Act of 1934, as
amended.

"GAAP" means generally accepted accounting principles as
applied in the United States set forth in the opinions and pronouncements of
the Accounting Principals Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States, which are applicable as of the date of determination.

"guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of
participation arrangements, by agreement to keep well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring the obligee of such Indebtedness in any other manner of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.

"Guarantee" means the guarantee of the obligations of the
Company pursuant to this Indenture and the Notes, issued by each Guarantor
pursuant to Article 11 hereof.

6
<PAGE> 14

"Guarantor" means any of NewCity Broadcasting Company, Inc., a
Delaware corporation, NewCity Communications of Alabama, Inc., a Delaware
corporation, NewCity Communications of Atlanta, Inc., a Delaware corporation,
NewCity Communications of Connecticut, Inc., a Connecticut corporation, NewCity
Communications of Daytona, Inc., a Connecticut corporation, NewCity
Communications of Florida, Inc., a Delaware corporation, NewCity Communications
of Fulton, Inc., a Delaware corporation, NewCity Communications of
Massachusetts, Inc., a Delaware corporation, NewCity Communications of San
Antonio, Inc., a Delaware corporation, NewCity Communications of Syracuse,
Inc., a Delaware corporation, NewCity Communications of Tulsa, Inc., a Delaware
corporation, American Comedy Network, Inc., a Delaware corporation, Birmingham
Communications, Inc., a Delaware corporation, CommercialWorks, Inc., a
Connecticut corporation, NewCity Tulsa Tower, Inc., an Oklahoma corporation, or
ParkCity Productions, Inc., a Connecticut corporation.

"Holder" or "Noteholder" means the person in whose name a Note
is registered on the Registrar's books.

"Indebtedness" of any Person means any indebtedness,
contingent or otherwise, in respect of borrowed money and deferred interest
thereon (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof) or evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or reimbursement
obligations with respect thereto) or representing the balance deferred and
unpaid of the purchase price of any property (including pursuant to Capital
Lease Obligations), if and to the extent any of the foregoing indebtedness
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP (except that any such balance that constitutes a trade
payable and/or an accrued liability arising in the ordinary course of business
shall not be considered Indebtedness), and shall also include, to the extent
not otherwise included, any Capital Lease Obligations, the maximum liquidation
preference of any Redeemable Stock or Subsidiary Preferred Stock, indebtedness
secured by a Lien to which the property or assets owned or held by such Person
is subject, whether or not the obligations secured thereby shall have been
assumed, and guarantees of items that would be included within this definition
to the extent of such guarantees (regard-

7
<PAGE> 15

less of whether such items would appear upon such balance sheet). For purposes
of the preceding sentence, the maximum liquidation preference of any Redeemable
Stock or Subsidiary Preferred Stock shall be the greatest amount payable in
respect thereof on a liquidation, whether voluntary or involuntary, plus
accrued and unpaid dividends. The amount of Indebtedness of any Person at any
date shall be, without duplication, (i) the outstanding balance at such date of
all unconditional obligations as described above and the maximum liability of
any such contingent obligations at such date and (ii) in the case of
Indebtedness of others secured by a Lien to which the property or assets owned
or held by such Person is subject, the lesser of the fair market value at such
date of any asset subject to a Lien securing the Indebtedness of others and the
amount of the Indebtedness secured.

"Indenture" means this Indenture as amended or supplemented
from time to time.

"Initial Public Offering" means the first offer and sale to
the public by the Company of shares of any class of the Capital Stock of the
Company pursuant to a registration statement that has been declared effective
by the Securities and Exchange Commission.

"Investments" means, with respect to any Person, (i) all
investments by such Person in any other Person in the form of loans, advances
or capital contributions, (ii) all guarantees of Indebtedness or other
obligations of any other Person by such Person, (iii) all purchases (or other
acquisitions for consideration) by such Person of Indebtedness, Capital Stock
or other securities of any other Person and (iv) all other items that would be
classified as investments (including, without limitation, purchases of assets
outside the ordinary course of business) on a balance sheet of such Person
prepared in accordance with GAAP.

"Junior Subordinated Notes" means the notes issued on the date
hereof in exchange for notes issued by Birmingham Communications, Inc. and
NewCity Communications of Fulton, Inc., which notes are subordinated in right
of payment to the Notes.

"Lien" means any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind,

8
<PAGE> 16

whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give any
security interest in and any filing or other agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).

"LMA" means a local marketing agreement.

"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP, excluding, however,
(i) any gain (but not loss) realized upon the sale or other disposition
(including, without limitation, dispositions pursuant to Sale and Lease-Back
Transactions) of any real property or equipment of such Person which is not
sold or otherwise disposed of in the ordinary course of business, and (ii) any
gain (but not loss) realized upon the sale or other disposition by such Person
of any Capital Stock or marketable securities.

"Net Proceeds" means the aggregate proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale, net of the
out-of-pocket costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees and sales commissions) and any
relocation expenses and severance and shutdown costs incurred as a result
thereof, taxes paid or payable as a result thereof, amounts required to be
applied to the repayment of Indebtedness secured by a Lien on the asset or
assets which are the subject of such Asset Sale and any reserve for adjustment
in respect of the sale price of such asset or assets.

"Notes" means the securities that are issued under this
Indenture, as amended or supplemented, from time to time pursuant to this
Indenture.

"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, the Secretary or the Controller of the Company.

"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant

9
<PAGE> 17

Treasurer, Assistant Secretary or Assistant Controller of the Company. See
Sections 12.04 and 12.05.

"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.

"Permitted Holders" means, collectively, any of the holders of
the Company's Capital Stock identified under "Stock Ownership" in the final
prospectus relating to the offering of the Notes, the members of their
immediate families, the respective estates, spouses, heirs, ancestors, lineal
descendants, legatees and legal representatives of any of the foregoing and the
trustee of any bona fide trust of which one or more of the foregoing are the
sole beneficiaries or the grantors thereof, or any entity of which any of the
foregoing, individually or collectively, beneficially own more than 50% of the
voting securities.

"Permitted Indebtedness" means, without duplication, any of
the following Indebtedness of the Company or any Subsidiary, as the case may be:

(i) Indebtedness of the Company outstanding at
any time under the Senior Credit Facility, or
any successor or successors thereto, in an
aggregate principal amount not to exceed the
aggregate commitments as in effect on the
date of the Indenture;

(ii) Indebtedness and obligations of the Company
under the Notes, (b) any Indebtedness and
obligations outstanding on the date hereof
and (c) Indebtedness and obligations arising
after the date hereof in respect of
agreements existing as of the date hereof
providing for indemnification, adjustment of
purchase price or similar obligations
incurred in connection with the acquisition
of any business;

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<PAGE> 18

(iii) Indebtedness the proceeds of which are used,
directly or indirectly, to refinance
outstanding Indebtedness of the Company or
any Subsidiary in a principal amount (or, if
such Indebtedness does not require cash
payments prior to maturity, with an original
issue price of such Indebtedness) not to
exceed the principal amount of the
Indebtedness so refinanced (or, if the
Indebtedness being refinanced was issued with
an original issue discount, the original
issue price plus the amortized portion of the
original issue discount to the date that such
refinancing Indebtedness was incurred);
provided that if the Indebtedness being
refinanced is Indebtedness of the Company,
such refinancing shall be Indebtedness of the
Company; provided, further, that Indebtedness
the proceeds of which are used to refinance
Indebtedness of the Company that is expressly
subordinated in right of payment to the Notes
will only be permitted if (x) such
Indebtedness is expressly subordinated in
right of payment to the Notes at least to the
same extent that the Indebtedness to be
refinanced is subordinated to the Notes, (y)
the Average Life to Stated Maturity of such
Indebtedness exceeds the Average Life to
Stated Maturity of the Notes, and (z) the
final scheduled maturity of such Indebtedness
exceeds the final maturity of the Notes; and

(iv) Indebtedness of a wholly owned Subsidiary to
the Company or the Company to a wholly owned
Subsidiary.

"Permitted Investments" means (i) certificates of deposit with
final maturities of one year or less issued by United States commercial banks
having capital and surplus in excess of $100,000,000; (ii) commercial paper
with a grade of no less than A1 or P1; (iii) direct

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<PAGE> 19

obligations of the United States Government or a United States agency with a
maturity of one year or less; (iv) money market preferred stock with a rating
of "A" or greater; and (v) shares of money market mutual or similar funds
having assets in excess of $100,000,000.

"Permitted Liens" means (i) Liens existing on the date of this
Indenture as specifically identified in the final prospectus relating to the
offering of the Notes; (ii) Liens for taxes, assessments, governmental charges
or claims which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor; (iii) statutory Liens of landlords and
carriers', warehousemen's, mechanics', suppliers', materialmen's, repairmen's,
or other like Liens arising in the ordinary course of business and with respect
to amounts not yet delinquent or being contested in good faith by appropriate
proceedings, and if a reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made therefor; (iv) Liens
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security; (v) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory obligations, surety and appeal bonds,
government contracts, performance and return-of-money bonds and other
obligations of a like nature incurred in the ordinary course of business
(exclusive of obligations for the payment of borrowed money); (vi) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with
the business of the Company or any of its Subsidiaries incurred in the ordinary
course of business; (vii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods; (viii) judgment and attachment Liens not giving
rise to an Event of Default; (ix) leases or subleases granted to others not
interfering in any material respect with the business of the Company or any of
its Subsidiaries; (x) any interest or title of a lessor in the property subject
to any capital lease obligation or operating lease; (xi) Liens arising from
filing Uniform Commercial Code financing statements

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<PAGE> 20

regarding leases; and (xii) any renewal of or substitution for any Lien
permitted by any of the preceding clauses, provided, however, that the
Indebtedness secured is not increased nor the Lien extended to any additional
property.

"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.

"Redeemable Stock" means any Equity Interest which, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable before the stated maturity of the Notes), or upon the
happening of any event, matures or is mandatorily redeemable, in whole or in
part, prior to the second anniversary of the final stated maturity of the
Notes, or is, by its terms or upon the happening of any event, redeemable at
the option of the holder thereof, in whole or in part, at any time prior to the
second anniversary of the final stated maturity of the Notes.

"Redemption Date" when used with respect to any Note to be
redeemed means the date fixed for such redemption pursuant to this Indenture.

"Sale and Lease-Back Transaction" means any arrangement with
any Person (other than the Company or a Subsidiary), or to which any such
Person is a party, providing for the leasing to the Company or a Subsidiary of
any property owned by the Company or a Subsidiary and sold or transferred by
the Company or such Subsidiary to such Person or to any other Person (other
than the Company or a Subsidiary).

"SEC" means the Securities and Exchange Commission.

"Senior Credit Facility" means the Senior Credit Facility in
the aggregate principal amount of $15,000,000 from Fleet National Bank to the
Company, dated as of October 1, 1993, and any amendments, extensions,
refundings or renewals thereof with the same or different lenders.

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<PAGE> 21

"Senior Indebtedness" means (i) the principal of, premium, if
any, and accrued and unpaid interest on, and letters of credit (and matured and
unmatured reimbursement obligations with respect thereto) and any fees,
expenses, indemnities and other amounts payable under or in connection with the
Senior Credit Facility, provided, however, that (a) any Indebtedness under any
refinancing, refunding or replacement of the Senior Credit Facility shall not
constitute Senior Indebtedness to the extent that Indebtedness thereunder is by
its terms expressly subordinate in right of payment to any other Indebtedness
of the Company and (b) all interest accruing after the filing of a petition by
or against the Company under any Federal, state or foreign bankruptcy or
similar law, whether or not such interest is allowed as a claim after such
filing in any proceeding under such bankruptcy or similar law, shall constitute
Senior Indebtedness; and (ii) the principal of, premium, if any, and accrued
and unpaid interest on Indebtedness of the Company, contingent or otherwise, in
respect of borrowed money or otherwise, whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Notes.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (i)
Indebtedness evidenced by the Notes, (ii) Indebtedness that is expressly
subordinate or junior in right of payment to any Indebtedness of the Company,
(iii) any liability for Federal, state, local or other taxes owed or owing by
the Company, (iv) Indebtedness of or amounts owed by the Company for
compensation to employees and for services, (v) Indebtedness of the Company to
a Subsidiary of the Company or any other Affiliate of the Company or any of
such Affiliate's subsidiaries, (vi) any Indebtedness which at the time of
issuance is issued in violation of the Indenture, and (vii) amounts owing under
leases (other than Capital Lease Obligations).

"Series B Preferred Stock" means the Series B Preferred Stock
of the Company, par value $.05 per share, issued on the date hereof.

