NASSAU BROADCASTING CORP, 424A, 2000-07-10

NASSAU BROADCASTING CORP
424A, 2000-07-10
RADIO BROADCASTING STATIONS

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<PAGE>

As filed with the Securities and Exchange Commission on July 10, 2000
Registration Statement No. 333-36634

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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Nassau Broadcasting Corporation
(Exact Name of Registrant as Specified in Its Charter)

<TABLE>
<S> <C> <C>
Delaware 4832 223737119
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

619 Alexander Road
Princeton, New Jersey 08540
(609) 452-9696
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

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

Michael S. Libretti
Executive Vice President and
Chief Financial Officer
Nassau Broadcasting Corporation
619 Alexander Road
Princeton, New Jersey 08540
(609) 452-9696
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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Copies to:

Phyllis G. Korff, Esq. Michael J. Schiavone, Esq.
Skadden, Arps, Slate, Meagher & Shearman & Sterling
Flom LLP 599 Lexington Avenue
Four Times Square New York, New York 10022
New York, New York 10036-6522 Tel: (212) 848-4000
Tel: (212) 735-3000 Fax: (212) 848-7179
Fax: (212) 735-2000

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Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
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, as amended, 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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: [_]

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CALCULATION OF REGISTRATION FEE

<TABLE>
--------------------------------------------------------------------------------
<CAPTION>
Title of Each Class of Proposed Maximum Aggregate Amount of Registration
Securities To Be Registered Offering Price(1) Fee(2)
--------------------------------------------------------------------------------
<S> <C> <C>
Class A common stock, $0.01
par value................. $236,075,000 $62,324
--------------------------------------------------------------------------------
</TABLE>
(1)Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(o) of the Securities Act.
(2)Nassau previously paid $50,160 of this registration fee on May 9,
2000.

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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 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>

EXPLANATORY NOTE

This Amendment No. 1 to the Registration Statement contains two forms of
prospectus: one to be used in connection with a U.S. and Canadian offering of
the registrant's class A common stock and one to be used in a concurrent
international offering of the class A common stock. The international
prospectus will be identical to the U.S. prospectus except that it will have a
different front cover page, underwriting section and back cover page. The U.S.
prospectus is included herein and is followed by the alternate front cover
page, underwriting section and back cover page to be used in the international
prospectus, each of which has been labeled "Alternative Page for International
Prospectus."
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell these securities and it is not soliciting an offer to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion

Preliminary Prospectus dated July 10, 2000

P R O S P E C T U S

12,425,000 Shares

[LOGO OF NASSAU BROADCASTING CORPORATION APPEARS HERE]

Class A Common Stock

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This is Nassau's initial public offering. Nassau is selling all of the
shares. The U.S. underwriters are offering 9,940,000 shares in the U.S. and
Canada and the international managers are offering 2,485,000 shares outside the
U.S. and Canada.

We expect the public offering price to be between $16 and $19 per share.
Currently, no public market exists for the shares. After pricing of the
offering, we expect that the shares will be quoted on the Nasdaq National
Market under the symbol "NBCR."

Investing in the class A common stock involves risks that are described in
the "Risk Factors" section beginning on page 11 of this prospectus.

-----------

<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public offering price............................. $ $
Underwriting discount............................. $ $
Proceeds, before expenses, to Nassau.............. $ $
</TABLE>

The U.S. underwriters may also purchase up to an additional 1,491,000
shares from Nassau at the public offering price, less the underwriting
discount, within 30 days from the date of this prospectus to cover over-
allotments. The international managers may similarly purchase up to an
additional 372,750 shares from Nassau.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

The shares of class A common stock will be ready for delivery on or about
, 2000.

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Merrill Lynch & Co. Salomon Smith Barney

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Banc of America Securities LLC

Lazard

Prudential Volpe Technology
a unit of Prudential Securities

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The date of this prospectus is , 2000.
<PAGE>

Prospectus Cover and Outside Back Cover

The cover page of the prospectus and the outside back cover will contain the
Nassau Broadcasting Corporation logo. The main graphic in this logo is a
lowercase "n" written in a cursive font. It is in the center of the image and is
in a deep gold color. Just below, "Nassau Broadcasting Corporation" is written
in a blue violet. All letters are capitalized and the font size in relationship
with the "n" is approximately 36 points smaller. Beneath this text "A New
Generation of Broadcasting" is written in a silver color. The text is all
capitalized and the width of the phrase stretches out to fit the same length as
the phrase above it. This font size relative to the text above it is
approximately 24 points smaller.

Inside Back Cover

The inside back cover to the prospectus will contain a map of DataWorld, Inc. AM
coverage. This geographic map outlines in color certain states and sections of
other states that are located in the mid-Atlantic region of the United States.
These states include all of New Jersey, most of Connecticut, southern
Massachusetts, southeastern New York State (New York City is at the center of
the piece), eastern Pennsylvania, northern Maryland and northern Delaware. The
Atlantic Ocean and the Long Island Sound are the two bodies of water that are
shown. All major cities are pinpointed and labeled in bold text. Major counties
are also listed by black thin lines. Other central cities are pinpointed and
labeled in smaller font. The regions that Nassau's AM stations' signals cover
are all outlined and labeled in different colors.

Inside Front Cover

The inside front cover to the prospectus will contain a map of DataWorld, Inc.
FM coverage. This geographic map outlines in color certain states and sections
of other states that are located in the mid-Atlantic region of the United
States. These states include all of New Jersey, most of Connecticut, southern
Massachusetts, southeastern New York State (New York City is at the center of
the piece), eastern Pennsylvania, northern Maryland and northern Delaware. The
Atlantic Ocean and the Long Island Sound are the two bodies of water that are
shown. All major cities are pinpointed and labeled in bold text. Major counties
are also listed by black thin lines. Other central cities are pinpointed and
labeled in smaller font. The regions that Nassau's FM stations' signals cover
are all outlines and labeled in different colors.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 3
Risk Factors............................................................. 11
Recapitalization and Reorganization...................................... 18
Pending Acquisitions..................................................... 19
Use of Proceeds.......................................................... 22
Dividend Policy.......................................................... 22
Capitalization........................................................... 23
Dilution................................................................. 24
Unaudited Pro Forma Consolidated Financial Data.......................... 26
Selected Historical Financial Data....................................... 34
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 36
Industry Overview........................................................ 46
Business................................................................. 49
Management............................................................... 71
Related Party Transactions............................................... 80
Principal Stockholders................................................... 82
Description of Capital Stock............................................. 84
Shares Eligible for Future Sale.......................................... 89
Material United States Federal Tax Consequences to Non-U.S. Holders of
Our Class A Common Stock................................................ 91
Underwriting............................................................. 93
Legal Matters............................................................ 98
Experts.................................................................. 98
Where You Can Find Additional Information................................ 99
Index to Financial Statements............................................ F-1
</TABLE>

i
<PAGE>

SUMMARY

This is only a summary and does not contain all of the information that
may be important to you. You should read the entire prospectus, including the
risk factors section and our financial statements and related notes, before
making an investment decision.

Nassau Broadcasting Corporation

We are a radio broadcasting company focused on building contiguous
clusters of local radio stations in demographically attractive suburban areas
surrounding major metropolitan markets in the northeastern United States. We
view radio markets as demographically attractive when they serve highly
populated suburban areas characterized by above average affluence and retail
sales per capita. Presently, we own and/or operate 11 FM and 10 AM stations
located in five markets in New Jersey, Pennsylvania and New York. Pro forma for
pending acquisitions, we will own and/or operate 17 FM and 15 AM stations
located in nine markets in New Jersey, Pennsylvania, New York and Connecticut.
We have assembled geographically adjacent groups, or clusters, of market-
leading radio stations offering market characteristics that we believe provide
us with significant growth potential. On a historical basis, we had net
revenues of $31.4 million and broadcast cash flow of $10.6 million for the year
ended December 31, 1999 and net revenues of $7.3 million and broadcast cash
flow of $2.0 million for the three months ended March 31, 2000. Broadcast cash
flow means operating income (loss) before depreciation and amortization
expense, corporate general and administrative expenses and local marketing
agreement fees. After giving effect to a recent sale of all our membership
interests in Nassau Tower Holdings LLC, which owns the real estate properties
on which the broadcasting facilities we use are located, and our pending
acquisitions we would have had, on a pro forma basis, net revenues of $55.9
million and broadcast cash flow of $20.8 million for the year ended December
31, 1999 and net revenues of $13.0 million and broadcast cash flow of $4.5
million for the three months ended March 31, 2000.

By acquiring, developing and operating radio stations in demographically
attractive suburban markets, we have substantially increased the net revenues
and broadcast cash flow of our stations resulting in 21.0% and 33.0% two-year
compound annual same station net revenue and same station broadcast cash flow
growth, respectively. We have organized our stations into four clusters:
Northern, Northwestern, Central and Shore. We also have a division called the
Nassau Radio Network that markets all of our stations to national advertisers.
Our stations currently cover approximately 4.8 million people and, if we
complete our pending acquisitions, our stations will cover approximately 7.1
million people.

Our principal executive offices are located at 619 Alexander Road,
Princeton, New Jersey 08540, our telephone number is (609) 452-9696, and the
address of our website is www.nassaubroadcasting.com. We do not intend the
information contained on our website to be part of this prospectus.

Competitive Strengths

We believe that the following competitive strengths have been critical to
our success:

. Covering contiguous suburban markets. We provide comprehensive
coverage of suburban markets surrounding the New York and Philadelphia
metropolitan areas, which we believe are demographically attractive
and have strong revenue growth potential;

. Strengthening underperforming stations. We have a demonstrated record
of developing and strengthening underperforming radio stations into
viable, competitive local brands that produce significant revenue and
cash flow increases;

. Operating stations effectively. We have generated consistent growth on
a same station basis at both our developing and established stations;

. Acquiring and integrating stations. We have successfully acquired and
integrated 19 stations during the past five years; and

3
<PAGE>

. Broad base of advertisers. We have a broad base of advertising
clients. No one client accounts for more than 1% of our total
revenues, and Internet companies account for less than 1% of our
revenues.

We have achieved the following growth by operating our stations in market
clusters and having advertising, sales and programming expertise:

. same station net revenues increased 25.0% from 1998 to 1999; and

. same station broadcast cash flow increased 42.0% from 1998 to 1999.

We calculated same station results for the periods presented above for
stations we operated as of January 1, 1998 and continued to operate through
December 31, 1999.

Operating Strategy

We intend to continue to grow our business, both internally and through
acquisitions, by pursuing the following strategies:

. Building station clusters. We operate multiple stations within each of
our markets and cluster them to provide beneficial operating
efficiencies and deliver extensive coverage of diverse and attractive
demographic groups to advertisers in a cost-effective manner.

. Improving station programming. We focus on continually enhancing and
increasing the local content of our station programming to increase
our audience share.

. Enhancing brand awareness. We brand and market individual stations to
improve audience recognition, loyalty and ratings.

. Cultivating a broad base of advertisers. We continue to develop our
sales force to proactively serve local and national advertisers.

We have sustained substantial net losses since our inception and have
never generated positive operating income. We incurred net losses of
approximately $6.7 million in 1997, $4.0 million in 1998, $4.6 million in 1999
and $1.0 million for the three months ended March 31, 2000. We expect to
continue to incur net losses while we pursue our strategy of growing our
business.

Acquisition Strategy

We intend to continue to expand our presence in demographically
attractive suburban areas surrounding major metropolitan markets, primarily in
the Northeast. We target markets that have lower radio market revenue relative
to total retail sales as compared to the national average and/or where radio
has historically captured only a small portion of total local advertising
expenditure. We seek to acquire stations that enable us to further strengthen
our presence in existing markets or to create leadership positions in new,
complementary markets. Frequently, the suburban areas we target are markets
that have fragmented ownership of radio stations or a limited number of fully
developed local stations. We are especially attracted by the opportunity to
acquire underperforming stations with the potential for significantly increased
revenues. We have an established process to integrate new stations into our
portfolio, culture and operating philosophy. As we integrate our acquisitions,
we involve senior management in the design and execution of plans to revitalize
any underperforming stations and transform them into more profitable ones.

4
<PAGE>

Station Portfolio

The following table sets forth information as of the date of this
prospectus with respect to stations we own, operate or have agreed to acquire.
We have not received regulatory approvals in connection with any of our pending
acquisitions and, with respect to some of them, we have not yet applied to the
Federal Communications Commission for approval. We cannot assure you that the
FCC or any other regulatory body will grant final orders approving these
acquisitions or that we or any other relevant party will be able to satisfy all
of the other conditions required to close these acquisitions. The completion of
this offering is not conditioned upon the consummation of any of the pending
acquisitions.

<TABLE>
<CAPTION>
1999
Radio Group
1999 1999 1999 Stations Rank in
Market Radio Market Number of Radio Market --------- Market
Market Rank Revenue Rank Listeners(1) Revenue Growth FM AM Revenue
------ ------ ------------ ------------ -------------- -- ---- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Northern (2)
Westchester, NY (3)..... 1 2 161,600 16.8% 2 1 N/A
Bridgeport, CT.......... 112 91 320,100 5.6% 1 1 1
Danbury, CT............. 189 190 148,600 8.0% 2 2 2
Northwestern
Sussex, NJ.............. 239 250 188,900 16.7% 3 1 1
Newburgh-Middletown, NY
(4).................... 141 258 18,500 9.8% 1 1 5
Wilkes Barre-Scranton,
PA..................... 64 77 64,900 11.3% 1 2 4
Allentown, PA (5)....... 67 76 235,100 6.8% 1 1 3
Central
Trenton, NJ (6)......... 138 100 858,800 14.6% 2 4 1
Shore
Monmouth-Ocean, NJ (7).. 47 83 419,300 21.3% 4 2 1
--------- ---- ----
Total................. 2,415,800 17 15
========= ==== ====
</TABLE>
--------
(1) Number of listeners refers to the estimated number of different persons
who listened to a station for a minimum of five minutes in a quarter-hour
within a specified period in the day.
(2) Consists of the nine radio stations we expect to own upon our acquisition
of Aurora Communications, LLC.
(3) Falls within the greater New York market.
(4) Consists of the two radio stations we expect to acquire from Port Jervis
Broadcasting Co., Inc.
(5) Consists of the two radio stations we expect to acquire from Clear Channel
Communications, Inc.
(6) Includes two radio stations we expect to acquire from Great Scott
Broadcasting Ltd. and one radio station we expect to acquire from
Multicultural Radio Broadcasting, Inc.
(7) Includes the construction permit of WCHR (FM), which we will acquire upon
our acquisition of Manahawkin Communications Corporation and two radio
stations we expect to own upon our acquisition of North Shore Broadcasting
Corp. and Seashore Broadcasting Corp.

5
<PAGE>

The Offering

Class A common stock offered by us:

<TABLE>
<S> <C>
U.S. offering....................... 9,940,000 shares
International offering.............. 2,485,000 shares
-----------------
Total........................... 12,425,000 shares
12,504,419 shares of class A common
Shares outstanding after the offering.. stock
3,179,534 shares of class B common
stock
506,287 shares of class C common stock
Voting rights.......................... Class A common stockholders have one
vote for each share, class B common
stockholders have ten votes for each
share and class C common stockholders
have no votes.
Conversion rights...................... Class A common stockholders may
convert their shares into class C
common stock on a one-for-one basis.
Class B common stockholders may at any
time convert their shares into shares
of class A or class C common stock on
a one-for-one basis. In addition, the
shares of class B common stock convert
automatically into shares of class A
common stock on a one-for-one basis
upon their transfer to someone other
than a permitted transferee. Class C
common stockholders may only convert
their shares into shares of class A or
class B common stock at the option of
the holders upon satisfying conditions
specified in our certificate of
incorporation.
Use of proceeds........................ We estimate that our net proceeds from
this offering without exercise of the
underwriters' over-allotment options
will be approximately $200.7 million.
We intend to use these net proceeds:
. to redeem all of our outstanding
senior discount notes;
. to finance a portion of the
acquisition of Aurora
Communications;
. to finance most of the acquisition
of the Allentown stations;
. to reimburse the limited partners
of our predecessor for tax payable
by them as a result of our
reorganization; and
. to pay transaction costs and
provide for general corporate
purposes.
Risk factors........................... See "Risk Factors" and other
information included in this
prospectus for a discussion of factors
you should carefully consider before
deciding to invest in shares of our
class A common stock.
Nasdaq National Market symbol.......... NBCR
</TABLE>

The number of shares of class A common stock outstanding after the
offering excludes:

. 2,205,707 shares of class A common stock we have reserved for issuance
under our 2000 stock incentive plan, of which we have already issued
options to acquire 205,707 shares under this plan at a weighted
average option price of $1.82; and

. up to 1,863,750 additional shares of class A common stock issuable
upon exercise of the underwriters' over-allotment options.

The number of shares of class C common stock outstanding after the
offering excludes the shares of class C common stock that we will issue if we
complete the Aurora acquisition. The number of shares of class C common stock
that we will issue will be based on the market value of our class A common
stock at the date of closing of the acquisition. Assuming a market value equal
to $17.50, the midpoint of the price range set forth on the cover page of this
prospectus, we expect to issue an additional 2,000,000 shares of class C common
stock.

6
<PAGE>

Summary Pro Forma Consolidated Financial Data

In the table below, we provide you with our summary unaudited pro forma
consolidated financial data as of the dates and for the periods indicated. Our
unaudited pro forma consolidated statement of operations data for the year
ended December 31, 1999 and for the three months ended March 31, 2000 give
effect to the following transactions as though they had occurred on January 1,
1999 and January 1, 2000, respectively:

. our recapitalization and reorganization;

. the completion of this offering and the application of the net
proceeds as described in this prospectus;

. the completion of our acquisition of Aurora Communications;

. the completion of our acquisition of two radio stations in Allentown,
Pennsylvania;

. the completion of our acquisitions of WILT (AM) and WCHR (FM);

. the completion of our acquisitions of seven stations that we currently
operate under local marketing agreements; and

. the sale of all our membership interests in Nassau Tower Holdings LLC.

Our unaudited pro forma consolidated balance sheet data as of March 31,
2000 gives effect to those of the transactions listed above that are expected
to occur, or have occurred, after March 31, 2000, as if they had occurred on
March 31, 2000. We have included all adjustments, consisting only of normal
recurring adjustments, which, in the opinion of management, are necessary for a
fair presentation of this data. We based the pro forma adjustments on available
information and on assumptions that we believe are reasonable under the
circumstances.

We provide you with our summary unaudited pro forma consolidated
financial data for illustrative purposes only and not to indicate what our
results of operations or financial position would have been if we had
consummated the transactions described above on the dates indicated or to
indicate future results of operations or financial positions. We based the
summary unaudited pro forma consolidated financial data on assumptions and
adjustments we describe in the notes to the unaudited pro forma consolidated
financial data included elsewhere in this prospectus.

You should read the following data in conjunction with our historical
financial statements and related notes, our unaudited pro forma consolidated
financial statements and related notes and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this prospectus.

7
<PAGE>

Summary Pro Forma Consolidated Financial Data (Cont'd)

<TABLE>
<CAPTION>
Year Ended Three Months Ended
December 31, 1999 March 31, 2000
----------------- --------------------
(unaudited)
(dollars in thousands, except per
share data)
<S> <C> <C>
Statement of Operations Data:
Gross revenues......................... $ 61,568 $ 14,222
Less agency and outside commissions.... 5,709 1,239
----------- -----------
Net revenues......................... 55,859 12,983
----------- -----------
Operating expenses..................... 35,085 8,476
Depreciation and amortization.......... 17,409 4,552
Corporate general and administrative
expenses.............................. 2,280 587
Local marketing agreement fees......... 700 175
----------- -----------
Total operating expenses............. 55,474 13,790
----------- -----------
Operating income (loss)............ 385 (807)
----------- -----------
Other income (expense)
Investment income.................... 2,615 458
Gain on sale of assets............... 538 1,633
Interest expense..................... (10,916) (2,810)
Loss on impairment................... (13,250) --
----------- -----------
Total other expense.................. (21,013) (719)
----------- -----------
Net Loss............................. $ (20,628) $ (1,526)
=========== ===========
Basic and diluted net loss per common
share................................. $ (1.13) $ (0.08)
=========== ===========
Weighted average shares outstanding
used in determining net loss per
share................................. 18,190,240 18,190,240
=========== ===========
Other Data:
Broadcast cash flow (1)................ $ 20,774 $ 4,507
EBITDA (1)............................. 18,494 3,920
After-tax cash flow (1)................ 9,493 1,393
<CAPTION>
As of March 31, 2000
--------------------
(unaudited)
(in thousands)
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents.............. $ 1,883
Working capital........................ 814
Total assets........................... 306,230
Total indebtedness..................... 112,214
Stockholders' equity................... 182,253
</TABLE>

--------
(1) The term "broadcast cash flow" means operating income (loss) before
depreciation and amortization expense, corporate general and administrative
expenses and local marketing agreement fees. The term "EBITDA" means
operating income (loss) before depreciation and amortization expense and
local marketing agreement fees. The term "after-tax cash flow" means income
(loss) before extraordinary items, where applicable, minus net gain on sale
of assets, plus depreciation and amortization expense. Although broadcast
cash flow, EBITDA and after-tax cash flow are not measures of performance
calculated in accordance with GAAP, we believe that they are useful to an
investor in evaluating our performance because they are measures widely
used in the broadcasting industry to evaluate a radio company's operating
performance. However, you should not consider broadcast cash flow, EBITDA
and after-tax cash flow in isolation or as substitutes for net income, cash
flow from operating activities and other income or cash flow statement data
prepared in accordance with GAAP, or as measures of liquidity or
profitability. Broadcast cash flow, EBITDA and after-tax cash flow, as we
define these terms, may not be comparable to similarly titled measures
other companies use.

8
<PAGE>

Summary Historical Financial Data

In the table below, we provide you with our summary historical financial
data as of the dates and for the periods indicated. The historical financial
data appearing below is that of Nassau Broadcasting Partners, L.P. We have
derived the statement of operations data for each of the years in the three-
year period ended December 31, 1999 from the audited financial statements of
Nassau Broadcasting Partners, L.P. included elsewhere in this prospectus. We
have derived the statement of operations data for the three months ended March
31, 1999 and 2000 and the balance sheet data as of March 31, 2000 from the
unaudited financial statements of Nassau Broadcasting Partners, L.P. which have
been prepared on the same basis as the audited financial statements and which,
in the opinion of management, reflect all adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of this data.
Results for the three-month period ended March 31, 2000 are not necessarily
indicative of results that may be expected for the entire year or for any
future period. You should read the following data in conjunction with our
historical financial statements and related notes, our unaudited pro forma
consolidated financial statements and related notes, and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
----------------------------- -------------------
1997 1998 1999 1999 2000
-------- ------- ---------- ------- ----------
(unaudited)
(dollars in thousands except per share data)
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Gross revenues............. $ 20,891 $27,349 $ 34,295 $ 6,811 $ 7,893
Less agency and outside
commissions............... 1,812 2,353 2,893 544 612
-------- ------- ---------- ------- ----------
Net revenues.............. 19,079 24,996 31,402 6,267 7,281
-------- ------- ---------- ------- ----------
Operating expenses......... 13,437 17,227 20,794 4,570 5,318
Depreciation and
amortization.............. 2,139 2,364 2,634 603 822
Corporate general and
administrative expenses... 1,995 1,825 2,280 500 587
Local marketing agreement
fees...................... 1,666 2,271 2,517 725 640
-------- ------- ---------- ------- ----------
Total operating expenses.. 19,237 23,687 28,225 6,398 7,367
-------- ------- ---------- ------- ----------
Operating income (loss).. (158) 1,309 3,177 (131) (86)
-------- ------- ---------- ------- ----------
Other income (expense)
Investment income......... 530 992 2,562 154 453
Gain on sale of assets.... -- 3,176 567 141 1,633
Interest expense.......... (6,367) (8,781) (10,946) (2,718) (3,024)
Special management fee.... (744) -- -- -- --
-------- ------- ---------- ------- ----------
Total other expense...... (6,581) (4,613) (7,817) (2,423) (938)
-------- ------- ---------- ------- ----------
Loss before extraordinary
item.................... (6,739) (3,304) (4,640) (2,554) (1,024)
Extraordinary loss on early
retirement of debt........ -- (677) -- -- --
-------- ------- ---------- ------- ----------
Net loss................. $ (6,739) $(3,981) $ (4,640) $(2,554) $ (1,024)
======== ======= ========== ======= ==========
Pro forma:
Basic and diluted loss per
common share............. $ (1.23) $ (0.27)
========== ==========
Weighted average shares
outstanding used in
determining net loss per
share.................... 3,765,240 3,765,240
========== ==========
Other Data:
Broadcast cash flow ....... $ 5,642 $ 7,769 $ 10,608 $ 1,697 $ 1,963
EBITDA..................... 3,647 5,944 8,328 1,197 1,376
After-tax cash flow ....... (4,600) (4,116) (2,573) (2,093) (1,835)
Net cash provided by (used
in)
Operating activities...... (3,600) (1,041) (233) 117 27
Investing activities...... (18,334) 3,535 (8,300) (6,905) (4,487)
Financing activities...... 17,172 3,847 2,071 (536) 6,269
</TABLE>

9
<PAGE>

<TABLE>
<CAPTION>
As of March 31, 2000
----------------------
(unaudited)
(dollars in thousands)
<S> <C>
Balance Sheet Data:
Cash and cash equivalents................................ $ 2,397
Working capital.......................................... 8,428
Total assets............................................. 82,686
Total indebtedness....................................... 97,412
Stockholders' deficiency................................. (21,489)
</TABLE>

10
<PAGE>

RISK FACTORS

You should consider the risks described below before making an investment
decision. We believe that the risks and uncertainties described below are the
principal material risks facing us as of the date of this prospectus. In the
future, we may become subject to additional risks that are not currently known
to us. If any of the following risks occur, our business, financial condition
or results of operations could be materially adversely affected. In addition,
the trading price of our class A common stock could decline due to any of the
following risks, and you could lose all or part of your investment.

Risks relating to our business

The market price of our class A common stock could decline and you could lose
some or all of your investment if our losses continue.

Since our inception, we have incurred substantial net losses and, on an
annual basis, have never generated positive cash flow from operations. For the
years ended December 31, 1997, 1998 and 1999, we incurred net losses of
approximately $6.7 million, $4.0 million and $4.6 million, respectively, and
our net loss for the three months ended March 31, 2000 is approximately $1.0
million. Our aggregate net losses to March 31, 2000 are approximately $18.5
million. We believe that we will continue to incur losses while we pursue our
strategy of acquiring radio stations and developing our network. We may never
become profitable or generate positive cash flow. If we are unable to become
profitable, the market price of our class A common stock could decline, and you
could lose some or all of your investment in us. In addition, if the market
price declines, we might be unable to raise additional capital through debt or
equity issuances.

Because of our substantial level of debt and the restrictions imposed on us by
the terms of our debt, we might be unable to grow or compete.

As of March 31, 2000, after giving pro forma effect to our pending
acquisitions, our recapitalization and reorganization and this offering, we
would have had outstanding long-term debt, inclusive of current portion, of
approximately $112.2 million. Because of this substantial level of debt:

. it could be difficult for us to obtain additional financing in the
future for working capital, capital expenditures, acquisitions,
general corporate or other purposes;

. we might have to dedicate a substantial portion of cash flow from our
operations to make interest and principal payments on our debt; and

. we could be more vulnerable to economic downturns, limited in our
ability to withstand competitive pressures and less flexible in
adjusting rapidly to changing business and economic conditions.

The following table represents the aggregate amount of principal and
interest due each year for the next five years based upon the amount of debt
specified above.

<TABLE>
<CAPTION>
Principal and
Year Interest Due
---- -------------
<S> <C>
2000........................... $14,189,000
2001........................... 17,728,000
2002........................... 20,119,000
2003........................... 20,541,000
2004........................... 20,191,000
</TABLE>

11
<PAGE>

In addition, because our new credit facility is secured by substantially
all of our assets, we might be forced to sell some of our assets if we are
unable to service our debt.

Our new credit facility contains covenants that restrict our ability to:

. incur additional indebtedness, contingent liabilities and liens;

. redeem or repurchase capital stock and redeem, repurchase or prepay
subordinated debt;

. pay cash dividends or make other distributions on our capital stock;

. enter into specified investments or joint ventures;

. consolidate, merge or effect asset sales;

. make capital expenditures;

. enter into sale and leaseback transactions;

. sell or discount accounts receivable;

. enter into transactions with stockholders and affiliates; and

. change the nature of our business.

Our new credit facility also requires us to maintain financial ratios
with respect to interest coverage, fixed charge coverage and senior and total
debt. A breach of any of these covenants could result in a default under our
new credit facility. Upon the occurrence of an event of default under our new
credit facility, the lenders could elect to declare the debt to be due and
payable immediately and could terminate their commitments to make further
extensions of credit. If the debt under our new credit facility were
accelerated, our assets might not be sufficient to repay in full this debt and
our other debt.

Our acquisition strategy might not yield the results that we anticipate which
could cause the price of our class A common stock to decline.

We intend to accelerate our growth by acquiring additional radio stations
in suburban areas surrounding major metropolitan markets, primarily in the
Northeast. Our strategy of accelerating growth through acquisitions is subject
to a variety of risks, including:

. a reduction in the number of suitable acquisition targets resulting
from continued industry consolidation;

. an increase in prices for radio stations due to increased competition
for acquisition opportunities;

. an inability to negotiate definitive purchase agreements on
satisfactory terms;

. our failure to complete, or unanticipated delays in completing,
acquisitions due to difficulties in obtaining regulatory approval;

. difficulty in integrating the operations, systems and management of
our acquired stations and absorbing the increased demands on our
administrative, operational and financial resources;

. the diversion of management's attention from their other business
concerns;

. the loss of key employees of acquired stations; and

. an inability to strengthen underperforming stations.

If we are not able to address successfully these risks, we will be unable
to achieve targeted growth levels and the value of our class A common stock
could decline.

Our company, and your investment in our company, could be less valuable if we
are unable to close our pending acquisitions.

Our pending acquisitions will not close unless we and the other relevant
parties satisfy or waive all the conditions to closing. In addition, we cannot
waive legal and regulatory requirements. For example, the Communications Act of
1934 and FCC rules and regulations limit the number of stations that one
individual or entity can own, directly or by attribution, in a market and
requires prior approval from the FCC for the issuance, renewal, modification,
transfer of control or assignment of broadcasting licenses to us. To date, we

12
<PAGE>

have not received final orders from the FCC approving any of our pending
acquisitions. In addition, if interested members of the public file petitions
or complaints against us or any FCC licensee from which we propose to acquire a
station, these petitions or complaints could result in the FCC delaying the
grant of, refusing to grant, or imposing conditions on its consent to the
assignment or transfer of control of FCC licenses. As a result, we might not be
able to close any of these acquisitions within the expected time frame or at
all.

In addition, we could be subject to further examination by the Department
of Justice or the Federal Trade Commission which evaluate acquisitions to
determine whether they serve the public interest and whether they should be
challenged under antitrust laws. Any decision by the Department of Justice or
the Federal Trade Commission to challenge any proposed acquisition could affect
our ability to close that acquisition. Depending on the size of the
acquisition, a failure to close, or a substantial delay in closing, could have
a material adverse effect upon our business prospects, financial condition and
results of operations. The completion of this offering is not conditioned upon
the consummation of any of our pending acquisitions.

If we are unable to manage effectively our rapid growth, our operating results
will suffer.

We have experienced rapid growth over a period of approximately four
years and expect to continue to experience rapid growth in the future. We now
operate 21 stations, which will increase to 32 stations when, and if, we
complete our pending acquisitions. To effectively manage this growth, we will
need to, amongst other things, continue to develop our financial and management
controls and management information systems, maintain stringent cost controls,
increase marketing activities and train new personnel. We intend to hire
additional personnel in order to manage our expected growth and expansion. If
we fail to successfully manage our rapid growth, our operating results will
suffer and the value of our class A common stock will decline.

If we are unable to obtain additional financing when required for operations or
growth, our business may suffer and our revenues could decline.

We might require financing for operations or future acquisitions in
excess of that provided under our new credit facility. Our new credit facility
or any other agreements to which we are a party might prohibit us from
obtaining additional financing from other sources. Even if we are permitted to
seek third party financing, additional financing for these purposes may not be
available to us or, if available, the additional financing may not be provided
on terms acceptable to us. If we cannot obtain additional financing when
required on acceptable terms, we may be unable to continue operations on the
same scale or grow our business. As a result, we may be unable to compete
successfully with other broadcasters and we could lose audience share and
advertisers, causing our revenues to decline.

Our operations are concentrated in a limited number of markets. A downturn in
any of our markets could result in a decline in our revenue and cash flow.

Our stations are located in a limited number of markets in the
northeastern United States. We currently own and/or operate stations in five
markets and, upon completion of our pending acquisitions, we will own and/or
operate stations in nine markets. A significant decline in net broadcasting
revenue from our stations in any one of these markets, and particularly in our
two largest existing markets, the Trenton, New Jersey and the Monmouth-Ocean,
New Jersey markets, could have a material adverse effect on our operations and
financial condition.