14
<PAGE> 22

"Series C Preferred Stock" means the Series C Preferred Stock
of the Company, par value $.05 per share, issued on the date hereof.

"Specified Senior Indebtedness" means (i) all Senior
Indebtedness under the Senior Credit Facility and (ii) all other Senior
Indebtedness, which (a) is secured by a Lien or Liens on all or substantially
all of the assets of the Company, (b) has at the time of initial issuance an
aggregate outstanding principal amount, together with all other Senior
Indebtedness sharing pari passu in such Liens, of $5 million or more and (c) is
designated as such by the Board of Directors at the time of initial issuance.

"Subordinated Indebtedness" means Indebtedness which is
subordinated in right of payment to any other Indebtedness of the Company.

"Subsidiary" means (i) a corporation, the majority of the
Common Equity of which is owned, directly or indirectly through other
subsidiaries, by the Company or a subsidiary of the Company, and (ii) any
entity other than a corporation, the majority of the Common Equity of which is
owned, directly or indirectly through other subsidiaries, by the Company or a
subsidiary of the Company.

"Subsidiary Preferred Stock" means any Capital Stock issued by
a Subsidiary which has any preference as to payment of dividends or upon
liquidation over any other Capital Stock of such Subsidiary.

"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
Section Section 77aaa-77bbbb) as in effect on the date of this Indenture.

"Trustee" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and thereafter means
the successor.

"Trust Officer" means any officer in the Trustee's principal
corporate trust office customarily performing functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred

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<PAGE> 23

because of his knowledge of and familiarity with the particular subject.

"United States" means the United States of America.

"wholly owned Subsidiary" means any Subsidiary of the Company
all the Common Equity of which is owned by the Company, either directly or
through wholly owned Subsidiaries.

Section 202 Other Definitions.

<TABLE>
<CAPTION>
Term Defined in Section
---- ------------------
<S> <C>
"Adjusted Net Worth" 11.04
"Asset Sale Payment" 4.09
"Asset Sale Payment Date" 4.09
"Bankruptcy Law" 6.01
"Change of Control Offer" 4.08
"Change of Control Payment Date" 4.08
"Custodian" 6.01
"Event of Default" 6.01
"Excess Proceeds" 4.09
"Excess Proceeds Offer" 4.09
"Guarantee Date" 11.04
"Legal Holiday" 12.08
"Maximum Guaranteed Amount" 11.04
"Note Proceeds" 11.04
"Paying Agent" 2.03
"Registrar" 2.03
"Restricted Payments" 4.04
"Senior Indebtedness of the Guarantor" 11.02
"U.S. Government Obligations" 8.01
</TABLE>

Section 303 Incorporation by Reference of Trust Indenture Act.

Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:

"indenture securities" means the Notes.

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<PAGE> 24

"indenture to be qualified" means this Indenture.

"indenture trustee" or "institutional trustee" means the
Trustee.

"obligor" on the indenture securities means the Company or any
other obligor on the indenture securities; with respect to the requirement of
Sections 312 to 317, inclusive, of the TIA, such term shall include the
Guarantors if the Company fails to perform its obligations under such Sections.

All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them.

Section 404 Rules of Construction.

Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally
accepted accounting principles in effect on the date
hereof;

(3) "or" is not exclusive; and

(4) words in the singular include the plural and in the
plural include the singular.

ARTICLE II

THE NOTES

Section 101 Dating; Incorporation of Form in Indenture.

The Notes, the notation thereon relating to the Guarantee and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit A which is incorporated in and made a part of this Indenture. The
Notes may have notations, legends or endorsements re-

17
<PAGE> 25

quired by law, stock exchange rule, agreements to which the Company is subject,
or usage. The Company shall approve the form of the Notes and any notation,
legend or endorsement on them. Each Note shall be dated the date of its
authentication.

Section 202 Execution and Authentication.

Two Officers shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be impressed, affixed, imprinted
or reproduced on the Notes and may be in facsimile form. An Officer of each
Guarantor shall sign the notation on the Notes relating to the Guarantee by
manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds
that office at the time the Trustee authenticates the Note, the Note shall be
valid nevertheless.

A Note shall not be valid until the Trustee manually signs the
certificate of authentication on the Note. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture.

The Trustee shall authenticate Notes for original issue in the
aggregate principal amount of $75,000,000 upon a written order of the Company
signed by two Officers or by an Officer and an Assistant Treasurer of the
Company. The aggregate principal amount of Notes outstanding at any time may
not exceed such amount except as provided in Section 2.07.

The Trustee may appoint an authenticating agent to
authenticate Notes. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company.

The Notes shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.

Section 303 Registrar and Paying Agent.

The Company shall maintain an office or agency where Notes may
be presented for registration of transfer

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<PAGE> 26

or for exchange ("Registrar"), an office or agency where Notes may be presented
for payment ("Paying Agent") and an office or agency where notices and demands
to or upon the Company in respect of the Notes and this Indenture may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may have one or more co-registrars and one or more
additional co-paying agents. The Company or any Subsidiary may act as Paying
Agent, Registrar or co-registrar and the term "Paying Agent" includes any
additional paying agent.

The Company shall notify the Trustee of the name and address
of any Agent not a party to this Indenture. If the Company fails to maintain a
Registrar or Paying Agent, or agent for service of notices and demands, or
fails to give the foregoing notice, the Trustee shall act as such.

The Company initially appoints the Trustee as Registrar,
Paying Agent and agent for service of notices and demands.

Section 404 Paying Agent to Hold Money in Trust.

Prior to each due date of the principal or interest on any
Notes, the Company (or any other obligor on the Notes) shall deposit with the
Paying Agent a sum sufficient to pay such principal and interest so becoming
due. Each Paying Agent shall hold in trust for the benefit of Noteholders or
the Trustee all money held by the Paying Agent for the payment of principal or
interest on the Notes, and shall notify the Trustee of any default by the
Company (or any other obligor on the Notes) in making any such payment. If the
Company or a Subsidiary acts as Paying Agent, it shall on or before each due
date of the principal of or interest on any Notes segregate the money and hold
it as a separate trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and the Trustee may at any
time during the continuance of any payment default, upon written request to a
Paying Agent, require such Paying Agent to forthwith pay to the Trustee all
sums so held in trust by such Paying Agent. Upon doing so, the Paying Agent
(other than the Company or a Subsidiary) shall have no further liability for
the money.

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<PAGE> 27

Section 505 Noteholder Lists.

The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Noteholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least ten days before each semi-annual interest
payment date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Noteholders.

Section 606 Transfer and Exchange.

When a Note is presented to the Registrar or a co-registrar
with a request to register the transfer, the Registrar or co-registrar shall
register the transfer as requested and when Notes are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Notes of other authorized denominations, the Registrar
shall make the exchange as requested provided that every Note presented or
surrendered for registration of transfer or exchange shall be duly endorsed or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Registrar duly executed by the Holder thereof or his attorney
duly authorized in writing. To permit transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Notes and each Guarantor shall
endorse the Guarantee thereon at the Registrar's or co-registrar's request.
The Company may charge a reasonable fee for any transfer or exchange and may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto, but this provision shall not
apply to any exchange pursuant to Sections 2.09, 3.06 or 9.05. The Registrar
is not required to transfer or exchange any Note (i) during a period beginning
at the opening of business 15 days before any selection of Notes to be redeemed
and ending at the close of business on the day of the mailing of a notice of
redemption or (ii) selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.

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<PAGE> 28

Section 707 Replacement Notes.

If a mutilated Note is surrendered to the Trustee or if the
Holder of a Note presents evidence to the satisfaction of the Company and the
Trustee that the Note has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Note and each
Guarantor shall endorse the Guarantee thereon if the requirements of Section
8-405 of the Uniform Commercial Code as in effect on the date of this Indenture
are met. An indemnity bond may be required that is sufficient in the judgment
of the Company and the Trustee to protect the Company, the Trustee or any Agent
from any loss which any of them may suffer if a Note is replaced. The Company
may charge for its expenses in replacing a Note.

Every replacement Note is an additional obligation of the
Company and each Guarantor and shall be entitled to the benefits of this
Indenture.

Section 808 Outstanding Notes.

Notes outstanding at any time are all Notes authenticated by
the Trustee except for those cancelled by it and those described in this
Section 2.08 as not outstanding.

If a Note is replaced pursuant to Section 2.07, (other than a
mutilated Note surrendered for replacement) it ceases to be outstanding until
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon
surrender of such Note and replacement thereof pursuant to Section 2.07.

If the Paying Agent (other than the Company or a Subsidiary)
holds on a Redemption Date or maturity date money sufficient to pay the
principal of and accrued interest on Notes payable on that date, then on and
after that date such Notes cease to be outstanding and interest on them ceases
to accrue.

A Note does not cease to be outstanding because the Company or
an Affiliate holds the Note.

21
<PAGE> 29

Section 909 Temporary Notes.

Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes and each Guarantor
shall endorse the Guarantee thereon. Temporary Notes shall be substantially in
the form of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes and each Guarantor
shall endorse the Guarantee thereon in exchange for temporary Notes. Until
such exchange, such temporary Notes shall be entitled to the same rights,
benefits and privileges as the definitive Notes, including the Guarantee.

Section 1010 Cancellation.

The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar or the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment for
cancellation. Subject to Section 2.07, the Company may not issue new Notes to
replace Notes that it has previously paid or delivered to the Trustee for
cancellation.

Section 1111 Defaulted Interest.

If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest to the persons who are Noteholders on a
subsequent special record date. The Company shall fix the special record date
and payment date in a manner satisfactory to the Trustee. At least 15 days
before the special record date, the Company shall mail to each Noteholder a
notice that states the special record date, the payment date, and the amount of
defaulted interest to be paid. The Company may pay defaulted interest in any
other lawful manner.

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<PAGE> 30

ARTICLE III

REDEMPTION

Section 101 Right to Redeem; Notices to Trustee.

The Company may redeem the Notes on the terms and conditions
set forth in paragraph 5 of the Notes. If the Company elects to redeem the
Notes pursuant to paragraph 5 of the Notes, it shall notify the Trustee in
writing of the Redemption Date and the principal amount of Notes to be
redeemed. The Company shall give each notice provided for in this Section in
an Officers' Certificate delivered at least 50 days before the Redemption Date
(unless a shorter period shall be satisfactory to the Trustee).

Section 202 Selection of Notes to Be Redeemed.

If less than all the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed pro rata or by lot or by any other method
the Trustee considers fair and appropriate. The Trustee shall make the
selection from Notes outstanding and not previously called for redemption. The
Trustee may select for redemption portions of the principal of Notes that have
denominations larger than $1,000. Notes and portions of them the Trustee
selects shall be in amounts of $1,000 or multiples of $1,000. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.

Section 303 Notice of Redemption.

At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail a notice of redemption by first-class mail to each
Holder of Notes to be redeemed.

The notice shall identify the Notes to be redeemed and shall
state:

(1) the Redemption Date;

(2) the redemption price;

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<PAGE> 31

(3) if any Note is to be redeemed in part, the portion of
the principal amount to be redeemed, and that on and
after the Redemption Date, upon surrender of such
Note a new Note or Notes in principal amount equal to
the unredeemed portion thereof will be issued;

(4) the name and address of the Paying Agent;

(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
and

(6) if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion
thereof) to be redeemed, as well as the aggregate
principal amount of Notes to be redeemed and the
aggregate principal amount of Notes estimated to be
outstanding after such partial redemption.

At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.

Section 404 Effect of Notice of Redemption.

Once notice of redemption is mailed, Notes called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Notes shall be paid at the
redemption price, plus accrued interest to the Redemption Date.

Section 505 Deposit of Redemption Price.

Prior to the Redemption Date, the Company shall deposit with
the Paying Agent (or, if the Company or a Subsidiary is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of
and accrued interest on all Notes to be redeemed on that date.

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<PAGE> 32

Section 606 Notes Redeemed in Part.

After the Redemption Date, upon surrender of a Note that is
redeemed in part, the Trustee shall authenticate for the Holder a new Note and
each Guarantor shall endorse the Guarantee thereon equal in principal amount to
the unredeemed portion of the Note surrendered.

ARTICLE IV

COVENANTS

Section 101 Payment of Notes.

The Company shall pay the principal of and interest on the
Notes on the dates and in the manner provided in the Notes and this Indenture.
An installment of principal or interest shall be considered paid on the date it
is due if the Trustee or Paying Agent (other than the Company or a Subsidiary
of the Company) holds on that date money designated for and sufficient to pay
the installment. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at a
rate per annum equal to the rate set forth in the title of the Notes; it shall
pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest at the same rate to the
extent lawful.