The loss of key personnel could disrupt our business and result in a loss of
advertising revenue.

Our business depends on the continued efforts, abilities and expertise of
our senior officers and key employees. These include Louis F. Mercatanti, Jr.,
our President and Chief Executive Officer, Michael Libretti, our Executive Vice
President, Operations and Finance and Chief Financial Officer, and Peter Tonks,
our Executive Vice President and Director of Accounting & Human Resources. In
particular, Mr. Mercatanti has been instrumental in determining our strategic
direction and focus. If we lose the services of any of these senior

13
<PAGE>

officers, our ability to expand our business could be seriously compromised and
the value of your investment could decline. In addition, in the future if we
are unable to:

. attract and retain highly skilled and qualified management personnel,

. expand, train and manage our employee base, or

. develop, attract and retain on-air radio talent,

in the future, our listener base could decline, our advertising revenue could
decrease and our business will be unsuccessful.

Our quarterly results are subject to seasonal fluctuations; these fluctuations
could cause volatility in the market price of our class A common stock.

Typically, our revenues are lowest in the first quarter and highest in
the fourth quarter. This seasonality could cause fluctuations in the market
price of our class A common stock, including a drop in the market price of our
class A common stock in response to our first quarter earnings.

Risks relating to our industry

If we are unable to compete effectively against other radio stations and other
media companies, we will suffer a decrease in advertising revenue.

Radio broadcasting is a highly competitive business. The
Telecommunications Act of 1996 facilitates the entry of other radio
broadcasting companies into our current or future markets. The financial
success of each of our radio stations will depend, to a significant degree,
upon our audience demographics and ratings, our share of the overall radio
advertising revenue within each geographic market and the economic health of
that market.

Our radio stations compete for audience share and advertising revenue
directly with other FM and AM radio stations as well as with other advertising
media within their respective markets. The radio companies with which we
currently compete in our two main markets are New Jersey Broadcasting, Press
Communications LLC, Big City Radio Inc. and Jersey Shore Broadcasting, all in
the Monmouth-Ocean market, and Crystal Communications, Straus Media Group,
Parmal and Sunrise Broadcasting Corporation, all in the Newburgh-Middletown
market. Some of these radio stations have the same broadcasting formats as our
radio stations and compete for the same audience demographic groups in the same
market. If we are unable to compete successfully with these radio stations, we
will lose audience share and advertisers and our revenues will decline.

If we do not respond to rapidly changing technology, we will not remain
competitive and our operating losses could continue.

The radio broadcasting industry is continually adopting rapidly changing
technology, such as that permitting satellite and terrestrial delivery of
digital audio broadcasting. In addition, several new media technologies are
currently being developed, including:

. Internet audio content distribution; and

. in-band on-channel digital radio and new low-power FM radio, which
could result in additional radio services being broadcast on the
frequencies currently occupied by traditional FM and AM radio
services.

We may not be able to afford, or successfully adopt, new technologies on
a timely basis or at all, in order to compete effectively with other
participants in the radio broadcast industry. If we are unable to compete, we
could lose market share and our revenue could decline.

14
<PAGE>

If we fail to maintain our licenses, the FCC could terminate our ability to own
and operate our radio network.

In order to operate, radio broadcasters must maintain radio broadcasting
licenses issued by the FCC. The FCC ordinarily issues these licenses for a
maximum term of eight years, and broadcasters may renew these licenses. Most of
our existing licenses expire in 2006. Although we may apply to renew these
licenses, third parties may challenge our renewal applications. In addition, if
we or any of our officers, directors or significant stockholders violates the
FCC's rules and regulations or the Communications Act, is convicted of a felony
or is otherwise found to be disqualified from being a party to a FCC license,
the FCC may commence a proceeding to impose sanctions against us and our
licenses might not be renewed.

If the FCC revises existing federal regulations relating to ownership criteria,
we could be required to divest radio stations.

The number of radio stations we may acquire or operate pursuant to local
marketing agreements in any market, overall and in each of the AM and FM
services, is limited by the Telecommunications Act and FCC rules and
regulations. That number may vary depending upon whether the interests in other
radio stations or certain other media properties of our officers, directors and
stockholders are attributable to them under FCC rules. The FCC generally
applies its ownership limits to "attributable" broadcast interests held by an
individual, corporation, partnership or other association. The interests of our
officers, directors and stockholders with five percent or greater voting power
are also generally attributable to us. One of our officers and directors, Louis
F. Mercatanti, Jr., and two of our stockholders, Toronto Dominion Capital
(U.S.A.), Inc. and Bank of America Capital Investors, after the consummation of
the Aurora acquisition, have or will have attributable broadcast interests
outside of their involvement with us. These attributable interests could limit
the number of radio stations that we may acquire or own in any market in which
these officers, directors or stockholders hold or acquire outside attributable
broadcast interests.

Additionally, the Communications Act and FCC rules and regulations impose
limitations on non-U.S. ownership and voting of our capital stock. These and
other governmental regulations and policies may change over time and such
changes could have a material adverse impact upon our business, results of
operations or financial condition. For example, the FCC has recently indicated
it may propose new rules to define a "market" for purposes of the local radio
station ownership limits in the Telecommunications Act and the FCC's multiple
ownership rules. If the FCC redefines "market" for these purposes, the number
of stations that we would be allowed to acquire in some markets could be
reduced.

Risks relating to our ownership structure

Our class B common stockholders will continue to control our company and their
interests could conflict with yours.

The holders of our class B common stock, which has 10 votes per share,
will own 71.4% of the outstanding voting power of our common stock, will be
able to exercise a controlling influence over us and generally will be able to
determine the outcome of all corporate actions requiring stockholder approval.
As a result, these holders will be in a position to continue to control all
matters affecting us, including:

. composition of our board of directors and, through it, our direction
and policies, including the appointment and removal of officers;

. mergers or other business combinations involving us;

. acquisition or disposition of assets;

. future issuances of common stock or other securities;

15
<PAGE>

. incurrence of debt;

. amendments, waivers and modifications to our agreements; and

. the payment of dividends on our common stock.

The interests of our class B common stockholders could conflict with your
interests.

The extra voting rights of the class B common stockholders and our
ability to issue additional shares of class B common stock could adversely
affect the value of the class A common stock. Additional shares of class B
common stock can be authorized by the majority vote of voting stockholders
acting together as one class. As a result, class A common stockholders
generally will not be able to prevent the authorization of additional shares of
class B common stock.

Risks relating to our class A common stock

Sales of class A common stock after this offering could cause the market price
of our class A common stock to decline.

If our stockholders sell substantial amounts of our class A common stock
in the public market following this offering, including shares issued upon the
exercise of outstanding options, the market price of our class A common stock
could decline. These sales also might make it more difficult for us to sell
equity or equity-related securities in the future at a time and price that we
deem appropriate. The shares sold in this offering will be freely tradeable
immediately upon completion of this offering. In addition, no later than the
181st day after completion of this offering, our existing stockholders will be
able to sell their shares of our common stock, and have the right to require us
to register those shares for sale to the public. Our existing stockholders
would be able to sell their shares before the 181st day if the underwriters
waive contractual lockup restrictions. Sales of these shares could cause the
market price of our class A common stock to decline.

In addition, following the completion of this offering, we intend to
register under the Securities Act the 2,205,707 shares of class A common stock
reserved for issuance under our 2000 stock incentive plan. Options to acquire
205,707 shares of class A common stock have already been issued under this plan
at a weighted average exercise price of $1.82. Once the 2000 stock incentive
plan shares are registered, the class A common stock issued upon exercise of
the options will be freely tradeable beginning on the 181st day after
completion of this offering or earlier if the underwriters waive contractual
lockup restrictions.

Provisions of our organizational documents, Delaware law and federal law could
have anti-takeover effects that could prevent a change in control, even if this
would be beneficial to stockholders.

Provisions of our organizational documents and Delaware law could make it
more difficult for a third party to acquire us, even if doing so would be
beneficial to our stockholders. Provisions in our organizational documents
include:

. a classified board of directors, in which our board is divided into
three classes with three-year terms with only one class elected at
each annual meeting of stockholders, which means that a holder of a
majority interest in our common stock will need two annual meetings
of stockholders to gain control of the board;

. a provision which prohibits our stockholders from acting by written
consent without a meeting;

. a provision which permits only the board of directors, the president
or the chairman to call special meetings of stockholders; and

. a provision which requires advance notice to the company of items of
business to be brought before stockholders' meetings.

16
<PAGE>

Amending any of the above provisions will require the vote of the holders
of a majority of our outstanding class A and class B common stock acting
together as one class. In addition, the Communications Act and FCC rules
require the prior consent of the FCC to any change in control of our company
and restrict ownership by non-U.S. persons. This could discourage third parties
from acquiring us and consequently decrease the market value of your investment
in our class A common stock.

As a new investor, you will experience immediate and substantial dilution.

The initial public offering price per share of our class A common stock
is higher than our net tangible book value per share. Consequently, you will
incur immediate and substantial dilution in pro forma net tangible book value
of $17.53 per share. If the holders of outstanding options exercise those
options, you will incur further dilution.

Since the price you will pay for our class A common stock in this offering was
not established in a competitive market, the subsequent market price could be
lower.

Prior to this offering, there has been no public market for our class A
common stock. We have applied to list the common stock for trading on The
Nasdaq National Market. After this offering, an actual trading market might not
develop or continue. If you purchase shares of common stock in this offering,
you will pay a price that was not established in a competitive market. This
price was negotiated with our underwriters, which is substantially greater than
that paid by our existing stockholders. The price of the common stock that will
prevail in the market after this offering could be higher or lower than the
price you pay.

Special note regarding forward-looking statements

This prospectus contains forward-looking statements that relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expect," "plan," "anticipate," "believe," "estimate," "forecast," "predict,"
"intend," "potential" or "continue" or the negative of such terms or other
comparable terminology. These forward-looking statements are based on current
expectations about future events. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements. The risks set
forth above and elsewhere in this prospectus could cause our future operating
results to differ materially from those contemplated by our forward-looking
statements. In addition, factors that we are not currently aware of could harm
our future operating results. The safe harbor provided by the Private
Securities Litigation Reform Act of 1995 is not applicable to the disclosure in
this document.

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

You should rely only on the information contained in this prospectus. We
have not, and the underwriters have not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriters are not, making an offer to sell these securities in any
jurisdiction where the offer or sale is not permitted. You should assume that
the information appearing in this prospectus is accurate only as of the date on
the front cover of this prospectus. Our business, financial condition, results
of operations and prospects may have changed since that date.

17
<PAGE>

RECAPITALIZATION AND REORGANIZATION

In May 2000, we undertook a recapitalization in which, among other
things, we:

. entered into a new credit facility that provides for borrowings of up
to $144.0 million;

. issued and sold units consisting of senior discount notes and limited
partnership units for gross proceeds of $60.0 million. The limited
partnership units were converted into 79,419 shares of our class A
common stock as of the date of this offering;

. repaid all outstanding obligations under our old credit facility and
redeemed all $42.4 million of our outstanding subordinated discount
notes which we had issued to our existing stockholders; and

. redeemed $7.5 million of equity interests of, and paid a $2.9 million
preferred distribution to, Louis F. Mercatanti, Jr., one of our
stockholders.

Immediately prior to this offering, we effected a reorganization in which
all equity holders of Nassau Broadcasting Partners, L.P. contributed their
equity interests in the limited partnership to Nassau Broadcasting Corporation,
a newly formed corporation, in exchange for common stock of Nassau Broadcasting
Corporation. As a result of the reorganization, Nassau Broadcasting Partners,
L.P. is terminated, all of the assets previously held by Nassau Broadcasting
Partners, L.P. are now held by Nassau Broadcasting Corporation and the limited
liability companies which were wholly owned subsidiaries of Nassau Broadcasting
Partners, L.P. are now wholly owned subsidiaries of Nassau Broadcasting
Corporation.

Before giving effect to this offering, each of our stockholders owned an
amount of our common stock representing its previous economic interest in
Nassau Broadcasting Partners, L.P. The following table shows the common stock
issued in the reorganization. As a result of this reorganization, Spectrum
Equity Investors, L.P., Spectrum Equity Investors II, L.P., Grotech Partners
IV, L.P. and Mr. Mercatanti hold the majority voting power in us.

<TABLE>
<CAPTION>
Pre-offering
Economic Number Of Shares Of Class A,
Interest In Our Common Class B
Limited Stock Issued In The Or Class C
Partnership (1) Reorganization Common Stock
--------------- ------------------- ------------
<S> <C> <C> <C>
Spectrum Equity Investors,
L.P......................... 30.0% 1,190,120 B
Spectrum Equity Investors II,
L.P......................... 17.0 675,050 B
Grotech Partners IV, L.P..... 12.7 505,078 B
Toronto Dominion Capital
(U.S.A.), Inc............... 12.7 506,287 C
Louis F. Mercatanti, Jr.
(2)......................... 20.3 805,916 B
Others (3)................... 7.3 82,789 A/B
----- ---------
Total........................ 100.0% 3,765,240
===== =========
</TABLE>
(1) On May 4, 2000, we redeemed $7.5 million of equity interests in Nassau
Broadcasting Partners, L.P. which were held by Mr. Mercatanti of which $2.5
million was paid in cash. Mr. Mercatanti also has the right to require
Nassau Broadcasting Partners to pay the remaining $5.0 million of his
equity interests at any time, provided there is no existing event of
default under our new credit facility, and no new event of default would
result. We calculated these percentages assuming that as of the date of our
reorganization, we have redeemed $7.5 million of Mr. Mercatanti's equity
interests.

(2) Includes 12,342 shares of class B common stock held by Mr. Mercatanti
directly, 193,365 shares of class B common stock held by Nassau
Broadcasting Company, and 600,209 shares of class B common stock held by
Nassau Holdings, Inc. Mr. Mercatanti has the power to vote, or direct the
vote, and the power to dispose or direct the disposition, of the shares
owned by Nassau Broadcasting Company and Nassau Holdings, Inc.

(3) Includes 79,419 shares of our class A common stock issued upon conversion
of limited partnership units which we issued in connection with our
recapitalization on May 4, 2000. Merrill Lynch Capital Corporation, an
affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated, owns
26,470 of these shares of our class A common stock. Also includes 3,370
shares of our class B common stock owned by Noel Rahn.

18
<PAGE>

PENDING ACQUISITIONS

We have several acqusitions currently pending which, if completed, will
result in the purchase by us of ten FM and ten AM radio stations. We must
receive final regulatory approvals before we can consummate these pending
acquisitions.

The table below sets forth information regarding each of the pending
acquisitions.

<TABLE>
<CAPTION>
No. of Call Purchase
Seller Market StationLetterss Price
------ ------ -------------- -------------
(in millions)
<S> <C> <C> <C> <C> <C>
Owners of Aurora Westchester, NY 3 WFAS (FM) $185.0 (1)
Communications, LLC ...
WFAF (FM)
WFAS (AM)
Bridgeport, CT 2 WEBE (FM)
WICC (AM)
Danbury, CT 4 WAXB (FM)
WRKI (FM)
WINE (AM)
WPUT (AM)
Clear Channel Allentown, PA 2 WODE (FM) 30.0
Communications, Inc. ..
WEEX (AM)
Owners of Manahawkin
Communications
Corporation............ Monmouth-Ocean, NJ 1 WCHR (FM) (2) 4.7
Multicultural Radio Trenton, NJ 1 WJHR (AM) 2.5
Broadcasting, Inc......
Port Jervis Broadcasting Newburgh-Middletown, NY 2 WTSX (FM) 2.7
Co., Inc...............
WDLC (AM)
Great Scott Broadcasting Trenton, NJ 2 WNJO (FM) 20.0
Ltd....................
WCHR (AM)
Owners of North Shore
Broadcasting Corp. and
Seashore Broadcasting
Corp. ................. Monmouth-Ocean, NJ 2 WOBM (FM) 21.0
WOBM (AM)
</TABLE>
--------
(1) Purchase price is subject to a working capital adjustment.
(2) Manahawkin Communications Corporation currently holds a construction permit
to build this station.

Regulatory Filings

We filed an application for consent to acquire WNJO (FM) and WCHR (AM)
with the FCC on September 10, 1998. The FCC issued a letter of inquiry dated
March 1, 1999 seeking additional information on the radio market concentration
in Trenton, New Jersey, which we subsequently provided. The application remains
pending before the FCC.

We filed an application for consent to acquire control of Manahawkin
Communications Corporation, which holds the construction permit for WCHR (FM),
with the FCC on September 13, 1999. New Jersey Broadcasting Partners, L.P. and
Jersey Shore Broadcasting Corp. challenged this transfer of control application
before the FCC on the grounds of premature transfer of control and undue market
concentration. We filed a

19
<PAGE>

response to this challenge but the transfer application remains pending before
the FCC. In addition, on June 23, 1999, New Jersey Broadcasting Partners, L.P.
filed a complaint against this acquisition with the Merger Task Force,
Antitrust Division, U.S. Department of Justice. To date, the Department of
Justice has taken no action on this complaint.

On March 10, 2000, we filed an application for consent to acquire two
radio stations from Clear Channel Communications, Inc. with the FCC. The FCC
placed this application on public notice on April 4, 2000. Interested parties
had until May 4, 2000 to challenge our acquisition of these stations. To date,
no party has challenged this application. In addition, we filed an application
with the Department of Justice for approval of the acquisition under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976. The Department of Justice has
not yet given this approval.

On April 3, 2000, we filed applications for consent to acquire Aurora
Communications, LLC which owns nine radio stations with the FCC. The FCC
placed these applications on public notice on April 25, 2000. Interested
parties had until May 25, 2000 to challenge our acquisition of these stations.
To date, no party has challenged these applications. In addition, we filed an
application with the Department of Justice for approval of the acquisition
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The Department
of Justice has not yet given this approval.

All of these applications remain pending before the FCC. We have not yet
applied for FCC approval of our acquisitions of the seven radio stations that
we currently operate under local marketing agreements. We intend to file our
applications to acquire these stations shortly after we complete this
offering. Once we file our applications, third parties may file petitions to
deny or a request for reconsideration or judicial review or the FCC may reject
our applications. We expect the FCC will approve all of these acquisitions,
but we cannot assure you that we will obtain any or all of the regulatory
approvals we seek.

In addition, other factors beyond our control could delay or prevent the
closing of these acquisitions.

Acquisition Agreements

Aurora Communications, LLC. On March 24, 2000, we entered into a purchase
and exchange agreement with the owners of Aurora Communications to purchase
all of their equity interests, and thereby acquire its nine stations, for
total consideration of $185.0 million, consisting of $35.0 million in our
equity, $85.0 million in cash and $65.0 million in assumed debt. The cash
amount is subject to a working capital adjustment. The number of class C
shares of common stock which we will issue to satisfy our obligation to pay
$35.0 million in equity will depend on the market value of our class A shares
at the time of consummation of this purchase. We have irrevocably deposited
$7.0 million toward the purchase of Aurora Communications.

WODE (FM) and WEEX (AM), Allentown, Pennsylvania. On February 29, 2000,
we entered into an asset purchase agreement with Clear Channel to purchase
these stations for total cash consideration of $30.0 million. We have
irrevocably deposited $6.0 million toward the purchase of these stations.

WCHR (FM), Manahawkin, New Jersey. On August 18, 1999, we entered into a
stock purchase agreement with the owners of all the outstanding stock of
Manahawkin Communications Corporation, the holder of a construction permit in
the Monmouth-Ocean market, for total cash consideration of $4.7 million, of
which $2.0 million has been paid. This permit allows the holder to construct
and operate a radio station on a temporary basis. Once the radio station has
begun operating, the holder can apply to the FCC for a broadcast license.

WJHR (AM), Flemington, New Jersey. On January 21, 1999, we entered into
an asset purchase agreement with Multicultural Radio Broadcasting, Inc. to
purchase this radio station for total cash consideration of $2.5 million. We
have irrevocably deposited $130,000 toward the purchase of this station.

WTSX (FM) and WDLC (AM), Newburgh-Middletown, New York. On August 7,
1998, we entered into an asset purchase agreement with Port Jervis
Broadcasting Co., Inc., to acquire these radio stations for total cash
consideration of approximately $2.7 million. We have irrevocably deposited
$600,000 toward the purchase of these stations.

20
<PAGE>

WCHR (AM) and WNJO (FM), Trenton, New Jersey. On August 30, 1996, we
entered into an asset purchase agreement with Great Scott Broadcasting Ltd. to
acquire these radio stations for total cash consideration of $20.0 million. We
have either paid or placed in escrow the full acquisition price of these
stations.

WOBM (FM) and WOBM (AM), Toms River, New Jersey and Lakewood, New
Jersey. On July 1, 1996, we entered into a stock purchase agreement to purchase
all of the outstanding stock of North Shore Broadcasting Corp. and Seashore
Broadcasting Corp., the owners of these stations, for total cash consideration
of $21.0 million. We have irrevocably deposited $3.4 million toward the
purchase of these stations and paid a total of $4.6 million in scheduled
monthly payments, which we expensed as local marketing agreement fees, and
which also constitute a credit against the purchase price.

21
<PAGE>

USE OF PROCEEDS

We estimate that the net proceeds from the sale of 12,425,000 shares of
our class A common stock, after deducting the underwriting discount and
estimated offering expenses, will be approximately $200.7 million, assuming an
initial offering price of $17.50 per share, the midpoint of the range set forth
on the cover page of this prospectus. If the underwriters exercise their over-
allotment options in full, we estimate that the net proceeds we will receive
will be approximately $231.1 million.

We will use the net proceeds in the following manner:

. $60.0 million plus approximately $2.5 million of accretion and early
redemption premium to redeem all of our outstanding senior discount
notes issued to redeem subordinated discount notes held by some of
our existing stockholders and to repay a portion of the borrowings
under our old credit facility;

. $85.0 million to finance a portion of the acquisition of Aurora
Communications;

. $24.0 million to finance a portion of the acquisition of the
Allentown stations;

. $10.7 million to reimburse the limited partners of our predecessor
for tax payable by them as a result of our reorganization; and

. the remainder to pay transaction costs and for general corporate
purposes.

The following table illustrates how we intend to finance the acquisitions
of Aurora Communications and the Allentown stations:

<TABLE>
<CAPTION>
Sources of Funds
----------------
<S> <C>
New credit facility..... $ 58,000,000
This class A common
stock offering......... 109,000,000
------------
Total................... $167,000,000
============
</TABLE>
<TABLE>
<CAPTION>
Uses of Funds
-------------
<S> <C>
Aurora
Communications
Acquisition........ $143,000,000(1)(2)
Acquisition of
Allentown
stations........... 24,000,000(3)
------------
Total............... $167,000,000
============
</TABLE>
--------
(1) These amounts are subject to a working capital adjustment.
(2) Reflects $185.0 million purchase price less (a) $7.0 million that we have
irrevocably deposited toward the Aurora Communications purchase price and
(b) $35.0 million that we expect to pay for in shares of our class C common
stock.
(3) Reflects $30.0 million purchase price less $6.0 million that we have
irrevocably deposited toward the purchase price of these stations.

If the Aurora Communications or the Allentown stations acquisitions do
not close, then we will use the proceeds intended for these transactions to pay
down additional debt, possibly to finance other acquisitions, to provide for
general corporate purposes or for any combination of these proposed uses. Other
than the pending acquisitions described elsewhere in this prospectus, we have
not entered into any agreements, arrangements or understandings to proceed with
any acquisitions.

Pending these uses, we intend to invest the net proceeds in U.S.
government securities or other interest bearing short-term investment grade
securities.

DIVIDEND POLICY

We do not expect to pay any cash dividends or distributions on our
capital stock for the foreseeable future. We currently intend to retain future
earnings, if any, to finance the expansion of our business. Our credit facility
restricts our ability to pay cash dividends.

22
<PAGE>

CAPITALIZATION

The following table sets forth our actual capitalization as of March 31,
2000, our capitalization as adjusted to give effect to the recapitalization and
reorganization and the offering but not the application of the proceeds from
this offering as contemplated, and our pro forma capitalization, as adjusted,
as of March 31, 2000 as if the following events that occurred or will occur
after March 31, 2000 occurred on March 31, 2000:

. our recapitalization and reorganization;

. the completion of this offering and the application of the net
proceeds as contemplated;

. the completion of our acquisition of Aurora Communications;

. the completion of our acquisition of the Allentown stations;

. the completion of our acquisitions of WILT (AM) and WCHR (FM); and

. the completion of our acquisitions of seven stations that we
currently operate under local marketing agreements.

You should read this table together with the historical financial
statements and related notes, the unaudited pro forma consolidated financial
statements and related notes and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
prospectus.

<TABLE>
<CAPTION>
As of March 31, 2000
----------------------------
(unaudited)
(dollars in thousands)
Pro
Forma,
As As
Actual Adjusted Adjusted
-------- -------- --------
<S> <C> <C> <C>
Cash and cash equivalents........................ $ 2,397 $112,381 $ 1,883
======== ======== ========
Old credit facility.............................. $ 56,139 $ -- $ --
New credit facility.............................. -- 33,100 111,100
Senior discount notes............................ -- -- --
Subordinated discount notes...................... 40,159 -- --
Other debt....................................... 1,114 1,114 1,114
-------- -------- --------
Total long-term debt......................... 97,412 34,214 112,214
Partners' deficit................................ (21,489)
Stockholders' equity (1):
Preferred stock, $0.01 par value; 10,000,000
shares authorized; none issued and
outstanding................................... -- -- --
Class A common stock, $0.01 par value;
67,000,000 shares authorized; 12,504,419
shares issued and outstanding as adjusted;
12,504,419 shares issued and outstanding pro
forma as adjusted............................. -- 125 125
Class B common stock, $0.01 par value;
15,000,000 shares authorized; 3,179,534 shares
issued and outstanding as adjusted; 3,179,534
shares issued and outstanding pro forma as
adjusted...................................... -- 32 32
Class C common stock, $0.01 par value;
20,000,000 shares authorized; 506,287 shares
issued and outstanding as adjusted; 2,506,287
shares issued and outstanding pro forma as
adjusted...................................... -- 5 25
Paid-in capital................................ -- 155,213 190,193
Accumulated deficit............................ -- (8,122) (8,122)
-------- -------- --------
Total stockholders' equity................... -- 147,253 182,253
-------- -------- --------
Total capitalization......................... $ 75,923 $181,467 $294,467
======== ======== ========
</TABLE>
--------

(1) Does not include (i) 2,205,707 shares of class A common stock issuable
upon exercise of options we granted or which we may grant under our 2000
stock incentive plan and (ii) up to 1,863,750 shares of class A common
stock issuable upon the exercise of the underwriters' over-allotment
options.

23
<PAGE>

DILUTION

Purchasers of the shares of class A common stock offered by this
prospectus will experience an immediate and substantial dilution in net
tangible book value per share. Dilution is the amount by which the initial
public offering price paid by the purchasers of the shares of our class A
common stock will exceed the net tangible book value per share of our common
stock after the offering. The net tangible book value per share of our common
stock is determined by subtracting total liabilities from the total book value
of the tangible assets and dividing the difference by the number of shares of
our common stock deemed to be outstanding on the date the book value is
determined.

As of March 31, 2000, we had a deficit in pro forma net tangible book
value of approximately $(278,000), or $(0.07) per share, after giving effect to
the following, but excluding this offering:

. our recapitalization and reorganization;

. the completion of our acquisition of Aurora Communications;

. the completion of our acquisition of the Allentown stations;

. the completion of our acquisitions of WILT (AM) and WCHR (FM); and

. the completion of our acquisitions of seven stations that we
currently operate under local marketing agreements.

Assuming the sale of 12,425,000 shares of our class A common stock at an
initial public offering price of $17.50 per share, and deducting the
underwriting discount and estimated offering expenses, our pro forma net
tangible book value as of March 31, 2000 would have been a deficit of
approximately $(93,000), or $(0.01) per share. This represents an immediate
increase in pro forma net tangible book value to existing stockholders of $0.04
per share and an immediate dilution to new investors of $17.53 per share.

The following table illustrates the per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................ $17.50
Pro forma net tangible book value deficiency per share as of
March 31, 2000.............................................. $(0.07)
Increase in pro forma net tangible book value per share
attributable to new investors purchasing shares in the
offering.................................................... 0.04
------
Pro forma net tangible book value deficiency per share after
the offering.................................................. (0.03)
------
Pro forma dilution per share to new investors.................. $17.53
======
</TABLE>

24
<PAGE>

The following table summarizes, on a pro forma basis as of March 31,
2000, the differences between existing common stockholders immediately prior to
this offering and new investors purchasing class A common stock in connection
with this offering, with respect to the number of shares of our common stock
purchased, the total consideration paid and the average price per share paid.
The table assumes no exercise of the underwriters' over-allotment options.

<TABLE>
<CAPTION>
Shares Purchased Consideration
------------------ ----------------------- Average Price
Number Percent Paid Percent Per Share
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders... 3,685,821 31.3% $ 500,000(1) 0.2% $0.13
New investors........... 12,425,000 68.7% 217,437,500 99.8 17.50
---------- ----- ------------ -----
Total................. 18,086,630 100.0% $212,937,500 100.0%
========== ===== ============ =====
</TABLE>
--------
(1) In addition to acquiring equity interests in us, some of our existing
stockholders purchased $42.4 million of subordinated discount notes from
us, which we redeemed on May 4, 2000.

The foregoing discussion and tables assume no exercise of any stock
options outstanding. There are options outstanding to purchase 205,707 shares
of our class A common stock at a weighted average exercise price of $1.21 per
share. To the extent that any of these options are exercised, there will be
further dilution to the new investors.

In addition, the foregoing discussion and tables do not give effect to
the shares of class C common stock we will issue to the owners of Aurora
Communications if we complete the Aurora acquisition. The number of shares of
class C common stock which we will issue will be based on the market value of
our class A common stock at the date of closing of the acquisition. Assuming a
market value equal to $17.50, the midpoint of the price range set forth on the
cover page of this prospectus, we expect to issue an additional 2,000,000
shares of class C common stock. Accordingly, the percentage ownership of our
existing stockholders and of the new investors will be reduced.

25
<PAGE>

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA

Our historical financial statements and the historical audited financial
statements of some of the businesses we plan to acquire are included elsewhere
in this prospectus. The unaudited pro forma consolidated financial data
presented here should be read together with those financial statements and
related notes.

The unaudited pro forma consolidated statement of operations data for the
year ended December 31, 1999 and for the three months ended March 31, 2000 give
effect to the following transactions as if they had occurred on January 1, 1999
and January 1, 2000, respectively:

. our recapitalization and reorganization;

. the completion of this offering and the application of the net
proceeds as described in this prospectus;

. the completion of our acquisition of Aurora Communications;

. the completion of our acquisition of the Allentown stations;

. the completion of our acquisitions of WILT (AM) and WCHR (FM);

. the completion of our acquisitions of seven stations that we
currently operate under local marketing agreements; and

. the sale of our membership interests in Nassau Tower Holdings LLC.

The unaudited pro forma consolidated balance sheet as of March 31, 2000
gives effect to those of the transactions listed above that are expected to
occur, or have occurred, after March 31, 2000, as if they had occurred on March
31, 2000. We have included all adjustments, consisting of normal recurring
adjustments, which, in the opinion of management, are necessary for a fair
presentation of this data. We based the pro forma adjustments on available
information and on assumptions that we believe are reasonable under the
circumstances.

The pro forma consolidated financial data are not necessarily indicative
of the results of operations or financial position that we would have achieved
had the transactions described above occurred on the dates indicated, and
should not be construed as being representative of future results of
operations. Our results of operations for the three months ended March 31, 2000
and for any future quarters are not necessarily indicative of results that may
be expected over the entire year or for any future period.

26
<PAGE>

NASSAU BROADCASTING CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS

Year Ended December 31, 1999
(dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Nassau Aurora WEBE/ Westchester Capstar Allentown Pro Forma Consolidated
Broadcasting Communications(1) WICC(1) Radio(1) Trust(1) Stations Adjustments Pro Forma
------------ ----------------- ------- ----------- -------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross Revenues......... $34,295 $6,924 $9,106 $ 4,349 $3,586 $ 4,115 $ (807)(2) $ 61,568
Less agency and outside
commissions........... 2,893 719 1,083 397 249 368 5,709
------- ------ ------ -------- ------ ------- ------ ----------
Net Revenues.......... 31,402 6,205 8,023 3,952 3,337 3,747 (807) 55,859
------- ------ ------ -------- ------ ------- ------ ----------
Operating expenses..... 20,794 3,106 4,113 2,656 2,375 2,281 (240)(2) 35,085
Depreciation and
amortization.......... 2,635 825 275 908 317 1,259 11,190 (3) 17,409
Corporate general and
administrative
expenses.............. 2,280 744 1,867 205 48 103 (2,967)(4) 2,280
Local marketing
agreement fees........ 2,517 -- -- -- -- -- (1,817)(5) 700
------- ------ ------ -------- ------ ------- ------ ----------
28,226 4,675 6,255 3,769 2,740 3,643 6,166 55,474
------- ------ ------ -------- ------ ------- ------ ----------
Operating Income...... 3,176 1,530 1,768 183 597 104 (6,973) 385
------- ------ ------ -------- ------ ------- ------ ----------
Other income
(expenses):
Investment income..... 2,562 32 -- 7 14 -- -- 2,615
Gain on sale of
assets............... 567 -- -- -- -- (29) -- 538
Interest expense...... (10,946) (2,137) -- (3,377) -- (1,474) 7,018 (6) (10,916)
Loss on impairment of
intangibles.......... -- -- -- (13,250) -- -- -- (7) (13,250)
------- ------ ------ -------- ------ ------- ------ ----------
Total Other Income
(Expense)............ (7,817) (2,105) -- (16,620) 14 (1,503) 7,018 (21,013)
------- ------ ------ -------- ------ ------- ------ ----------
Net Income (Loss) .... $(4,641) $(575) $1,768 $(16,437) $ 611 $(1,399) $ 45 $ (20,628)
======= ====== ====== ======== ====== ======= ====== ==========
Net loss per common
share--basic and
diluted............... $ (1.13)
==========
Weighted average shares
outstanding--basic and
diluted............... 18,190,240
==========
</TABLE>
--------
(1) We based the financial information shown for the Aurora Communications
stations on the historical audited financial statements of the seller and
the seller's predecessor entities as follows:
. WEBE/WICC (Divisions of ML Media Partners, L.P.)--WEBE (FM);
WICC (AM) for the period January 1, 1999 to August 31, 1999.
. Westchester Radio, LLC--WFAS (AM)/WFAS (FM); WFAF (FM) for the
period January 1, 1999 to October 26, 1999.
. Capstar Trust--WRKI (FM); WAXB (FM); WINE (AM); WPUT (AM) for
the period January 1, 1999 to October 26, 1999.

(2) We have eliminated tower revenues (807) and expenses (240) to give effect
to the sale of our membership interests in Nassau Tower Holdings LLC.

27
<PAGE>

(3) We have adjusted depreciation and amortization to (i) eliminate the
depreciation and amortization expense recorded by Aurora Communications
and the Allentown stations (3,584); (ii) eliminate the depreciation of
tower-related assets (43); (iii) eliminate our amortization of deferred
finance costs on our old credit facility (560); (iv) record amortization
of the financing costs incurred for our new credit facility (617); and (v)
record depreciation and amortization expense on the acquisitions as
follows:

Allocation of Purchase Price
<TABLE>
<CAPTION>
Annual
Licenses Depreciation
Fixed and and
Acquisition Total Assets Goodwill Amortization
----------- -------- ------- -------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Aurora Communications............... $185,000 $ 6,000 $179,000 $ 9,800
Allentown stations.................. 30,000 5,000 25,000 2,000
WCHR (FM)........................... 4,700 700 4,000 300
Stations currently under local
marketing agreements:
WJHR (AM)......................... 2,500 1,000 1,500 200
WTSX (FM)/WDLC (AM)............... 2,700 500 2,200 200
WNJO (FM)/WCHR (AM)............... 20,000 1,000 19,000 1,100
WOBM (AM)/WOBM (FM)*.............. 16,400 3,000 13,400 1,100
Professional fees associated with
acquisitions....................... 1,100 1,100 60
-------- ------- -------- -------
$262,400 $17,200 $245,200 $14,760
======== ======= ======== =======
Period of depreciation and
amortization....................... 7 yrs 20 yrs
------- --------
Annual expense...................... $ 14,760 $ 2,500 $ 12,260
======== ======= ========
</TABLE>
--------
* The WOBM (AM) and WOBM (FM) asset allocation reflects the fact
that we have previously expensed $4,600 of the $21,000 purchase
price as local marketing agreement fees.
(4) We have eliminated the corporate general and administrative expenses
recorded by Aurora Communications and its predecessor entities (2,864) and
the Allentown stations (103).
(5) We have eliminated local marketing agreement fees for those radio stations
that are described as pending acquisitions: WNJO (FM); WCHR (AM); WOBM
(AM); WOBM (FM); WTSX (FM); WDLC (AM); WJHR (AM) (1,817). We operate WSBG
(FM) and WVPO (AM) under a local marketing agreement, however there is no
agreement to purchase these stations. Therefore, we have not eliminated
the local marketing agreement fees for WSBG/WVPO (700).

(6) We adjusted interest expense to (i) eliminate interest related to the
tower assets (181); (ii) eliminate interest recorded by Aurora
Communications, Westchester Radio, and the Allentown stations (6,988);
(iii) eliminate interest for the debt that has been fully repaid in
connection with our recapitalization (10,404); and (v) record interest at
an assumed annual rate of 9.5% on our new credit facility assuming $111.1
million outstanding (10,555). Although we will assume the Aurora
Communications senior debt upon closing of the Aurora Communications
acquisition, we intend to repay those existing obligations with our new
credit facility and proceeds from this offering.

(7) The impairment of intangibles was recorded by Westchester Radio LLC.

Additional notes:

(8) The Aurora Communications purchase agreement requires a termination
payment to one of its senior executives in the approximate amount of
$1,000. We have not included this amount in the accompanying unaudited pro
forma consolidated financial statements.

(9) We incurred financing costs in the approximate amount of $3,000 in
connection with our new credit facility. Since we redeemed the
subordinated discount notes with some of the proceeds of the offering, we
did not reflect these expenses in the accompanying unaudited pro forma
consolidated financial statements.

(10) Prior to the offering, we converted to a corporation which will be subject
to income tax at the corporate level. On a pro forma basis, there are net
operating losses resulting in no current income tax provision. In
addition, we have established a valuation allowance to the extent of the
net deferred tax asset, which primarily relates to net operating losses,
as it is more likely than not that such deferred tax asset will not be
realized based on our history of losses.

28
<PAGE>

NASSAU BROADCASTING CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS

Three Months Ended March 31, 2000
(dollars in thousands, except per share data)

<TABLE>
<CAPTION>
Nassau Aurora Allentown Pro Forma Consolidated
Broadcasting Communications Stations Adjustments Pro Forma
------------ -------------- --------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Gross Revenues.......... $ 7,893 $ 5,511 $ 944 $ (126) (1) $ 14,222
Less agency and outside
commissions............ 612 551 76 1,239
------- ------- ----- ------ -----------
Net Revenues........ 7,281 4,960 868 (126) 12,983
------- ------- ----- ------ -----------
Operating expenses...... 5,318 2,639 515 (4) (1) 8,476
Depreciation and
amortization........... 822 756 316 2,658 (2) 4,552
Corporate general and
administrative
expenses............... 587 568 27 (595) (3) 587
Local marketing
agreement fees......... 640 -- -- (465) (4) 175
------- ------- ----- ------ -----------
7,367 3,963 858 1,602 13,790
------- ------- ----- ------ -----------
Operating Income.... (86) 997 10 (1,728) (807)
------- ------- ----- ------ -----------
Other income (expenses):
Investment income..... 453 5 -- 458
Gain on sale of
assets............... 1,633 -- -- -- 1,633
Interest expense...... (3,024) (1,977) (293) 2,484 (5) (2,810)
------- ------- ----- ------ -----------
Total other income
(expenses)......... (938) (1,972) (293) 2,484 (719)
------- ------- ----- ------ -----------
Net Income (Loss) .. $(1,024) $ (975) $(283) $ 756 $ (1,526)
======= ======= ===== ====== ===========
Net loss per common
share--basic and
diluted................ $ (0.08)
===========
Weighted average shares
outstanding--basic and
diluted................ 18,190,240
===========
</TABLE>

--------

(1) We have eliminated tower revenues (126) and adjusted expenses (4) to give
effect to the sale of our membership interests in Nassau Tower Holdings
LLC.
(2) We have adjusted depreciation and amortization expense to (i) eliminate the
depreciation recorded by Aurora Communications and the Allentown stations
(1,072); (ii) eliminate our amortization of deferred finance costs on our
old credit facility (114); (iii) record amortization of the financing costs
incurred for our new credit facility (154); and (iv) record depreciation
and amortization on the acquisitions as follows:

29
<PAGE>

Allocation of Purchase Price

<TABLE>
<CAPTION>
Quarterly
Licenses Depreciation
Fixed and and
Acquisition Total Assets Goodwill Amortization
----------- -------- ------ -------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Aurora Communications................ $185,000 $6,000 $179,000 $2,450
Allentown stations................... 30,000 5,000 25,000 500
WCHR (FM)............................ 4,700 700 4,000 75
Stations currently under local
marketing agreements:
WJHR (AM).......................... 2,500 1,000 1,500 50
WTSX (FM)/WDLC (AM)................ 2,700 500 2,200 50
WNJO (FM)/WCHR (AM)................ 20,000 1,000 19,000 275
WOBM (AM)/WOBM (FM)*............... 16,400 3,000 13,400 275
Professional fees associated with
acquisitions........................ 1,100 -- 1,100 15
-------- ------ -------- ------
262,400 17,200 245,200 3,690
======== ====== ======== ======
Period of depreciation and
amortization........................ 7 yrs 20 yrs
------ --------
Quarterly expense.................... $ 3,690 $ 625 $ 3,065
======== ====== ========
</TABLE>
--------
* The WOBM (AM) and WOBM (FM) asset allocation reflects the fact that
$4,600 of the $21,000 purchase price has previously been expensed as
local marketing agreement fees.
(3) We have eliminated the corporate general and administrative expenses
recorded by Aurora Communications (568) and the Allentown stations (27).
(4) We have eliminated all local marketing agreement fees for those radio
stations that are described as pending acquisitions: WNJO (FM); WCHR (AM);
WOBM (AM); WOBM (FM); WTSX (FM); WDLC (AM); WJHR (AM); (465). We operate
WSBG (FM) and WVPO (AM) under a local marketing agreement, however there is
no agreement to purchase these stations. Therefore, we have not eliminated
the local marketing agreement fees paid for WSBG (FM)/WVPO (AM) (175).

(5) We have adjusted interest expense to (i) eliminate interest related to the
tower assets (29); (ii) eliminate interest recorded by Aurora
Communications (1,977) and the Allentown stations (293); (iii) eliminate
interest for the debt that has been fully repaid in connection with our
recapitalization (2,599); (iv) eliminate the expense of our subordinated
discount notes associated with our old credit facility (225); and (v)
record interest at an assumed annual rate of 9.5% on our new credit
facility assuming $111.1 million outstanding (2,639). Although we will
assume the Aurora Communications senior debt upon closing of the Aurora
Communications acquisition, we intend to repay those existing obligations
with our new credit facility and proceeds from this offering.

Additional notes:

(6) The Aurora Communications purchase agreement requires a termination payment
to one of its senior executives in the approximate amount of $1,000. We
have not included this amount in the accompanying unaudited pro forma
consolidated financial statements.

(7) We incurred financing costs in the approximate amount of $3,000 in
connection with our new credit facility. Since we redeemed the subordinated
discount notes with some of the proceeds of the offering, we did not
reflect these expenses in the accompanying unaudited pro forma consolidated
financial statements.

(8) Prior to the offering, we converted to a corporation which will be subject
to income tax at the corporate level. On a pro forma basis, there are net
operating losses resulting in no current income tax provision. In addition,
we have established a valuation allowance to the extent of the net deferred
tax asset, which primarily relates to net operating losses, as it is more
likely than not that such deferred tax asset will not be realized based on
our history of losses.

30
<PAGE>

NASSAU BROADCASTING CORPORATION

UNAUDITED PRO FORMA CONSOLIDATED
BALANCE SHEET

As of March 31, 2000
(in thousands)

<TABLE>
<CAPTION>
Pro Forma Adjustments For
Pro Forma The Acquisitions
Adjustments For Pro Forma For Aurora Allentown ---------------------------
Nassau The The Communications Stations Eliminate Record
Historical Recapitalization Recapitalization Historical Historical Historicals(5) Acquisitions
ASSETS ---------- ---------------- ---------------- -------------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Current Assets:
Cash.............. $ 2,397 $ (996)(1) $ 1,401 $ 1,636 $ 3 $ (1,639) $(110,498)(6)
Marketable
securities....... 2,100 (2,100)(1) -- -- -- -- --
Accounts
receivable, net.. 5,456 -- 5,456 3,401 544 (3,945) --
Prepaid and other
current assets... 652 -- 652 231 -- (231) --
------- ------- ------- -------- ------- --------- ---------
Total Current
Assets........... 10,605 (3,096) 7,509 5,268 547 (5,815) (110,498)
Property and
Equipment, net.... 5,672 -- 5,672 5,662 1,120 (6,782) 17,200 (7)
Other Assets:
Deferred costs,
net............... 1,040 5,660 (2) 6,700 2,089 -- (2,089) --
Intangibles, net... 26,317 -- 26,317 91,459 25,356 (116,815) 245,200 (7)
Deposits........... 38,902 -- 38,902 -- -- -- (38,902)(6)
Other Assets....... 150 -- 150 -- -- -- --
------- ------- ------- -------- ------- --------- ---------
TOTAL ASSETS...... $82,686 $ 2,564 $85,250 $104,478 $27,023 $(131,501) $ 113,000
======= ======= ======= ======== ======= ========= =========
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
Liabilities:
Accounts payable
and accrued
expense.......... $ 1,705 $ -- $ 1,705 $1,443 $ 104 $ (1,547) $ --
Distributions
payable.......... 5,000 5,000 -- -- -- --
Capitalized lease
obligations,
current.......... 472 -- 472 -- -- -- --
------- ------- ------- -------- ------- --------- ---------
Total Current
Liabilities...... 2,177 5,000 7,177 1,443 104 (1,547) --
Senior Debt........ 56,139 (6,539)(3) 49,600 50,873 -- (50,873) 78,000 (6)
Subordinated Debt.. 40,159 17,219 (3) 57,378 14,206 -- (14,206) --
Capitalized Lease
Obligations, Long
Term.............. 642 -- 642 -- -- -- --
Deferred Income.... 5,058 -- 5,058 -- -- -- --
------- ------- ------- -------- ------- --------- ---------
Total
Liabilities.... 104,175 15,680 119,855 66,522 104 (66,626) 78,000
------- ------- ------- -------- ------- --------- ---------
Stockholders'
Equity:
Common stock...... -- -- -- -- -- -- 20 (6)
Additional paid in
capital.......... -- -- -- -- 34,980 (6)
Partners'
deficit.......... (21,489) (13,116)(4) (34,605) 37,956 -- (37,956) --
Parent company
investment
account.......... -- -- -- -- 26,919 (26,919) --
Accumulated
deficit.......... -- -- -- -- -- -- --
------- ------- ------- -------- ------- --------- ---------
Total
Stockholders'
Equity
(Deficiency) .... (21,489) (13,116) (34,605) 37,956 26,919 (64,875) 35,000
------- ------- ------- -------- ------- --------- ---------
TOTAL
LIABILITIES AND
STOCKHOLDERS'
EQUITY............ $82,686 $ 2,564 $85,250 $104,478 $27,023 $(131,501) $ 113,000
======= ======= ======= ======== ======= ========= =========
<CAPTION>
Pro Forma
Adjustments
For The Consolidated
Offering(8) Pro Forma
ASSETS --------------- ------------ ---
<S> <C> <C> <C>
Current Assets:
Cash.............. $110,980 $ 1,883
Marketable
securities....... -- --
Accounts
receivable, net.. -- 5,456
Prepaid and other
current assets... -- 652
--------------- ------------
Total Current
Assets........... 110,980 7,991
Property and
Equipment, net.... -- 22,872
Other Assets:
Deferred costs,
net............... (3,000)(9) 3,700
Intangibles, net... -- 271,517
Deposits........... -- --
Other Assets....... -- 150
--------------- ------------
TOTAL ASSETS...... $107,980 $306,230
=============== ============
LIABILITIES AND
STOCKHOLDERS'
EQUITY
Current
Liabilities:
Accounts payable
and accrued
expense.......... $ -- $ 1,705
Distributions
payable.......... -- 5,000
Capitalized lease
obligations,
current.......... -- 472
--------------- ------------
Total Current
Liabilities...... -- 7,177
Senior Debt........ (16,500) 111,100
Subordinated Debt.. (57,378) --
Capitalized Lease
Obligations, Long
Term.............. -- 642
Deferred Income.... -- 5,058
--------------- ------------
Total
Liabilities.... (73,878) 123,977
--------------- ------------
Stockholders'
Equity:
Common stock...... 162 (10) 182
Additional paid in
capital.......... 155,213 (10) 190,193
Partners'
deficit.......... 34,605 (10) --
Parent company
investment
account.......... -- --
Accumulated
deficit.......... (8,122)(10) (8,122)
--------------- ------------
Total
Stockholders'
Equity
(Deficiency) .... 181,858 182,253
--------------- ------------
TOTAL
LIABILITIES AND
STOCKHOLDERS'
EQUITY............ $107,980 $306,230
=============== ============
</TABLE>

footnotes on following page

31
<PAGE>

--------
(1) Cash used in the recapitalization resulted from (i) the proceeds of our
senior discount notes and our new credit facility (109,600); (ii)
liquidation of marketable securities as required by the new credit
facilities (2,100); (iii) repayment of our old credit facility and our
subordinated discount notes (100,538); (iv) the payment of a redemption of
some equity interests and a preferred distribution to Louis F. Mercatanti,
Jr. (5,458); and (v) the financing costs incurred in the recapitalization
(6,700).
(2) We expensed previously deferred financing costs on our old credit facility
(1,040) and deferred financing costs incurred in our recapitalization
(6,700).
(3) We repaid off our old credit facility (56,139) and our subordinated
discount notes (40,159) from the proceeds of our new credit facility
(49,600) and our senior discount notes (57,378).
(4) The increase in partners' deficit resulting from the recapitalization was
due to the (i) distributions to Mr. Mercatanti one of our equity holders
(10,458); (ii) the accretion and other costs on the old credit facility
(5,280); and (iii) the proceeds allocated to limited partnership units
issued in connection with the senior discount notes (2,622).
(5) We have eliminated the historical balance sheets of Aurora Communications
and the Allentown stations in order to present an allocation of our
purchase price in the consolidated pro forma balance sheet.
(6) We financed and recorded the acquisitions as follows:

<TABLE>
<CAPTION>
Under Local
Aurora Allentown Marketing
Communications Stations Agreements Total
-------------- --------- ----------- --------
(in thousands)
<S> <C> <C> <C> <C>
Cash payments................ $ 85,000 $24,000 $ 1,498 $110,498
Application of previously
paid deposits............... 7,000 6,000 25,902 38,902
Increase in debt............. 58,000 -- 20,000 78,000
Issuance of common stock..... 35,000 -- -- 35,000
-------- ------- ------- --------
Total...................... $185,000 $30,000 $47,400 $262,400
======== ======= ======= ========
</TABLE>

Professional fees associated primarily with the stations under local
marketing agreements, in the approximate amount of $1,100, are included as
deposits in the table above.

(7) The allocation of the total cost incurred in the acquisition is as follows:
<TABLE>
<CAPTION>
Total Fixed
Stations Acquired Cost Assets Intangibles
----------------- -------- ------- -----------
(in thousands)
<S> <C> <C> <C>
Aurora Communications......................... $185,000 $ 6,000 $179,000
Allentown stations............................ 30,000 5,000 25,000
WCHR (FM)..................................... 4,700 700 4,000
Stations currently under local marketing
agreements:
WJHR (AM)................................... 2,500 1,000 1,500
WTSX (FM)/WDLC (AM)......................... 2,700 500 2,200
WNJO (FM)/WCHR (AM)......................... 20,000 1,000 19,000
WOBM (AM)/WOBM (FM)*........................ 16,400 3,000 13,400
Professional fees associated with
acquisitions................................. 1,100 1,100
-------- ------- --------
$262,400 $17,200 $245,200
======== ======= ========
</TABLE>
--------
* The WOBM (AM) and WOBM (FM) asset allocation reflects the fact
that we have previously expensed $4,600 of the $21,000 purchase
price as local marketing agreement fees.

Fixed assets, which will primarily consist of broadcast equipment,
will depreciate over the period of seven years.

The intangible amount represents the total cost of the acquisition
in excess of the fair value of net assets acquired and includes the
FCC licenses. We will amortize the intangible over 20 years.

32
<PAGE>

(8) We recorded the offering as follows:

<TABLE>
<CAPTION>
(in thousands)
--------------
<S> <C>
Gross proceeds (at an assumed initial offering price of
$17.50 per share).......................................... $217,400
Costs of offering........................................... (16,720)
Repayment of senior discount notes.......................... (57,378)
Payment of accretion and early redemption premium on senior
discount notes............................................. (5,122)
Payment of tax distribution to predecessor partners......... (10,700)
Reduction in senior debt.................................... (16,500)
--------
Net proceeds................................................ $110,980
========
(9) We wrote off the financing costs associated with our new credit facility
when we repaid our old credit facility (3,000).
(10) We converted to a corporation immediately prior to this offering. The
resulting adjustment to the common stock, paid in capital, and accumulated
deficit accounts is as follows:

Common stock:
12,504,419 Class A common stock, $0.01 par value.......... $ 125
3,179,534 Class B common stock, $0.01 par value........... 32
506,287 Class C common stock, $0.01 par value............. 5
--------
$ 162
========
Additional Paid In Capital:
Gross proceeds from offering.............................. $217,400
Costs of offering......................................... (16,720)
Conversion of partners' capital prior to tax
distribution'............................................ (34,605)
Tax distribution charged to partners' capital............. (10,700)
Portion of proceeds recorded as common stock.............. (162)
--------
$155,213
========
Accumulated Deficit:
Accretion of senior discount notes........................ $ (5,122)
Write-off of financing costs.............................. (3,000)
--------
$ (8,122)
========
</TABLE>

33
<PAGE>

SELECTED HISTORICAL FINANCIAL DATA

The table below sets forth selected historical financial data of Nassau
Broadcasting Partners, L.P. and its predecessors, Nassau Broadcasting Company,
Inc. and Nassau Broadcasting Holdings, Inc., as of the dates and for the
periods indicated. We derived the selected combined statement of operations
data for the year ended December 31, 1995 from audited financial statements of
Nassau Broadcasting Company, Inc. and Nassau Broadcasting Holdings, Inc. which
are not included in this prospectus. We derived the selected consolidated
statement of operations data for the year ended December 31, 1996 and the
consolidated balance sheet data as of December 31, 1995, 1996 and 1997 from
audited financial statements of Nassau Broadcasting Partners, L.P. which are
not included in this prospectus. We derived the statement of operations data
for the years ended December 31, 1997, 1998 and 1999 and the balance sheet data
as of December 31, 1998 and 1999 from audited financial statements of Nassau
Broadcasting Partners, L.P. and are included elsewhere in this prospectus. We
derived the statement of operations data for the three months ended March 31,
1999 and 2000 and the balance sheet data as of March 31, 2000 from the
unaudited financial statements of Nassau Broadcasting Partners, L.P. which, in
the opinion of management, have been prepared on the same basis as the audited
financial statements and reflect all adjustments, consisting of normal
recurring adjustments, which are necessary for a fair presentation of this
data. Results for the three-month period ended March 31, 2000 are not
necessarily indicative of results that may be expected for the entire year or
for any future period.

You should read the following data in conjunction with the historical
financial statements and related notes, the unaudited pro forma consolidated
financial statements and related notes, and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included elsewhere
in this prospectus.
<TABLE>
<CAPTION>
Three Months
Year Ended December 31, Ended March 31,
--------------------------------------------- ------------------
1995 1996 1997 1998 1999 1999 2000
------- ------- ------- ------- --------- ------- ---------
(unaudited)
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Gross revenues.......... $ 5,999 $12,906 $20,891 $27,349 $ 34,295 $ 6,811 $ 7,893
Less agency and outside
commissions............ 487 1,082 1,812 2,353 2,893 544 612
------- ------- ------- ------- --------- ------- ---------
Net revenues.......... 5,512 11,824 19,079 24,996 31,402 6,267 7,281
------- ------- ------- ------- --------- ------- ---------
Operating expenses...... 3,916 7,001 13,437 17,227 20,794 4,570 5,318
Depreciation and
amortization........... 274 851 2,139 2,364 2,634 603 822
Corporate general and
administrative
expenses............... 370 1,583 1,995 1,825 2,280 500 587
Local marketing
agreement fees......... -- 1,307 1,666 2,271 2,517 725 640
------- ------- ------- ------- --------- ------- ---------
Total operating
expenses............. 4,560 10,742 19,237 23,687 28,225 6,398 7,367
------- ------- ------- ------- --------- ------- ---------
Operating income
(loss)............. 952 1,082 (158) 1,309 3,177 (131) (86)
------- ------- ------- ------- --------- ------- ---------
Other income (expenses)
Investment income..... -- -- 530 992 2,562 154 453
Gain on sale of
assets............... -- -- -- 3,176 567 141 1,633
Interest expense...... (1,351) (2,334) (6,367) (8,781) (10,946) (2,718) (3,024)
Settlement expense.... (691)
Write-off of debt
offering costs....... -- (851) -- -- -- -- --
Special management
fee.................. -- -- (744) -- -- -- --
------- ------- ------- ------- --------- ------- ---------
Total other income
(expenses)......... (2,042) (3,185) (6,581) (4,613) (7,817) (2,423) (938)
------- ------- ------- ------- --------- ------- ---------
Loss before
extraordinary item..... (1,090) (2,103) (6,739) (3,304) (4,640) (2,554) (1,024)
Extraordinary loss on
early retirement of
debt................... -- -- -- (677) -- -- --
------- ------- ------- ------- --------- ------- ---------
Net loss............ $(1,090) $(2,103) $(6,739) $(3,981) $ (4,640) $(2,554) $ (1,024)
======= ======= ======= ======= ========= ======= =========
Pro forma:
Basic and diluted loss
per common share..... $ (1.23) $ (0.27)
========= =========
Weighted average
shares outstanding
used in determining
net loss per share... 3,765,240 3,765,240
========= =========
</TABLE>

34
<PAGE>

<TABLE>
<CAPTION>
Three Months
Ended March
Year Ended December 31, 31,
--------------------------------------------- ---------------
1995 1996 1997 1998 1999 1999 2000
------- -------- -------- ------- ------- ------- ------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Other Data:
Broadcast cash flow..... $ 1,596 $ 4,823 $ 5,642 $ 7,769 $10,608 $ 1,697 $1,963
EBITDA.................. 1,226 3,240 3,647 5,944 8,328 1,197 1,376
After-tax cash flow..... (816) (1,252) (4,600) (4,116) (2,573) (2,093) (1,835)
Net cash provided by
(used in)
Operating activities.. (897) (1,402) (3,600) (1,041) (233) 117 27
Investing activities.. (3,480) (28,021) (18,334) 3,535 (8,300) (6,905) (4,487)
Financing activities.. 4,341 33,893 17,172 3,847 2,071 (536) 6,269
</TABLE>

<TABLE>
<CAPTION>
As of
As of December 31, March 31,
--------------------------------------------- -----------
1995 1996 1997 1998 1999 2000
------- ------- ------- -------- -------- -----------
(unaudited)
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $ 1,000 $ 5,471 $ 747 $ 7,050 $ 587 $ 2,397
Working capital......... 612 7,018 6,046 12,857 7,278 8,428
Total assets............ 9,599 44,503 57,445 70,694 74,768 82,686
Total indebtedness...... 14,179 50,113 65,299 82,808 90,445 97,412
Partners' deficit....... (5,789) (7,793) (9,032) (15,595) (19,510) (21,489)
</TABLE>

35
<PAGE>

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

You should read the following discussion and analysis together with
"Unaudited Pro Forma Consolidated Financial Data," "Selected Historical
Financial Data" and the financial statements and the related notes included
elsewhere in this prospectus. This discussion contains forward-looking
statements that involve risks and uncertainties. The statements are based on
current expectations and actual results could differ materially from those
discussed here. Factors that could cause or contribute to such difference
include, but are not limited to, those discussed below and elsewhere in this
prospectus, particularly in the "Risk Factors" section.

Overview
We were founded in December 1986 with the purchase of WPST (FM) and WHWH
(AM) in Trenton, New Jersey by Louis F. Mercatanti, Jr., our President and
Chief Executive Officer. With the enactment of the Telecommunications Act of
1996, industry deregulation has allowed us to create a unified regional radio
broadcasting group with 21 clustered radio stations. Today, we are a radio
broadcasting company focused on building local radio station clusters in
demographically attractive suburban areas surrounding major metropolitan
markets in the northeastern United States. We currently own and/or operate
11 FM and 10 AM stations in five markets. We are currently in the process of
acquiring Aurora Communications, LLC, which operates nine stations in three
markets, and two Allentown stations from Clear Channel Communications, Inc.
Following these and other pending acquisitions, we will own and/or operate 17
FM and 15 AM stations in nine markets.

We have increased the net revenues and broadcast cash flow of our
stations resulting in 21.0% and 33.0% two-year compound annual same station
broadcast cash flow growth, respectively. For the year ended December 31, 1999,
giving pro forma effect to our recent tower-related asset sale, our
recapitalization and reorganization, this offering and our pending
acquisitions, as if we had completed these transactions as of January 1, 1999,
we would have had net revenues of $55.9 million, broadcast cash flow of $20.8
million and a net loss of $20.6 million. For the three months ended March 31,
2000, giving pro forma effect to our recent tower-related asset sale, our
recapitalization and reorganization, this offering and our pending
acquisitions, as if we had completed these transactions as of January 1, 2000,
we would have had net revenues of $13.0 million, broadcast cash flow of $4.5
million and a net loss of $1.5 million.

In May 2000, we undertook a recapitalization in which we:

. entered into a new credit facility that provides for borrowings of up
to $144.0 million;

. repaid all outstanding obligations under our old credit facility and
redeemed all our $42.4 million of outstanding subordinated discount
notes which we had issued to our existing stockholders; and

. redeemed $7.5 million of equity interests of, and paid a $2.9 million
preferred distribution to, Mr. Mercatanti, who is also one of our
stockholders.

Until immediately prior to this offering, we were a limited partnership
whose principal subsidiaries were single-member limited liability companies.
The limited partnership, Nassau Broadcasting Partners, L.P., was a flow-through
entity for federal and some state and local income tax purposes, and the
limited liability companies were disregarded for federal and some state and
local tax purposes. As a result, our equity holders, rather than us, had
reported, and had been taxed directly with respect to our net income (loss) for
federal and some state and local income tax purposes. In connection with this
offering, we have terminated our limited partnership status and have become
subject to federal and applicable state and local corporate income tax as a
subchapter C corporation.

36
<PAGE>

We derive all of our revenue from the sale of broadcasting time on our
radio stations for advertising. As a result, our revenue is affected primarily
by the advertising rates our radio stations charge. Our radio stations base
these advertising rates primarily on the station's ability to attract listeners
in a given market and on the attractiveness to advertisers of the station's
listener demographics. Rates vary depending upon a program's popularity among
the listeners an advertiser is seeking to attract, the number of advertisers
vying for available air time and the availability of advertising time on other
radio stations and alternative media in the market. Radio advertising rates
generally are highest during the morning and afternoon drive-time hours which
are the peak hours for radio listening. The number of advertisements that a
radio station can broadcast within any given time period without jeopardizing
listener levels, and the resulting ratings, are limited in part by the format
of that station. Each of our stations has a general predetermined level of on-
air inventory that it makes available for advertising. Available inventory may
vary at different times of the day but tends to remain stable over time. We
base much of our selling activity on demand for our radio stations' on-air
inventory and, in general, we respond to this demand by varying prices rather
than by changing the available inventory.

Radio stations often utilize trade or barter agreements to exchange
advertising time for goods or services, such as other media advertising, travel
or lodging, in lieu of cash. In order to preserve most of our on-air inventory
for cash advertising, we generally enter into trade agreements only if we will
use the goods or services bartered to us in our business. We have minimized our
use of trade agreements and in 1999 we sold over 96% of our advertising time
for cash. In addition, we generally do not preempt advertising spots paid for
in cash with advertising spots paid for in trade.

Historically, our broadcast revenues have varied through the year. As is
typical in the radio broadcasting industry, we expect our first calendar
quarter to produce the lowest revenues for the year, and we expect the fourth
calendar quarter to produce the highest revenues for the year. The incurrence
of advertising and promotion expenses that do not necessarily produce
commensurate revenues until the impact of the advertising and promotion is
realized in future periods may affect our operating results in any period.

In 1999, we derived approximately 75% of our gross revenues from the sale
of local advertising, and approximately 25% from the sale of national
advertising. We value local advertising, which is sold primarily by each
station's sales staff, because it represents a stable revenue source which is
less affected by economic downturns. We receive higher rates for national
advertising and consequently we also focus on obtaining national advertisers.
However, we believe that the volume of national advertising revenue is more
susceptible to changes in the economic environment and a less reliable source
over the long-term. To generate national advertising sales, we engage Katz
Communications, Inc., a national advertising representation firm. In addition,
we have created a division called Nassau Radio Network to market to national
advertisers the importance of utilizing our radio stations to complement any
New York-Philadelphia radio schedule. In 1999, no single advertiser accounted
for more than 1% of our gross revenue.