Section 202 Maintenance of Office or Agency.

Pursuant to the provisions of Section 2.03, the Company shall
designate in New York City an office or agency where at all times the Notes may
be surrendered for registration of transfer or exchange and where at all times
the notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. If at any time the Company shall fail to so designate
any such required office or agency or shall fail to furnish the Trustee with
the address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 12.02.

The Company may also designate from time to time one or more
other offices or agencies where the

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<PAGE> 33

Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided that no such designation or
rescission shall in any manner relieve the Company of its obligation to so
designate as aforesaid an office or agency in New York City for such purposes.
The Company shall give prompt notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.

The Company hereby designates the Shawmut Trust Company, 40
Broad Street, New York, New York, as such office or agency of the Company in
accordance with this Section.

Section 303 Provision of Reports.

(a) The Company will supply without cost to each
Holder of the Notes, and file with the Trustee within 30 days after the Company
is required to file the same with the SEC, copies of the annual reports and
quarterly reports and of the information, documents and other reports which the
Company may be required to file with the SEC pursuant to Sections 13(a), 13(c)
or 15(d) of the Exchange Act.

(b) If the Company is not required to file with
SEC such reports and other information referred to in paragraph (a) above, the
Company will furnish without cost to each Holder of the Notes and file with the
Trustee (i) within 120 days after the end of each fiscal year, annual reports
containing substantially the information required to be contained in Form 10-K
promulgated under the Exchange Act, or substantially the same information
required to be contained in comparable items of any successor form, (ii) within
60 days after the end of each of the first three fiscal quarters of each fiscal
year, quarterly reports containing substantially the information required to be
contained in Form 10-Q promulgated under the Exchange Act, or substantially the
same information required to be contained in comparable items of any successor
form and (iii) promptly from the time after the occurrence of an event required
to be therein reported, such other reports containing substantially the
information required to be contained in Form 8-K promulgated under the Exchange
Act, or substantially the same

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<PAGE> 34

information required to be contained in any successor form.

At the Company's request and at the Company's expense, the
Trustee shall deliver to the Holders the documents required to be delivered by
the Company pursuant to this Section.

Section 404 Limitation on Restricted Payments.

The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or
make any distribution on account of the Company's or any of its Subsidiaries'
Capital Stock or other Equity Interests (other than dividends or distributions
payable to the Company or any of its Subsidiaries or payable in shares of
Capital Stock or Equity Interests of the Company or its Subsidiaries (other
than Redeemable Stock)), (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company or any of its Subsidiaries (other
than any such Equity Interests owned by the Company or any of its
Subsidiaries), (iii) prepay, repay, redeem, defease or otherwise acquire or
retire for value prior to any scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of the Company that ranks
junior or pari passu in right of payment to the Notes (including the Junior
Subordinated Notes and capitalized interest thereon), (iv) incur, create or
assume any guarantee of Indebtedness of any Affiliate of the Company (other
than a wholly owned Subsidiary), provided, however, that any Subsidiary may
guarantee any Senior Indebtedness of the Company or (v) make Investments, other
than Permitted Investments, in any Person other than a wholly owned Subsidiary
(the foregoing actions set forth in clauses (i) through (v) being referred to
as "Restricted Payments") (a) if at the time of such action, or after giving
effect thereto, an Event of Default or Default shall have occurred and be
continuing; or (b) if after giving effect to such Restricted Payment, the
aggregate amount of Restricted Payments subsequent to the date of this
Indenture, would exceed: (1) the aggregate EBITDA of the Company or, in the
event such aggregate EBITDA shall be a deficit, minus such deficit, accrued
subsequent to December 31, 1993 to the end of the fiscal quarter immediately
preceding such Restricted Payment, less (2) 1.6 times Consolidated Interest
Expense

27
<PAGE> 35

for the same period, plus (3) the aggregate net cash proceeds received by the
Company from the issue or sale of Equity Interests of the Company (other than
Equity Interests issued or sold to a Subsidiary and other than Redeemable
Stock) after December 31, 1993, plus (4) the aggregate net cash proceeds
received by the Company upon the exercise of Equity Interests of the Company
(other than Equity Interests exercised by a Subsidiary or for Redeemable Stock)
after December 31, 1993, plus (5) $1,000,000; or (c) if after giving effect to
such Restricted Payment, the ratio of the Company's total Indebtedness to the
Company's EBITDA (determined on a pro forma basis for the last four fiscal
quarters of the Company for which financial statements are available at the
date of determination) would be such that the Company would not be permitted to
incur $1.00 of additional Indebtedness under Section 4.07 hereof; provided,
however, that the provisions of this Section 4.04 shall not prevent (i) the
payment of any dividend within 60 days after the date of declaration thereof,
if at said date of declaration such payment complied with the provisions
hereof, (ii) any redemption of the Junior Subordinated Notes or the Series B
Preferred Stock or Series C Preferred Stock with all or part of the net
proceeds of the sale of WYAI (FM), Atlanta, Georgia, (iii) any repurchase of
Capital Stock of the Company from employees of the Company in an aggregate
amount not to exceed $500,000, provided, however, that if such Capital Stock is
resold to another employee, the aggregate net cash proceeds shall be added back
to such $500,000, provided, further, that such sale shall not be included in
clause (b)(3) of this Section 4.04 or (iv) an Investment in any Person which,
immediately after such Investment, will be a wholly owned Subsidiary, provided
that such Person conducts a business which is substantially identical to any
business conducted by the Company and its Subsidiaries on the date of this
Indenture.

Prior to making any Restricted Payment under this Section
4.04, the Company shall deliver to the Trustee an Officers' Certificate setting
forth the computation by which the amount available for Restricted Payments was
determined and stating that no Default or Event of Default exists and is
continuing and no Default or Event of Default will result from making the
Restricted Payment. The Trustee shall have no duty or responsibility to
determine the accuracy or correctness of this

28
<PAGE> 36

computation and shall be fully protected in relying on such Officers'
Certificate.

Section 505 Limitation on Payment Restrictions Affecting
Subsidiaries.

The Company will not, and will not permit any Subsidiary to,
create or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction which restricts the ability of any such Subsidiary
to (i) pay dividends or make any other distributions on such Subsidiary's
Capital Stock or pay any Indebtedness owed to the Company or any Subsidiary,
(ii) make any Investment in the Company or any Subsidiary, (iii) transfer any
of its property or assets to the Company or any Subsidiary, or (iv) guarantee
any Indebtedness of the Company or any of its Subsidiaries, except any
restrictions existing under (a) applicable law, (b) this Indenture, (c) written
agreements in effect at the issuance of the Notes as described on Schedule I
hereto or restrictions contained in Specified Senior Indebtedness that are no
more restrictive than those provided in the Senior Credit Facility as in effect
on the date of this Indenture.

Section 606 Limitation on Transactions with Affiliates.

The Company will not, and will not permit any Subsidiary to,
directly or indirectly, conduct any business or enter into any transaction or
series of related transactions (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any Affiliate of the Company (other than the Company or a Subsidiary) unless
(i) the terms of such business, transaction or series of transactions are as
favorable to the Company or such Subsidiary as terms that would be obtainable
at the time for a comparable transaction or series of related transactions in
arm's-length dealings with an unrelated third person, (ii) if the business or
transaction or series of transactions is in a potential aggregate amount
greater than $1,000,000, but less than $3,000,000, such business or transaction
or series of transactions shall have been approved in good faith by the Board
of Directors and a majority of the independent directors thereof and the Board
Resolution provides that the business or transac-

29
<PAGE> 37

tion or series of transactions meets the criterion set forth in (i) above or
(iii) if the business or transaction or series of transactions is in a
potential aggregate amount equal to or greater than $3,000,000, but less than
$15,000,000, the Company has received the written opinions of two nationally
recognized experts with experience in appraising the terms and conditions of
the type of business or transaction or series of transactions for which
approval is required, selected by the Board of Directors and all the
independent directors thereof, and such opinions are to the effect that the
business or transaction or series of transactions are fair to the Company from
a financial point of view, or (iv) if the business or transaction or series of
transactions is in a potential aggregate amount equal to or greater than
$15,000,000, the Company has received a written opinion of a nationally
recognized investment banking firm to the effect that the transaction is fair
to the Company from a financial point of view. For purposes of the preceding
sentence, a business or a transaction or series of transactions involving the
incurrence of Indebtedness or the issuance of preferred stock shall be valued
at the aggregate net proceeds of such Indebtedness or preferred stock,
respectively, without regard to interest or dividend payments. Notwithstanding
the foregoing, this provision will not apply to (a) any transaction with an
officer or director of the Company or of any Subsidiary in his or her capacity
as officer or director entered into in the ordinary course of business
(including compensation and employee benefit arrangements with any officer or
director of the Company or of any Subsidiary) or (b) the exercise of any
purchase option on a property operated pursuant to an LMA as in effect at the
issuance of the Notes.

Section 707 Limitation on Incurrence of Indebtedness.

The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur, issue, assume,
guarantee or in any other manner become liable with respect to, or otherwise
become responsible for the payment of (collectively, "incur"), any Indebtedness
(including Acquired Indebtedness) other than Permitted Indebtedness, provided,
however, the Company and its Subsidiaries shall be permitted to incur
Indebtedness if, after giving effect to the incurrence of such Indebtedness and
the receipt and application of the

30
<PAGE> 38

proceeds thereof, the ratio of the Company's total Indebtedness to the
Company's EBITDA (determined on a pro-forma basis for the last four fiscal
quarters of the Company for which financial statements are available at the
date of determination) is less than 6.75 to 1 if the Indebtedness is incurred
prior to December 31, 1996 and 6.25 to 1 if the Indebtedness is incurred
thereafter; provided, however, that if the Indebtedness which is the subject of
a determination under this provision is Acquired Indebtedness, or Indebtedness
incurred in connection with the simultaneous acquisition of any Person,
business, property or assets, then such ratio shall be determined by giving
effect (on a pro forma basis, as if the transaction had occurred at the
beginning of the four quarter period) to both the incurrence or assumption of
such Acquired Indebtedness or such other Indebtedness by the Company and the
inclusion in the EBITDA of the EBITDA of the acquired Person, business,
property or assets. The accrual of deferred interest on the Junior
Subordinated Notes shall not be deemed an incurrence of Indebtedness for
purposes of this covenant.

Notwithstanding the foregoing, the Company may not incur or
otherwise cause or suffer to exist any Indebtedness of the Company that ranks
junior in right of payment to the Notes that (a) has a maturity date or
mandatory sinking fund payment prior to the maturity of the Notes or (b) would
become due and payable or be capable of being declared due and payable, with
the passage of time or otherwise, prior to the date on which it would otherwise
become due and payable, solely as a result of a default or Event of Default
under the Notes or a default or event of default under the Senior Credit
Facility which would cause Indebtedness thereunder to be capable of being
declared due and payable prior to the date on which it would otherwise become
due and payable.

Section 808 Change of Control.

Following the occurrence of any Change of Control, the Company
shall offer (a "Change of Control Offer") to purchase all outstanding Notes at
a purchase price equal to 101% of the aggregate principal amount of the
outstanding Notes, plus accrued and unpaid interest to the date of purchase.
The Change of Control Offer shall be deemed to have commenced upon mailing of
the notice described in the next succeeding paragraph and

31
<PAGE> 39

shall terminate 20 Business Days after its commencement, unless a longer
offering period is required by law. Promptly after the termination of the
Change of Control Offer (the "Change of Control Payment Date"), the Company
shall purchase and mail or deliver payment for all Notes properly tendered in
response to the Change of Control Offer. If the Change of Control Payment Date
is on or after an interest payment record date and on or before the related
interest payment date, any accrued interest will be paid to the person in whose
name a Note is registered at the close of business on such record date, and no
additional interest will be payable to Holders who tender Notes pursuant to the
Change of Control Offer.

Within 30 days after any Change of Control, the Company (with
notice to the Trustee), or the Trustee at the Company's request, will mail or
cause to be mailed to all Holders on the date of the Change of Control a notice
of the occurrence of such Change of Control and of the Holders' rights arising
as a result thereof. Such notice will contain all instructions and materials
necessary to enable Holders to tender their Notes to the Company. Such notice,
which shall govern the terms of the Change of Control Offer, shall state:

(1) that the Change of Control Offer is being made
pursuant to this Section 4.08, the events causing
such Change of Control and the length of time the
Change of Control Offer will remain open;

(2) the purchase price and the Change of Control Payment
Date;

(3) that any Note not tendered will continue to accrue
interest;

(4) that any Note or portion thereof tendered for payment
pursuant to the Change of Control Offer shall cease
to accrue interest on the Change of Control Payment
Date, except for any Note for which the Change of
Control Payment Date falls between an interest
payment record date and the related interest payment
date, which shall bear interest to such latter date;
and

32
<PAGE> 40

(5) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than
the expiration of the Change of Control Offer, or
such longer period as may be required by law, a
telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the certificate
number and the principal amount of the Note the
Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have the
Note purchased.