Our operating expenses are primarily sales commissions and programming,
engineering, advertising and promotional expenses. We aim to control these
expenses by working closely with local station management.

We typically collect our advertising revenue within 120 days of the date
on which we air the related advertisement. We pay most accrued expenses,
however, within 45 to 60 days. As a result of this time lag, as we grow, we
require more working capital and we are likely to continue to require more in
the future.

We have generated net losses primarily as a result of significant charges
for depreciation and amortization relating to the acquisition of radio stations
and interest charges on outstanding debt. Based upon the large number of
acquisitions we expect to consummate within the next six months, we anticipate
that depreciation and amortization charges will continue to be significant for
several years. Historically, we have amortized FCC licenses and goodwill
attributable to the acquisition of radio stations over a 40 year period. Going
forward, we plan to amortize FCC licenses and goodwill attributable to
acquisitions over a 20 year

37
<PAGE>

period. To the extent that we complete additional acquisitions, our interest
expense and depreciation and amortization charges are likely to increase. If
this occurs, we would expect to continue to incur net losses.

We measure our ability to generate broadcast cash flow and EBITDA, as is
customary in our industry. Broadcast cash flow consists of operating income
(loss) before depreciation and amortization, corporate general and
administrative expenses and local marketing agreement fees. "EBITDA" consists
of operating income (loss) before depreciation and amortization expense and
local marketing agreement fees. Broadcast cash flow and EBITDA, as we define
them, may not be comparable to similarly titled measures used by other
companies. Although broadcast cash flow and EBITDA are not measures of
performance calculated in accordance with generally accepted accounting
principles, we believe that they are accepted by the broadcasting industry as
generally recognized measures of performance and are used by analysts who
report publicly on the operating performance of radio broadcasting companies.
Nevertheless, you should not consider these measures in isolation or as a
substitute for operating income, net income, net cash provided by operating
activities or any other measure for determining our operating performance or
liquidity that is calculated in accordance with generally accepted accounting
principles.

Our financial results are dependent on a number of factors, including the
general strength of the local and national economies, population growth, the
ability to provide popular programming, local market competition, the relative
efficiency of radio broadcasting compared to other media, signal strength and
government regulation and policies.

Results of Operations

Three months ended March 31, 2000 compared to three months ended March 31, 1999

Net revenues for the three months ended March 31, 2000 were $7.3 million
compared to $6.3 million for the three months ended March 31, 1999, an increase
of 16.2%. Of this increase, approximately $200,000 is attributable to an
increase in advertisements sold by our developing stations. The balance of the
increase predominantly results from increases in rates charged by the remainder
of our stations.

Operating expenses for the three months ended March 31, 2000 were $5.3
million compared to $4.6 million for the three months ended March 31, 1999, an
increase of 16.4%. The increase was attributable primarily to continuing
investments in our programming, which amounted to approximately $260,000, an
increase of approximately $261,000 in selling expenses and an increase of
$128,000 in general and administrative expense in operating the stations.

Depreciation and amortization expense for the three months ended March
31, 2000 was $822,000 compared to $603,000 for the three months ended March 31,
1999, an increase of 36.3%. This increase reflected the amortization of
goodwill associated with the acquisition of WNJO (FM), which amounted to
approximately $198,000 in the quarter ended March 31, 2000.

Corporate general and administrative expenses for the three months ended
March 31, 2000 were $587,000 compared to $500,000 for the three months ended
March 31, 1999, an increase of 17.4%. This increase was attributable primarily
to investment in additional personnel necessary to manage our growing radio
station portfolio, of approximately $39,000, and an increase in travel and
entertainment expenses of approximately $30,000.

Local marketing agreement fees for the three months ended March 31, 2000
were $640,000 compared to $725,000 for the three months ended March 31, 1999, a
decrease of 11.7%. The decrease reflected a reduction in the amount of local
marketing agreement fees we paid for WNJO (FM) and WCHR (AM) in the amount of
approximately $150,000. This decrease was partially offset by an increase in
fees we paid for WOBM (FM)/WOBM (AM), WJHR (AM), WTSX (FM) and WDLC (AM)
totaling approximately $65,000.

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As a result of the factors described above, our operating loss for the
three months ended March 31, 2000 was $86,000 compared to $131,000 for the
three months ended March 31, 1999, a decrease of 34.4%.

Other expenses for the three months ended March 31, 2000 were $938,000
compared to $2.4 million for the three months ended March 31, 1999. The change
is attributable primarily to the gain recognized in the sale of all our
membership interests in Nassau Tower Holdings LLC.

As a result of the factors described above, our net loss for the three
months ended March 31, 2000 was $1.0 million compared to a net loss of $2.6
million for the three months ended March 31, 1999.

Year ended December 31, 1999 compared to year ended December 31, 1998

Net revenues for the year ended December 31, 1999 were $31.4 million
compared to $25.0 million for the year ended December 31, 1998, an increase of
25.6%. Of this increase, approximately $3.2 million is attributable to an
increase in advertising sold by our developing stations. The balance of the
increase predominantly results from increases in rates charged by the remainder
of our stations.

Operating expenses for 1999 were $20.8 million compared to $17.2 million
for 1998, an increase of 20.7%. The increase was due to increased investments
in programming of approximately $735,000, increased advertising and promotion
expenditures of approximately $400,000 and increased sales expenses of
approximately $1,700,000 which was associated with higher revenues.

Depreciation and amortization expense for 1999 was $2.6 million compared
to $2.4 million for 1998, an increase of 11.5%. This increase reflected the
write-off of deferred financing costs associated with our old credit facility
of approximately $65,000 and amortization of goodwill associated with the
acquisitions of WNJO (FM) and WCHR (AM) of approximately $133,000.

Corporate general and administrative expenses for 1999 were $2.3 million
compared to $1.8 million for 1998, an increase of 24.9%. The increase was
attributable primarily to an increase in salaries we paid of approximately
$300,000, an increase in professional fees paid of approximately $80,000 and an
increase in travel and entertainment expenses of approximately $69,000.

Local marketing agreement fees for 1999 were $2.5 million compared to
$2.3 million in 1998, an increase of 10.8%. The increase was due primarily to
the local marketing agreement initiated in January 1999 for WJHR (AM).

Operating income for 1999 was $3.2 million compared to $1.3 million in
1998, an increase of 142.6%. This increase was primarily attributable to the
strong revenue growth coupled with management's control of expenses.

Other expenses for 1999 were $7.8 million compared to $4.6 million in
1998. This increase was attributable to the gain recognized on the sale of WSBG
(FM) and WVPO (AM) in 1998.

As a result of the factors described above, our net loss for 1999 was
$4.6 million compared to $4.0 million in 1998.

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Year ended December 31, 1998 compared to year ended December 31, 1997

Net revenues for the year ended December 31, 1998 were $25.0 million
compared to $19.1 million for the year ended December 31, 1997, an increase of
31.0%. 1998 also included a full twelve months of operating results for WBBO
(FM) which went on the air in May 1997. WNJO (FM) and WCHR (AM) were
successfully switched to new formats in mid-1998. The increase in net revenues
derived from these developing properties was approximately $3.0 million. The
balance of the increase was predominantly, attributable to rates charged by the
remainder of our stations.

Operating expenses for 1998 were $17.2 million compared to $13.4 million
in 1997, an increase of 28.2%. The increase attributable to the commencement of
operation of WNJO (FM), WCHR (AM), WBBO (FM) in 1998 was approximately $2.0
million. Selling expenses also increased by $1.7 million due to increased
sales.

Depreciation and amortization expense for 1998 was $2.4 million compared
to $2.1 million for 1997, an increase of 10.5%. The increase was attributable
primarily to the full year of depreciation and amortization expense associated
with the radio stations acquired in 1997.

Corporate general and administrative expenses were $1.8 million in 1998
compared to $2.0 million in 1997, a decrease of 8.5%. This decrease was
attributable primarily to a reduction in fees paid under a management
consulting agreement which terminated in 1997.

Local marketing agreement fees were $2.3 million in 1998 compared to $1.7
million in 1997, an increase of 36.3%. New local marketing agreements were
initiated in 1998 for WTSX (FM) and WDLC (AM) in Port Jervis, New York, and
WSBG (FM) and WVPO (AM) in Stroudsburg, Pennsylvania.

As a result of the factors described above, operating income for 1998 was
$1.3 million compared to a loss of $158,000 in 1997.

Other expenses were $4.6 million in 1998 and $6.6 million in 1997. The
decrease was attributable to the gain recognized on the sale of WSBG (FM) and
WVPO (AM) in 1998 which approximated $3.2 million, an increase in investment
income of approximately $0.5 million and the management fee paid in 1998. These
decreases were partially offset by increased interests expenses of
approximately $2.2 million.

As a result of the factors described above, our net loss for 1998 was
$4.0 million compared to $6.7 million in 1997.

Other Operating Data

Three months ended March 31, 2000 computed to three months ended March 31, 1999

Broadcast cash flow was $2.0 million for the three months ended March 31,
2000, compared to $1.7 million for the three months ended March 31, 1999, an
increase of 15.7%. The increase was predominately due to increase revenues of
approximately $1.0 million, which resulted from an increase in advertisements
sold by our stations. These additional revenues were partially offset by
increased programming, sales and corporate general and administrative expenses
in operating the stations.

EBITDA was $1.4 million for the three months ended March 1, 2000 compared
to $1.2 million for the three months ended March 31, 1999, an increase of 15%.
This increase was predominantly due to the reasons set forth in the previous
paragraph. In addition, we incurred an additional $90,000 in corporate general
and administrative expenses in the three months ended March 2000. The increase
primarily related to personnel and travel and entertainment expenses.

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Year ended December 31, 1999 compared to year ended December 31, 1998

Broadcast cash flow was $10.6 million for 1999 compared to $7.8 million
for 1998, an increase of 36.5%. The increase was due to revenues increasing,
as a result of more advertising sales, by $6.4 million which were offset by an
increase of $3.6 million in operating expenses. Operating expenses increased
primarily due to an increased investment in programming, advertising and sales
expenses resulting from the higher revenues.

EBITDA was $8.3 million for 1999 compared to $5.9 million for 1998, an
increase of 40.1%. This increase was predominantly due to the reasons set
forth in the previous paragraph. In addition, we incurred an additional
$500,000 in corporate general and administrative expenses during 1999 relating
to salaries, professional fees and travel and entertainment expenses.

Year ended December 31, 1998 compared to year ended December 31, 1997

Broadcast cash flow was $7.8 million for 1998 compared to $5.6 million
for 1997, an increase of 37.7%. The increase was due to revenues increasing,
as a result of more advertising sales, by $5.9 million which were offset by an
increase of $3.8 million in operating expenses. Operating expenses increased
primarily due to the commencement of several new stations and an increase in
selling expenses relating to increased sales.

EBIDTA was $5.9 million for 1998 compared to $3.6 million for 1998, an
increase of 63.0%. This increase was predominantly due the reasons set forth
in the previous paragraph.

Liquidity and Capital Resources

Overview. We have financed our acquisitions from one or a combination of
the following sources:

. our credit facilities;

. borrowings from our equity investors and others;

. additional equity issuance;

. asset sales; and

. internally generated cash flow.

Our other liquidity needs have been for working capital, debt service,
capital expenditures and other general corporate purposes. In the future, we
expect that our principal liquidity requirements will be for acquisitions of
additional radio stations, working capital, debt service and other general
corporate purposes. We expect to finance future acquisitions through a
combination of bank borrowings and internally generated funds.

We will use the net proceeds from this offering in the following manner:

. $60.0 million plus approximately $2.5 million of accretion and early
redemption premium to redeem all of our outstanding senior discount
notes incurred to repay subordinated discount notes held by some of
our existing stockholders and to repay a portion of the borrowings
under our old credit facility;

. $85.0 million to finance a portion of the acquisition of Aurora
Communications;

. $24.0 million to finance the acquisition of the Allentown stations;

. $10.7 million to reimburse the limited partners of our predecessor
for tax payable by them as a result of our reorganization; and

. the remainder to pay transaction costs and provide for general
corporate purposes.

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As of March 31, 2000, we held $2.4 million in cash and cash equivalents,
held $2.1 million in marketable securities available for sale, and had $1.1
million available under our old credit facility. Our pending acquisitions have
an aggregate purchase price of $267.0 million with a remaining cash requirement
of $187.2 million. Based on our current debt obligations, we anticipate that
our debt service costs for the twelve months ending March 31, 2001 will be
$12.0 million. Under our new credit facility, we can currently borrow up to
$144.0 million, subject to compliance with financial ratios and covenants. We
believe that the net proceeds from this offering, together with the
availability under our new credit facility and cash on hand should be
sufficient to permit us to meet our financial obligations for at least the next
twelve months.

We had working capital of $7.3 million at December 31, 1999, $12.9
million at December 31, 1998 and $6.0 million at December 31, 1997.

Operating Activities. Our operating activities used $232,881 in 1999
compared to $1.0 million used in 1998. The change relates primarily to improved
working capital management in 1999.

Investing Activities. Our investing activities used $8.3 million in 1999,
primarily for payments due under the purchase agreement for WNJO (FM) and WCHR
(AM).

Financing Activities. Cash provided by financing activities totaled $2.1
million in 1999. In 1999, we drew against our old credit facility to make
payments under existing asset purchase agreements.

As of March 31, 2000, we had an outstanding balance under our old credit
facility of approximately $56.0 million and availability under our old credit
facility of $1.0 million for future acquisitions and other corporate purposes.
Giving pro forma effect to the following transactions as of March 31, 2000, and
assuming compliance with covenants contained in our new credit facility, we
would have had an outstanding balance under our new credit facility of
approximately $111.1 million and availability under our new credit facility of
$32.9 million for future acquisitions and other corporate purposes:

. our recapitalization and reorganization;

. the completion of this offering and the application of the net
proceeds as contemplated;

. the completion of our acquisition of Aurora Communications;

. the completion of our acquisition of the Allentown stations;

. the completion of our acquisitions of seven radio stations that we
currently operate under local marketing agreements;

. the completion of our acquisition of Manahawkin Communications
Corporation, the owner of a construction permit to build a new radio
station, WCHR (FM), in the New Jersey market of Monmouth and Ocean
counties; and

. the completion of our acquisition of WILT (AM).

New Credit Facility. Our new credit facility is secured by substantially
all our assets, including our ownership interests in each of our subsidiaries.
Our principal operating subsidiary, Nassau Broadcasting I, LLC, is the borrower
under our new credit facility. However, we have, and each of our other
subsidiaries has, fully and unconditionally guaranteed all of Nassau
Broadcasting I, LLC's obligations under this facility. The terms we use below
have the meaning given to them in our new credit facility.

The new credit facility consists of the following:

. $20.0 million revolving credit facility, approximately $4.6 million
of which we have drawn in connection with our recapitalization and
which we use to provide for general corporate purposes. The revolving
credit facility bears interest at the following annual rates:

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(1) during the periods that the loan is an Alternative Base Rate
Loan, the Alternative Base Rate, plus the Applicable Margin, and

(2) during the periods that the loan is a LIBOR Loan, for each
related Interest Period, the LIBO Rate for the loan for that
Interest Period, plus the Applicable Margin.

This loan matures in June, 2006.

. $33.0 million delayed-draw term loan A1, which we will use to finance
a portion of the purchase price of Aurora Communications in the form
of repayment of debt of Aurora Communications. This loan bears
interest at the following annual rates:

(1) during the periods that the loan is an Alternative Base Rate
Loan, the Alternative Base Rate, plus the Applicable Margin, and

(2) during the periods that the loan is a LIBOR Loan, for each
related Interest Period, the LIBO Rate for the loan for that
Interest Period, plus the Applicable Margin.

This loan will amortize on a quarterly basis and matures in June,
2006.

. $26.0 million delayed-draw term loan A2, $5.0 million of which we
have drawn in connection with our recapitalization and the remainder
of which we will use to finance a portion of the purchase price of
stations we currently operate under local marketing agreements. This
loan bears interest at the following annual rates:

(1) during the periods that the loan is an Alternative Base Rate
Loan, the Alternative Base Rate, plus the Applicable Margin, and
(2) during the periods that the loan is a LIBOR Loan, for each
related Interest Period, the LIBO Rate for the loan for that
Interest Period, plus the Applicable Margin.

This loan will amortize on a quarterly basis and matures in June,
2006.

. $40.0 million term loan B, which we have drawn in connection with our
recapitalization and to fund an equity redemption. This loan bears
interest at the following annual rates:

(1) during the periods that the loan is an Alternative Base Rate
Loan, the Alternative Base Rate, plus the Applicable Margin, and

(2) during the periods that the loan is a LIBOR Loan, for each
related Interest Period, the LIBO Rate for the loan for that
Interest Period, plus the Applicable Margin.

This loan will have minimal amortization over its life and matures in
June, 2007, at which time a balloon payment will be due.

. $25.0 million delayed-draw term loan C, which we will use to finance
a portion of the purchase price of Aurora Communications in the form
of repayment of debt of Aurora Communications. This loan bears
interest at the following annual rates:

(1) during the periods that the loan is an Alternative Base Rate
Loan, the Alternative Base Rate, plus the Applicable Margin, and

(2) during the periods that the loan is a LIBOR Loan, for each
related Interest Period, the LIBO Rate for the loan for that
Interest Period, plus the Applicable Margin.

This loan will have minimal amortization over its life and matures in
June, 2008, at which time a balloon payment will be due.

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Our new credit facility prohibits us from paying cash dividends and
restricts our ability to make other distributions with respect to our capital
stock. Our new credit facility also contains other customary restrictive
covenants. Among other things, these covenants limit our ability to:

. incur additional indebtedness, contingent liabilities and liens;

. redeem or repurchase capital stock and redeem, repurchase or prepay
subordinated debt;

. enter into certain investments or joint ventures;

. consolidate, merge or effect asset sales;

. make capital expenditures;

. enter sale and leaseback transactions;

. sell or discount accounts receivable;

. enter into transactions with stockholders and affiliates; or

. change the nature of our business.

We are also required to satisfy financial covenants, which require us to
maintain specified financial ratios and to comply with financial tests, such as
ratios for interest coverage, fixed charge coverage and senior and total debt.

Our new credit facility contains events of default typical for this type
of facility subject in each case to certain grace periods and materiality
thresholds, including, without limitation, (1) non-payment of amounts due under
the credit facility, (2) material misrepresentations, (3) covenant defaults,
(4) cross-defaults to other indebtedness, (5) judgment defaults, (6)
bankruptcy, and (7) a change of control of the principal operating company,
Nassau Broadcasting I, LLC or its successors.

Senior Discount Notes. On May 4, 2000, we issued and sold units
consisting of senior discount notes and limited partnership units for gross
proceeds of $60.0 million. The limited partnership units were converted into
79,419 shares of class A common stock as of the date of this offering. These
senior discount notes will be fully redeemed with the proceeds of this
offering. We used the proceeds from these senior discount notes to redeem the
subordinated discount notes held by some of our equity holders.

Old Credit Facility. On May 4, 2000, we repaid approximately $58.0
million in then-outstanding borrowings under our old credit facility from
borrowings under our new credit facility and from proceeds of our senior
discount notes.

Subordinated Discount Notes, Preferred Distribution and Equity
Redemption. On May 4, 2000, we redeemed all outstanding subordinated discount
notes that we had issued to our existing stockholders in an amount of $42.4
million and made a preferred distribution to Mr. Mercatanti under the Nassau
Broadcasting partnership agreement, in an amount of $2.9 million. In addition,
Nassau Broadcasting, L.P. redeemed $2.5 million of equity interests held by Mr.
Mercatanti, who also has the right to require us to redeem a further $5.0
million of equity interests at any time provided there is no existing event of
default under our new credit facility and no new event of default would result.

Pending Acquisitions. We expect that we will require approximately $222.2
million to fund our pending acquisitions, with a remaining cash requirement of
$187.2 million. We cannot consummate our pending acquisitions unless we satisfy
specified conditions, including approval of the FCC. Although we believe the
closing conditions are customary for transactions of this type, we may not
satisfy these conditions. We believe that the FCC ultimately will approve the
proposed acquisitions, but we cannot be certain of this. Therefore, we do not
know when these acquisitions will close, if at all.

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Qualitative and Quantitative Disclosures about Market Risk

Market risk is the risk of loss arising from adverse changes in market
rates and prices such as interest rates, foreign currency exchange rate and
commodity prices. Our primary exposure to market risk is interest rate risk
associated with our new credit facility. Amounts that we borrow under the new
credit facility incur interest at the Alternate Base Rate or the LIBO Rate plus
the then Applicable Margin depending on the outstanding principal balance under
our new credit facility. We are required to fix the interest rate of, or enter
into interest rate hedging arrangements for, approximately 50% of the aggregate
principal amount then outstanding under our new credit facility.

Historically, we believe that we have not been exposed to market risk
which has had a material adverse effect on our operations.

Year 2000 Compliance

We have experienced no material problems as a result of the year 2000
issue. We do not anticipate experiencing any latent material problems. We have
not incurred, nor do we expect to incur, any material costs to ensure that our
systems are year 2000 compliant.

Inflation

To date, inflation has not materially impacted our results of operations.

Recent Pronouncements

In September 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires entities to recognize all
derivatives in their financial statements as either assets or liabilities
measured as fair value. SFAS No. 133 also specifies new methods of accounting
for hedging transactions, prescribes the items and transactions that may be
hedged and specifies detailed criteria to be met to qualify for hedge
accounting. SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal
years beginning after June 15, 2000. We are evaluating the impact that this
statement will have on our results of operations and financial position.

In January 2000, the Emerging Issues Task Force reached a consensus on
Issue No. 99-17, "Accounting for Advertising Barter Transactions," to be
effective for transactions entered into after January 20, 2000. The consensus
states that advertising barter transactions should be accounted for at fair
value and that the fair value recognized be disclosed in the financial
statements, if there is verifiable objective evidence provided by sufficient
cash transactions received by the seller of the advertising or similar
advertising. We do not expect EITF No. 99-17 to have a material effect on our
financial statements.

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INDUSTRY OVERVIEW

Radio stations generate the majority of their revenue from the sale of
advertising time to local and national spot advertisers and national network
advertisers. Radio gives advertisers an economy of scale with regard to
targeting demographic groups in specific geographic locations compared to other
forms of media advertising. As a result, radio broadcasting is affordable to
both large and small advertisers, although it serves primarily as a medium for
local advertising. According to the Radio Advertising Bureau's Radio and
Marketing Guide & Fact Book for Advertisers: Fall 1999 to Spring 2000, from
1990 to 1999, local advertising revenue as a percentage of total radio
advertising revenue in the United States has ranged from approximately 77% to
80%. The growth in total radio advertising revenue has been fairly stable in
the past six years, growing between approximately 8% and 15% annually. Total
radio advertising in 1999 reached an estimated $17.7 billion, which represents
almost 15% growth over the prior year.

Advertisers consider radio to be 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
or news/talk. A station's format and style of presentation enable it to target
particular segments of listeners sharing certain demographic features. By
capturing a specific share of a market's radio listening audience, with
particular concentration in a targeted demographic group, a station is able to
market its broadcasting time to advertisers seeking to reach a defined
audience. Advertisers and stations use data published by audience measuring
services, such as Arbitron, to estimate how many people within particular
geographical markets and demographic groups listen to each station in those
markets. In addition, rates vary depending upon a program's popularity among
the listeners an advertiser is seeking to attract, the number of advertisers
vying for available air time and the availability of alternative advertising
media in the market. Radio advertising rates generally are highest during the
morning and afternoon drive-time hours which are the peak hours for radio
audience listening.

The number of advertisements that a station can broadcast without
jeopardizing listening levels and the resulting ratings is limited in part by
the format of the particular station and the local competitive environment.
Although the number of advertisements that are broadcast during any 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
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 they obtain.

Consumer Reach

Radio is a powerful medium through which to reach consumers. Radio is
able to reach consumers more frequently than television or cable because it can
be listened to outside the home, in cars and in the workplace. According to the
Radio Advertising Bureau's Radio and Marketing Guide & Fact Book for
Advertisers: Fall 1999 to Spring 2000, radio reaches 75% of consumers 12 years
of age and older everyday and with more radio listening occurring outside the
home, radio advertising is confronted with less competition in attracting
consumers than other mediums of advertising. Every week, radio reaches 95% of
all consumers 12 years of age and older. Radio is also the number one medium
close to the point of purchase as it reaches 63% of adults 25 to 54 years old
within one hour of making their largest purchase of the day.

More than 60% of all radio listening is done outside the home, and radio
reaches four out of five adults travelling in vehicles each week. The average
listener spends approximately three hours and 12 minutes every weekday
listening to radio. The highest portion of radio listenership occurs during the
morning,

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particularly between the time a listener wakes up and the time the listener
reaches work. Each week, this "morning drive time" period reaches more than 80%
of people 12 years of age and older and, as a result, radio advertising sold
during this period achieves premium advertising rates.

Radio listeners have gradually shifted over the years from AM (amplitude
modulation) to FM (frequency modulation) stations. FM reception is generally
clearer and provides greater tonal range and higher fidelity than AM reception.
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.

A combination of frequency, transmitter power and antenna orientation
determines the area served by AM stations. Power, operating frequency, antenna
patterns and day/night operating modes are required to determine the effective
service area of an AM station. A combination of transmitter power and antenna
height determines the area that an FM station can serve, with stations divided
into classes according to their anticipated service area.

The class of an FM station determines the minimum and maximum facilities
requirements for that station. FM class designations depend upon the geographic
zone in which the transmitter of the FM station is located. In general,
commercial FM stations are classified as follows, in order of increasing power
and antenna height: Class A, B1, C3, B, C2, C1 and C. Class C FM stations
operate at 100 kilowatts of power with up to 1,968 feet of antenna elevation
above average terrain. They are the most powerful FM stations, providing
service to a large area, typically a substantial portion of a state. Class B FM
stations operate at up to 50 kilowatts of power with up to 500 feet of antenna
elevation. These stations typically serve large metropolitan areas as well as
their associated suburbs. Class A FM stations operate at 6 kilowatts with up to
328 feet of antenna elevation, and serve smaller cities and towns or suburbs of
larger cities.

License Grant and Renewal

The FCC grants, and reviews, radio broadcast licenses for maximum terms
of eight years. The licensor may renew its license through an application to
the FCC. Interested parties, including members of the public, can file
petitions to deny license renewal applications.

Market and Industry Data and Industry Terms

We use the term local marketing agreement in various places in this
prospectus. A typical local marketing agreement is an agreement under which an
FCC licensee of a radio station makes available, for a fee, air time on its
station to another person. This person provides programming to be broadcast
during its allocated air time, collects revenues from the advertising it sells
for broadcast during its programming and pays related expenses.

Unless otherwise indicated:

. we based metropolitan statistical areas on the Arbitron Radio Metro
and Television Market Population Estimates 1999;

. we obtained radio market rankings, radio market revenue rankings,
radio market revenue growth and other radio market data from BIA
Research, Inc., a recognized broadcasting research firm;

. we calculated our revenue rankings in each radio market by
aggregating radio revenues of all radio stations in that market, as
derived from BIA Research, and calculating each radio station's
percentage share of this aggregate revenue. We ranked the radio
station with the highest percentage share in the market first in the
market, the radio station with the second highest percentage share
second in the market, and so forth;

. we obtained total industry listener and revenue levels from the Radio
Advertising Bureau, a national trade organization;

. we derived number of listeners data from the Spring 2000 Arbitron
Market Report;

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. we derived all audience share data and audience rankings, including
ranking by population, from surveys of people 12 years of age and
older, listening Monday through Sunday, 6 a.m. to 12 midnight, and
based on the Spring 2000 Arbitron Market Report pertaining to each
market, as reported by BIA Research; and

. we obtained all county-wide retail sales information from the 1999
edition of Sales and Marketing Management, a recognized publication
containing market and economic research data.

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BUSINESS

We focus on building contiguous clusters of local radio station in
demographically attractive suburban areas surrounding major metropolitan
markets in the Northeast. Our primary strategy is to capture leadership
positions in the markets in which we currently operate and, while growing those
markets, also expand to other attractive suburban markets with strong growth
opportunities. We attribute our broadcast cash flow growth on a same station
basis of 33% over the past two years to our ability to identify and define
underdeveloped markets and transform radio stations into competitive local
brands.

Operating Strategy

We intend to grow our business, both internally and through acquisitions,
by pursuing the following strategies:

Build clusters of stations and operate multiple stations within each market

We operate stations in clusters to provide coverage over a series of
adjacent markets. In this way, we realize operational efficiencies through a
combined sales force and shared support functions for each cluster. In
addition, we create larger marketing programs than an individual radio station
could otherwise economically afford through joint promotions among our
stations.

Each cluster of stations presents advertisers with multiple opportunities
to reach their target audiences and achieve their marketing objectives.
Synergies derived from clustering enable us to present cost efficient solutions
to advertisers. If an advertiser desires airtime on several stations, we
provide it with one point of contact within our organization and request only
one order form.

Improve station programming to increase audience share

We recognize the importance of focusing on the local community to ensure
that our radio stations address the public interest. In many of our markets, we
believe that improving the coverage of local stories has filled a void in the
community and created audience loyalty. For example, last year we recognized
the growing desire for sports coverage in Trenton, New Jersey with the
introduction of professional hockey and baseball teams. To respond to this
community interest, we established WTTM (AM) in May 1999 as the first all
sports station and the exclusive radio broadcaster of ESPN in this market. In
addition to focusing on local interests, we also actively participate in
community events and charities.

We invest in our on-air talent and program directors who monitor the
content and advertising on our stations to ensure each station is operating
under its designed format. We continually search for ways to improve our
programming as we evolve with our listeners. We aim to maintain or improve
station ratings, which we believe is essential to achieve consistent growth. We
attempt to do this by creating distinct, highly visible profiles for our on-air
personalities, particularly those broadcasting during "morning drive-time,"
which is traditionally between 6:00 am and 10:00 am, weekdays. We recently
detected an opportunity to grow the audience for the hot adult contemporary
format during the evening hours, a typically weaker time period. We designed an
original interactive show built around the radio personality, Roberta, that we
believe will captivate a significant number of listeners. Based on the current
success in syndicating this program on several of our stations, we intend to
syndicate Roberta nationally later this year.

Enhance brand awareness

We believe brand awareness and brand loyalty are essential to achieving a
sizable audience, which attracts advertising revenue. We brand and market
individual stations to maintain or improve audience ratings. Creating a brand
for a station facilitates the ability of people in the local community to
identify with the

49
<PAGE>

station. For example, in 1997, we branded WJLK (FM) in the Monmouth-Ocean
market as "The POINT." The POINT's concept and design is intended to reflect
the lifestyle of its target audience. The station ranks first in its target
demographic audience, women 25-54 years old, among all local and New York
stations in the Monmouth-Ocean market.

Cultivate a broad base of advertisers

We focus on the needs of both local and national advertisers by
developing a sales force trained to proactively serve local and national
advertisers in creative ways. We have an ongoing training program which
includes seminars offered by the Radio Advertising Bureau and other industry
groups as well as in-house training organized by management. Our sales force
seeks to design advertising packages which include those stations in a cluster
that best fit an advertiser's needs. We utilize Katz Communications, Inc., or
Katz, a national advertising representation firm, to obtain national
advertising for our stations. We also use Nassau Radio Network, our own
national sales force, to locate additional national advertisers.

Acquisition Strategy

Identification of target stations

We seek to expand our presence by acquiring additional stations in
demographically attractive suburban areas surrounding major metropolitan
markets, primarily in the Northeast. We target radio markets that are
underdeveloped and have lower radio market revenue relative to total retail
sales as compared to the national average and/or where radio has historically
captured only a small portion of total local advertising for all media. We
identify and seek to acquire stations that we believe will enable us to create
leadership positions in ratings and format in our existing markets or new,
complementary markets and provide us with the opportunity to increase revenues
and broadcast cash flow. In executing this strategy, we focus on properties
which:

. provide a regional fit with our overall portfolio;

. provide proximity to larger markets that may lead to increased
economic expansion into our markets;

. are situated in previously unconsolidated markets with fragmented
individual ownership of stations; and

. provide the opportunity to assemble a group of stations that have
competitive signal strengths and that are diversified in format to
provide a wide range of target audiences for advertisers.

Integration of acquired stations

Since 1995, we have acquired or signed local marketing agreements to
operate 19 radio stations. We have developed an efficient process to integrate
new stations into our portfolio, culture and operating philosophy. Our
integration process consists of the following key elements:

. improving local presence of stations through top-quality on-air
talent and programming personnel;

. building an experienced sales force through continued recruitment and
on-going training; and

. designing marketing efforts to build brand awareness for each
station.

We intend to transform stations in our portfolio that currently
contribute minimal broadcast cash flow into profitable stations. After
identifying an underperforming station, our senior management carefully
analyzes the characteristics of the station, including the current programming
and the audience's perception of the station, and uses market studies to
determine market receptivity for change. In designing a plan to revitalize the

50
<PAGE>

station, senior management examines how the station profile fits with our
existing portfolio in terms of station reach, format and audience. We then
focus on hiring and retaining strong on-air talent and programming personnel to
create a dynamic station and garner new listeners.