On or before a Change of Control Payment Date, the Company
shall (i) accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent money sufficient to
pay the purchase price of all Notes or portions thereof so accepted and (iii)
deliver to the Trustee Notes so accepted together with an Officers' Certificate
stating the Notes or portions thereof accepted for payment by the Company. The
Paying Agent shall promptly mail or deliver to Holders of Notes so accepted
payment in an amount equal to the purchase price, and the Company and the
Guarantors shall execute and the Trustee shall promptly authenticate and mail
or deliver to Holders of Notes tendered only in part, a new Note equal in
principal amount to any unpurchased portion of the Note surrendered. The
Company will publicly announce the results of the Change of Control Offer on
the Change of Control Payment Date. For purposes of this Section 4.08, the
Trustee shall act as the Paying Agent.

Section 909 Limitation on Use of Proceeds from Asset Sales.

The Company and its Subsidiaries will not, directly or
indirectly, consummate any Asset Sale unless (i) at least 85% of the Net
Proceeds from the Asset Sale are received in cash at closing, (ii) the
consideration received from such Asset Sale is at least equal to the fair
market value of the property sold as determined by the Board of Directors and
(iii) the Company makes an offer (the "Excess Proceeds Offer") to apply the
Excess Proceeds (as defined below), once such Excess Proceeds accumulate to a
sum greater than $5,000,000 (such sum, without the addition of subsequent
Excess Proceeds re-

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<PAGE> 41

flecting subsequent Asset Sales, referred to herein as the "Asset Sale
Payment"), to redeem Notes, on a date not later than 180 days after any Asset
Sale which causes such Excess Proceeds to exceed $5,000,000 (the "Asset Sale
Payment Date"), at a purchase price equal to 100% of the principal amount of
such Notes, plus accrued and unpaid interest to the Asset Sale Payment Date.
Any amount of Net Proceeds from an Asset Sale, whether received in cash at the
closing of such sale or disposition or subsequently received in cash upon
liquidation of non-cash Net Proceeds, shall be deemed Excess Proceeds from such
sale or disposition to the extent it is not within 180 calendar days after such
sale or disposition, (i) reinvested or contractually committed to be reinvested
pursuant to a binding agreement in properties or assets that will be used in
the lines of business of the Company and its Subsidiaries existing on the date
of such sale or disposition and the Company delivers a notice of such
reinvestment to the Trustee within such 180 calendar days, (ii) used for the
prepayment of any Senior Indebtedness of the Company, provided, however, such
prepayment causes a permanent reduction of borrowing availability under the
debt instrument related to such Indebtedness and the Company delivers a notice
to such effect to the Trustee within such 180 calendar days or (iii), in the
case of proceeds from the sale of WYAI(FM), used for the repayment or
redemption of the Junior Subordinated Notes, Series B Preferred Stock or Series
C Preferred Stock.

Notice of an Excess Proceeds Offer shall be mailed by the
Company to all Holders not less than 30 days nor more than 60 days before the
Asset Sale Payment Date at their last registered address. The Excess Proceeds
Offer shall remain open from the time of mailing until five days before the
Asset Sale Payment Date. The notice shall be accompanied by a copy of the most
recent report furnished to the Holders pursuant to Section 4.03 hereof. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Excess Proceeds Offer. The notice,
which shall govern the terms of the Excess Proceeds Offer, shall state:

(1) that the Excess Proceeds Offer is being made pursuant
to this Section 4.09;

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<PAGE> 42

(2) the Asset Sale Payment, the purchase price (including
the amount of accrued interest) and the Asset Sale
Payment Date;

(3) that any Note not tendered or accepted for payment
will continue to accrue interest;

(4) that, unless the Company defaults in the making of
the Asset Sale Payment, any Note accepted for payment
pursuant to the Excess Proceeds Offer shall cease to
accrue interest after the Asset Sale Payment Date;

(5) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than
three days prior to the Asset Sale Payment Date, a
telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase
and a statement that such Holder is withdrawing his
election to have the Note purchased;

(6) that if Notes in a principal amount in excess of the
Asset Sale Payment are tendered pursuant to the
Excess Proceeds Offer, the Company shall purchase
Notes on a pro rata basis (with such adjustments as
may be deemed appropriate by the Company and the
Trustee so that only Notes in denominations of $1,000
or integral multiples of $1,000 shall be acquired);
and

(7) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.

Before an Asset Sale Payment Date, the Company shall (i)
accept for payment Notes or portions thereof tendered pursuant to the Excess
Proceeds Offer (on a pro rata basis if required pursuant to paragraph (6)
above), (ii) deposit with the Paying Agent money sufficient to pay the purchase
price of all Notes or portions thereof

35
<PAGE> 43

so accepted and (iii) deliver to the Trustee Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail or deliver to
Holders of Notes so accepted payment in an amount equal to the purchase price,
and the Company and the Guarantors shall execute and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any unpurchased portion of the Note surrendered. Any Notes not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Excess Proceeds
Offer on the Asset Sale Payment Date. For purposes of this Section 4.09, the
Trustee shall act as the Paying Agent.

After the Asset Sale Payment Date, any Excess Proceeds not
used to repurchase Notes (excluding Excess Proceeds received after the Asset
Sale causing the repurchase, which shall be available for subsequent Asset Sale
Payments in subsequent Excess Proceeds Offers) shall be available for general
corporate purposes and shall not be applied to subsequent Excess Proceeds
Offers.

All cash Net Proceeds from an Asset Sale shall be invested
only in Permitted Investments until reinvested, used for prepayment of debt,
used to repurchase Notes or made available for general corporate purposes all
in accordance with this Section 4.09.

Notwithstanding the foregoing, the Company will not, and will
not permit any Subsidiary to, directly or indirectly make any Asset Sale of any
of the Capital Stock of a Subsidiary except pursuant to an Asset Sale of all
the Capital Stock of such Subsidiary.

Section 1010 Compliance with Securities Laws upon Purchase of
Notes.

In connection with any offer to purchase or purchase of Notes
under Sections 4.08 or 4.09 hereof, the Company shall (i) comply with Rule
14e-1 under the Exchange Act and (ii) otherwise comply with all Federal and
state securities laws so as to permit the rights and obligations under Sections
4.08 and 4.09 to be exercised in the time and in the manner specified in
Sections 4.08 and 4.09.

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<PAGE> 44

Section 1111 Limitation on Liens Securing Subordinated
Indebtedness.

The Company will not, and will not permit any Subsidiary to,
create, incur, assume or suffer to exist any Lien of any kind, other than
Permitted Liens, upon any of their respective assets now owned or acquired
after the date hereof or any income or profits therefrom securing (i) any
Subordinated Indebtedness of the Company, unless the Company provides, and
causes its Subsidiaries to provide, concurrently or immediately thereafter,
that the Notes are equally and ratably secured, provided that, if such
Subordinated Indebtedness is expressly subordinated to the Notes, the Lien
securing such Subordinated Indebtedness shall be subordinate and junior to the
Lien securing the Notes with the same relative priority as such Subordinated
Indebtedness shall have with respect to the Notes, and provided, further, that
this clause (i) shall not be applicable to any Liens securing any such
Indebtedness which became Indebtedness of the Company pursuant to a transaction
subject to the provisions of Article 5 or which constitutes Acquired
Indebtedness and which Liens were in existence at the time of such transaction
(unless such Indebtedness was incurred or such Lien created in connection with,
or in contemplation of, such transaction), so long as such Liens do not extend
to or cover any property or assets of the Company or any Subsidiary of the
Company other than property or assets acquired in such transaction; or (ii) any
assumption, guarantee or other liability of any Subsidiary of the Company in
respect of any Subordinated Indebtedness of the Company, unless a substantially
similar assumption, guarantee or other liability of such Subsidiary in respect
of the Notes, concurrently or immediately thereafter, shall be equally and
ratably secured, provided that if such Subordinated Indebtedness is expressly
subordinated in right of payment to the Notes, the Lien securing the
assumption, guarantee or other liability of such Subsidiary in respect to such
Subordinated Indebtedness shall be subordinate and junior to the Lien securing
the assumption, guarantee or other liability of such Subsidiary in respect of
the Notes with the same relative priority as such Subordinated Indebtedness
shall have with respect to the Notes, and provided, further, that this clause
(ii) shall not be applicable to Liens securing any such assumption, guarantee
or other liability which existed at the time such Subsidiary

37
<PAGE> 45

became a Subsidiary of the Company or which constitutes Acquired Indebtedness
of a Subsidiary and which Liens were in existence at the time of such
transaction (unless such assumption, guarantee or other liability was incurred
or such Lien created in connection with, or in contemplation of, such Person
becoming a Subsidiary of the Company), so long as such Liens do not extend to
or cover any property or assets of the Company or any Subsidiary of the Company
other than the assets of such Person.

Section 1212 Limitation on Other Senior Subordinated Indebtedness.

The Company will not create, incur, assume, guarantee or in
any manner become liable with respect to any Indebtedness (other than the
Notes) that is expressly subordinate in right of payment to any Senior
Indebtedness unless such Indebtedness is also pari passu with or subordinate in
right of payment to the Notes, pursuant to subordination provisions
substantially similar to those contained in Article 10 hereof.

Section 1313 Limitation on Capital Stock of Subsidiaries.

The Company will not (i) sell, pledge, hypothecate or
otherwise convey or dispose of any Capital Stock of a Subsidiary (other than
under the Senior Credit Facility or a successor facility or under the terms of
any Specified Senior Indebtedness) or (ii) permit any of its Subsidiaries to
issue any Capital Stock, other than to the Company or a wholly owned Subsidiary
of the Company. The foregoing restrictions shall not apply to an Asset Sale
made in compliance with Section 4.09 hereof or the issuance of Subsidiary
Preferred Stock in compliance with Section 4.07 hereof.

Section 1414 Limitation on Sale and Lease-Back Transactions.

The Company will not, and will not permit any Subsidiary to,
enter into any Sale and Lease-Back Transaction unless (i) the consideration
received in such Sale and Lease-Back Transaction is at least equal to the fair
market value of the property sold, as determined by a Board Resolution of the
Company, and (ii) the Company

38
<PAGE> 46

could incur Attributable Debt in respect of such Sale and Lease-Back
Transaction under Section 4.07 hereof.

Section 1515 Corporate Existence.

Subject to Article 5, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence and that of each Subsidiary and the rights (charter and
statutory) and franchises of the Company and the Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise, or the corporate existence of any Subsidiary (except as provided in
Article 11), if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company
and the Subsidiaries taken as a whole and that the loss thereof is not, and
will not be, adverse in any material respect to the Noteholders.

Section 1616 Payment of Taxes and Other Claims.

The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments
and governmental charges levied or imposed upon the Company or any Subsidiary
or upon the income, profits or property of the Company or any Subsidiary and
(2) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a Lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings if adequate reserves, if necessary, have been made for
such disputed amounts.

Section 1717 Notice of Defaults.

In the event that the Company becomes aware of any Default or
Event of Default, the Company shall promptly deliver to the Trustee an
Officers' Certificate specifying such Default or Event of Default.

39
<PAGE> 47

Section 1818 Compliance Certificates.

The Company shall deliver to the Trustee within 120 days after
the end of each fiscal year of the Company an Officers' Certificate stating
whether or not the signers know of any Default or Event of Default. If they do
know of such a Default or Event of Default, the Certificates shall describe the
Default or Event of Default and the efforts to remedy the same. The first
certificates to be delivered by the Company pursuant to this Section shall be
for the fiscal year ending December 31, 1993.

Section 1919 Waiver of Stay, Extension or Usury Laws.

The Company and each Guarantor covenant (to the extent that
they may lawfully do so) that they will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law which would prohibit or forgive the
Company or such Guarantor from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance
of this Indenture, and (to the extent that they may lawfully do so) the Company
and each Guarantor hereby expressly waive all benefit or advantage of any such
law, and covenant that they will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.

Section 2020 Properties.

The Company shall cause all properties used in the conduct of
its businesses and the business of each of the Subsidiaries to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such

40
<PAGE> 48

properties, or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Board of Directors, or of an officer (or other agent
employed by the Company) of the Company having managerial responsibility for
any such property, desirable in the conduct of the business of the Company or
the Subsidiary and not disadvantageous in any material respect to the Holders.

Section 2121 Insurance.

The Company shall provide, or cause to be provided, for itself
and each of its Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured against by corporations
similarly situated and owning like properties, including, but not limited to,
products liability insurance and public liability insurance for itself and
where appropriate for its Subsidiaries, with reputable insurers or with the
government of the United States or an agency or instrumentality thereof, in
such amounts, with such deductibles and by such methods as shall be customary
for corporations similarly situated in the industry.

Section 2222 Payments for Consent.

Neither the Company nor any of its Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Noteholder for or as an inducement to
any consent, waiver or amendment of any of the terms or provisions of the
Indenture or the Notes unless such consideration is offered to be paid or
agreed to be paid to all Noteholders which so consent, waive or agree to amend
in the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.

ARTICLE V

MERGER AND SALE OF ASSETS

Section 101 When Company or Guarantor May Merge, etc.

Neither the Company nor any Guarantor shall consolidate with
or merge with or into, or transfer all

41
<PAGE> 49

or substantially all of its assets in one transaction or a series of related
transactions to, any Person unless:

(1) either the Company or such Guarantor, as the case may
be, shall be the continuing Person, or the Person (if
other than the Company or such Guarantor, as the case
may be) formed by such consolidation or into which
the Company or such Guarantor, as the case may be, is
merged or to which the properties and assets of the
Company or such Guarantor, as the case may be, as an
entirety or substantially as an entirety are
transferred, shall be a corporation organized and
existing under the laws of the United States or any
state thereof or the District of Columbia and shall
expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations
of the Company under the Notes or such Guarantor
under the Guarantee and this Indenture shall remain
in full force and effect;

(2) the Person formed by such consolidation or surviving
such merger or to which the properties and assets of
the Company or such Guarantor, as the case may be, as
an entirety or substantially as an entirety are
transferred, shall have a Consolidated Net Worth
after giving effect to such transaction (including
the assumption by the successor of the Notes but
excluding any write-ups of assets resulting from such
transaction) equal to or greater than the
Consolidated Net Worth of the Company or such
Guarantor, as the case may be, immediately preceding
such transaction;

(3) immediately before and immediately after giving
effect to such transaction, no Event of Default and
no Default shall have occurred and be continuing;

(4) the Company, such Guarantor or the successor, as the
case may be, for the last four

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<PAGE> 50

full fiscal quarters preceding the date of the
transaction for which financial statements are
available, on a pro forma basis to give effect to the
transaction, would be entitled to incur, immediately
following the transaction, $1.00 of additional
Indebtedness under Section 4.07 hereof; and

(5) the Company or such Guarantor, as the case may be,
has delivered to the Trustee an Officers' Certificate
(attaching the arithmetic computations to demonstrate
compliance with clauses (2) and (4)) and an Opinion
of Counsel, each stating that such consolidation,
merger, transfer or lease and such supplemental
indenture comply with this Article and that all
conditions precedent herein provided relating to such
transaction have been complied with.

Notwithstanding the foregoing, any Subsidiary may consolidate
with, merge into or transfer all or part of its properties and assets to the
Company or any other Subsidiary or Subsidiaries.

Section 202 Successor Entity Substituted.

Upon any consolidation or merger or any transfer of all or
substantially all of the assets of the Company or any Guarantor, in accordance
with Section 5.01, the successor Person formed by such consolidation or into
which the Company or such Guarantor, as the case may be, is merged or to which
such transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or such Guarantor, as the case
may be, under this Indenture with the same effect as if such successor Person
had been named as the Company or such Guarantor, as the case may be, herein.
When a successor Person assumes all of the obligations of the Company or any
Guarantor, as the case may be, hereunder and under the Notes or the Guarantee,
the predecessor shall be released from such obligation.

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ARTICLE VI

DEFAULTS AND REMEDIES

Setion 101 Events of Default.

An "Event of Default" occurs if one of the following shall
have occurred and be continuing:

(1) the Company defaults in the payment of (i) interest
on any Note and the default continues for a period of
30 days, or (ii) the principal of or premium, if any,
on any Notes when the same becomes due and payable at
maturity, acceleration, on the Redemption Date, on
the Change in Control Payment Date, on any Asset Sale
Payment Date or otherwise;

(2) The Company or any Guarantor fails to comply with any
of its covenants or agreements in the Notes or this
Indenture (other than those referred to in clause (1)
above) and such failure continues for 30 days after
receipt by the Company of a Notice of Default;

(3) default under any mortgage, indenture or instrument
under which there may be issued or by which there may
be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Subsidiaries
(or the payment of which is guaranteed by the Company
or any of its Subsidiaries) whether such Indebtedness
or guarantee is now existing or hereafter created,
and the default relates to (a) the obligation to pay
principal on such Indebtedness when due and such
default is not cured or waived or paid within any
grace period and such principal payment, together
with any other principal amount in default,
aggregates $3,000,000 or more or (b) any other
obligation which results in such Indebtedness being
accelerated prior to its express maturity and, in
each case, the principal amount of such Indebtedness,

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together with principal amount of any other such
Indebtedness the maturity of which has been
accelerated, aggregates $3,000,000 or more;

(4) the Company or any Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:

(A) commences a voluntary case or proceeding;

(B) consents to the entry of an order for relief
against it in an involuntary case or
proceeding;

(D) makes a general assignment for the benefit of
its creditors; or

(E) admits in writing its inability to pay its
debts generally as they become due;

(5) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:

(A) is for relief against the Company or any
Subsidiary in an involuntary case or
proceeding;

(B) appoints a Custodian of the Company or any
Subsidiary for all or substantially all of
its properties;

(D) and in each case the order or decree remains
unstayed and in effect for 60 days; or

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(6) final judgments for the payments of money which in
the aggregate exceed $1,000,000 shall be rendered
against the Company or any Subsidiary by a court and
shall remain unstayed or undischarged for a period of
45 days.

The term "Bankruptcy Law" means Title 11, U.S. Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.

A Default under clause (2) above is not an Event of Default
until the Trustee notifies the Company, or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding notify the Company and
the Trustee, of the default and the Company does not cure the default within
the time specified in clause (2) above after receipt of such notice. The
notice must specify the Default, demand that it be remedied and state that the
notice is a "Notice of Default."

Subject to the provisions of Sections 7.01 and 7.02, the
Trustee shall not be charged with knowledge of any Event of Default unless a
Trust Officer of the Trustee has actual knowledge thereof or written notice
thereof shall have been given to a Trust Officer of the Trustee at the
Corporate Trust Office by the Company, the Paying Agent, any Holder of a Note
or an agent of such Holder.

Section 202 Acceleration.

If any Event of Default under clauses (1), (2), (3) or (6)
occurs and is continuing, the Trustee may, by written notice to the Company, or
the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding may, by notice to the Company and the Trustee, and the Trustee
shall, upon the request of such Holders, declare the principal of the Notes,
premium, if any, and accrued interest due and payable (i) immediately if no
amount is outstanding and no commitment is in effect under the Specified Senior
Indebtedness or (ii) if any amount is outstanding or any commitment is in
effect under the Specified Senior Indebtedness, upon the earlier of three
business days after delivery of the acceleration notice to the Company by the
Trustee or the Holders, as

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the case may be, or acceleration of the Specified Indebtedness, and thereupon
the Trustee may, at its discretion, proceed to protect and enforce the rights
of the Holders of the Notes by appropriate judicial proceedings. If any Event
of Default under clauses (4) or (5) occurs, all principal, premium, if any, and
interest on the Notes will immediately become due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in aggregate principal amount of the Notes then outstanding by
written notice to the Trustee and to the Company may rescind an acceleration
and its consequences (except an acceleration due to a default in payment of the
principal and interest on any of the Notes) if all existing Events of Default
have been cured or waived except non-payment of principal or interest that has
become due solely because of the acceleration.

Section 303 Other Remedies.

If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of, premium, if any, or interest on the Notes or to
enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Noteholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy
is exclusive of any other remedy. All available remedies are cumulative.

Section 404 Waiver of Past Defaults.

The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding, by notice to the Trustee (and without notice to
any other Noteholder), may waive an existing Default or Event of Default and
its consequences except (a) an Event of Default described in Section 6.01(1)
hereof, or (b) a Default in respect of a provision that under Section 9.02
hereof cannot be amended without the consent of each Noteholder affected. When
a Default is waived, it is

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deemed cured and shall cease to exist, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

Section 505 Control by Majority.

The Holders of a majority in aggregate principal amount of the
Notes at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on it. The Trustee, however, may
refuse to follow any direction that conflicts with law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial to the rights
of other Noteholders or would involve the Trustee in personal liability. The
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.

Section 606 Limitation on Suits.

A Noteholder may not pursue any remedy with respect to this
Indenture or the Notes unless:

(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;

(2) the Holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding make a
written request to the Trustee to pursue the remedy;

(3) such Holder or Holders offer to the Trustee
reasonable indemnity against any loss, liability or
expense;

(4) the Trustee does not comply with the request within
30 days after receipt of the notice, the request and
the offer of indemnity; and

(5) the Holders of a majority in aggregate principal
amount of the Notes at the time outstanding do not
give the Trustee a direction inconsistent with the
request during such 30-day period.

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A Noteholder may not use this Indenture to prejudice the
rights of any other Noteholder or to obtain a preference or priority over any
other Noteholder.

Section 707 Rights of Holders to Receive Payment.

Notwithstanding any other provisions of this Indenture, the
right of any Holder to receive payment of the principal amount, premium, if
any, or interest, in respect of the Notes held by such Holder, on or after the
respective due dates expressed in the Notes, any Redemption Date, any Change in
Control Payment Date or any Asset Sale Payment Date, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected adversely without the consent of each such Holder.

Section 808 Collection Suit by Trustee.

If an Event of Default described in Section 6.01(1) hereof
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company, any Guarantor or any other
obligor on the Notes for the whole amount owing with respect to the Notes and
the amounts provided for in Section 7.07 hereof.

Section 909 Trustee May File Proofs of Claim.

In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company, any Guarantor or any
other obligor upon the Notes or their respective properties, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise:

(1) to file and prove a claim for the whole amount of the
principal amount, premium, if any, and interest on
the Notes and to file such other papers or documents
as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and

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of the Holders allowed in such judicial proceeding;
and

(2) to collect and receive any moneys or other property
payable or deliverable on any such claims and to
distribute the same;

and any Custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any
other amounts due the Trustee under Section 7.07 hereof.

Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Notes or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.

Section 1010 Priorities.

If the Trustee collects any money pursuant to this Article 6,
it shall pay out the money in the following order:

First: to the Trustee for amounts due under Section 7.07 hereof;

Second: to Noteholders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to such amounts due and payable on
the Notes; and

Third: the balance, if any, to the Company, or its designee.

The Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 6.10.

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Section 1111 Undertaking for Costs.

In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by
a Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in
aggregate principal amount of the Notes at the time outstanding.

ARTICLE VII

TRUSTEE

Section 101 Duties of Trustee.

(a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise its rights and
powers and use the same degree of care and skill in
their exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own
affairs.

(b) Except during the continuance of an Event of Default:

(1) The Trustee need perform only those duties
that are specifically set forth in this
Indenture and no others.

(2) In the absence of bad faith on its part, the
Trustee may conclusively rely as to the truth
of the statements and the correctness of the
opinions expressed therein upon certificates
or opinions furnished to the Trustee and
conforming to the

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requirements of this Indenture. The Trustee,
however, shall examine the certificates and
opinions to determine whether or not they
conform to the requirements of this
Indenture.

(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:

(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01.

(2) The Trustee shall not be liable for any error
of judgment made in good faith by a Trust
Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent
facts.

(3) The Trustee shall not be liable with respect
to any action it takes or omits to take in
good faith in accordance with a direction
received by it pursuant to Section 6.05.

(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.

(e) The Trustee may refuse to perform any duty or
exercise any right or power unless it receives
indemnity satisfactory to it against any loss,
liability, expense or fee.

(f) The Trustee shall not be liable for interest on any
money received by it. Money held in trust by the
Trustee need not be segregated from other funds
except to the extent required by law.

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Sectin 202 Rights of Trustee.

Subject to Section 7.01:

(1) The Trustee may rely on any document believed by it
to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate
any fact or matter stated in the document.

(2) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of
Counsel, which shall conform to Section 12.05. The
Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such
Certificate or Opinion.

(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any
agent appointed with due care.