By implementing our acquisition strategy, we have quickly achieved
success in many of our markets, such as:

WJLK (FM)--Monmouth-Ocean, NJ. After acquiring WJLK (FM) and WQNJ (FM) in
October 1996, we began the process of disconnecting the simulcast of WJLK (FM)
and WQNJ (FM), while at the same time adjusting the format on WJLK (FM) to hot
adult contemporary. In May 1997, we relaunched WQNJ (FM) as WBBO (FM) in a
contemporary hit radio format and have since increased combined net revenues of
these stations from $3.6 million in 1996 to $7.8 million in 1999.

WNNJ (FM)--Sussex, NJ. After acquiring WNNJ (FM) in August 1996, we
determined the listeners targeted by the station's hot adult contemporary
format were more receptive to our two other adult contemporary stations in the
area, WSUS (FM) and WSBG (FM). In 1997, we changed the station's format to
classic hits and increased the signal power to 25,000 watts. WNNJ (FM) now
shares the number one market position with WSUS (FM) in the 25-54 year old
target demographic audience.

WNJO (FM)--Trenton, NJ. When we acquired WNJO (FM) in May 1997, the
station was broadcasting a religious format. Given the high signal power of
50,000 watts, we believed we could move the religious format to an AM station
without losing significant revenue and implement a more popular format on the
FM station. In March 1998, we placed the religious format on WCHR (AM) and
implemented an oldies format on WNJO (FM). With the addition of this signal, we
had two 50,000-watt FM stations in the Trenton market and also a very strong FM
presence in the Philadelphia metropolitan market. After the format change, we
increased the combined net revenues of WNJO (FM) and WCHR (AM) by 322% over the
next two years.

Advertising

We derive all of our revenue from advertising. Similar to other radio
stations, we have a sales force that solicits local advertising and we employ
Katz as our national sales representative. Further, we believe that some
national businesses, that do not have a direct presence in our markets,
represent opportunities for additional, directly-generated advertising revenue.
We created a division called Nassau Radio Network to target these advertisers.
Nassau Radio Network is a sales force that focuses on conveying to advertisers
the importance of utilizing our radio stations to complement a New York or
Philadelphia radio advertising schedule. Through Nassau Radio Network, we offer
a simple process with flexibility and creativity to adapt to an advertiser's
desire to target our affluent suburban markets. With our expansion throughout
the Northeast, we intend to expand this concept to supplement any major
metropolitan market in which we operate.

We believe that through direct advertiser relationships we can better
understand the advertiser's business needs and more effectively design an
advertising campaign to help the advertiser sell its product. As a result, we
pay a higher commission rate to both our local sales staff and Nassau Radio
Network sales staff than our national representative for generating sales. Our
employees work with our advertisers in each of our markets to produce
commercials in our technologically advanced facilities.

A radio station charges advertising rates which are based primarily on
the station's ability to attract listeners in a given market and on the
attractiveness to advertisers of the station's listener demographics. We
believe that operating multiple stations in a market enables us to offer a
variety of rates to advertisers. We believe we will be able to continue to
increase our rates and fully sell our advertising time as new and existing
advertisers recognize the desirability of our stations' diverse formats.

51
<PAGE>

Each station broadcasts a predetermined number of advertisements each
hour with the actual number depending upon the format of a particular station.
We determine the number of advertisements broadcast hourly that can maximize
each of our station's available revenue dollars without jeopardizing its
listener levels.

Our revenue mix between local and national advertising varies
significantly by market. Currently, approximately 75% of our advertising is
local and approximately 25% is national. We believe that local revenues are
important as they represent a stable revenue source which is less affected by
economic downturns. However, we also view national advertising as important
because it generally commands a higher dollar rate for each advertising spot
than local advertising.

Station Portfolio

Our stations are clustered in demographically attractive mid-size
suburban areas, particularly those surrounding the New York and Philadelphia
metropolitan areas. With this configuration, we can coordinate our sales effort
and realize operating efficiencies in our sales, programming, engineering and
accounting divisions. We set forth information about our stations and the
markets we serve and will serve upon completion of the acquisition of Aurora
Communications, the acquisition of the Allentown stations and our other pending
acquisitions in the following table. We describe the sources for this
information under "Industry Overview."

<TABLE>
<CAPTION>
1993-1998 1999
1999 1999 Radio Market 1999 Stations Radio Group
Market Radio Market Average Annual Radio Market --------- Rank in
Market Rank Revenue Rank Revenue Growth Revenue Growth FM AM Market Revenue
------------------------ ------ ------------ -------------- -------------- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Northern(1)
Westchester, NY(2)...... 1 2 10.8% 16.8% 2 1 N/A
Bridgeport, CT.......... 112 91 8.9% 5.6% 1 1 1
Danbury, CT............. 189 190 5.3% 8.0% 2 2 2
Northwestern
Sussex, NJ.............. 239 250 N/A 16.7% 3 1 1
Newburgh-Middletown,
NY(3).................. 141 258 0% 9.8% 1 1 5
Wilkes Barre-Scranton,
PA..................... 64 77 6.5% 11.3% 1 2 4
Allentown, PA(4)........ 67 76 7.5% 6.8% 1 1 3
Central
Trenton, NJ(5).......... 138 100 11.5% 14.6% 2 4 1
Shore
Monmouth-Ocean, NJ(6)... 47 83 5.6% 21.3% 4 2 1
---- ----
Total stations........ 17 15
==== ====
</TABLE>
--------
(1) Consists of the nine radio stations we expect to own upon our acquisition
of Aurora Communications, LLC.
(2) Falls within the greater New York market.
(3) Consists of the two radio stations we expect to acquire from Port Jervis
Broadcasting Co., Inc.
(4) Consists of two radio stations we expect to acquire from Clear Channel
Communications, Inc.
(5) Includes two radio stations we expect to acquire from Great Scott
Broadcasting Ltd. and one radio station we expect to acquire from
Multicultural Radio Broadcasting, Inc.
(6) Includes the construction permit of WCHR (FM), which we will acquire upon
our acquisition of Manahawkin Communications Corporation and two radio
stations we expect to own upon our acquisition of North Shore Broadcasting
Corp. and Seashore Broadcasting Corp.

The following is a general description of each of our markets and our
radio stations within these markets. We derived information relating to radio
market revenue rank, radio market revenue and revenue growth of stations from
information reported by BIA Research.

52
<PAGE>

WESTCHESTER, NEW YORK
1999 Radio Market Revenue Rank: 2

<TABLE>
<CAPTION>
Target Audience Share Audience Rank
Station Date Demographic in Target in Target
Call Letters Acquired Format Audience Demographic(1) Demographic(1)
------------------- -------- ------------------ ------------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
WFAS (FM).......... pending Adult contemporary 25-54 Women 5.8 3
WFAF (FM).......... pending Adult contemporary 25-54 Women N/A N/A
WFAS (AM).......... pending News/talk/sports 40-64 Women N/A N/A
</TABLE>
--------
(1) Westchester County only.

Market Overview

Currently radio stations in Westchester County are listed under the New
York, New York market. Arbitron is in the process of designating Westchester as
a recognized market. Based on 1999 population estimates, it would be the 58th
largest radio market in the United States.

Westchester Stations

Upon receiving final approval from the FCC, we will acquire all the
equity interests in Aurora Communications which owns the following three radio
stations in Westchester County.

WFAS (FM), known to its listeners by its branded name "Westchester
Radio," broadcasts on two frequencies--103.9, covering southern Westchester
county and 106.3, covering northern Westchester County which is licensed as
WFAF (FM). WFAS (FM) targets the 25-54 year old demographic audience with an
adult contemporary format and includes local news, Westchester traffic updates,
weather, and other local information. We promote the station throughout the
year by sponsoring numerous charity events and expositions, which we believe
emphasizes our community orientation.

WFAF (FM) began simulcasting WFAS (FM) in an adult contemporary format at
the end of 1999 in an effort to reduce expenses. We believe that the signal is
very viable in the Westchester market and intend to relaunch the station with a
new format by the end of 2001.

WFAS (AM) broadcasts a news/talk/sports format for Westchester County.
Established over 60 years ago, WFAS (AM) was Westchester's first radio station.
We position this station as "News/Talk 1230" with local news, traffic and
weather information, local and national talk shows, block programming and
sports news. In addition, we include daily appearances by local civic, service,
and business leaders and spot news coverage, and we participate in community
events to promote WFAS (AM) as Westchester's favorite local radio station.

BRIDGEPORT, CONNECTICUT
1999 Radio Market Revenue Rank: 91

<TABLE>
<CAPTION>
Target Audience Share Audience Rank
Station Date Demographic in Target in Target
Call Letters Acquired Format Audience Demographic Demographic
------------------- -------- ------------------ ------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WEBE(FM)........... pending Adult contemporary 25-54 Women 10.8% 2
WICC(AM)........... pending Full service 35-64 Women 7.5% 2
</TABLE>

Market Overview

The Bridgeport radio market ranks 91st in the United States based on 1999
radio market revenue. Radio market revenues in Bridgeport have grown from
approximately $12.8 million in 1993 to approximately

53
<PAGE>

$20.7 million in 1999, representing a compound average annual revenue growth
rate of 8.3%. Radio market revenue grew 5.6% during the year ended December 31,
1999, as compared to the prior year.

Bridgeport Stations

Upon receiving final approval from the FCC, we will acquire all the
equity interests in Aurora Communications, which owns two radio stations in
Bridgeport.

WEBE (FM) broadcasts an adult contemporary format that we believe has a
strong listener following in Fairfield County. Founded in 1982, WEBE (FM) is a
Class B FM station, broadcasting at 50,000 watts. As of the Spring 2000
Arbitron Market Report, WEBE (FM) ranked number two in its target demographic
audience group of women 25-54 years old. WEBE (FM)'s primary competition is
WEZN (FM), which broadcasts an adult contemporary format.

WICC (AM), established in 1926, was Bridgeport's first radio station.
WICC (AM) has ranked number one among listeners 12 years of age and older in
the Bridgeport metropolitan area in six of the last ten Arbitron Market
Reports. The station's full-service format includes news and information, long
term radio personalities, evening talk shows and weekend specialty shows. Our
"Family Breakfast Show" on WICC (AM) ranks number one among listeners 12 years
of age and older in all of Fairfield County.

DANBURY, CONNECTICUT
1999 Radio Market Revenue Rank: 190

<TABLE>
<CAPTION>
Target Audience Share Audience Rank
Station Call Date Demographic in Target in Target
Letters Acquired Format Audience Demographic Demographic
------------------- -------- ------------------- ------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WRKI(FM)........... pending Album oriented rock 25-54 8.8% 2
WAXB(FM)........... pending Oldies 35-64 3.6% 7
WINE(AM)........... pending Adult standards 50+ 0.8% N/A
WPUT(AM)........... pending Adult standards 50+ N/A N/A
</TABLE>

Market Overview

The Danbury market ranks 190th in the United States based on 1999 radio
market revenue. Radio market revenues in Danbury have grown from approximately
$5.8 million in 1993 to approximately $8.1 million in 1999, representing a
compound average annual revenue growth rate of 5.7%. Radio market revenue grew
8.0% during the year ended December 31, 1999, as compared to the prior year.

Danbury Stations

Upon receiving final approval from the FCC, we will acquire all the
equity interests in Aurora Communications, which owns four radio stations in
Danbury.

WRKI (FM) is known to listeners by its brandname "I-95." Established in
1957, this station has operated under an album oriented rock format since the
1970s. WRKI (FM) is a Class B FM station, broadcasting at 50,000 watts and
covering Fairfield and New Haven Counties, Connecticut, and parts of New York
State. The station currently ranks second in its target demographic audience in
the Danbury market with an 8.8% share. Overall in Fairfield County, WRKI (FM)
has a 10.0% revenue share.

WAXB (FM), founded in 1964, currently broadcasts an oldies format and
ranks seventh in its target demographic audience in Danbury with a 3.6%
audience share. We believe that the station is underperforming and intend to
improve its performance by instituting programming changes.

54
<PAGE>

WINE (AM) switched from an unsuccessful satellite country format to
adult standards at the beginning of this year and is presently the only
station broadcasting this format in its market. This format is simulcast on
WPUT (AM) to reach a greater audience. We believe that the success of this
format on similar signals in similar markets has been proven.

WPUT (AM), which was founded in 1958, simulcasts the WINE (AM) adult
standards format.

SUSSEX, NEW JERSEY
1999 Radio Market Revenue Rank: 250

<TABLE>
<CAPTION>
Target Audience Share Audience Rank
Station Call Date Demographic in Target in Target
Letters Acquired Format Audience Demographic Demographic
------------------- -------- ------------------ ------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WNNJ(FM)........... 8/96 Classic hits 25-54 13.8% 1
WSUS(FM)........... 4/97 Adult contemporary 25-54 13.8% 1
WHCY(FM)........... 3/96 Country 18-49 3.5% 8
WNNJ(AM)........... 8/96 Adult standards 50+ N/A N/A
</TABLE>

Market Overview

The Sussex market ranks 250th in the United States based on 1999 radio
market revenue. Radio market revenues in Sussex have grown from approximately
$2.4 million in 1995 to approximately $4.9 million in 1999, representing a
compound average annual revenue growth rate of 19.5%. Radio market revenue
grew 16.7% during the year ended December 31, 1999, as compared to the prior
year.

Sussex Stations

We own and operate four radio stations, one AM and three FM, in the
Sussex market. We requested Arbitron make Sussex a recognized market in 1997.
The addition of WHCY (FM) has allowed our sales force to market four stations
with different formats and listener bases to advertisers in this market. Of
our four stations, two ranked first in 1999 in their respective target
demographic audiences.

WNNJ (FM) broadcasts a classic hits format. WNNJ (FM)'s signal reaches
all of Northwestern New Jersey, the Poconos in Pennsylvania and Orange County
in New York. After acquiring WNNJ (FM) in August 1996, we changed the
station's format from hot adult contemporary to classic hits and increased the
signal power to 25,000 watts. In 1999, WNNJ (FM) shared the number one market
position with its sister station, WSUS (FM), in the 25-54 year old target
demographic audience, with a market share of 13.8%.

WSUS (FM) began operations in 1972. We acquired the station in 1997 and
reprogrammed its format to adult contemporary with a focus on local news and
issues. With this programming focus, the station now ranks number one in the
market, based on the Spring 2000 Arbitron Market Report for listeners 12 years
of age and older. WSUS (FM) also ranks first in the 25-54 year old target
demographic audience. The station's signal reaches Sussex, Morris and Warren
Counties in New Jersey, along with Orange County in New York and Pike County
in Pennsylvania.

WHCY (FM) broadcasts country music and focuses on events in the country
music world. In addition, WHCY (FM) provides local news, weather and traffic
reports to its listeners. Based on the Spring 2000 Arbitron Market Report,
WHCY (FM) has an overall market share of 3.4% for listeners 12 years of age
and older, an increase of 90.0% since we acquired the station. WHCY (FM)
currently ranks eighth in the market.

WNNJ (AM) programs an adult standards format, targeting listeners 50
years of age and older by featuring musical hits of the past five decades from
big band classics to soft contemporary.

55
<PAGE>

NEWBURGH-MIDDLETOWN, NEW YORK
1999 Radio Market Revenue Rank: 258

<TABLE>
<CAPTION>
Target Audience Share Audience Rank
Station Call Date Demographic in Target in Target
Letters Operated Format Audience Demographic Demographic
------------------- -------- --------------- ------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WTSX(FM)........... 8/98 Oldies 35-64 N/A N/A
WDLC(AM)........... 8/98 Adult standards 50+ N/A N/A
</TABLE>

Market Overview

The Newburgh-Middletown market ranks 258th in the United States based on
1999 radio market revenue. Radio market revenues in Newburgh-Middletown did not
change from 1993 to 1998. However, radio market revenue grew 9.8% during the
year ended December 31, 1999, as compared to the prior year.

Newburgh-Middletown Stations

We currently operate two radio stations pursuant to a local marketing
agreement, in what Arbitron designates as the Newburgh-Middletown market. We do
not subscribe to Arbitron in respect of this market due to signal limitations
of our stations. In August 1998, we entered into a local marketing agreement
for the stations to increase our listener base in Sussex, Pike, Sullivan and
Orange counties which are not reflected in the Newburgh-Middletown market.
Therefore, we believe the ratings for this market are not meaningful.

Under the local marketing agreement with Port Jervis Broadcasting Co.
Inc., we have access to the broadcasting transmission facilities of each of
WDLC (AM) and WTSX (FM) for a minimum of 158 hours a week, in return for the
minimum monthly payment of $20,000 which will rise to $25,000 a month from
August 1, 2000. The fee for any month increases to 20% of the stations' monthly
net revenues if that percentage exceeds the minimum payment. In addition, we
also agree to reimburse Port Jervis Broadcasting for all of its operating and
maintenance expenses, including salaries, taxes, insurance and related costs
for all personnel used in the production of our programming. We have agreed to
indemnify Port Jervis Broadcasting against any liability it may incur as a
result of the broadcast of programs we furnish. This local marketing agreement
will expire upon the earlier of the date on which we complete our acquisition
of these stations and August 7, 2001. It may be terminated prior to its
expiration upon any of the specified events of default or upon the order of a
government authority.

WTSX (FM) changed to an oldies format after we began operating the
station in August 1998. As part of our branding strategy to increase listener
recognition, we branded WTSX (FM) as "Fox 96.7." This brand consists of a
carefully designed play list of the most popular songs from the 1960s,
promotions, specialty weekends, local personalities, and an emphasis on local
news and community information.

WDLC (AM) changed to an adult standards format after we began operating
the station and targets listeners of 50 years of age and older. Its format
features musical hits of the past five decades from big classics to soft
contemporary and provides news and information for the local community.

WILKES BARRE-SCRANTON, PENNSYLVANIA
1999 Radio Market Revenue Rank: 77

<TABLE>
<CAPTION>
Audience Share Audience Rank
Station Call Date Target in Target in Target
Letters Operated Format Demographic Audience Demographic(1) Demographic(1)
-------------- -------- ---------------------- -------------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
WSBG(FM)...... 3/95 Hot adult contemporary 18-34 Women 15.5% 1
WVPO(AM)...... 3/95 Adult standards 50+ N/A N/A
WILT(AM)...... 11/99 ESPN sports 25-54 Men N/A N/A
</TABLE>
--------
(1) Monroe County only.

56
<PAGE>

Market Overview

Wilkes Barre-Scranton is the 77th largest radio market in the United
States based on 1999 radio market revenue. Radio market revenues in the Wilkes
Barre-Scranton market have grown from approximately $17.4 million in 1993 to
approximately $26.5 million in 1999, representing a compound average annual
revenue growth rate of 7.3%. Radio market revenue grew 11.3% during the year
ended December 31, 1999, as compared to the prior year. Although our stations
are listed in the greater Wilkes Barre-Scranton market, due to the mountainous
terrain, our stations primarily serve Monroe County, which is a part of the
Wilkes Barre-Scranton market, and do not compete in the remainder of the
market.

Wilkes Barre-Scranton Stations

We own WILT (AM) in Mount Pocono and operate WSBG (FM) and WVPO (AM)
under a local marketing agreement dated November 12, 1998 with Multicultural
Radio Broadcasting, Inc., the owner of the stations.

Under the local marketing agreement with Multicultural Radio
Broadcasting, Inc. referred to above, we have access to the broadcasting
transmission facilities of each of WSBG (FM) and WVPO (AM), including their
respective subcarriers, for a minimum of 158 hours a week, in return for the
payment of $175,000 quarterly fees in advance and all operating and some
maintenance expenses, including salaries, taxes, insurance and related costs
for all personnel used in the production of our programming. We have agreed to
indemnify Multicultural Radio against any liability it may incur as a result of
the broadcast of programs we furnish. This local marketing agreement will
expire in November, 2001, unless we or Multicultural Radio terminate the
agreement prior to its expiration. We may mutually agree with Multicultural
Radio to extend the term for an additional two years. This agreement is
terminable prior to its expiration upon any of the specified events of default
or upon the order of a government authority.

WSBG (FM) is currently ranked as Monroe County's number one radio
station, with a hot adult contemporary format. WSBG (FM) shares group
promotions, imaging and content with its sister station, WJLK (FM), "The
POINT". We emphasize the station's commitment to the community and raise brand
awareness through a variety of charity and promotional events.

WVPO (AM) targets potential listeners 50 years of age and older. Its
adult standard format features musical hits of the past five decades from big
band classics to soft contemporary. In 1999, the Associated Press and
Pennsylvania Broadcasters Association recognized WVPO (AM) for its outstanding
news and public service.

WILT (AM), a recently acquired station which started programming in March
2000, broadcasts the ESPN sports format for the area.

ALLENTOWN, PENNSYLVANIA
1999 Radio Market Revenue Rank: 76

<TABLE>
<CAPTION>
Target Audience Share Audience Rank
Station Date Demographic in Target in Target
Call Letters Acquired Format Audience Demographic Demographic
------------------- -------- ---------------- ------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WODE(FM)........... pending Oldies 35-64 Women 14.8% 2
WEEX(AM)........... pending News/talk/sports 25-54 N/A N/A
</TABLE>

Market Overview

Allentown is the 76th largest radio market in the United States based on
1999 radio market revenue. Radio market revenues in the Allentown market have
grown from approximately $17.4 million in 1993 to approximately $26.7 million
in 1998, representing a compound average annual revenue growth rate of 7.4%.
Radio market revenue grew 6.8% during the year ended December 31, 1999, as
compared to the prior year.

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<PAGE>

Allentown Stations

Upon receiving final approval from the FCC, we will purchase two radio
stations in Allentown for $30.0 million from Clear Channel, further
strengthening our northwestern cluster.

WODE (FM) broadcasts heritage oldies and consistently ranks in the top
five stations in the market for the demographic audience 12 years of age and
older. WODE (FM) utilizes a carefully designed play list of Allentown's most
popular songs from the 1960s, offers promotions, and emphasizes a strong
community commitment by providing local content, traffic and weather. We intend
to improve the programming to further maximize market opportunities.

WEEX (AM) currently programs a news/talk/sports format. We intend to
review the programming on the station and seek to make improvements.

TRENTON, NEW JERSEY
1999 Radio Market Revenue Rank: 100

<TABLE>
<CAPTION>
Audience Share Audience Rank
Station Call Date Target in Target in Target
Letters Operated Format Demographic Audience Demographic Demographic
------------------- -------- ---------------------- -------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WPST (FM).......... 12/86 Contemporary hit radio 18-34 13.1% 1
WNJO (FM).......... 5/97 Oldies 35-64 9.0% 1
WHWH (AM).......... 12/86 Financial news 25-54 -- N/A
WJHR (AM) (1)...... 2/99 Financial news 25-54 -- N/A
WTTM (AM).......... 5/99 ESPN sports 18-54 -- N/A
WCHR (AM).......... 5/97 Religion N/A N/A
</TABLE>
--------
(1) WJHR (AM) is licensed to Flemington, NJ

Market Overview

Trenton is the 100th largest radio market in the United States based on
1999 radio market revenue. Radio market revenues in the Trenton market have
grown from approximately $9.5 million in 1993 to approximately $18.8 million in
1999, representing a compound average annual revenue growth rate of 12.0%.
Radio market revenue grew 14.6% during the year ended December 31, 1999, as
compared to the prior year.

Trenton Stations

We own the radio stations WHWH (AM), WTTM (AM) and WPST (FM) in the
Trenton market. We currently operate three additional radio stations, WCHR
(AM), WNJO (FM) and WJHR (AM), under local marketing agreements. We expect to
close our acquisition of WCHR (AM) and WNJO (FM) upon receiving final approval
from the FCC for the transfer of these licenses. We have paid or escrowed all
of the purchase price for the stations. We expect to file for the transfer of
the license of WJHR (AM) after the completion of this offering.

We have entered into a local marketing agreement with Multicultural Radio
Broadcasting, Inc. dated January 21, 1999, pursuant to which we have access to
the broadcasting transmission facilities of WJHR (AM), including its
subcarrier, for a minimum of 158 hours a week. In return, we have agreed to pay
Multicultural Radio of the station a yearly fee of $200,000, payable quarterly
in advance, and to reimburse Multicultural Radio for all operating and
maintenance expenses, including the salaries, taxes, insurance and related
costs for all personnel used in the production of our programming. We are
responsible for the artistic material to be used in the programming. We have
agreed to indemnify Multicultural Radio for any liability arising from the
broadcasting of our programs. This local marketing agreement will expire on
November 16, 2001 unless terminated earlier. This agreement is terminable upon
any of the specified events of default or upon the order of a government
authority.

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<PAGE>

In addition, we have entered into a local marketing agreement with Great
Scott Broadcasting, Ltd. dated June 1, 1997, as amended on November 25, 1998,
pursuant to which we have access to the broadcasting transmission facilities of
WNJO (FM) and WCHR (AM) for a minimum of 158 hours a week. In return, we have
agreed to reimburse Great Scott for all of its operating expenses. We must
furnish artistic material and personnel for the programs and pay the salaries,
taxes, insurance and related costs for all personnel used in the production of
our programming. We have agreed to indemnify Great Scott for any liability
resulting from the broadcast of programs we furnish. This local marketing
agreement will expire on the earlier of (a) the agreement's early termination;
(b) January 31, 1999, in specified circumstances; or (c) the day after the date
on which we obtain initial FCC approval for the transfer of the licenses to us
pursuant to the acquisition agreement which we have entered into with the
owner. The agreement is terminable upon any of the specified events of default
or upon the order of a government authority, or, if the FCC rejects our
purchase of the stations, upon the sale of the stations to a third party or
three years from the date of the expiration of lawful appeals of the FCC's
decision.

WPST (FM) broadcasts a contemporary hit radio format. We believe it is
the market's most popular station. Its Class B FM 50,000-watt signal covers
Central New Jersey and Philadelphia. WPST (FM) is programmed as a mass appeal
pop culture radio station, playing today's hit music, offering promotions,
featuring interesting on-air personalities, and focusing on local issues.

WPST (FM) and its programming team have won numerous industry awards from
Billboard, Gavin, The Friday Morning Quarterback and Bobby Poe. WPST (FM) has
also been named "Best Radio Station in Philadelphia" by Philadelphia magazine.
Based on the Spring 2000 Arbitron Market Report, WPST (FM) had an audience
share of 13.1% for its target demographic audience, the largest in the Trenton
market. Although WPST (FM) targets the 18-34 year old demographic audience, the
station ranks number one in every demographic audience from 12-54 years old.

WNJO (FM) is an oldies radio station. The station programmed a religious
format before we began operating the station in May 1997 and moved the
religious format to WCHR (AM). With the addition of this signal, we have two
Class B 50,000-watt FM stations in the Trenton market and also a strong FM
presence in the Philadelphia metropolitan market. The WNJO (FM) brand consists
of a play list of the most popular songs from the 1960s, promotions, specialty
weekends and local personalities. In 1999, the station had an audience share of
9.0% in the 35-64 year old target demographic audience, the largest in the
Trenton market. Before we began operating the station, it had a 0.5% market
share of this demographic audience.

WHWH (AM), Trenton's financial news station, provides live news covering
Wall Street to Main Street, the Associated Press, Bloomberg News and business
talk 24 hours a day. The station broadcasts its 5,000 watt signal to listeners
in Central New Jersey and Bucks County, Pennsylvania. In January 2000, we
expanded the coverage of its format to include WJHR (AM) in Hunterdon County,
New Jersey.

WJHR (AM) changed its format to financial news in January 2000. Except
for local news and traffic, the station builds off the format of WHWH (AM).

WTTM (AM) is a 24-hour sports and sports talk station. We launched the
station in May 1999 and was strategically designed to coincide with the
market's increased interest in sports, including minor league ice hockey and
baseball, which resulted from the introduction of new sports facilities in the
area. We believed this interest was not being addressed in the market and used
this opportunity to target sports fans. In addition, the station is the
market's exclusive radio broadcaster of ESPN. The station features some of
America's most popular sports personalities, inside information and breaking
news in the world of sports. The station also focuses on local New Jersey
sports teams. WTTM (AM) is the only signal that offers the market total sports
content in the morning.

WCHR (AM) is Trenton's religious and inspirational talk station. The
station provides syndicated programming featuring introspective talk and
inspirational music.

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MONMOUTH-OCEAN, NEW JERSEY

1999 Radio Market Revenue Rank: 83

<TABLE>
<CAPTION>
Audience Share Audience Rank
Station Call Date Target in Target in Target
Letters Operated Format Demographic Audience Demographic Demographic
------------------- -------- ---------------------- -------------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
WBBO (FM).......... 5/96 Contemporary hit radio 18-34Women 6.0% 5
WJLK (FM).......... 5/96 Hot adult contemporary 25-54Women 7.7% 1
WOBM (FM).......... 7/96 Adult contemporary 35-64Women 7.7% 2
WCHR (FM) (1)...... TBD TBD TBD N/A N/A
WADB (AM).......... 5/96 Adult standards/news 55+ 3.9% 9
WOBM (AM).......... 7/96 Adult standards/news 55+ 11.3% 1
</TABLE>
--------
(1) We are acquiring Manahawkin Communications Corporation, the owner of a
construction permit to build this station.

Market Overview

Monmouth-Ocean is the 83rd largest radio market in the United States
based on 1999 radio market revenue. Radio market revenues in the Monmouth-Ocean
market have grown from approximately $13.5 million in 1993 to approximately
$21.6 million in 1999, representing a compound average annual revenue growth
rate of 8.1%. Radio market revenue grew 21.3% during the year ended December
31, 1999, as compared to the prior year.

Monmouth-Ocean Stations

We own and operate the radio stations WBBO (FM), WJLK (FM) and WADB (AM)
in the Monmouth-Ocean market. Additionally, we currently operate two Monmouth-
Ocean radio stations, WOBM (AM) and WOBM (FM), under a local marketing
agreement with North Shore Broadcasting Corporation and Seashore Broadcasting
Corporation respectively, the owners of the stations. We have entered into an
agreement to purchase these two stations, which is subject to final approval
from the FCC.

Pursuant to the local marketing agreement referred to above, North Shore
Broadcasting and Seashore Broadcasting have agreed to make available to us, for
a minimum of 158 hours a week, the broadcasting transmission facilities of WOBM
(FM) and WOBM (AM). In return, we agree to reimburse North Shore Broadcasting
and Seashore Broadcasting for all operating expenses, to furnish artistic
material and personnel for the programs and to employ and be responsible for
the salaries, taxes, insurance and related costs for all personnel used in the
production of our programming. We have agreed to indemnify North Shore
Broadcasting and Seashore Broadcasting against any liability resulting from the
broadcast of programs we furnish. This local marketing agreement expires on
July 1, 2000, unless terminated earlier. The agreement is terminable upon any
of the specified events of default or upon the order of a government authority.

WBBO (FM) was acquired with WJLK (FM) and WADB (AM) in November 1996. The
station was originally a simulcast of WJLK (FM). We relaunched the station in
May 1997 with a contemporary hit radio format in the Jersey Shore market. Based
on the Spring 2000 Arbitron Market Report, the station had 6.0% of the
Monmouth-Ocean market, ranking fifth in the 18-34 year old women target
demographic audience.

WJLK (FM) is a hot adult contemporary station. We have operated the
station since May 1996 and have developed a new programming strategy and brand.
We designed "The POINT" as a new style of hot adult contemporary for the 25-54
year old demographic audience. Based on the Spring 2000 Arbitron Market Report,
The POINT had an audience share of 7.7% in its target demographic audience of
women 25-54 years old, ranking first among all local and New York stations in
the Monmouth-Ocean market.

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<PAGE>

WOBM (FM) plays adult contemporary music and offers local news. The
station has a strong community commitment. WOBM (FM)'s signal covers the Ocean
County portion of the Monmouth-Ocean market. We repositioned the station to a
"soft rock" concept which we believe has resulted in a more focused product and
stronger brand image. Based on the Spring 2000 Arbitron Market Report, WOBM
(FM) had an audience share of 7.0% in its target demographic audience of women
25-54 years old, ranking second among all local and New York stations in the
Monmouth-Ocean market.

WCHR (FM). Upon receiving final approval from the FCC of our purchase of
Manahawkin Communications Corporation, the owner of the construction permit,
currently constructing the radio station, we will commence operations and
receive a license from the FCC. WCHR (FM) will have the largest signal covering
the Monmouth-Ocean market.

WADB (AM) targets listeners of 50 years of age and older with its adult
standards format, broadcasting musical hits of the past five decades from big
band hits to soft contemporary classics.

WOBM (AM), known as "Wonderful Memories," broadcasts an adult standards
format, targeting listeners 50 years of age and older in Ocean County, New
Jersey. The station also focuses heavily on local information and news. We
believe that this format will continue to be successful in Ocean County, in
which approximately one-third of the population is over 55 years of age.

Competition; Changes in the Broadcasting Industry

Overview. The radio broadcasting industry is highly competitive. The
success of each of our stations depends largely upon its audience ratings and
its share of the overall advertising revenue within its market. Our 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 particular
demographic group. By building a strong listener base consisting of specific
demographic groups in each of our markets, we are able to attract advertisers
seeking to reach those listeners.