(4) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it
believes to be authorized or within its rights or
powers.

Section 303 Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.

Section 404 Trustee's Disclaimer.

The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement in the Notes other than its certificate of authentication.

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Section 505 Notice of Defaults or Events of Default.

If a Default or an Event of Default occurs and is continuing
and if it is actually known to a Trust Officer of the Trustee, the Trustee
shall mail to each Noteholder notice of the Default or Event of Default within
90 days after it occurs. Except in the case of a Default or an Event of
Default in payment of any Note, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Noteholders.

Secton 606 Reports by Trustee to Holders.

Within 60 days after each May 15 beginning with May 15, 1994,
the Trustee shall mail to each Noteholder a brief report dated as of such May
15 that complies with TIA Section 313(a). The Trustee also shall comply with
TIA Section 313(b)(2) and (c).

A copy of each report at the time of its mailing to
Noteholders shall be filed with the SEC and each stock exchange on which the
Notes are listed. The Company agrees to notify the Trustee whenever the Notes
become listed on any stock exchange.

Section 707 Compensation and Indemnity.

The Company shall pay to the Trustee from time to time
reasonable compensation for its services (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust). The Company shall reimburse the Trustee upon request for
all reasonable disbursements, expenses and advances incurred or made by it.
Such expenses may include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.

The Company shall indemnify the Trustee, its agents,
employees, officers, directors and stockholders for, and hold them harmless
against, any loss, liability or expense incurred by them in connection with
their duties under this Indenture. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity.

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The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it through its
negligence or bad faith.

To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Notes on all money or property held
or collected by the Trustee, except such money or property held in trust to pay
principal and interest on particular Notes.

Section 808 Replacement of Trustee.

The Trustee may at any time resign by so notifying the
Company. The Holders of a majority in principal amount of the Notes then
outstanding may remove the Trustee by so notifying the removed Trustee and the
Company and may appoint a successor Trustee with the Company's written consent.
A resignation or removal of the Trustee and the appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section. The Company may remove the Trustee if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged a bankrupt or an insolvent;

(3) a receiver or other public officer takes charge of
the Trustee or its property; or

(4) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee.

If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least a majority in principal amount of the Notes
then outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.

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If the Trustee fails to comply with Section 7.10, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.

A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after
that, the retiring Trustee shall, upon payment of its charges, transfer all
property held by it as Trustee to the successor Trustee, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Noteholder.

Section 909 Successor Trustee by Merger, etc.

If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.

Section 1010 Eligibility; Disqualification.

This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee is subject to TIA Section
310(b), provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities,
of the Company are outstanding, if the requirements for such exclusion set
forth in TIA Section 310(b)(1) are met.

Section 1111 Preferential Collection of Claims against Company.

The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.

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ARTICLE VIII

SATISFACTION AND DISCHARGE OF INDENTURE

Section 101 Termination of Company's Obligations.

The Company may terminate all of its obligations under the
Notes and this Indenture, and the obligations of the Guarantors shall
terminate, if all Notes previously authenticated and delivered (other than
destroyed, lost or stolen Notes which have been replaced or paid) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder. In addition, the Company may elect to have either
paragraph (a) or (b) below applied to the outstanding Notes upon compliance
with the conditions set forth in paragraph (c) below.

(a) Upon exercise of the option applicable to this
paragraph (a), the Company and each Guarantor shall
be deemed to have been released and discharged from
their obligations with respect to the outstanding
Notes on the date the conditions set forth below are
satisfied (hereinafter, "legal defeasance"). For
this purpose, such legal defeasance means that the
Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the
outstanding Notes, which shall thereafter be deemed
to be "outstanding" only for the purposes of the
Sections of and matters under this Indenture referred
to in (i) and (ii) below, and to have satisfied all
their other obligations under such Notes and this
Indenture insofar as such Notes are concerned (and
the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same),
except for the following which shall survive until
otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Notes to receive
solely from the trust fund described in paragraph (c)
below and as more fully set forth in such paragraph,
payments in respect of the principal of, premium, if

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any, and interest on such Notes when such payments
are due, (ii) the Company's obligations and, to the
extent applicable, the Guarantors' obligations with
respect to such Notes under Sections 2.06, 2.07 and
4.02, and, with respect to the Trustee, under
Sections 7.07 and 8.03, (iii) the rights, powers,
trusts, duties and immunities of the Trustee
hereunder and (iv) this Section 8.01. Subject to
compliance with this Section 8.01, the Company may
exercise its option under this paragraph (a)
notwithstanding the prior exercise of its option
under paragraph (b) below with respect to the Notes.

(b) Upon exercise of the option applicable to this
paragraph (b), the Company and, to the extent
applicable, each Guarantor shall be released and
discharged from their obligations under any covenant
contained in Article 5 and in Sections 4.03 through
4.07 and 4.09 through 4.14 with respect to the
outstanding Notes on and after the date the
conditions set forth below are satisfied
(hereinafter, "covenant defeasance"), and the Notes
shall thereafter be deemed to be not "outstanding"
for the purpose of any direction, waiver, consent or
declaration or act of Holders of Notes (and the
consequences of any thereof) in connection with such
covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that,
with respect to the outstanding Notes, the Company
and each Guarantor may omit to comply with and shall
have no liability in respect of any term, condition
or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of
any reference in any such covenant to any other
provision herein or in any other document and such
omission to comply shall not constitute a Default or

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an Event of Default under Section 6.01, but, except
as specified above, the remainder of this Indenture
and such Notes shall be unaffected thereby.

(c) The following shall be the conditions to the
application of either paragraph (a) or (b) above to
the outstanding Notes:

(1) the Company irrevocably deposits in trust
with the Trustee money or U.S. Government
Obligations, sufficient to pay (upon initial
deposit without need for reinvestment)
principal and interest on the Notes to
maturity or redemption, as the case may be,
and to pay all other sums payable by it
hereunder;

(2) the Company has delivered to the Trustee an
Officers' Certificate stating that (A) all
conditions precedent provided for relating to
either the legal defeasance under paragraph
(a) above or the covenant defeasance under
paragraph (b) above, as the case may be, have
been complied with and (B) if any other
Indebtedness of the Company shall then be
outstanding or committed, such legal
defeasance or covenant defeasance will not
violate the provisions of the agreements or
instruments evidencing such Indebtedness;

(3) no Default or Event of Default shall have
occurred and be continuing on the date of
such deposit;

(4) such legal defeasance or covenant defeasance
shall not result in a breach or violation of,
or constitute a Default or Event of Default
under, this Indenture or any other agreement
or instrument to which the Company is a party
or by which it is bound;

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(5) in the case of an election under paragraph
(a) above, the Company shall have delivered
to the Trustee an Opinion of Counsel from
nationally recognized counsel acceptable to
the Trustee stating that (a) the Company has
received from, or there has been published
by, the Internal Revenue Service a ruling or
(b) since the date of this Indenture, there
has been a change in the applicable Federal
income tax law, in either case to the effect
that the Holders of the outstanding Notes
will not recognize income, gain or loss for
Federal income tax purposes as a result of
such legal defeasance and will be subject to
Federal income tax on the same amount and in
the same manner and at the same time as would
have been the case if such legal defeasance
had not occurred; and

(6) in the case of an election under paragraph
(b) above, the Company shall have delivered
to the Trustee an Opinion of Counsel from
nationally recognized counsel acceptable to
the Trustee to the effect that the Holders of
the outstanding Notes will not recognize
income, gain or loss for Federal income tax
purposes as a result of such covenant
defeasance and will be subject to Federal
income tax on the same amount and in the same
manner and at the same time as would have
been the case if such covenant defeasance had
not occurred.

After such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Notes, the Guarantee and this Indenture except for those
surviving obligations specified above.

In order to have money available on a payment date to pay
principal or interest on the Notes, the U.S.

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Government Obligations shall be payable as to principal of or interest on or
before such payment date in such amounts as will provide the necessary money.

"U.S. Government Obligations" means direct obligations of the
United States for the payment of which the full faith and credit of the United
States is pledged.

Section 202 Application of Trust Money.

The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 8.01. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of principal
and interest on the Notes.

Section 303 Repayment to Company.

The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess money or U.S. Government Obligations held by
them at any time.

The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal or interest on the
Notes that remains unclaimed for two years, provided that the Company shall
have first caused notice of such payment to be published once in a newspaper of
general circulation in the City of New York or mailed by certified mail to each
Noteholder entitled thereto no less than 30 days prior to such repayment.
After that, Noteholders entitled to the money must look to the Company or the
Guarantors for payment as general creditors unless otherwise provided by law.

Section 404 Reinstatement.

If the Trustee or the Paying Agent is unable to apply any
money in accordance with Section 8.02 by reason of any legal proceeding or by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and the Guarantors' obligations under this Indenture, the Notes and the
Guarantee shall be revived and reinstated as though no deposit had occurred

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pursuant to Section 8.01 until such time as the Trustee or the Paying Agent is
permitted to apply all such money in accordance with Section 8.02; provided
that, if the Company has made any payment of interest on or principal of any
Note because of the reinstatement of its obligations, the Company or the
Guarantors shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or the Paying Agent.

ARTICLE IX

AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 101 Without Consent of Holders.

The Company and the Trustee may amend this Indenture or the
Notes without notice to or consent of any Noteholder:

(1) to comply with Article Five;

(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes;

(3) to cure any ambiguity, defect or inconsistency, or to
make any other change that does not adversely affect
the rights of any Noteholder; or

(4) to comply with the TIA.

Section 202 With Consent of Holders.

The Company and the Trustee may amend this Indenture or the
Notes with the written consent of the Holders of a majority in principal amount
of the Notes then outstanding. The Holders of a majority in principal amount
of the Notes then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Notes. However,
without the consent of each Noteholder affected, an amendment, supplement or
waiver, including a waiver pursuant to Section 6.04, may not:

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(1) reduce the principal amount of Notes whose Holders
must consent to an amendment or waiver;

(2) reduce the rate of or extend the time for payment of
interest on any Note;

(3) reduce the principal of or change the fixed maturity
of any Note or alter the redemption provisions with
respect thereto;

(4) waive a default in the payment of the principal of
(or premium, if any, on) or interest on any Note
(including any payment required pursuant to Sections
4.08 and 4.09);

(5) make any Note payable in money other than that stated
in the Note;

(6) make any change in Section 6.04 or 6.07 or the third
sentence of this Section; or

(7) make any change in Section 4.08 or 4.09 hereof.

Any amendment shall be effective upon certification to the
Trustee by the Company or an agent of the Company that such amendment has been
authorized by the Company and that the consent of the majority of an aggregate
principal amount of the Notes has been obtained, unless such consents specify
that they shall become effective at a later date, in which case such amendment
shall become effective in accordance with the terms of such consent.

After an amendment or waiver under this Section becomes
effective, the Company shall mail to Noteholders a notice briefly describing
the amendment. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
supplemental indenture.

It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but

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it shall be sufficient if such consent approves the substance thereof.

Section 303 Compliance with Trust Indenture Act.

Every amendment to or supplement of this Indenture or the
Notes shall comply with the TIA as then in effect.

Section 404 Revocation and Effect of Consents.

Until an amendment, supplement, waiver, or other action
becomes effective, a consent to it by a Holder of a Note is a continuing
consent by the Holder and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's Note even if
notation of the consent is not made on any Note. Any such Holder or subsequent
Holder, however, may revoke the consent as to his Note or portion of a Note if
the Trustee receives the notice of revocation before the date the amendment,
supplement, waiver or other action becomes effective.

The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such persons continue to be
Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.

After an amendment, supplement, waiver or other action becomes
effective, it shall bind every Noteholder, unless it makes a change described
in any of clauses (1) through (7) of Section 9.02. In that case the amendment,
supplement, waiver or other action shall bind each Holder of a Note who has
consented to it and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note.

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Section 505 Notation on or Exchange of Notes.

If an amendment, supplement or waiver changes the terms of a
Note, the Trustee may request the Holder of the Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Note about the
changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determine, the Company in exchange for the Note shall issue and
the Trustee shall authenticate a new Note that reflects the changed terms.

Section 606 Trustee to Sign Amendments, etc.

The Trustee shall sign any amendment or supplement authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If it
does, the Trustee may but need not sign it. In signing or refusing to sign
such amendment or supplement the Trustee shall be entitled to receive and,
subject to Section 7.01, shall be fully protected in relying upon, an Opinion
of Counsel stating that such amendment or supplement is authorized or permitted
by this Indenture. The Company may not sign an amendment or supplement until
the Board of Directors approves it.

ARTICLE X

SUBORDINATION

Section 101 Agreement to Subordinate.