Some of the factors that are important to a radio station's competitive
position include:

. management experience;

. the station's local audience rank in its market;

. transmitter power;

. assigned frequency;

. audience characteristics;

. local program acceptance; and

. the number and characteristics of other radio stations and other
advertising media in the market area.

In addition, we attempt to improve our competitive position with
promotional campaigns aimed at the demographic groups targeted by our stations
and by sales efforts designed to attract advertisers.

Main competitors. Our stations compete for audiences and advertising
revenues within their respective markets directly with other radio stations, as
well as with other media such as newspapers, magazines, network and cable
television, outdoor advertising and direct mail. In addition, the radio
broadcasting industry is subject to competition from new media technologies
that are being developed or introduced such as:

. cable television operators have introduced a service commonly
referred to as "cable radio" which provides cable television
subscribers with several high-quality channels of music, news and
other information;

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<PAGE>

. direct satellite broadcast television companies are supplying
subscribers with several high quality music channels;

. the Internet offers new and diverse forms of program distribution;

. satellite digital audio radio technology, initially developed for
automotive applications, could result in new high quality satellite
radio services; and

. the introduction of in-band on-channel digital radio and new low-
power FM radio could provide radio services in the same bandwidth
currently occupied by traditional FM and AM radio services.

The FCC has adopted rules for the establishment of low-powered FM
stations that are designed to serve small localized areas. The radio
broadcasting industry historically has grown despite the introduction of new
technologies for the delivery of entertainment and information, such as,
television broadcasting, 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. We cannot assure you,
however, that this historical growth will continue or that the development or
introduction in the future of any new media technology or low-powered FM
stations will not have an adverse effect on the radio broadcasting industry.

The FCC has adopted licensing and operating rules for satellite delivered
audio and awarded two licenses for this service in April 1997. Satellite
delivered audio may provide a medium for the delivery by satellite or
terrestrial means of multiple new audio programming formats to local and/or
national audiences. Digital technology also may be used in the future by
terrestrial radio broadcast stations either on existing or alternate
broadcasting frequencies, and the FCC has stated that it will consider making
changes to its rules to permit AM and FM radio stations to offer digital sound
following industry analysis of technical standards. In addition, the FCC has
authorized an additional 100 kHz of bandwidth for the AM band and has allotted
frequencies in this new band to certain existing AM station licensees that
applied for migration to the expanded AM band. The FCC will require the
licensees to return either the license for their existing AM band station or
the license for the expanded AM band station at the end of a transition period.

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

On-air talent. We employ a number of on-air personalities and generally
enter into employment agreements with these personalities to protect our
interests in those relationships. If we lose some of these personalities, we
could suffer a short-term loss of audience share, but we do not believe that
the loss would have a material adverse effect on our business.

Federal Regulation of Radio Broadcasting

The radio broadcasting industry is subject to extensive and changing
regulation of, among other things, program content, advertising content,
technical operations and business and employment practices. The ownership,
operation and sale of radio stations are subject to the jurisdiction of the
FCC. Among other things, the FCC:

. assigns frequency bands for broadcasting;

. determines the particular frequencies, locations and operating power
of stations;

. issues, renews, revokes and modifies station licenses;

. determines whether to approve changes in ownership or control of
station licenses;

. regulates equipment used by stations; and

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<PAGE>

. adopts and implements regulations and policies that directly affect
the ownership, operation and employment practices of stations.

The FCC has the power to impose penalties for violations of its rules or
the Communications Act, including the imposition of monetary forfeitures, the
issuance of short-term licenses, the imposition of a condition on the renewal
of a license, nonrenewal of licences and the revocation of operating authority.

The following is a brief summary of some provisions of the Communications
Act and of specific FCC regulations and policies. The summary is not a
comprehensive listing of all of the regulations and policies affecting radio
stations. For further information concerning the nature and extent of federal
regulation of radio stations, you should refer to the Communications Act, FCC
rules and regulations and FCC public notices and rulings.

FCC Licenses. Radio stations operate pursuant to renewable broadcasting
licenses that are ordinarily granted by the FCC for maximum terms of eight
years. A station may continue to operate beyond the expiration date of its
license if a timely filed license renewal application is pending. During the
periods when renewal applications are pending, interested parties, including
members of the public, can file petitions to deny license renewals. The FCC
must hold hearings on a station's renewal application if a substantial or
material question of fact exists as to whether the station has served the
public interest, convenience and necessity. If, as a result of an evidentiary
hearing, the FCC determines that the licensee has failed to meet certain
requirements and that no mitigating factors justify the imposition of a lesser
sanction, then the FCC may deny a license renewal application. Only after a
license renewal application is denied will the FCC accept and consider
competing applications for the vacant frequency. Historically, the FCC has
generally renewed licenses. We have no reason to believe that our licenses will
not be renewed in the ordinary course, although we cannot assure you that any
or all of our licenses will be renewed. The non-renewal of one or more of our
licenses could have a material adverse effect on our business.

The FCC classifies each AM and FM station. An AM station operates on
either a clear channel, regional channel or local channel. A clear channel is
one on which AM stations are assigned to serve wide areas. Clear channel AM
stations include: Class A stations, which operate on an unlimited time basis
and are designated to render primary and secondary service over an extended
area; Class B stations, which operate on an unlimited time basis and are
designed to render service only over a primary service area; or Class D
stations, which operate either during daytime hours only, during limited times
only or on an unlimited time basis with low night-time power. A regional
channel is one on which Class B and Class D AM stations may operate and serve
primarily a principal center of population and the rural areas contiguous to
it. A local channel is one on which AM stations operate on an unlimited time
basis and serve primarily a community and the immediately contiguous suburban
and rural areas. Class C AM stations operate on a local channel and are
designed to render service only over a primary service area that may be reduced
as a consequence of interference.

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<PAGE>

The following table sets forth the metropolitan market served, call
letters, FCC license classification, frequency, power and FCC license
expiration date of each of the stations that we will own and/or operate upon
the completion of all pending acquisitions. Our wholly owned subsidiary, Nassau
Broadcasting II LLC, holds our licenses. Pursuant to FCC rules and regulations,
many AM radio stations are licensed to operate at a reduced power during the
nighttime broadcasting hours, which results in reducing the radio station's
coverage during the nighttime hours of operation. Both power ratings are shown.
For FM stations, the maximum effective radiated power in the main lobe is
given.

<TABLE>
<CAPTION>
Daytime Nighttime Expiration
FCC Power Power Date of
Market Station Class Frequency (in watts) (in watts) FCC License
------------------------ -------- ----- ----------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Northern
Westchester, NY......... WFAS (FM) A 103.9 MHz 600 600 June, 2006
WFAF (FM) A 106.3 MHz 1,400 1,400 June, 2006
WFAS (AM) C 1,230.0 kHz 1,000 1,000 June, 2006
Bridgeport, CT.......... WEBE (FM) B 107.9 MHz 50,000 50,000 April, 2006
WICC (AM) B 600.0 kHz 1,000 500 April, 2006
Danbury, CT............. WRKI (FM) B 95.1 MHz 29,500 29,500 April, 2006
WAXB (FM) A 105.5 MHz 900 900 June, 2006
WINE (AM) B 940.0 kHz 680 4 April, 2006
WPUT (AM) B 1,510.0 kHz 1,000 1,000 June, 2006
Northwestern
Sussex, NJ.............. WNNJ (FM) B1 103.7 MHz 2,300 2,300 June, 2006
WSUS (FM) A 102.3 MHz 590 590 June, 2006
WHCY (FM) A 106.3 MHz 430 430 June, 2006
WNNJ (AM) B 1,360.0 kHz 2,000 2,000 June, 2006
Newburgh-Middletown,
NY..................... WTSX (FM) A 96.7 MHz 890 890 June, 2006
WDLC (AM) C 1,490.0 kHz 1,000 1,000 June, 2006
Wilkes Barre-Scranton,
PA..................... WSBG (FM) A 93.5 MHz 550 550 August, 2006
WVPO (AM) B 840.0 kHz 250 0 August, 2006
WILT (AM) B 960.0 kHz 1,000 24 August, 2006
Allentown, PA........... WODE (FM) B 99.9 MHz 50,000 50,000 August, 2006
WEEX (AM) C 1230.0 kHz 1,000 1,000 August, 2006
Central
Trenton, NJ............. WPST (FM) B 97.5 MHz 50,000 50,000 June, 2006
WNJO (FM) B 94.5 MHz 50,000 50,000 June, 2006
WHWH (AM) B 1,350.0 kHz 5,000 5,000 June, 2006
WJHR (AM) B 1,040.0 kHz 4,700 1,000 June, 2006
WTTM (AM) B 1,680.0 kHz 10,000 1,000 (1)
WCHR (AM) B 920.0 kHz 1,400 1,000 June, 2006
Shore
Monmouth-Ocean, NJ...... WBBO (FM) A 98.5 MHz 6,000 6,000 June, 2006
WJLK (FM) A 94.3 MHz 1,300 1,300 June, 2006
WOBM (FM) A 92.7 MHz 1,400 1,400 June, 2006
WCHR (FM) B 105.7 MHz 25,000 25,000 N/A
WADB (AM) B 1,310.0 kHz 2,500 1,000 June, 2006
WOBM (AM) B 1,160.0 kHz 5,000 8,900 June, 2006
</TABLE>
--------
(1) We are currently operating this station under temporary authority from the
FCC. We are awaiting the issuance of a formal license, which will expire
five years after the date of issuance.

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<PAGE>

Transfer or Assignment of License. The Communications Act prohibits the
assignment of broadcast licenses or the transfer of control of a broadcast
licensee without the prior approval of the FCC. In determining whether to grant
such approval, the FCC considers a number of factors pertaining to the licensee
and proposed licensee, including:

. compliance with the various rules limiting common ownership of media
properties in a given market;

. the character of the licensee and those persons holding attributable
interests in the licensee; and

. history of compliance with the Communications Act's limitations on
alien ownership as well as compliance with other FCC regulations and
policies.

To obtain FCC consent to assign or transfer control of a broadcast
license, the licensee and the proposed licensee must jointly file appropriate
applications with the FCC. If the application involves a substantial change in
ownership or control, for example, the transfer or acquisition of more than
50.0% of the voting stock, the FCC places the application on public notice for
not less than 30 days during which time interested parties, including members
of the public, may file petitions to deny or other objections against the
application. If the FCC grants an assignment or transfer application,
interested parties have 30 days from public notice of the grant to seek
reconsideration of that grant. The FCC usually has an additional ten days to
set aside the grant on its own motion. If the application does not involve a
substantial change in ownership or control, it is a pro forma application,
which is not subject to the public notice and 30-day petition to deny
procedure. Interested parties may file informal objections against the pro
forma application at any time until the FCC acts on the application. When
ruling on an assignment or transfer application, the FCC may not consider
whether the public interest might be served by an assignment or transfer of
control of the broadcast license to any party other than the assignee or
transferee specified in the application.

Multiple Ownership Rules. The Communications Act and FCC rules impose
specific limits on the number of commercial radio stations an entity can own in
a single market. These rules may preclude us from acquiring certain stations we
might otherwise seek to acquire. The rules also effectively prevent us from
selling stations in a market to a buyer that has reached its ownership limit in
the market unless that buyer divests other stations. The local radio ownership
rules are as follows:

. in markets with 45 or more commercial radio stations, an entity may
own, operate or control up to eight commercial stations, no more than
five of which can be either AM or FM;

. in markets with 30 to 44 commercial radio stations, an entity may
own, operate or control up to seven commercial stations, no more than
four of which can be either AM or FM;

. in markets with 15 to 29 commercial radio stations, an entity may
own, operate or control up to six commercial stations, no more than
four of which can be either AM or FM; and

. in markets with 14 or fewer commercial radio stations, an entity may
own, operate or control up to five commercial stations or no more
than 50.0% of the market's total, whichever is lower, and no more
than three of which can be either AM or FM.

Currently, FCC rules define a radio market in terms of the overlapping
signal contours of the commonly owned stations in question. Specifically, the
FCC looks to all stations that will be commonly owned after a proposed
transaction is consummated and then groups those stations into "markets" based
on whether the stations have overlapping signal contours. After defining the
market, the FCC then determines the total number of stations in that market by
adding all commercial radio stations whose signal contours overlap the contour
of any one or more of the stations used to define the market. The FCC, however,
recently has expressed concerns about its administration of the radio multiple
ownership rules, in particular its method of defining radio markets, counting
the number of stations within a particular market, and determining the number
of stations owned by an entity in a market. As a result, the FCC has announced
its intention to commence a

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rulemaking proceeding to address whether market definitions used by Arbitron
for ratings purposes would be a more accurate measure of radio markets. Because
the FCC has not yet commenced this rulemaking proceeding, we cannot predict
whether any change in how the FCC defines radio markets for purposes of the
multiple ownership rules would affect our ability to acquire additional
stations on a market-by-market basis.

The FCC is also reportedly considering proposing a policy that would give
special review to a proposed transaction if it would enable a single owner to
attain a high degree of revenue concentration in a market. In connection with
this, the FCC, in its public notices, has invited comment on the impact of
concentration of media voices in proposed transactions, and has delayed or
refused its consent in some cases because of revenue concentration.

The FCC recently revised its radio/television cross-ownership rule to
allow for greater common ownership of television and radio stations. The
revised radio/television cross-ownership rule permits a single owner to own up
to two television stations, consistent with the FCC's rules on common ownership
of television stations, together with one radio station in all markets. In
addition, an owner will be permitted to own additional radio stations, not to
exceed the local ownership limits for the market, as follows:

. in markets where 20 media voices will remain, an owner may own an
additional five radio stations, or, if the owner only has one
television station, an additional six radio stations; and

. in markets where 10 media voices will remain, an owner may own an
additional three radio stations.

A "media voice" includes each independently owned, full-power television
and radio station and each daily newspaper that has a circulation exceeding
5.0% of the households in the market, plus one voice for all cable television
systems operating in the market.

In addition to the limits on the number of radio stations and radio
television combinations that a single owner may own, the FCC's
broadcast/newspaper cross-ownership rule prohibits the same owner from owning a
broadcast station and a daily newspaper in the same geographic market. The FCC
recently announced its intention to commence a rulemaking proceeding to
liberalize the broadcast/newspaper cross-ownership rule because the
efficiencies of combined newspaper/broadcast operation might produce more
public affairs or news programming.

The FCC generally applies its ownership limits to attributable interests
held by an individual, corporation, partnership or other association. In the
case of corporations controlling 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 attributable. In addition,
passive investors are attributable if they hold 20.0% or more of the
corporation's voting stock. If a single individual or entity controls more than
50.0% of a corporation's voting stock, however, the interests of other
stockholders are generally not attributable unless the stockholders are also
officers or directors of the corporation. The FCC treats all partnership
interests as attributable, except for those limited partnership interests that
under FCC policies are "insulated" from "material involvement" in the
management or operation of the media related activities of the partnership. The
FCC currently treats limited liability companies like limited partnerships for
purposes of attribution.

The FCC recently adopted a new rule, known as the equity-debt-plus rule,
that causes certain creditors or investors to be attributable owners of a
station, regardless of whether there is a single majority stockholder. Under
this new rule, a major programming supplier or a same-market owner will be an
attributable owner of a station if the supplier or owner holds debt or equity,
or both, in the station that is greater than 33.0% of the value of the
station's total debt plus equity. A major programming supplier includes any
programming supplier that provides more than 15.0% of the station's weekly
programming hours. A same-market owner includes any attributable owner of a
media company, including broadcast stations, cable television and newspapers,
located in the same market as the station, but only if the owner is
attributable under an FCC attribution rule other than

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the equity-debt-plus rule. If attribution under the new equity-debt-plus rule
results in a violation of the FCC's multiple ownership rules, each affected
party must come into compliance with those rules, by reducing or eliminating
the party's interest in the affected media outlets or obtaining a waiver from
the FCC, no later than August 5, 2000. The attribution rules limit the number
of radio stations we may acquire or own in any market.

Alien Ownership Rules. The Communications Act prohibits the issuance or
holding of broadcast licenses by persons who are not U.S. citizens, whom the
FCC rules refer to as "aliens," including any corporation if more than 20.0% of
its capital stock is owned or voted by aliens. In addition, the FCC may
prohibit any corporation from holding a broadcast license if the corporation is
controlled by any other corporation of which more than 25.0% of the capital
stock is owned of record or voted by aliens, if the FCC finds that the
prohibition is in the public interest. Our certificate of incorporation
prohibits the ownership, voting and transfer of our capital stock in violation
of the FCC restrictions, and prohibits the issuance of capital stock or the
voting rights such capital stock represents to or for the account of aliens or
corporations otherwise subject to domination or control by aliens in excess of
the FCC limits. The certificate of incorporation authorizes our board of
directors to enforce these prohibitions. For example, the certificate of
incorporation provides for the redemption of shares of our capital stock by
action of the board of directors to the extent necessary to comply with these
alien ownership restrictions.

Local Marketing Agreements. Over the past few years, a number of radio
stations have entered into what have commonly been referred to as local
marketing agreements. While these agreements may take varying forms, under a
typical local marketing agreement, separately owned and licensed radio stations
agree to enter into cooperative arrangements of varying sorts, subject to
compliance with the requirements of antitrust laws and with FCC's rules and
regulations. Under these arrangements, separately owned stations could agree to
function cooperatively in programming, advertising sales and similar matters,
subject to the requirement that the licensee of each station maintain
independent control over the programming and operations of its own station. One
typical type of local marketing agreement is a programming agreement between
two separately-owned radio stations serving a common service area, whereby the
licensee of one station provides substantial portions of the broadcast
programming for airing on the other licensee's station, subject to ultimate
editorial and other controls being exercised by the latter licensee, and sells
advertising time during those program segments.

The FCC's rules provide that a radio station that brokers more than 15.0%
of the weekly broadcast time on another station serving the same market will
have an attributable ownership interest in the brokered station for purposes of
FCC's local radio ownership limits. As a result, in a market where we own a
radio station, we cannot enter into a local marketing agreement with another
radio station in the same market if we could not own the brokered station under
the multiple ownership rules, unless our programming on the brokered station
constituted 15.0% or less of the brokered station's programming time on a
weekly basis. FCC rules also prohibit a broadcast station from duplicating more
than 25.0% of its programming on another station in the same broadcast service,
that is AM-AM or FM-FM, through a local marketing agreement where the brokered
and brokering stations which it owns or programs serve substantially the same
area.

Programming and Operations. The Communications Act requires broadcasters
to serve the public interest. The FCC gradually has relaxed or eliminated many
of the more formalized procedures it had developed in the past to promote the
broadcast of certain types of programming responsive to the needs of a
station's community of license. The FCC, however, still requires a broadcast
licensee to present programming that is responsive to community problems, needs
and interests and to maintain records demonstrating this responsiveness. The
FCC often will consider complaints from listeners concerning a station's
programming when it evaluates renewal applications of a licensee, but listeners
may file complaints against a station at any time. Station licensees must
maintain copies of listener complaints in the station's public file. Stations
also must pay regulatory and application fees and follow various rules
promulgated under the Communications Act. Those rules regulate, among other
things, political advertising, sponsorship identifications, the advertisement
of contests and lotteries, obscene and indecent broadcasts and technical
operations, including limits on human exposure to radio frequency radiation.

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<PAGE>

In January 2000, the FCC adopted new rules prohibiting employment
discrimination by broadcast stations on the basis of race, religion, color,
national origin and gender; and requiring broadcasters to implement programs to
promote equal employment opportunities at their stations. The rules generally
require broadcast stations to disseminate information about job openings widely
so that all qualified applicants, including minorities and women, have an
adequate opportunity to compete for the job. Broadcasters may fulfill this
requirement by sending the station's job vacancy information to organizations
that request it, participating in community outreach programs or designing an
alternative recruitment program. Broadcasters with five or more full-time
employees must place in their public files annually a report detailing their
recruitment efforts and must file a statement with the FCC certifying
compliance with the rules every two years. Broadcasters with ten or more full-
time employees must file their annual reports with the FCC midway through their
license term. Broadcasters also must file employment information with the FCC
annually for statistical purposes. These new equal employment opportunity rules
replace the FCC's prior rules, some of which were ruled unconstitutional by the
U.S. Court of Appeals for the District of Columbia Circuit.

Proposed and Recent Changes. Congress and the FCC may in the future
consider and adopt new laws, regulations and policies regarding a wide variety
of matters that could affect, directly or indirectly, the operation, ownership
and profitability of our radio stations, including the loss of audience share
and advertising revenues for our radio stations, and an inability to acquire
additional radio stations or to finance those acquisitions. These matters may
include:

. changes in the FCC's cross-interest, multiple ownership and
attribution policies;

. regulatory fees, spectrum use fees or other fees on FCC licenses;

. foreign ownership of broadcast licenses;

. restatement in revised form of the FCC's equal employment opportunity
rules and revisions to the FCC's rules relating to political
broadcasting;

. technical and frequency allocation matters; and

. proposals to restrict or prohibit the advertising of beer, wine and
other alcoholic beverages on radio.

The FCC currently is considering standards for evaluating, authorizing,
and implementing terrestrial digital audio broadcasting technology, including
in-band on-channel technology for FM radio stations. Digital audio
broadcasting's advantages over traditional analog broadcasting technology
include improved sound quality and the ability to offer a greater variety of
auxiliary services. In-band on-channel technology would permit an FM station to
transmit radio programming in both analog and digital formats, or in digital
only formats, using the bandwidth that the radio station is currently licensed
to use. It is unclear what regulations the FCC will adopt regarding digital
audio broadcasting or in-band on-channel technology and what effect such
regulations would have on our business or the operations of our radio stations.

In January 2000, the FCC voted to adopt rules creating a new low-power FM
radio service. The new low-power stations will operate at a maximum power of
between 10 and 100 watts in the existing FM commercial and noncommercial band.
Low-power stations may be used by governmental and nonprofit organizations to
provide noncommercial educational programming or public safety and
transportation radio services. No existing broadcaster or other media entity,
including us, can have an ownership interest or enter into any program or
operating agreement with any low-power FM station. During the first two years
of the new service, applicants must be based in the area that they propose to
serve. FCC rules do not permit applicants to own more than one station
nationwide during the initial two-year period. After the initial two-year
period, the rules permit entities to own up to five stations nationwide, and
after three years, the limit will increase to ten stations nationwide. A single
person or entity may not own two low-power stations whose transmitters are less
than seven miles from each other. The authorizations for the new stations will
not be transferable. The FCC

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recently closed on June 8, 2000 the first filing window for applications for
new low-power FM radio stations in Alaska, California, Washington, D.C.,
Georgia, Indiana, Louisiana, Maine, Mariana Islands, Maryland, Oklahoma, Rhode
Island and Utah.

At this time, we cannot assess the competitive impact of these new
stations on our business. The new low-power stations must comply with certain
technical requirements aimed at protecting existing FM radio stations from
interference, although we cannot be certain of the level of interference that
low-power stations will cause after they begin operating. Moreover, if low-
power FM stations are licensed in the markets in which we operate our stations,
the low-power stations may compete for listeners and advertisers. The low-power
stations may also limit our ability to obtain new licenses or to modify our
existing facilities, although FCC engineers have conducted interference testing
and have concluded that the new 10-watt power FM stations will not produce
unacceptable levels of interference to existing FM stations, such as those
owned by us.

Finally, the FCC has adopted procedures for the auction of broadcast
spectrum in circumstances where two or more parties have filed for new or major
change applications which are mutually exclusive. These auction procedures may
limit our efforts to modify or expand the broadcast signals of our stations.

We cannot predict what other matters might be considered in the future by
the FCC or Congress, nor can we judge in advance what impact, if any, the
implementation of any of these proposals or changes might have on our business.

Federal Antitrust Laws. The agencies responsible for enforcing the
federal antitrust laws, the Federal Trade Commission or the Department of
Justice, may investigate certain acquisitions. We cannot predict the outcome of
any specific FTC or Department of Justice investigation. Any decision by the
FTC or the Department of Justice to challenge a proposed acquisition could
affect our ability to consummate an acquisition or to consummate it on the
terms acceptable to us.

For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino
Act requires the parties to file notification and report forms concerning
antitrust issues with the FTC and the Department of Justice and to observe
specified waiting period requirements before consummating the acquisition. If
the investigating agency raises substantive issues in connection with a
proposed transaction, then the parties frequently engage in lengthy discussions
or negotiations with the investigating agency concerning possible means of
addressing those issues, including restructuring the proposed acquisition or
divesting assets. In addition, the investigating agency could file suit in
federal court to enjoin the acquisition or to require the divestiture of
assets, among other remedies. The FTC or the Department of Justice may
investigate acquisitions under the antitrust laws before or after consummation
that are not required to be reported under the Hart-Scott-Rodino Act. In
addition, private parties may under certain circumstances bring legal actions
to challenge an acquisition under the antitrust laws.

As part of its increased scrutiny of radio station acquisitions, the
Department of Justice has stated publicly that it believes that local marketing
agreements, joint sales agreements and other similar agreements customarily
entered into in connection with radio station transfers could violate the Hart-
Scott-Rodino Act if such agreements take effect prior to the expiration of the
waiting period under the Hart-Scott-Rodino Act. Furthermore, the Department of
Justice has noted that joint sales agreements may raise antitrust concerns
under Section 1 of the Sherman Act and has challenged joint sales agreements in
certain locations. The Department of Justice also has stated publicly that it
has established certain revenue and audience share concentration benchmarks
with respect to radio station acquisitions, above which a transaction may
receive additional antitrust scrutiny. However, to date, the Department of
Justice has also investigated transactions that do not meet or exceed these
benchmarks and has cleared transactions that do exceed these benchmarks.

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<PAGE>

Employees

On March 31, 2000, we had a staff of 236 full-time employees and 78 part-
time employees. We believe that our relations with our employees are good.

Environmental

As the owner, lessee or operator of various real properties and
facilities, we are subject to various federal, state and local environmental
laws and regulations. Historically, compliance with these laws and regulations
has not had a material adverse effect on our business. We cannot assure you,
however, that we will not be required to expend significant funds in the future
to comply with existing or new environmental laws and regulations.

Properties And Facilities

We require offices, studios and transmitter and antenna sites to support
each of our radio stations. We typically lease our studio and office space with
lease terms that expire in six months to ten years. Our principal executive
offices are located at 619 Alexander Road, Princeton, New Jersey 08540. We
lease the majority of our main transmitter and antenna sites. We generally
locate the transmitter and antenna site for each station so as to provide
maximum market coverage, consistent with the station's FCC license. After the
completion of our acquisition of Aurora Communications, we will own some
additional antenna sites and studio and office space.

No single facility is material to us. We believe that our facilities are
generally in good condition and suitable for our operations. However, we
continually look for opportunities to upgrade our facilities and may do so in
the future. Substantially all of our properties and equipment serve as
collateral for our obligations under our new credit facility.

Seasonality

We expect that our operations and revenues will be seasonal in nature,
with generally lower revenue generated in the first quarter of the year and
generally higher revenue generated in the fourth quarter of the year. The
seasonality of our business causes, and is likely to continue to cause, a
significant variation in our quarterly operating results.

Legal Proceedings

From time to time, we are involved in litigation incidental to the
conduct of our business, but we are not currently a party to any lawsuit or
proceeding.

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MANAGEMENT

Directors, executive officers and senior officers

The names of our executive officers, directors and senior officers and
their respective ages and positions are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Louis F. Mercatanti, Jr. ......... 43 President, Chief Executive Officer and
Director
Michael S. Libretti............... 36 Executive Vice President, Operations and
Finance, Chief Financial Officer and
Director
Joan E. Gerberding................ 50 President of Nassau Radio Network
G. Daniel Henrickson, Jr. ........ 48 Executive Vice President and General
Manager
Peter D. Tonks.................... 49 Executive Vice President and Director of
Accounting & Human Resources
Anthony A. Gervasi, Jr. .......... 32 Senior Vice President of Engineering &
Technology
Michelle Stankowski............... 31 Senior Vice President of Programming
Donald E. Dalesio................. 38 Vice President and General Manager
Reuel H. Musselman, Jr. .......... 50 Vice President and General Manager
Brion B. Applegate................ 46 Director
William B. Collatos............... 45 Director
Stuart D. Frankel................. 53 Director
</TABLE>

There are no family relationships between any persons identified above.
The following are brief biographies of the persons identified above.

Louis F. Mercatanti, Jr., our founder, is our President and Chief
Executive Officer and a director and had until our reorganization held those
positions at our general partner since its inception in early 1995. Mr.
Mercatanti acquired all of our equity from Nassau Broadcasting Company in
December 1986 and operated the stations prior to the founding of the limited
partnership. In 1995, Mr. Mercatanti co-founded the partnership with Brion B.
Applegate and William B. Collatos of Spectrum Equity Investors, L.P. and Stuart
D. Frankel of Grotech Capital Group. Since the founding of the partnership, Mr.
Mercatanti has devoted substantially all of his time to the management of the
partnership. He has been responsible for formulating our annual operating
budgets and managing all of our financing requirements. Mr. Mercatanti was
actively involved in several other successful entrepreneurial activities prior
to his founding of the partnership.

Michael S. Libretti is our Executive Vice President, Operations and
Finance, Chief Financial Officer and Director and had until our reorganization
held those positions at our general partner since December 1997. Mr. Libretti
joined our general partner in November 1996 and served as its Senior Vice
President of Operations from then until December 1997. From 1986 to November
1996, Mr. Libretti worked in various capacities for AT&T Capital Corporation.
During his last three years at AT&T Capital he served as a Director of the
Capital Markets Division responsible for providing financing to the media
industry. From 1990 to 1993, Mr. Libretti was actively involved in providing
project financing for the energy industry, as well as leveraged lease financing
to the aircraft industry. Prior to 1990, Mr. Libretti was involved in a variety
of projects in accounting, systems, acquisition analysis, sales and budgeting.
During his career with AT&T Capital, he was involved in numerous financings
with an aggregate value in excess of $1.0 billion.

Joan E. Gerberding has served as President of our Nassau Radio Network
since March 1997. She had been Executive Vice President and Chief Operating
Officer of the limited partnership from 1995 to 1997. Prior to that, she served
in various management capacities with Nassau Broadcasting Company since 1981.

G. Daniel Henrickson, Jr. is our Executive Vice President and General
Manager and had until our reorganization held those positions at our general
partner since March 1998 and March 1995, respectively. His duties include the
management of our stations in the Central Region. Prior to being named
Executive Vice

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President of our general partner, he served in various management capacities
with Nassau Broadcasting Company since 1995.

Peter D. Tonks is our Executive Vice President and Director of Accounting
& Human Resources and had until our reorganization held those positions at our
general partner since March 1994. From 1980 to March 1994, he served as
President and Chief Executive Officer of Tonks & Company, CPAs.

Anthony A. Gervasi, Jr. is our Senior Vice President of Engineering &
Technology and had until our reorganization held those positions at our general
partner since December 1998. Prior to that, he had been Director of Engineering
from 1995 to 1997 and Vice President of Engineering from 1997 to 1998, of our
general partner. From September 1992 through October 1995, Mr. Gervasi was
Director of Engineering of a radio station at Chancellor Media.

Michelle Stankowski is our Senior Vice President of Programming and
manages our programming division for all our stations. She had until our
reorganization held various positions at our general partner since 1987. Ms.
Stankowski is the Chairperson of the Programming Committee for the National
Association of Broadcasters 2000 Radio Show and the Chairperson of the New
Jersey Broadcasters' Association and Mid- Atlantic States Annual Convention.

Donald E. Dalesio is our Vice President and Market Manager and had until
our reorganization held those positions at our general partner since September
1996. Prior to that, Mr. Dalesio had been General Sales Manager of Clear
Channel Communications, Inc. from May 1995 to August 1996. From 1991 through
1995, he was Vice President of Group Operations at H&D Broadcast Group.

Reuel H. Musselman, Jr. is our Vice President and General Manager and had
until our reorganization held those positions at our general partner since
1996. Prior to that, Mr. Musselman had been general manager of Clearview
Broadcasting Company from September 1992 to October 1996.

Brion B. Applegate is a director and had until our reorganization served
as a director of our general partner since 1995. Mr. Applegate has been the
managing general partner of Spectrum Equity Associates, L.P., since 1994. Mr.
Applegate is also the Chairman and Chief Executive Officer of Applegate &
Collatos, Inc., a company which provides management services to Spectrum. From
1982 through 1993, Mr. Applegate was a partner with Burr, Egan & Deleage & Co.,
a venture capital firm, in which he supervised the company's investments in
numerous broadcasting companies. Mr. Applegate serves on the boards of
directors of Network Access Solutions, Inc. and Tut Systems, Inc.

William B. Collatos is a director and had until our reorganization served
as a director of our general partner since 1995. Mr. Collatos is currently a
managing general partner of Spectrum Equity Associates, L.P. Mr. Collatos is
also the Chief Operating Officer of Applegate & Collatos, Inc., a company which
provides management services to Spectrum. Mr. Collatos serves on the boards of
directors of ITXC Corporation, Jazztel, PLC, Pegasus Satellite Television and
Galaxy Telecom.

Stuart D. Frankel is a director and had until our reorganization served
as a director of our general partner since 1995. Mr. Frankel currently serves
as a Managing Director and the Secretary of Grotech Capital Group IV, LLC, the
general partner of Grotech Partners IV, L.P., supervising certain of Grotech's
venture capital investments. Mr. Frankel has also served as a Managing Director
and the Secretary of Grotech Management Company, the provider of management
services to Grotech. Mr. Frankel serves as a principal for several other
venture capital funds and as the general partner of several real estate
partnerships.

Election of Directors

Our stockholders elect directors at our annual meeting of stockholders.
Directors hold office until the next annual meeting of stockholders and until
his or her successor is duly elected and qualified or until his or her
resignation or removal, if earlier.

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<PAGE>

Indemnification of Directors

Section 145 of the Delaware General Corporation Law allows us to
indemnify officers, directors and any corporate agents under certain
circumstances for liabilities, including reimbursement for expenses incurred,
arising under the Securities Act. Our certificate of incorporation and our by-
laws provide for indemnification of our directors, officers, employees and
other agents to the extent and under the circumstances permitted by the
Delaware General Corporation Law. We expect to enter into agreements with our
directors and executive officers that require us, among other things, to
indemnify them to the fullest extent permitted by Delaware law against certain
liabilities that may arise because of their status or service as directors and
executive officers. We also intend to purchase directors and officers liability
insurance, which provides coverage against liabilities, including liabilities
under the Securities Act.

Compensation of Directors

Directors who are also our employees will receive no additional
compensation for service as a director. We reimburse directors for their
reasonable expenses incurred in connection with attending board or committee
meetings. We expect that each outside director will be granted stock options
under our stock incentive plan. An outside director is a director who is not an
employee of our company and who owns, together with his or her affiliates, less
than 1% of our voting power. These grants are described under "--2000 Stock
Incentive Plan."

Committees of the Board of Directors

Prior to or immediately following the consummation of this offering, we
will establish an executive committee consisting of Louis F. Mercatanti, Jr.,
Michael S. Libretti and Brion B. Applegate. The executive committee will have
the authority to approve our acquisition and divestiture of business entities
for a price of up to $200.0 million, the appointment of our senior officers or
those of our affiliates and termination of their employment, the preparation
and approval of short-term and long-term budgets, and other material policy-
level decisions.

Prior to or immediately following the consummation of this offering, we
will establish an audit committee of the board of directors which will consist
solely of three or more independent directors unless otherwise permitted by
Nasdaq rules. In addition, we will adopt an audit committee charter. The audit
committee will review, act on and report to the board of directors with respect
to various auditing and accounting matters, including the selection of our
auditors, the scope of the annual audits, fees to be paid to the auditors, the
performance of our independent auditors and our accounting practices.

Prior to or immediately following the consummation of this offering, we
will establish a compensation committee of the board of directors which will
consist of at least two independent directors. The compensation committee will
determine the salaries and incentive compensation of our officers and provide
recommendations for the salaries and incentive compensation of our other
employees and consultants. The compensation committee will also administer our
2000 stock incentive plan and our employee stock purchase plan.

Compensation Committee Interlocks and Insider Participation

During the year ended December 31, 1999, our general partner had no
compensation committee. The board of directors of our general partner performed
the equivalent function for 1999. Following the consummation of this offering,
a newly established compensation committee of our board of directors will make
compensation decisions.

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<PAGE>

Executive Compensation

The following table sets forth, for the years ended December 31, 1999,
1998 and 1997, the compensation paid to the chief executive officer and the
other four most highly paid executives in 1999, all of whom served as executive
officers of our general partner and all of whom serve as executive officers of
our corporation.

Summary Compensation Table

<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual
Compensation Securities
----------------- Underlying All Other
Name and Principal Position Year Salary Bonus Options (1) Compensation
--------------------------- ---- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Louis F. Mercatanti, Jr. .... 1999 $275,000 $150,000 -- $12,263 (2)
President and Chief 1998 275,000 125,000 -- 25,299
Executive Officer
1997 275,000 188,000 -- 24,197
Michael S. Libretti.......... 1999 140,000 91,515 6,171 8,225 (3)
Executive Vice President, 1998 130,000 61,000 28,799 14,460
Operations and Finance
and Chief Financial Officer 1997 130,000 30,000 14,399 13,113
Joan E. Gerberding........... 1999 150,000 45,000 1,234 3,380 (4)
President, Nassau Radio 1998 150,000 35,000 3,703 5,981
Network
1997 150,000 27,000 17,691 6,006
G. Daniel Henrickson, Jr. ... 1999 150,000 20,500 2,057 7,515 (5)
Executive Vice President and 1998 130,000 35,000 2,057 12,773
General Manager
1997 130,000 26,000 18,513 13,101
Peter D. Tonks............... 1999 135,000 31,000 823 5,990 (6)
Executive Vice President and 1998 130,000 6,500 2,057 16,551
Director of
Accounting & Human Resources 1997 127,000 6,000 1,234 16,671
</TABLE>

--------
(1) See "Nassau Options" below.
(2) Consists of a $2,083 matching contribution made by Nassau Broadcasting
Partners, L.P. to the Nassau Broadcasting Partners, L.P. 401(k) plan and
$10,180 in respect of term life and disability premiums paid by Nassau
Broadcasting Partners, L.P.
(3) Consists of a $2,272 matching contribution made by Nassau Broadcasting
Partners, L.P. to the Nassau Broadcasting Partners, L.P. 401(k) plan and
$5,953 in respect of term life and disability premiums paid by Nassau
Broadcasting Partners, L.P.
(4) Consists of a $1,940 matching contribution made by Nassau Broadcasting
Partners, L.P. to the Nassau Broadcasting Partners, L.P. 401(k) plan and
$1,440 in respect of term life and disability premiums paid by Nassau
Broadcasting Partners, L.P.
(5) Consists of a $2,172 matching contribution made by Nassau Broadcasting
Partners, L.P. to the Nassau Broadcasting Partners, L.P. 401(k) plan and
$5,343 in respect of term life and disability premiums paid by Nassau
Broadcasting Partners, L.P.
(6) Represents premiums paid by Nassau Broadcasting Partners, L.P. in respect
of term life and disability insurance.

Nassau Options

One of our stockholders, Nassau Broadcasting Company, granted some of our
employees options to acquire its stock at an exercise price of $0.15 per share,
which we will refer to as the old Nassau options. Nassau Broadcasting Company
granted these options to these employees as additional compensation for

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<PAGE>

services provided by these employees to Nassau Broadcasting Partners, L.P. Upon
cancellation of the old Nassau options, Nassau Broadcasting Partners, L.P.
granted these employees options to purchase partnership interests in it
pursuant to the Nassau Broadcasting Partners, L.P. Partnership Unit Option
Plan, which we will refer to as the partnership options. As part of our
incorporation and reorganization in connection with this offering, we have
converted the partnership options into options to purchase our shares of class
A common stock, which we will refer to as the new Nassau options. We reserved
the shares needed to satisfy the new Nassau options, which are available for
issuance under the 2000 stock incentive plan described below.

The following table sets forth, with respect to the chief executive
officer of our general partner and the four other most highly compensated
executive officers, information concerning the number of shares of Nassau
Broadcasting Company subject to old Nassau options, the number of partnership
units in Nassau Broadcasting Partners, L.P. subject to partnership options, and
the number of shares of Nassau Broadcasting Corporation subject to new Nassau
options:
<TABLE>
<CAPTION>
Shares Partnership Shares
Subject Units Subject
to Old Subject to to New
Nassau Partnership Nassau
Name Options Options Options
---- ------- ----------- -------
<S> <C> <C> <C>
Louis F. Mercatanti, Jr............................. -- -- --
Michael S. Libretti................................. 600,000 12,000 49,369
Joan E. Gerberding.................................. 275,000 5,500 22,628
G. Daniel Henrickson, Jr............................ 275,000 5,500 22,628
Peter D. Tonks...................................... 87,000 1,740 7,159
</TABLE>

Stock and Option Ownership of Executive Officers

Messrs. Libretti, Henrickson and Tonks and Ms. Gerberding together own
vested options to purchase 101,784 shares of our class A common stock, and Mr.
Mercatanti owns 12,342 shares of our class B common stock. We will grant all of
our executive officers and directors additional options to purchase shares of
our class A common stock at the time of the completion of the offering. In
addition, some or all of our executive officers may purchase shares of our
class A common stock in the offering from the shares reserved for sale to our
employees, directors, affiliates, and other individuals whom we feel have
contributed to our success.

Employment Agreements

We have entered into employment agreements, effective July 1, 2000, with
Louis F. Mercatanti, Jr., our President and Chief Executive Officer, Michael S.
Libretti, our Executive Vice President, Operations and Finance and Chief
Financial Officer, and Peter D. Tonks, our Executive Vice President and
Director of Accounting & Human Resources. The terms of these agreements are as
follows:

Louis F. Mercatanti, Jr.: Mr. Mercatanti's employment agreement provides
that he will be employed for three years, with automatic extensions of one year
unless notice is otherwise given, as our President and Chief Executive Officer.
For the first year of the term, Mr. Mercatanti's base salary will be $400,000;
it will increase to $420,000 for the second year and $445,000 for the third
year of his employment. Mr. Mercatanti will be paid an annual bonus of 50% of
his base salary for the year if he achieves at least 90% of target performance.
His annual bonus will increase to 100% of base salary if he achieves 100% of
target performance. Mr. Mercatanti will be eligible for option grants under our
2000 stock incentive plan in amounts determined by the compensation committee.
Those options will vest at a rate of 25% per year, provided that they will vest
in

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<PAGE>

full upon Mr. Mercatanti's termination without cause, for death or disability
or by Mr. Mercatanti for good reason, including termination by him for any
reason within 90 days after a change in control, or for any reason by us within
18 months following a change in control. Mr. Mercatanti has agreed that, in the
event of his termination of employment, he will not compete with our business
for a period of six months. He has also agreed not to disclose at any time
confidential information about us.

Either party may terminate the contract upon 30 days' notice. If we
terminate Mr. Mercatanti's employment without cause or within 18 months
following a change in control, or if Mr. Mercatanti terminates his employment
for good reason, including termination by him for any reason within 90 days
after a change in control, we will pay Mr. Mercatanti 100% of his then current
base salary plus the amount of his annual bonus, assuming attainment of all
applicable performance goals, and we will provide benefits to Mr. Mercatanti
for the remaining period of the employment term. If any payment to Mr.
Mercatanti, whether pursuant to the terms of his employment agreement or
otherwise, in connection with a change in control triggers the excise tax
imposed under Section 4999 of the Internal Revenue Code, we will pay to him an
additional amount so that, after payment of that tax and all other taxes, the
net amount he retains will be that amount owing to him determined without
regard to the imposition of the excise tax.

Michael S. Libretti and Peter D. Tonks: We have also entered into
employment agreements with Mr. Libretti and Mr. Tonks which are similar to the
employment agreement with Mr. Mercatanti, with the following exceptions:

. We will pay Mr. Libretti a base salary of $165,000 for the first year,
$175,000 for the second year, and $190,000 for the third year of his
employment. In addition to his annual bonus, which will be at least 50% of
his base salary for the year if he achieves at least 90% of target
performance, and increasing to 100% of his base salary if he achieves 100%
of target performance, we will also pay Mr. Libretti a monthly bonus equal
to 0.5% of our broadcast cash flow for each month; and

. We will pay Mr. Tonks a base salary of $165,000 for the first year, $175,000
for the second year, and $190,000 for the third year of his employment after
we entered into this employment agreement. We will also pay Mr. Tonks an
annual bonus of 25% of his then current base salary if he achieves at least
90% of target performance, and increasing to 50% of his base salary if he
achieves 100% of target performance.

2000 Stock Incentive Plan

We have adopted a 2000 stock incentive plan. The purpose of this plan is
to promote our long-term growth and profitability by providing key personnel
with incentives to improve stockholder value and to contribute to our growth
and financial success and by enabling us to attract, retain and reward the best
available persons for positions of substantial responsibility. The principal
terms of the plan are as follows:

General. We have reserved for issuance up to 2,000,000 shares of our
outstanding class A common stock, subject to equitable adjustment upon the
occurrence of any stock dividend or other distribution, stock split, merger,
consolidation, combination, share repurchase or exchange or similar corporate
transaction or event. If an award granted under the plan expires or is
terminated for any reason, the shares of class A common stock underlying the
award will again be available for purposes of the plan. We may not grant any
individual awards relating to more than 1,000,000 shares of the class A common
stock, in any 12-month period.

Types of Awards. We may grant the following awards under the plan:

. stock options, including incentive and nonqualified stock options;

. restricted stock;

. stock bonuses; and/or

. other stock based awards.

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Administration. Our board of directors will administer the plan. In the
alternative, the board of directors may appoint a committee consisting of not
less than two members of the board of directors to administer the plan on
behalf of the board of directors, subject to the terms and conditions as the
board of directors may prescribe, and for this purpose, we refer to the body
administering the plan as the committee. The board of directors will organize
the committee in a manner so as to satisfy the provisions of Rule 16b-3
promulgated under Section 16 of the Securities Exchange Act of 1934 and Section
162(m) of the Internal Revenue Code, and the committee will interpret the plan
in a manner consistent with the requirements of those rules and regulations.

The committee has full authority, subject to the provisions of the plan,
among other things, to determine the persons to whom awards will be granted, to
determine the type of award to be granted, the number of shares to be made
subject to awards, the exercise price and other terms and conditions of the
awards, and to interpret the plan and prescribe, amend and rescind rules and
regulations relating to the plan.

Eligibility. We may grant awards under the plan to our employees,
directors, including directors who are not employees, and consultants or any of
our affiliates, as selected by the committee.

Terms and Conditions of Options. Options may be either incentive stock
options, as that is defined in Section 422 of the Internal Revenue Code, or
nonqualified stock options. The committee will determine the exercise price of
a stock option granted under the plan at the time the option is granted, but
the exercise price of an incentive stock option may not be less than the fair
market value per share of class A common stock on the date of grant. Stock
options are exercisable at the times and upon the conditions that the committee
may determine, as reflected in the applicable option agreement. Generally, the
committee will determine the exercise period, but in the case of any incentive
stock option, the exercise period may not exceed ten years from the date of
grant.

A participant must pay the option exercise price in full at the time of
exercise by any one of the following methods or a combination thereof:

. in cash or cash equivalents;

. the surrender of previously acquired shares of class A common stock
that have been held by the participant for at least six months prior
to the date of surrender;

. authorization for us to withhold a number of shares otherwise payable
upon the exercise of an option; or

. through a broker cashless exercise procedure we approve.

The committee may, in its sole discretion, authorize us to make or
guarantee loans to a participant to assist the participant in exercising
options.

The committee may provide at the time of grant of an option that the
participant may elect to exercise all or part of the option before it becomes
vested and exercisable. If the participant elects to exercise all or part of a
non-vested option, we will issue the participant shares of restricted stock
which will become vested in accordance with the vesting schedule set forth in
the original option agreement. The stock will be subject to our repurchase
option if the participant's employment or service terminates prior to its
vesting.

Outside Director Options. Outside directors, which are non-employee
directors who own, together with their affiliates, less than 1% of the voting
power of our company will be eligible for automatic grants of non-qualified
options under the plan. At the time of this offering, each outside director has
an option to purchase 10,000 shares of class A common stock. Following this
offering, we will grant each outside director upon his or her first election or
appointment to the board of directors, an option to purchase up to 10,000
shares of class A common stock. In addition, immediately following each annual
meeting of stockholders after the

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<PAGE>

initial public offering, our board of directors may grant, in its sole
discretion, to each outside director then serving who has been re-elected or
re-appointed at such stockholder meeting, an option to purchase up to 20,000
shares of class A common stock. Each option granted under the plan to an
outside director will have an exercise price equal to the fair market value of
the class A common stock on the date of grant and will become exercisable in
full on the second anniversary of the date of grant, provided that the director
is still serving as an outside director as of the date of vesting of the
option. Each option granted to an outside director will expire on the tenth
anniversary of the date of grant of the option. The other terms of the options
granted to outside directors will be consistent with the terms of options
granted to employees.

Restricted Stock. The plan provides for awards of class A common stock
that are subject to restrictions on transferability and other restrictions
imposed by the committee. Except to the extent restricted under the awarded
agreement relating to the restricted stock, a participant granted restricted
stock will have all of the rights of a stockholder.

Stock Bonuses; Other Awards. The plan provides that awards of shares of
common stock may be made to employees in the discretion of the committee. In
addition, the committee, in its discretion, may grant other awards valued in
whole or in part by reference to, or otherwise based on, our class A common
stock either alone or in addition to other awards under the plan.

Termination of Employment. Unless otherwise determined by the committee,
we will immediately cancel the unvested portion of awards granted under the
plan upon termination of a participant's employment or service with us and if a
participant's employment or service terminates other than because of death,
disability or retirement, the participant may exercise all options that are
exercisable at the time of termination for no longer than 90 days after the
date of termination. Unless otherwise determined by the committee, if a
participant's employment or service terminates for cause, all options held by
the participant will immediately terminate. If a participant's employment or
service terminates as a result of death, the participant's heirs or
distributees may exercise all options that are exercisable at the time of death
for one year and if a participant's employment or service terminates because of
disability or retirement, the participant may exercise all options that are
exercisable at the time of termination for a period of one year immediately
following termination. In no case may a participant exercise an option after it
expires in accordance with its terms.

Subject to such other conditions as the committee may impose, if, within
18 months following a change in control, an optionee's employment terminated by
us without cause or by the optionee for good reason, the unvested portion of
the optionee's options will become fully vested and exercisable on the date of
termination.

Amendment, Termination of Plan. The board of directors may modify or
terminate the plan or any portion of the plan at any time, except that an
amendment that requires stockholder approval in order for the plan to continue
to comply with any law, regulation or stock exchange requirement will not be
effective unless approved by the requisite vote of our stockholders. Amendment
or termination of the plan cannot adversely affect an outstanding awarded
without the awarded holder's consent. The committee may not grant options under
the plan after the date immediately preceding the tenth anniversary of its
adoption date.

Since the committee determines the amount of benefits to be received by
any plan participant who is our employee or an employee of any of our
affiliates, we cannot determine the amount of future benefits to be allocated
by any employee or group of employees under the plan in any particular year.

Employee Stock Purchase Plan

We have adopted an employee stock purchase plan intended to qualify under
Section 423 of the Internal Revenue Code. We have designed the plan to
encourage the purchase by our employees of shares of our class A common stock.
A committee appointed by our board of directors will administer the plan. Our
employees will be able to purchase up to a maximum of 2,000,000 shares of our
class A common stock under

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<PAGE>

this plan, subject to equitable adjustment upon the occurrence of any stock
dividend or other distribution, stock split, merger, consolidation,
combination, share repurchase or exchange or similar corporate transaction or
event. The plan is generally open to participation by any employee who has
completed at least six months of service and who customarily works at least 20
hours per week.

Each eligible employee will be eligible to purchase shares through
regular payroll deductions and/or cash payments in an amount equal to 1% to 20%
of the employee's compensation for each payroll period, provided that the fair
market value of the stock purchased in any year may not exceed $25,000. The
plan provides for a series of consecutive, overlapping offering periods that
will generally be 24 months long. Successive six-month purchase periods will
run during each offering period. During each offering period, participating
employees will be able to purchase shares of class A common stock at a purchase
price equal to 85% of their fair market value at either the beginning of each
offering period or the end of each purchase period within the offering period,
whichever price is lower. To the extent permitted by applicable laws,
regulations or stock exchange rules, if the fair market value of the shares at
the end of any purchase period is lower than the fair market value of the
shares on the date the related offering period began, then all participants in
that offering period will be automatically withdrawn from the offering period
immediately after the exercise of their option on the date the purchase period
ends, and the participants will automatically be re-enrolled in the immediately
following offering period.

The plan will automatically terminate on the tenth anniversary of the
beginning of the first offering period. Our board of directors may from time to
time amend or terminate the plan, provided that no amendment or termination may
adversely affect the rights of any participant without his or her consent and,
to the extent required by Section 423 of the Internal Revenue Code or any other
law, regulation or stock exchange rule, no such amendment will be effective
without the approval of stockholders entitled to vote on the matter.

Since the amount of benefits to be received by each participant in the
plan is determined by his or her elections, the amount of future benefits to be
allocated to any individual or group of individuals under the plan in any
particular year is not determinable.

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<PAGE>

RELATED PARTY TRANSACTIONS

Registration Rights Agreements

On May 4, 2000, we entered into a registration rights agreement with most
of our existing stockholders, in which we granted them registration rights in
respect of 30.1% of our currently outstanding common stock. We have also agreed
to enter into a registration rights agreement with the sellers of Aurora
Communications, who will receive shares of our class C common stock as partial
consideration towards the purchase price, once we complete this acquisition.
Under these registration rights agreements, beginning 180 days after this
offering, the holders of the registrable securities will have the right to
demand three registrations. Under each demand registration right, holders
owning at least 17.5% of the outstanding registrable securities can require us
to effect a registration of their shares, and the holders of the other shares
subject these registration rights can also require us to register their shares
at the same time. The holders of these registrable securities will also have
"piggy-back" registration rights. Under these piggy-back registration rights,
if we propose to register any other common stock under the Securities Act, we
will generally have to register the registrable securities whose holders
exercise these piggy-back rights. In addition, once we become eligible to file
registration statements on Form S-3, holders of registrable securities
generally can require us at any time to register their shares on a Form S-3
registration statement so long as no registration is for less than $5.0 million
of registrable securities. All of these registration rights are subject to
limitations and conditions, including, in the case of the piggy-back
registration rights, the right of underwriters of an offering to limit the
number of shares to be included in a registration. We would bear all
registration expenses incurred in connection with these registrations, except
for any underwriting discounts and selling commissions.

In addition, on May 4, 2000, we entered into a registration rights
agreement with holders of the 79,419 shares of our class A common stock that
were issued upon conversion of the limited partnership units issued with our
senior discount notes. Under this registration rights agreement, beginning 180
days after this offering, the holders of these registrable securities have the
right to demand two registrations. Under each of these demand registration
rights, holders owning at least 10.0% of these shares can require us to effect
a registration of their shares, and the holders of the other shares subject
these registration rights can also require us to register their shares at the
same time. The holders of these registrable securities will also have "piggy-
back" registration rights. Under these piggy-back rights, if we propose to
register any other common stock under the Securities Act, we will generally
have to register the registrable securities whose holders exercise these piggy-
back rights. Both the demand and piggy-back registration rights are subject to
limitations and conditions, including, in the case of the piggy-back
registration rights, the right of underwriters of an offering to limit the
number of shares to be included in a registration. We would bear all
registration expenses incurred in connection with these registrations, except
for any underwriting discounts and selling commissions.

Sale of Nassau Tower Holdings LLC

On February 7, 2000, we completed the sale of all our membership
interests in Nassau Tower Holdings LLC to affiliated entities, namely Nassau
Tower Management, Inc. and Nassau Holdings, Inc., controlled by Louis F.
Mercatanti, Jr., our President and Chief Executive Officer, pursuant to an
agreement which we entered into on same day. Nassau Tower Holdings owned real
estate properties on which the broadcasting facilities which we use are
located. We determined the sale price of $10.0 million for the membership
interests using a valuation methodology that is commonly used in the tower
industry and that was based on multiple cash flow of $356,000 for 1998 and
$710,000 for 1999. Our board of directors determined this sale of non-strategic
assets to be in our best interests, since we required liquidity to enable us to
make required interim payments with respect to our pending acquisitions. These
affiliated entities then immediately transferred the bulk of the properties
owned by Nassau Tower Holdings to Pinnacle Towers Inc., an unrelated entity,
which has in turn leased required tower space back to us. In addition, some of
our affiliates have leased assets to us. Our lease payments to affiliated
entities controlled by Mr. Mercatanti are expected to be approximately $250,000
this year.

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<PAGE>

Subordinated Discount Notes, Redemption and Preferred Distributions

From 1995 to 1997, we issued 8.0% subordinated discount notes to some of
our existing stockholders. On May 4, 2000, we fully redeemed all of these
subordinated discount notes with a portion of the proceeds from the sale of
units consisting of our senior discount notes and limited partnership units, as
follows.

<TABLE>
<CAPTION>
Issuer Amount Repaid
------ -------------
(in millions)
<S> <C>
Spectrum Equity Investors, L.P.................................... $18.1
Spectrum Equity Investors II, L.P. ............................... 9.5
Grotech Partners IV, L.P.......................................... 7.7
Toronto Dominion Capital (U.S.A.), Inc............................ 7.1
-----
Total........................................................... $42.4
=====
</TABLE>

We used an aggregate of $5.4 million of the proceeds from the sale of the
units described above to redeem some equity interests of, and to make a
preferred distribution to, Mr. Mercatanti, pursuant to our predecessor's
partnership agreement.

Loans to Stockholder and Employee

In 1998, and November 1999, we advanced an aggregate of $100,000, with an
interest rate of 8.0% per annum, due and payable on or prior to November 30,
2001, to Joan E. Gerberding, our President of Nassau Radio Network, to purchase
a residence.

In December 1999, we loaned an aggregate of $590,000 to Mr. Mercatanti to
finance a portion of the purchase price of a communications tower. This loan
accrued interest at a rate of 8.0% per annum and was repaid in full by Mr.
Mercatanti in February 2000.

In March 2000, we loaned $200,000 interest-free to Mr. Mercatanti to
enable him to purchase some real property. Mr. Mercatanti repaid this loan in
full in May 2000.

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<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth information with respect to the beneficial
ownership of our common stock upon our incorporation and as adjusted to reflect
the sale of the shares of class A common stock offered hereby by:

. each person who we know owns beneficially more than 5.0% of our
common stock;

. each of our directors, including our chief executive officer;

. our four most highly compensated executive officers, other than our
chief executive officer, who were serving as executive officers of
our general partner at the end of 1999; and

. all of our directors and executive officers as a group.

<TABLE>
<CAPTION>
Common Stock
----------------------------------------------------
Class A Class B Class C
---------------- ------------------ ---------------- % of Total % of Total
% of % of % of Economic Voting
Number Class Class Number Class Interest Power
of Post- Number of Post- of Post- Post- Post-
Stockholder Shares Offering Shares Offering Shares Offering Offering Offering
----------- ------ -------- --------- -------- ------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Spectrum Equity
Investors,
L.P. (1)............... -- -- % 1,190,120 37.4% -- -- % 7.3% 26.7%
Spectrum Equity
Investors II,
L.P. (1)............... -- -- 675,050 21.2 -- -- 4.1 15.2
Grotech Partners IV,
L.P. (2)............... -- -- 505,078 15.9 -- -- 3.1 11.3
Toronto Dominion Capital
(U.S.A.), Inc. (3)..... -- -- -- -- 506,287 100.0 3.1 0.0
Louis F. Mercatanti, Jr.
(4)(5)................. -- -- 805,916 25.3 -- -- 4.9 18.1
Michael S. Libretti
(4).................... 49,370 0.4 -- -- -- -- 0.3 0.1
Joan E. Gerberding (4).. 22,628 0.2 -- -- -- -- 0.1 0.1
G. Daniel Henrickson,
Jr. (4)................ 22,628 0.2 -- -- -- -- 0.1 0.1
Peter D. Tonks (4)...... 7,159 0.1 -- -- -- -- 0.0 0.0
Brion B. Applegate(6)... -- -- 1,865,170 58.7 -- -- 11.4 41.9
William B. Collatos(6).. -- -- 1,865,170 58.7 -- -- 11.4 41.9
Stuart D. Frankel....... -- -- 505,078 15.9 -- -- 3.1 11.3
All directors and
executive officers as a
group (12 persons)(6).. 150,743 1.2 3,176,164 99.9 -- -- 20.3 71.7
</TABLE>

(1) The address of both Spectrum Equity Investors, L.P. and Spectrum Equity
Investors II, L.P. is 333 Middlefield Road, Suite 200, Menlo Park, CA
94025.
(2) The address of Grotech Partners IV, L.P. is 9690 Deerco Road, Timonium, MD
21093.
(3) The address of Toronto Dominion Capital (U.S.A.), Inc. is c/o TD
Securities USA, Inc., 31 West 52nd Street, New York, NY 10019.
(4) The address of Mr. Mercatanti, Mr. Libretti, Ms. Gerberding, Mr.
Henrickson and Mr. Tonks is c/o Nassau Broadcasting Corporation, 619
Alexander Road, Princeton, New Jersey 08540.

(5) Includes 12,342 shares of class B common stock held by Mr. Mercatanti,
193,365 shares of class B common stock held directly by Nassau
Broadcasting Company and 600,209 shares of class B common stock held
directly by Nassau Holdings, Inc. Mr. Mercatanti has the power to vote or
direct the vote, and the power to dispose or direct the disposition, of
the shares owned by Nassau Broadcasting Company and Nassau Holdings, Inc.

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<PAGE>

(6) Includes the 1,190,120 shares of class B common stock held directly by
Spectrum Equity Investors L.P. and the 675,050 shares of class B common
stock held directly by Spectrum Equity Investors II, L.P. Mr. Applegate
and Mr. Collatos together have the power to vote or direct the voting of,
and the power to dispose or direct the disposition of, the shares held by
Spectrum Equity Investors L.P. and Spectrum Equity Investors II, L.P.

The table above does not give effect to the shares of class C common
stock which we will issue to BancAmerica Capital Investors SBIC I, L.P. and
several individuals in connection with the Aurora acquisition. The number of
shares of class C common stock we will issue will be based on the market value
of our class A common stock at the date of closing of the acquisition. Assuming
a market value equal to $17.50, the midpoint of the price range set forth on
the cover page of this prospectus, we expect to issue an additional 2,000,000
shares of class C common stock. Accordingly, the percentage ownership of our
existing stockholders and of the new investors will be reduced.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by footnote, and subject
to community property laws where applicable, the persons named in the table
above have sole voting and investment power with respect to all shares of
common stock. The number of shares beneficially owned includes shares of common
stock issuable upon the exercise of options or warrants that are currently
exercisable or exercisable within 60 days of the date of this prospectus.
Percentage of beneficial ownership is based on 16,395,947 shares of common
stock outstanding after completion of this offering, which includes vested
options to purchase shares of our common stock.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock and provisions of our
certificate of incorporation and by-laws is only a summary. For a more detailed
description, see our certificate of incorporation and by-laws, copies of which
we have filed as exhibits to our registration statement.

Our authorized capital stock consists of 67,000,000 shares of class A
common stock, par value $0.01 per share, 15,000,000 shares of class B common
stock, par value $0.01 per share, 20,000,000 shares of class C common stock,
par value $0.01 per share, and 10,000,000 shares of preferred stock, par value
$0.01 per share.

Common Stock

On the closing date of this offering, there will be issued and
outstanding 12,504,419 shares of class A common stock, excluding shares to be
issued if the underwriters exercise their over-allotment options, 3,179,534
shares of class B common stock and 506,287 shares of class C common stock.

Voting rights. Each share of class A common stock will be entitled to one
vote and each share of class B common stock will be entitled to ten votes,
while shares of class C common stock will generally not be entitled to any
votes. Except as otherwise provided by law, and subject to any voting rights
granted to holders of any outstanding shares of preferred stock, the holders of
our outstanding shares of class A common stock and the holders of our
outstanding shares of class B common stock will vote on all matters on which
stockholders are entitled to vote. Except as otherwise provided by law, and
subject to any voting rights granted to holders of any outstanding preferred
stock, amendments to the certificate of incorporation must be approved by a
majority of votes entitled to be cast by all holders of class A common stock
and class B common stock, voting together as a single class. However,
amendments to the certificate of incorporation that would alter or change the
powers, preferences or special rights of the class A common stock, class B
common stock or class C common stock so as to affect them adversely also must
be approved by a majority of the votes entitled to be cast by the holders of
the shares affected by the amendment, voting as a separate class. Any amendment
to our certificate of incorporation to increase or decrease the authorized
shares of any class requires the approval of the holders of a majority of the
common stock, voting together as a single class.

Dividends. Holders of class A common stock, class B common stock and
class C common stock will share equally on a per share basis, based on the
number of shares of common stock held, in any dividend declared by the board of
directors, subject to any preferential rights of any outstanding preferred
stock. Dividends consisting of shares of class A common stock, class B common
stock and class C common stock may be paid only as follows: (1) shares of class
A common stock may be paid only to holders of shares of class A common stock,
shares of class B common stock may be paid only to holders of class B common
stock and shares of class C common stock may be paid only to holders of shares
of class C common stock; and (2) shares will be paid proportionally with
respect to each outstanding share of class A common stock, class B common stock
and class C common stock. We may not subdivide or combine shares of any class
of common stock without at the same time proportionally subdividing or
combining shares of the other classes.

Conversion of class A common stock. Class A common stock is convertible
into shares of class C common stock at any time on a one-for-one basis.

Conversion of class B common stock. Class B common stock is convertible
into shares of class A common stock or class C common stock at any time on a
one-for-one basis. In addition, upon a transfer to anyone other than a
permitted class B transferee, shares of class B common stock automatically
convert into shares of class A common stock on a one-for-one basis.