The Company agrees, and each Noteholder by accepting a Note
agrees, that the Indebtedness evidenced by the Notes (including principal,
premium, if any, and interest) is subordinated in right of payment, to the
extent and in the manner provided in this Article 10, to the prior payment in
full of all Senior Indebtedness, and that the subordination is for the benefit
of the holders of the Senior Indebtedness.

Section 202 Liquidation; Dissolution; Bankruptcy.

Upon any distribution to creditors of the Company in a total
or partial liquidation or any dissolu-

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tion or winding up of the Company or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to the Company or its
property or in an assignment for the benefit of creditors or any marshalling of
the assets and liabilities of the Company, whether voluntary or involuntary:

(1) holders of Senior Indebtedness shall be entitled to
receive payment in full in cash of the principal and
interest (including interest after the commencement
of any such proceeding at the rate specified in the
applicable Senior Indebtedness, whether or not such
interest is allowed as a claim after commencement of
any such proceeding) to the date of payment on the
Senior Indebtedness before Noteholders shall be
entitled to receive any payment of principal of,
interest on or otherwise in respect of the Notes; and

(2) until the Senior Indebtedness (as provided in
subsection (1) above) is paid in full in cash, any
distribution to which Noteholders would be entitled
but for this Article 10 (including any payment which
may be payable by reason of the payment of any other
Indebtedness of the Company being subordinated to the
payment of the Notes) shall be made to holders of
Senior Indebtedness, as their interests may appear,
except that Noteholders may receive Capital Stock or
securities that are subordinated, to at least the
same extent as the Notes, to (a) Senior Indebtedness
and (b) any securities issued in exchange for Senior
Indebtedness.

For purposes of this Article 10, a distribution may consist of
cash, securities or other property, by setoff or otherwise.

Section 303 Default on Senior Indebtedness.

Upon the final maturity of any Senior Indebtedness by lapse of
time, acceleration or otherwise, all such Senior Indebtedness shall first be
paid in full or

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such payment duly provided for in cash or in a manner satisfactory to the
holders of such Senior Indebtedness, before any payment is made by the Company
or any person acting on behalf of the Company on account of the principal,
interest or other charges in respect of the Notes.

The Company may not pay principal of or interest on the Notes
or make any other direct or indirect payment or distribution on or in respect
of the Notes (including any payment which may be payable by reason of the
payment of any other Indebtedness of the Company being subordinated to the
payment of the Notes) and may not acquire any Notes for cash or property (other
than Capital Stock of the Company or other securities of the Company that are
subordinated, to at least the same extent as the Notes, to (a) Senior
Indebtedness and (b) any securities issued in exchange for Senior Indebtedness)
if:

(1) a default in the payment of the principal of or
interest on any Specified Senior Indebtedness occurs
and is continuing that then permits the holders (or
the agent) of such Specified Senior Indebtedness to
accelerate its maturity or on the basis of which the
maturity of such Specified Senior Indebtedness has
been accelerated; or

(2) a default, other than a payment default, on any
Specified Senior Indebtedness occurs and is
continuing that then permits the holders (or the
agent) of such Specified Senior Indebtedness to
accelerate its maturity, and either such default is
the subject of judicial proceedings or the Trustee or
Paying Agent receives a notice of the default from a
person who may give it pursuant to Section 10.11
hereof at least two business days prior to the
relevant payment date. If the Company receives any
such notice, a subsequent notice received within 365
days thereafter shall not be effective for purposes
of this Section 10.03(2). No non-payment default
which existed or was continuing on the date of
delivery of any such notice shall be, or be made, the
basis for a sub-

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sequent notice unless such default shall have been
cured or waived for a period of not less than 90
days.

The Company shall resume payments on the Notes (including any
missed payments and interest thereon) and may acquire them upon the earlier of:

(a) the default under Specified Senior Indebtedness is
cured or waived, or

(b) in the case of a default referred to in Section
10.03(2) above, 179 days pass after the notice is
given if the default is not the subject of judicial
proceedings,

if this Article 10 otherwise permits the payment or acquisition at that time.

Secton 404 Acceleration of Notes.

If payment of the Notes is accelerated because of an Event of
Default, the Company shall immediately notify holders of Senior Indebtedness of
the acceleration. The Company may pay the Notes three business days after the
delivery of the acceleration notice if this Article 10 permits the payment at
that time; provided, however, that if no Senior Indebtedness is outstanding at
the time of such acceleration, the Company shall pay the Notes in accordance
with the provisions of Article 6 hereof.

Section 505 When Distribution Must Be Paid Over.

In the event that the Company shall make any payment to the
Trustee on account of the principal and interest on the Notes at a time when
such payment is prohibited by Section 10.02 or 10.03 hereof and the Trustee has
received notice thereof, such payment shall be held by the Trustee, in trust
for the benefit of, and shall be paid forthwith over and delivered, upon
written request, to, the holders of Senior Indebtedness (pro rata as to each of
such holders on the basis of the respective amounts of Senior Indebtedness held
by them) or their representative, as their respective interests may appear, for
application to the payment of all Senior Indebtedness in full in accordance
with their terms, after giving

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effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.

If a distribution is made to Noteholders that because of this
Article 10 should not have been made to them, the Noteholders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness (pro
rata as to each of such holders on the basis of the respective amounts of
Senior Indebtedness held by them) or their representative, as their respective
interests may appear, for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in accordance with their terms, after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness.

Section 606 Notice by the Company.

The Company shall promptly notify the Trustee and the Paying
Agent of any facts known to the Company that would cause a payment of principal
of or interest on the Notes to violate this Article 10, but failure to give
such notice shall not affect the subordination of the Notes to the Senior
Indebtedness provided in this Article 10. Nothing in this Article 10 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07 hereof.

Section 707 Subrogation.

After all Senior Indebtedness is paid in full and until the
Notes are paid in full, Noteholders shall be subrogated (equally and ratably
with all other Indebtedness pari passu with the Notes, if any) to the rights of
holders of Senior Indebtedness to receive distributions applicable to Senior
Indebtedness. A distribution made under this Article 10 to holders of Senior
Indebtedness which otherwise would have been made to Noteholders is not, as
between the Company and the Noteholders, a payment by the Company on Senior
Indebtedness.

Section 808 Relative Rights.

This Article 10 defines the relative rights of Noteholders and
holders of Senior Indebtedness. Nothing in this Indenture shall:

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(1) impair, as between the Company and Noteholders, the
obligation of the Company, which is absolute and
unconditional, to pay principal of and interest on
the Notes in accordance with their terms;

(2) affect the relative rights of Noteholders and
creditors of the Company other than holders of Senior
Indebtedness; or

(3) prevent the Trustee or any Noteholder from exercising
its available remedies upon a Default or Event of
Default, subject to the rights of holders of Senior
Indebtedness to receive distributions otherwise
payable to Noteholders.

If the Company fails because of this Article 10 to pay
principal of or interest on a Note on the due date, the failure is still a
Default or Event of Default. Notwithstanding the foregoing, any acceleration
of the maturity of the Notes due to the default by the Company to make a
payment required by Sections 6.01(1) and (2) hereof resulting from the
operation of Section 10.03 hereof shall be automatically rescinded to the
extent permitted by applicable law and all Events of Default which permitted
the acceleration of the Notes or the pursuit of other remedies hereunder and
under applicable law shall be deemed to be automatically and permanently cured
to the extent permitted by applicable law if (i) all defaults on Specified
Senior Indebtedness are permanently cured or waived and (ii) the payment or
payments, the omission of which gave rise to the Event of Default, is or are
made within 179 days after the date on which the Trustee or the Paying Agent
received notice of the default or defaults on the Specified Senior
Indebtedness; and provided further that at the time of such automatic
rescission no other Event of Default or Defaults shall have occurred and be
continuing. Such automatic rescission shall be effective as of the date both
conditions specified in clauses (i) and (ii) above are satisfied.

Section 909 Subordination May Not Be Impaired by the Company.

No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evi-

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denced by the Notes shall be impaired by any act or failure to act by the
Company or by its failure to comply with this Indenture.

Section 1010 Distribution or Notice to Representative.

Whenever a distribution is to be made or a notice given to
holders of Senior Indebtedness, the distribution may be made and the notice
given to their representative.

Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Noteholders shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction or upon any certificate of such representative or of the
liquidating trustee or agent or other person making any distribution to the
Trustee or to the Noteholders for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10.

Section 1111 Rights of Trustee and Paying Agent.

The Trustee or Paying Agent may continue to make payments on
the Notes until it receives notice of facts that would cause the payment of
principal of or interest on the Notes to violate this Article 10. Only the
Company or a representative or a holder of Senior Indebtedness may give the
notice.

The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have it if were not Trustee.

Section 1212 Authorization to Effect Subordination.

Each Holder of a Note by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 10, and
appoints the Trustee as attorney-in-fact for any and all purposes.

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Section 1313 Miscellaneous.

(a) All rights and interests under this Article
10 of the holders of Specified Senior Indebtedness and Senior Indebtedness, and
all agreements and obligations of the Holders, the Trustee and the Company
under this Article 10, shall remain in full force and effect irrespective of:

(i) any lack of validity or
enforceability of the Senior Credit Facility, the notes or security
instruments issued pursuant thereto or any other agreement or
instrument relating thereto;

(ii) any exchange, release or
non-perfection of any Lien securing Senior Indebtedness, or any sale
of or realization upon any property subject to such Lien, or any
release or amendment or waiver of or consent to departure from any
guarantee, for all or any of the Senior Indebtedness;

(iii) any change in the manner, place or
terms of payment or extension of the time of payment of, or renewal or
alteration or increase of, Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness
is outstanding;

(iv) any release of any Person liable in
any manner for the collection of Senior Indebtedness;

(v) any exercise or failure to exercise
any rights against the Company and any other Person; or

(vi) any other circumstance that might
otherwise constitute a defense available to, or a discharge of, the
Company in respect of Senior Indebtedness or the Trustee in respect of
this Indenture.

(b) The provisions of this Article 10 constitute
a continuing agreement and shall (i) remain in full force and effect until the
Senior Indebtedness shall

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have been paid in full in cash, (ii) be binding upon the holders and the
Trustee, the Company and their successors and assigns, and (iii) inure to the
benefit of and be enforceable by each other holder of Specified Senior
Indebtedness and Senior Indebtedness and their successors, transferees and
assigns.

ARTICLE XI

GUARANTEE OF SECURITIES

Section 101 Guarantee.

Subject to the provisions of this Article 11, each Guarantor
hereby guarantees, on a senior subordinated basis, to each Holder of a Note
authenticated and delivered by the Trustee (i) the due and punctual payment of
the principal of, premium, if any, and interest on such Note, when and as the
same shall become due and payable, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal
of, and interest on, the Note, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms of such Note and of this Indenture,
and (ii) in the case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, at stated maturity, by acceleration or otherwise. In case of the
failure of the Company punctually to make any such payment of principal or
interest, each Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable, whether at
maturity, by acceleration or otherwise, and as if such payment were made by the
Company.

Each Guarantor hereby agrees that its obligations hereunder
shall be absolute and unconditional, irrespective of, and shall be unaffected
by, any invalidity, irregularity or unenforceability of any such Note or this
Indenture, any failure to enforce the provisions of any such Note or this
Indenture, any waiver, modification or indulgence granted to the Company with
respect thereto, by the Holder of such Note or the Trustee, or any

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other circumstances which may otherwise constitute a legal or equitable
discharge of a surety or guarantor. Each Guarantor hereby waives diligence,
presentment, filing of claims with a court in the event of merger or bankruptcy
of the Company, any right to require a proceeding first against the Company,
the benefit of discussion, protest or notice with respect to any such Note or
the Indebtedness evidenced thereby and all demands whatsoever, and covenants
that the Guarantees will not be discharged as to any such Note except by
payment in full of the principal thereof and interest thereon and as provided
in Sections 8.01 and 11.03. Each Guarantor further agrees that, as between
such Guarantor, on the one hand, and the Holders and the Trustee, on the other
hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 6 hereof for the purposes of the Guarantees,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (ii) in the
event of any declarations of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purpose of the
Guarantees. In addition, without limiting the foregoing provisions, upon the
effectiveness of an acceleration under Article 6, the Trustee shall promptly
make a demand for payment on the Notes under each Guarantee provided for in
this Article 11 and not discharged.

The Guarantor shall be subrogated to all rights of the Holders
against the Company in respect of any amounts paid by the Guarantor pursuant to
the provisions of the Guarantee or this Indenture; provided, however, that the
Guarantor shall not be entitled to enforce or to receive any payments arising
out of, or based upon, such right of subrogation until the principal of and
interest on all Notes issued hereunder shall have been paid in full.

Section 202 Agreement to Subordinate.

Each Guarantor agrees, and each Noteholder by accepting a Note
agrees, that all payments pursuant to the Guarantee by such Guarantor are
subordinated in right of payment to the prior payment in full of all Senior
Indebtedness of the Guarantors, to the same extent and manner that all payments
pursuant to the Notes are subor-

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dinated in right of payment to the prior payment in full of all Senior
Indebtedness of the Company. This Section 11.02 is intended to be for the
benefit of the holders of Senior Indebtedness of the Guarantors.

"Senior Indebtedness of the Guarantor" means, with respect to
any Guarantor, the principal of, premium, if any, and accrued and unpaid
interest on Indebtedness of the Guarantor, contingent or otherwise, in respect
of borrowed money or otherwise, whether outstanding on the date of the
Indenture or thereafter created, incurred or assumed, unless, in the case of
any particular Indebtedness, the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to the Guarantee.
Notwithstanding the foregoing, "Senior Indebtedness of the Guarantor" shall not
include (i) Indebtedness that is expressly subordinate or junior in right of
payment to any Indebtedness of such Guarantor, (ii) any liability for federal,
state, local or other taxes owed or owing by such Guarantor, (iii) Indebtedness
of or amounts owed by such Guarantor for compensation to employees and for
services, (iv) Indebtedness of such Guarantor to a Subsidiary of the Company or
any other Affiliate of the Company or any of such Affiliate's subsidiaries, (v)
amounts owing under leases (other than Capital Lease Obligations) and (vi) any
Indebtedness which at the time of issuance is issued in violation of this
Indenture (but, as to any such Indebtedness, no such violation shall be deemed
to exist for purposes of this definition if the holder(s) of such obligation or
their representative or the Company shall have furnished to the Trustee an
opinion of independent legal counsel unqualified in all material respects,
addressed to the Trustee (which legal counsel may, as to matters of fact, rely
upon an officers' certificate of the Company) to the effect that the incurrence
of such Indebtedness does not violate the provisions of the Indenture).

Section 303 Release of Guarantor.

A Guarantor shall be released from all of its obligations
under its Guarantee if all or substantially all of its assets are sold or all
of its Capital Stock are sold, in each case in a transaction in compliance with
Section 4.09 hereof, or the Guarantor merges with or

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into or consolidates with, or transfers all or substantially all of its assets
to, the Company or another Guarantor in a transaction in compliance with
Article 5 hereof, and such Guarantor has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to such transaction have been complied with.

Section 404 Limitation on Guarantee.

Notwithstanding the other provisions of this Article 11, the
maximum liability of a Guarantor pursuant to its Guarantee shall in no event
exceed the Maximum Guaranteed Amount (as defined below).

The "Maximum Guaranteed Amount" with respect to a Guarantor
shall mean the greater of:

(i) the amount received by such
Guarantor in respect of all loans, advances or capital contributions
made to such Guarantor with proceeds from the Notes ("Note Proceeds");
all debts and/or equity securities of such Guarantor acquired, repaid,
redeemed or otherwise discharged with Note Proceeds; and the fair
market value of all property acquired with Note Proceeds and
transferred to such Guarantor; and

(ii) ninety-five percent (95%) of the
Adjusted Net Worth of such Guarantor as of the earlier of (A) the date
of the commencement of a case under Title 11 of the United States Code
in which such Guarantor is a debtor or (B) the date enforcement
hereunder is sought (the "Guarantee Date").

The "Adjusted Net Worth" of a Guarantor as of the Guarantee
Date shall mean the excess of (a) the amount of the fair saleable value of the
assets of such Guarantor as of such date determined in accordance with
applicable Federal and state laws governing determinations of the insolvency of
debtors over (b) the amount of all liabilities of such Guarantor, contingent or
otherwise, as of the Guarantee Date, determined on the basis provided in clause
(a) above (excluding all liabilities under the Guarantees).

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Section 505 Successors.

The Guarantee shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the successors and
assigns of the Holders and, in the event of any transfer or assignment of
rights by any Holder, the rights and privileges herein conferred upon the party
shall automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof.

ARTICLE XII

MISCELLANEOUS

Section 101 Trust Indenture Act Controls.

If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.

Section 202 Notices.

Any notice or communication shall be given in writing and
delivered in person or by telex, by telecopier or registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:

if to the Company or any Guarantor:

c/o NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604-4277
Attention: President

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if to the Trustee:

Shawmut Bank Connecticut,
National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Administration

Any notice or communication to the Company, any Guarantor or
the Trustee shall be deemed to have been given or made as of the date so
delivered if personally delivered; when answered back, if telexed; when receipt
is acknowledged, if telecopied; and five calendar days after mailing if sent by
registered or certified mail (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee and
except that a mailed notice to the Trustee shall not be deemed to have been
given until actually received by the Trustee).

The Company, the Guarantors or the Trustee by notice to the
other may designate additional or different addresses for subsequent notices or
communications.

Any notice or communication mailed to a Noteholder shall be
mailed by first-class mail or other equivalent means to his address shown on
the register kept by the Registrar.

Failure to mail a notice or communication to a Noteholder or
any defect in it shall not affect its sufficiency with respect to other
Noteholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it. If the
Company or any Guarantor mails a notice or communication to Noteholders, it
shall mail a copy to the Trustee and each agent at the same time.

In case by reason of the suspension of regular mail service,
or by reason of any other cause, it shall be impossible to mail any notice as
required by this Indenture, then such method of notification as shall be made
with the approval of the Trustee shall constitute a sufficient mailing of such
notice.

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Section 303 Communication by Holders with Other Holders.

Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).

Section 404 Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:

(1) an Officers' Certificate (which shall include the
statements set forth in Section 12.05) stating that,
in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture
relating to the proposed action have been complied
with; and

(2) an Opinion of Counsel (which shall include the
statements set forth in Section 12.05) stating that,
in the opinion of such counsel, all such conditions
precedent have been complied with.

Setion 505 Statements Required in Certificate or Opinion.

Each Officers' Certificate and Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:

(1) a statement that the person making such certificate
or opinion has read such covenant or condition;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the
statements or opinions contained in such certificate
or opinion are based;

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<PAGE> 87

(3) a statement that, in the opinion of such person, he
has made such examination or investigation as is
necessary to enable him to express an informed
opinion as to whether or not such covenant or
condition has been complied with; and

(4) a statement as to whether or not, in the opinion of
such person, such covenant or condition has been
complied with;

provided, however, that with respect to matters of law, an Officers'
Certificate may be based upon an Opinion of Counsel, unless the signers know
that such Opinion of Counsel is erroneous, and provided, further, that with
respect to matters of fact, an Opinion of Counsel may rely on an Officers'
Certificate or certificates of public officials, unless the signer knows that
any such document is erroneous.

Section 606 When Treasury Notes Disregarded.

In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, any Guarantor or any other obligor on the Notes or by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company, such Guarantor or such obligor shall
be disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which the Trustee knows are so owned shall be so disregarded. Notes so
owned which have been pledged in good faith shall not be disregarded if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so
to act with respect to the Notes and that the pledgee is not the Company, a
Guarantor or any other obligor upon the Notes or any person directly or
indirectly controlling or controlled by or under direct common control with the
Company, such Guarantor or such obligor.

Section 707 Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a
meeting of Noteholders. The Registrar

80
<PAGE> 88

or Paying Agent may make reasonable rules and set reasonable requirements for
its functions.

Section 808 Legal Holidays.

A "Legal Holiday" is a Saturday, a Sunday, a legal holiday or
a day on which banking institutions are not required to be open in either the
State of New York or the State of Connecticut. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for
the intervening period.

Section 909 Governing Law.

The laws of the State of New York shall govern this Indenture
and the Notes and Guarantees, without regard to conflicts of laws and rules
thereof.

Section 1010 No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.

Secton 1111 No Recourse against Others.

No stockholder, officer, director or incorporator, as such,
past, present or future, of the Company or any Guarantor shall have any
personal liability under the Notes or the Guarantee by reason of his or its
status as such stockholder, officer, director or incorporator. Each Noteholder
by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the
Guarantee.

Section 1212 Successors.

All agreements of the Company or a Guarantor in this
Indenture, the Notes and the Guarantee shall bind its successor. All
agreements of the Trustee in this Indenture shall bind its successor.

81
<PAGE> 89

Section 1313 Multiple Counterparts.

The parties may sign multiple counterparts of this Indenture.
Each signed counterpart shall be deemed an original, but all of them together
represent the same agreement.

Section 1414 Table of Contents, Headings, etc.

The table of contents, cross-reference sheet and headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.

Section 1515 Severability.

In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

82
<PAGE> 90

SIGNATURES

NEWCITY COMMUNICATIONS, INC.
as Issuer

(SEAL) By:/s/ John Riccardi
------------------------------------------
Title: VP-CFO

Attest:

/s/ James T. Morley
- ----------------------------

NEWCITY BROADCASTING COMPANY, INC.
NEWCITY COMMUNICATIONS OF ALABAMA, INC.
NEWCITY COMMUNICATIONS OF ATLANTA, INC.
NEWCITY COMMUNICATIONS OF CONNECTICUT, INC.
NEWCITY COMMUNICATIONS OF DAYTONA, INC.
NEWCITY COMMUNICATIONS OF FLORIDA, INC.
NEWCITY COMMUNICATIONS OF FULTON, INC.
NEWCITY COMMUNICATIONS OF MASSACHUSETTS,INC.
NEWCITY COMMUNICATIONS OF SAN ANTONIO, INC.
NEWCITY COMMUNICATIONS OF SYRACUSE, INC.
NEWCITY COMMUNICATIONS OF TULSA, INC.
BIRMINGHAM COMMUNICATIONS,INC.
NEWCITY TULSA TOWER, INC.
as Guarantors

By:/s/ John Riccardi
------------------------------------------
Title: Treasurer VP-CFO

Attest:

/s/ James T. Morley
- ----------------------------

AMERICAN COMEDY NETWORK, INC.

COMMERCIALWORKS, INC.
PARKCITY PRODUCTIONS, INC.
as Guarantors

By:/s/ John Riccardi
------------------------------------------
Title: VP-CFO
Treasurer
Attest:

/s/ James T. Morley
- ----------------------------

83
<PAGE> 91
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
as Trustee

(SEAL) By:/s/ E.C. Hammer
------------------------------------------
Title: Vice President

Attest:

/s/ Michelle K. Belzard
- ----------------------------

<PAGE> 1

EXHIBIT 21

Subsidiaries of Cox Radio, Inc.(1)

Cox Kentucky, Inc.
KFI, Inc.
WCKG, Inc.
WHIO, Inc.
WSB, Inc.
WWRM, Inc.

- ------------
(1) Assumes completion of Cox Radio Consolidation.

<PAGE> 1

INDEPENDENT AUDITORS' CONSENT AND REPORT ON SCHEDULE

To the Board of Directors and Shareholders of
Cox Radio, Inc.
Atlanta, Georgia

We consent to the use in this Registration Statement of Cox Radio, Inc. on
Form S-1 of our report dated July 18, 1996 (which expresses an unqualified
opinion and includes an explanatory paragraph relating to changes in the methods
of accounting for postretirement benefits other than pension, income taxes, and
postemployment benefits), appearing in the Prospectus, which is part of this
Registration Statement, and to the reference to us under the heading "Experts"
in such Prospectus.

Our audits of the consolidated financial statements referred to in an
aforementioned report also included the consolidated financial statement
schedule of Cox Radio, Inc., listed in Item 16(b). This consolidated financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based or our audits. In our opinion,
such consolidated financial statement schedule, when considered in relation to
the basic financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
July 24, 1996

<PAGE> 1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated March 1, 1996, with respect to the financial
statements and schedule of NewCity Communications, Inc. included in the
Registration Statement (Form S-1) and related Prospectus of Cox Radio, Inc. for
the registration of shares of its common stock.

ERNST & YOUNG LLP

Stamford, CT
July 22, 1996

<PAGE> 1

INDEPENDENT AUDITORS CONSENT

We consent to the use in this Registration Statement of Cox Radio, Inc. on
Form S-1 of our report dated July 19, 1996 (relating to the financial statements
of Infinity Holdings Corp. of Orlando), appearing in the Prospectus, which is
part of this Registration Statement.

We also consent to the reference to us under the heading "Experts" in such
Prospectus.

DELOITTE & TOUCHE LLP

Atlanta, Georgia
July 24, 1996

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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
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