Conversion of class C common stock. Class C common stock is convertible
into shares of class A or class B common stock at the option of the holder, at
any time on a one-for-one basis, so long as, in the opinion

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<PAGE>

of our board of directors, the holder would not have an attributable interest
in radio stations pursuant to the FCC's multiple ownership rules as a result of
such conversion. However, shares of common stock which were converted into
class C from class A, cannot then be converted into shares of class B common
stock.

Other rights. In the event of any merger or consolidation with or into
another company in connection with which shares of common stock are converted
into or exchangeable for shares of stock, other securities or property,
including cash, all holders of common stock, regardless of class, will be
entitled to receive the same kind and amount of shares of stock and other
securities and property, including cash.

On liquidation, dissolution or winding up, after payment in full of the
amounts required to be paid to holders of preferred stock, if any, all holders
of common stock, regardless of class, are entitled to share ratably in any
assets available for distribution to holders of shares of common stock.

No shares of any class of common stock are subject to redemption or have
preemptive rights to purchase additional shares of common stock.

Upon consummation of the offering, all the outstanding shares of our
common stock will be legally issued, fully paid and nonassessable.

Preferred Stock

The board of directors will be authorized, without stockholder approval,
to issue from time to time up to 10,000,000 shares of preferred stock in one or
more series and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each series. The
specific matters that our board may determine include the following:

. the designation of each series;

. the number of shares of each series;

. the rate of any dividends;

. whether any dividends will be cumulative or noncumulative;

. the terms of any redemption;

. the amount payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of our company;

. rights and terms of any conversion or exchange;

. restrictions on the issuance of shares of the same series or any
other series; and
. any voting rights.

Upon the closing of the offering, there will be no shares of preferred
stock outstanding. We have no present plans to issue any shares of preferred
stock. See "--Anti-takeover Effects of Provisions of Delaware law and Our
Certificate of Incorporation and By-Laws" for more information.

Options

As of the date of this prospectus, options to purchase a total of 205,707
shares of class A common stock were outstanding, all of which are subject to
lockup agreements entered into with the underwriters.

The total of shares of class A common stock that may be subject to the
granting of options under our 2000 stock incentive plan will be equal to
2,000,000 shares of class A common stock. We refer you to "Management--2000
Stock Incentive Plan" and "Shares Eligible for Future Sale."

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<PAGE>

Limitation on Liability of Directors

Our certificate of incorporation provides that our directors will not be
personally liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability imposed by law, as in effect
from time to time:

. for any breach of the director's duty of loyalty to us or our
stockholders;

. for any act or omission not in good faith or which involved
intentional misconduct or a knowing violation of law;

. for unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law; or

. for any transaction from which the director derived an improper
personal benefit.

The inclusion of this provision in our certificate of incorporation may
have the effect of reducing the likelihood of derivative litigation against or
directors and may discourage or deter stockholders or us from bringing a
lawsuit against our directors for breach of their duty of care, even though
such an action, if successful, might otherwise have benefitted us and our
stockholders.

Foreign Ownership

Our certificate of incorporation restricts the ownership, voting and
transfer of our capital stock, including the class A common stock, in
accordance with the Communications Act and the rules of the FCC, which prohibit
the issuance of more than 25.0% of our outstanding capital stock, or more than
25.0% of the voting rights such stock represents, to or for the account of
aliens, as defined by the FCC, or corporations otherwise subject to domination
or control by aliens. Our certificate of incorporation prohibits any transfer
of our capital stock that would cause a violation of this prohibition. Our
certificate of incorporation authorizes the board of directors to take action
to enforce these prohibitions, including restricting the transfer of shares of
capital stock to aliens. In addition, our certificate of incorporation provides
for the redemption of shares of our capital stock by action of the board of
directors to the extent necessary to comply with alien ownership restrictions.

Anti-takeover Effects of Provisions of Delaware Law and Our Certificate of
Incorporation and By-Laws

Some of the provisions of our certificate of incorporation and by-laws
and Section 203 of the Delaware General Corporation Law could have the
following effects, among others:

. delaying, deferring or preventing a change in control;

. delaying, deferring or preventing the removal of our existing
management;

. deterring potential acquirors from making an offer to our
stockholders; and

. limiting our stockholders' opportunity to realize premiums over
prevailing market prices of our class A common stock in connection
with offers by potential acquirors.

This could be the case, notwithstanding that a majority of our stockholders
might benefit from such a change in control or offer. The following is a
summary of these provisions.

A classified board of directors. We have a classified board of directors,
which means that our board is divided into three classes with three-year terms
with only one class elected at each annual meeting of stockholders. As a
result, a holder of a majority of our common stock will need two annual
meetings of stockholders to gain control of the board.

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<PAGE>

Directors, and not stockholders, fix the size of our board of
directors. Our certificate of incorporation and by-laws provide that the number
of directors shall be fixed from time to time exclusively pursuant to a
resolution adopted by a majority of our board of directors, but in no event
shall it consist of less than one nor more than eight members.

Board vacancies to be filled by remaining directors, and not
stockholders. Our certificate of incorporation and by-laws provide that any
vacancy on the board of directors that results from an increase in the number
of directors may be filled by a majority of the board of directors then in
office, provided that a quorum is present, and any other vacancy occurring on
the board of directors will be filled by the affirmative vote of the majority
of the remaining directors, even if less than a quorum, or by a sole remaining
director. In any event, no vacancy shall be filled by our stockholders.

Advance notice for stockholder proposals. Our by-laws contain provisions
requiring that advance notice be delivered to us of any business to be brought
by a stockholder before an annual meeting and providing for procedures to be
followed by stockholders in nominating persons for election to our board of
directors. Generally, such advance notice provisions require that the
stockholder must give written notice to us not less than 120 calendar days
before the anniversary date of the date our proxy statement was released to
stockholders in connection with our previous year's annual meeting, unless the
annual meeting is called for a date not within 30 days of such anniversary
date, in which case the stockholder must receive notice no later than the 10th
day following the day on which the notice of the date of the annual meeting was
mailed or public disclosure of the date of the annual meeting was made,
whichever occurs first. Our by-laws provide that the notice must set forth
specific information regarding the stockholder and each director nominee by the
stockholder or other business proposed by the stockholder.

Section 203 of the Delaware General Corporation Law. We are a Delaware
corporation and subject to Section 203 of the Delaware General Corporation Law.
Generally, Section 203 prohibits a publicly held Delaware company from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the time such stockholder became an interested stockholder
unless, as described below, specified conditions are satisfied. Thus, it may
make it more difficult for third parties to acquire control of us. The
prohibitions in Section 203 of the Delaware General Corporation Law do not
apply if:

. prior to the time the stockholder became an interested stockholder,
the board of directors of the corporation approved either the
business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;

. upon consummation of the transaction, which resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85.0% of the voting stock of the
corporation outstanding at the time the transaction commenced; and

. at or subsequent to the time the stockholder became an interested
stockholder, the business combination is approved by the board of
directors and authorized by the affirmative vote of at least 66 2/3%
of the outstanding voting stock that is not owned by the interested
stockholder.

Under Section 203 of the Delaware General Corporation Law, a "business
combination" includes:

. any merger or consolidation of the corporation with the interested
stockholder;

. any sale, lease, exchange or other disposition, except
proportionately as a stockholder of such corporation, to or with the
interested stockholder of assets of the corporation having an
aggregate market value equal to 10.0% or more of either the aggregate
market value of all the assets of the corporation or the aggregate
market value of all the outstanding stock of the corporation;

. transactions resulting in the issuance or transfer by the corporation
of stock of the corporation to the interested stockholder;

. transactions involving the corporation, which have the effect of
increasing the proportionate share of the corporation's stock of any
class or series that is owned by the interested stockholder; and

. transactions in which the interested stockholder receives financial
benefits provided by the corporation.

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<PAGE>

Under Section 203 of the Delaware General Corporation Law, an "interested
stockholder" generally is:

. any person that owns 15.0% or more of the outstanding voting stock of
the corporation;

. any person that is an affiliate or associate of the corporation and
was the owner of 15% or more of the outstanding voting stock of the
corporation at any time within the three-year period immediately
prior to the date on which it is sought to be determined whether or
not such person is an interested stockholder; or

. the affiliates or associates of either of the above-stated categories
person.

Under some circumstances, Section 203 of the Delaware General Corporation
Law makes it more difficult for an "interested stockholder" to effect various
business combinations with us for a three-year period, although our
stockholders may elect to exclude us from the restrictions imposed thereunder.

Registration Rights

All of our current stockholders have, or will have, registration rights
for their securities. Registration of these securities under the Securities Act
would result in those shares becoming freely tradeable by persons not
affiliated with us. For a more complete explanation of these registration
rights, you should read "Related Party Transactions--Registration Rights
Agreement" and "Shares Eligible for Future Sale--Registration Rights."

Transfer Agent and Registrar

The transfer agent and registrar for our class A common stock is American
Stock Transfer & Trust Company.

Nasdaq Stock Market Listing

We expect the shares to be approved for quotation on The Nasdaq National
Market, subject to notice of issuance, under the symbol "NBCR."

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to the offering, there has been no public market for our common
stock. Although we can make no prediction as to the effect, if any, that sales
of shares of common stock by our existing stockholders would have on the market
price of our class A common stock prevailing from time to time, sales of
substantial amounts of common stock or the availability of the shares for sale
could adversely affect prevailing market prices.

Upon completion of the offering, we will have outstanding 12,504,419
shares of class A common stock, 3,179,534 shares of class B common stock and
506,287 shares of class C common stock. If the underwriters exercise their
over-allotment options in full, we will have a total of 14,368,169 shares of
class A common stock outstanding, 3,179,534 shares of class B common stock
outstanding and 506,287 shares of class C common stock outstanding. All of the
shares of class A common stock to be sold in the offering will be freely
tradable without restrictions or further registration under the Securities Act,
except that shares purchased by our "affiliates" as defined in Rule 144 under
the Securities Act will be subject to the resale limitations of Rule 144. The
shares of class A common stock, class B common stock and class C common stock
owned by our existing stockholders are "restricted securities" within the
meaning of Rule 144 and may not be sold in the absence of registration under
the Securities Act other than pursuant to Rule 144 under the Securities Act or
another exemption from registration under the Securities Act.

Shares of our class A common stock, class B common stock and class C
common stock outstanding prior to this offering and any shares of common stock
acquired by any of our affiliates will be subject to the resale limitations of
Rule 144 of the Securities Act. Rule 144 defines an affiliate as a person that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, the issuer.

In general, beginning 90 days after the date of this prospectus, a
stockholder who has beneficially owned shares of our common stock for at least
one year may, within any three-month period, sell up to the greater of:

. 1.0% of the total number of shares of class A common stock then
outstanding; or

. the average weekly trading volume of the shares of class A common
stock during the four calendar weeks preceding the stockholder's
required filing of notice of sale.

Rule 144 requires stockholders to aggregate their sales with other
stockholders with which it is affiliated for purposes of complying with this
volume limitation. A stockholder who has owned shares of our common stock for
at least two years, and who has not been our affiliate for at least three
months, may sell shares of our common stock free from the volume limitation and
notice requirements of Rule 144.

The shares of class A common stock authorized for issuance pursuant to
options that may be granted under the 2000 stock incentive plan or the employee
stock purchase plan may be either authorized but unissued shares or treasury
shares obtained by us through market or private purchases. See "Management--
2000 Stock Incentive Plan" and "Management--Employee Stock Purchase Plan." We
intend to register under the Securities Act the shares of common stock issuable
upon the exercise of options granted pursuant to the 2000 stock incentive plan
and the employee stock purchase plan.

We and our executive officers and directors and most of our existing
stockholders have agreed, with limited exceptions, not to sell or transfer any
common stock for 180 days after the date of this prospectus without first
obtaining the written consent of Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Smith Barney Inc. Specifically, we and these other
individuals have agreed not to directly or indirectly:

. offer, pledge, sell or contract to sell any common stock, other than
common stock issued by us in connection with our purchase of Aurora
Communications;

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. sell any option or contract to purchase any common stock;

. purchase any option or contract to sell any common stock;

. grant any option, right or warrant for the sale of any common stock,
other than pursuant to our stock incentive plan;

. lend or otherwise dispose of or transfer any common stock;

. request or demand that we file a registration statement related to
any common stock; or

. enter into any swap or other agreement that transfers, in whole or in
part, the economic consequence of ownership of any common stock
whether any such swap or transaction is to be settled by delivery of
shares or other securities, in cash or otherwise.

This lockup provision applies to common stock and to securities
convertible into or exchangeable or exercisable for or repayable with common
stock. It also applies to common stock owned now or acquired later by the
person executing the agreement or for which the person executing the agreement
later acquires the power of disposition.

As a result of contractual restrictions, notwithstanding possible earlier
eligibility for sale under the provisions of Rule 144 promulgated under the
Securities Act, which are summarized above, shares subject to lockup agreements
will not be saleable until the agreements expire.

Registration Rights

We have granted registration rights to most of our existing stockholders
pursuant to the registration rights agreement described in "Related Party
Transactions--Registration Rights Agreement."

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MATERIAL UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-U.S. HOLDERS OF OUR CLASS A COMMON STOCK

The following is a general summary of the material United States federal
income and estate tax consequences of the purchase, ownership, and sale or
other taxable disposition of our class A common stock by any person or entity,
who we refer to as a non-U.S. Holder, other than:

. a citizen or individual resident of the United States;

. a partnership, corporation or other entity created or organized in or
under the laws of the United States or of any political subdivision
thereof;

. a trust, if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or
more United States persons have the authority to control all
substantial decisions of the trust or the trust has a valid election
in effect under applicable U.S. Treasury regulations to be treated as
a United States person; and

. an estate, the income of which is includible in gross income for
United States federal income tax purposes regardless of its source.

This summary does not address all tax considerations that may be relevant
to non-U.S. Holders in light of their particular circumstances or to certain
non-U.S. Holders that may be subject to special treatment under United States
federal income or estate tax laws. This summary is based upon the Internal
Revenue Code of 1986, as amended, existing, temporary and proposed Treasury
regulations promulgated thereunder, and administrative and judicial decision
thereof, all as in effect on the date of this prospectus and all of which are
subject to change, possibly with retroactive effect. In addition, this summary
does not address the effect of any state, local or foreign tax laws. Each
prospective purchaser of class A common stock should consult its tax advisor
with respect to the tax consequences of purchasing, owning and disposing of the
class A common stock.

Dividends

Dividends paid to a non-U.S. Holder of class A common stock generally
will be subject to a withholding of United States federal income tax at a 30
percent rate or such lower rate as may be specified by an applicable income tax
treaty unless:

. the dividend is effectively connected with the conduct of a trade or
business of the non-U.S. Holder within the United States; or

. if an income tax treaty applies, it is attributable to a United
States permanent establishment of the non-U.S. Holder,

in which case the dividend will be taxed at ordinary United States federal
income tax rates. If the non-U.S. Holder is a corporation, such effectively
connected income may also be subject to an additional "branch profits tax"
equal to 30.0% of its effectively connected earnings and profits for the
taxable year, as adjusted for certain items, unless an applicable income tax
treaty provides otherwise. A non-U.S. Holder generally is required to satisfy
certain certification requirements in order to claim treaty benefits or
otherwise claim a reduction of, or exemption from, the withholding described
above.

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Sale or Other Disposition of Common Stock

A non-U.S. Holder generally will not be subject to United States federal
income tax in respect of any gain recognized on the sale or other taxable
disposition of class A common stock unless one of the following applies:

. the gain is effectively connected with the conduct of a trade or
business of the non-U.S. Holder within the United States; and, if an
income treaty applies, is attributable to a U.S. permanent
establishment of the non-U.S. Holder. Unless an applicable income tax
treaty provides otherwise, the non-U.S. Holder will be taxed on its
net effectively connected gain derived from the sale under the
regular graduated United States federal income tax rates. If the non-
U.S. Holder is a foreign corporation, it may be subject to an
additional branch profits tax equal to 30.0% of its effectively
connected earnings and profits for the taxable year, as adjusted for
certain items, unless an applicable income tax treaty provides
otherwise;

. in the case of a non-U.S. Holder who is an individual and holds the
class A common stock as a capital asset, the holder is present in the
United States for 183 or more days in the taxable year of the sale or
other taxable disposition and certain other tests are met; in this
case, the non-U.S. Holder will be subject to a flat 30.0% tax on the
gain derived from the sale, which may be offset by certain United
States capital losses;

. the non-U.S. Holder is subject to tax pursuant to the provisions of
United States federal income tax law applicable to certain United
States expatriates; or

. we are or have been a "United States real property holding
corporation" at any time during the five-year period ending on the
date of disposition or, if shorter, the non-U.S. Holder's holding
period, unless both (i) the non-U.S. Holder held, actually or
constructively, no more than 5.0% of our outstanding class A common
stock and (ii) our stock is "regularly traded on an established
securities market," for purpose of these rules. We believe that we
will not constitute a United States real property holding corporation
immediately after the offering and we do not expect to become a
United States real property holding corporation.

Estate Tax

Class A common stock owned or treated as owned by an individual non-U.S.
Holder at the time of death will be includible in the individual's gross estate
for United States federal estate tax purposes, unless an applicable estate
treaty provides otherwise, and may be subject to United States federal estate
tax.

Backup Withholding

Under the backup withholding rules, dividends payable to a non-U.S.
holder and the proceeds from any disposition of class A common stock by a non-
U.S. holder may be subject to backup withholding at the rate of 31.0% unless
the non-U.S. holder (i) is a corporation or comes within certain other exempt
categories and demonstrates that fact when required or (ii) provides a current
taxpayer identification number, certifies as to no loss of exemption from
backup withholding, and otherwise complies with applicable requirements of the
backup withholding rules.

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UNDERWRITING

We intend to offer the shares in the U.S. and Canada through the U.S.
underwriters and elsewhere through the international managers. Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Salomon Smith Barney Inc., Banc of America
Securities LLC, Lazard Freres & Co. LLC and Prudential Securities Incorporated
are acting as U.S. representatives of the U.S. underwriters named below.
Subject to the terms and conditions described in a U.S. purchase agreement
among us and the U.S. underwriters, and concurrently with the sale of 2,485,000
shares to the international managers, we have agreed to sell to the U.S.
underwriters, and the U.S. underwriters severally have agreed to purchase from
us, the number of shares listed opposite their names below.

<TABLE>
<CAPTION>
Number
U.S. Underwriter of Shares
---------------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................
Salomon Smith Barney Inc. .......................................
Banc of America Securities LLC ..................................
Lazard Freres & Co. LLC..........................................
Prudential Securities Incorporated...............................

---------
Total....................................................... 9,940,000
=========
</TABLE>

We have also entered into an international purchase agreement with the
international managers, for whom Merrill Lynch International, Salomon Brothers
International Limited, Bank of America International Limited, Lazard Capital
Markets and Prudential-Bache International Limited are acting as lead managers,
for sale of the shares outside the U.S. and Canada. Subject to the terms and
conditions in the international purchase agreement, and concurrently with the
sale of 9,940,000 shares to the U.S. underwriters pursuant to the U.S. purchase
agreement, we have agreed to sell to the international managers, and the
international managers severally have agreed to purchase 2,485,000 shares from
us. The initial public offering price per share and the total underwriting
discount per share are identical under the U.S. purchase agreement and the
international purchase agreement.

The U.S. underwriters and the international managers have agreed to
purchase all of the shares sold under the U.S. and international purchase
agreements if any of these shares are purchased. If an underwriter defaults,
the U.S. and international purchase agreements provide that the purchase
commitments of the nondefaulting underwriters may be increased or the purchase
agreements may be terminated. The closings for the sale of shares to be
purchased by the U.S. underwriters and the international managers are
conditioned on one another.

We have agreed to indemnify the U.S. underwriters and the international
managers against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the U.S. underwriters and
international managers may be required to make in respect of those liabilities.

The underwriters are offering the shares, subject to prior sale, when, as
and if issued to and accepted by them, subject to approval of legal matters by
their counsel, including the validity of the shares, and other conditions
contained in the purchase agreements, such as the receipt by the underwriters
of officer's certificates and legal opinions. The underwriters reserve the
right to withdraw, cancel or modify offers to the public and to reject orders
in whole or in part.

Commissions and Discounts

The U.S. representatives have advised us that the U.S. underwriters
propose initially to offer the shares to the public at the initial public
offering price on the cover page of this prospectus and to dealers at that
price less a concession not in excess of $ per share. The U.S. underwriters
may allow, and the dealers may reallow, a discount not in excess of $ per
share to other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.

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<PAGE>

The following table shows the initial public offering price, underwriting
discount and proceeds before expenses to Nassau. In addition, the table
includes certain other items considered by the NASD to be underwriting
compensation for purposes of the NASD's Conduct Rules. The information assumes
either no exercise or full exercise by the U.S. underwriters and the
international managers of their over-allotment options.

<TABLE>
<CAPTION>
Per Share Without Option With Option
--------- -------------- -----------
<S> <C> <C> <C>
Public offering price.................. $ $ $
Underwriting discount.................. $ $ $
Proceeds, before expenses, to Nassau... $ $ $
Other items............................ $ $ $
</TABLE>

Merrill Lynch Capital Corporation, an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, owns 26,473 shares of our class A common stock
which were received upon conversion of limited partnership units acquired in
connection with our recapitalization. The compensation in the table above in
the line titled "other items" was computed based on the difference between the
$ initial public offering price and $ , the price deemed to be paid
for the shares of class A common stock held by Merrill Lynch Capital
Corporation.

The expenses of the offering, not including the underwriting discount,
are estimated at $1,920,000 and are payable by us, as set forth in the
following table.

<TABLE>
<S> <C>
SEC registration fee................................................ $ 62,324
NASD filing fee..................................................... 22,300
Nasdaq National Market listing fee.................................. 87,000
Printing and engraving expenses..................................... 400,000
Legal fees and expenses............................................. 600,000
Accounting fees and expenses........................................ 550,000
Blue sky fees and expenses (including legal fees)................... 7,500
Transfer agent and registrar fees and expenses...................... 3,500
Premiums for director and officer insurance......................... 175,883
Miscellaneous....................................................... 11,493
----------
Total............................................................. $1,920,000
==========
</TABLE>
Over-allotment Options

We have granted an option to the U.S. underwriters to purchase up to
1,491,000 additional shares at the public offering price less the underwriting
discount. The U.S. underwriters may exercise this option for 30 days from the
date of this prospectus solely to cover any over-allotments. If the U.S.
underwriters exercise this option, each will be obligated, subject to
conditions contained in the purchase agreements, to purchase a number of
additional shares proportionate to that U.S. underwriter's initial amount
reflected in the above table.

We have also granted an option to the international managers, exercisable
for 30 days from the date of this prospectus, to purchase up to 372,750
additional shares to cover any over-allotments on terms similar to that granted
to the U.S. underwriters.

Intersyndicate Agreement

The U.S. underwriters and the international managers have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Under the intersyndicate agreement, the U.S. underwriters and the
international managers may sell shares to each other for purposes of resale at
the initial public offering price, less an amount not greater than the selling
concession. Under the intersyndicate agreement, the U.S. underwriters and any
dealer to whom they sell shares will not offer to sell or sell shares to
persons who are

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<PAGE>

non-U.S. or non-Canadian persons or to persons they believe intend to resell to
persons who are non-U.S. or non-Canadian persons, except in the case of
transactions under the intersyndicate agreement. Similarly, the international
managers and any dealer to whom they sell shares will not offer to sell or sell
shares to U.S. persons or Canadian persons or to persons they believe intend to
resell to U.S. or Canadian persons, except in the case of transactions under
the intersyndicate agreement.

Reserved Shares

At our request, the underwriters have reserved for sale, at the initial
public offering price, up to 621,250 shares offered by this prospectus for sale
to some of our directors, officers, employees and business associates. If these
persons purchase reserved shares, this will reduce the number of shares
available for sale to the general public. Any reserved shares that are not
orally confirmed for purchase within one day of the pricing of this offering
will be offered by the underwriters to the general public on the same terms as
the other shares offered by this prospectus.

Purchasers of shares pursuant to the reserved share program generally
will not be subject to lock-up agreements in respect of the shares so purchased
unless required by the Conduct Rules of the NASD. The NASD's Conduct Rules will
require that some purchasers of shares who are affiliated or associated with
NASD members or who hold senior positions at financial institutions or members
of their immediate families be subject to three-month lock-up agreements.

No Sales of Similar Securities

. offer, pledge, sell or contract to sell any common stock, other than
common stock issued by us in connection with our purchase of Aurora
Communications;

. sell any option or contract to purchase any common stock;

. purchase any option or contract to sell any common stock;

. grant any option, right or warrant for the sale of any common stock,
other than pursuant to our stock incentive plan;

. lend or otherwise dispose of or transfer any common stock;

. request or demand that we file a registration statement related to
any common stock; or

This lock-up provision applies to common stock and to securities
convertible into or exchangeable or exercisable for or repayable with common
stock. It also applies to common stock owned now or acquired later by the
person executing the agreement or for which the person executing the agreement
later acquires the power of disposition.

Quotation on the Nasdaq National Market

We expect the shares to be approved for quotation on The Nasdaq National
Market, subject to notice of issuance, under the symbol "NBCR."

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<PAGE>

Before this offering, there has been no public market for our class A
common stock. The initial public offering price will be determined through
negotiations among us and the U.S. representatives and lead managers. In
addition to prevailing market conditions, the primary factors to be considered
in determining the initial public offering price are:

. the valuation multiples of publicly traded companies that the U.S.
representatives and the lead managers believe to be comparable to us;

. our financial information;

. the history of, and the prospects for, our company and the industry
in which we compete;

. an assessment of our management, its past and present operations, and
the prospects for, and timing of, our future revenues;

. the present state of our development;

. the general condition of the securities market at the time of this
offering; and

. the above factors in relation to market values and various valuation
measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also
possible that after the offering the shares will not trade in the public market
at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares in the
aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the shares is completed, SEC rules may limit
underwriters and selling group members from bidding for and purchasing our
class A common stock. However, the U.S. representatives may engage in
transactions that stabilize the price of the class A common stock, such as bids
or purchases to peg, fix or maintain that price.

If the underwriters create a short position in the class A common stock
in connection with the offering, i.e., if they sell more shares than are listed
on the cover of this prospectus, the U.S. representatives may reduce that short
position by purchasing shares in the open market. The U.S. representatives may
also elect to reduce any short position by exercising all or part of the over-
allotment options described above. Purchases of the class A common stock to
stabilize its price or to reduce a short position may cause the price of the
class A common stock to be higher than it might be in the absence of such
purchases.

The U.S. representatives may also impose a penalty bid on underwriters
and selling group members. This means that if the U.S. representatives purchase
shares in the open market to reduce the underwriters' short position or to
stabilize the price of such shares, they may reclaim the amount of the selling
concession from the underwriters and selling group members who sold those
shares. The imposition of a penalty bid may also affect the price of the shares
in that it discourages resales of those shares.

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the class A common stock. In addition,
neither we nor any of the underwriters makes any representation that the U.S.
representatives or the lead managers will engage in these transactions or that
these transactions, once commenced, will not be discontinued without notice.
These transactions may be effected on The Nasdaq National Market, in the over-
the-counter market or otherwise.

Electronic Prospectus

Merrill Lynch, Pierce, Fenner & Smith Incorporated will facilitate
Internet distribution for this offering to certain of its Internet subscription
customers. Merrill Lynch, Pierce, Fenner & Smith Incorporated intends to
allocate a limited number of shares for sale to its online brokerage customers.
An electronic prospectus is available on the website maintained by Merrill
Lynch, Pierce, Fenner & Smith Incorporated.

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Prudential Securities Incorporated facilitates the marketing of new
issues online through its PrudentialSecurities.com division. Clients of
Prudential Advisor SM, a full service brokerage firm program, may view offering
terms and a prospectus online and place orders through their financial
advisors.

Other than the prospectus in electronic format, the information on the
websites maintained by Merrill Lynch, Pierce, Fenner & Smith Incorporated and
PrudentialSecurities.com and relating to this offering is not intended to be
part of this prospectus.

Other Relationships

Merrill Lynch, Pierce, Fenner & Smith Incorporated has acted as our
financial advisor in connection with our pending acquisition of Aurora
Communications and our reorganization. In addition, Merrill Lynch, Pierce,
Fenner & Smith Incorporated has acted as sole placement agent with respect to
our units consisting of senior discount notes and limited partnership units,
and as sole lead arranger, book running manager and syndication agent with
respect to our new credit facility. Merrill Lynch, Pierce, Fenner & Smith
Incorporated has received customary fees and commissions for these
transactions. Merrill Lynch Capital Corporation, an affiliate of Merrill Lynch,
Pierce, Fenner & Smith Incorporated, owns $20.0 million aggregate principal
amount of our senior discount notes and 26,473 shares of our class A common
stock. Merrill Lynch Capital Corporation is also a lender under our new credit
facility. We will issue shares of our class C common stock to BancAmerica
Capital Investors SBIC I, L.P., an affiliate of Banc of America Securities LLC,
in connection with the satisfaction of $35.0 million of the purchase price
payable with respect to the Aurora acquisition. The number of shares that we
issue will be based on the market value of our class A common stock at the date
of closing of the acquisition. Assuming a market value equal to $17.50, the
midpoint of the price range set forth on the cover page of this prospectus, we
expect to issue 2,000,000 shares of class C common stock to BancAmerica Capital
Investors. Merrill Lynch Capital Corporation has agreed that it will not, with
limited exceptions, sell, transfer, assign, pledge or hypothecate any shares of
class A common stock for one year after the date of this prospectus.

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<PAGE>

LEGAL MATTERS

The validity of the class A common stock offered in this prospectus and
certain other legal matters will be passed upon for us by Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York. Certain legal matters will be passed
upon for the underwriters by Shearman & Sterling, New York, New York.

EXPERTS

The historical financial statements of Nassau Broadcasting Partners, L.P.
as of December 31, 1998 and 1999, and for each of the three years in the period
ended December 31, 1999 appearing in this prospectus and registration statement
were audited by Grant Thornton LLP, independent auditors, as set forth in their
report thereon appearing elsewhere in this prospectus and registration
statement, and are included in reliance upon such report given on their
authority as experts in accounting and auditing.

The consolidated financial statements of Aurora Communications, LLC as of
December 31, 1999, and for the period January 20, 1999, the date of
commencement of operations, to December 31, 1999 appearing in this prospectus
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon appearing elsewhere in this prospectus, and are included
in reliance upon such report given on their authority as experts in accounting
and auditing.

The combined financial statements of radio stations WODE(FM) and WEEX(AM)
as of December 31, 1998 and 1999, for the period from January 29, 1998, the
date of commencement of operations by Clear Channel Communications, Inc., to
December 31, 1998 and for the year ended December 31, 1999 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
in this prospectus and registration statement and are included in reliance upon
such report given on the authority of such firm as experts in accounting and
auditing.

The combined financial statements of WEBE and WICC Radio Stations,
divisions of ML Media Partners, L.P., as of December 31, 1997 and 1998 and
August 31, 1999 for each of the three years in the period ended December 31,
1998 and for the period January 1, 1999 to August 31, 1999 appearing in this
prospectus have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports thereon appearing elsewhere in this prospectus, and are
included in reliance upon such reports given on their authority as experts in
accounting and auditing.

The historical financial statements of (i) Capstar Trust, as of December
31, 1998 and October 26, 1999, for the period May 29, 1998, the date of
inception, to December 31, 1998 and for the period January 1, 1999 to October
26, 1999; (ii) Westchester Radio, LLC as of December 31, 1998 and October 26,
1999, for the period April 2, 1998, the date of inception, to December 31, 1998
and for the period January 1, 1999 to October 26, 1999; (iii) Commodore Media
of Westchester, Inc. as of December 31, 1996 and 1997 and as of April 1, 1998,
for each of the two years in the period ended December 31, 1997 and for the
period from January 1, 1998 to April 1, 1998; (iv) WRKI, WAXB, WPUT, and WINE,
operating divisions of Commodore Media of Norwalk, Inc., as of December 31,
1997 and May 29, 1998, for the year ended December 31, 1997 and for the period
from January 1, 1998 to May 29, 1998; and (v) WRKI, WAXB, WPUT, WZZN and WINE,
operating divisions of Commodore Media of Norwalk, Inc., as of December 31,
1996 and for the year then ended, appearing in this prospectus were audited by
Weeks Holderbaum Huber & DeGraw, LLP, independent auditors, as set forth in
their reports thereon appearing elsewhere in this prospectus, and are included
in reliance upon such reports given on their authority as experts in accounting
and auditing.

98
<PAGE>

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We have filed a registration statement on Form S-1 with the SEC covering
our class A common stock. For further information about us and the class A
common stock, you should refer to our registration statement and its exhibits.
This prospectus summarizes material provisions of contracts and other documents
to which we refer you. Since the prospectus may not contain all the information
that you may find important, you should review the full text of these
documents. We have included copies of these documents as exhibits to our
registration statement.

After the offering, we will be subject to the reporting requirements of
the Securities Exchange Act of 1934. We will fulfill these requirements by
filing periodic reports, proxy statements and other information with the SEC.
We intend to furnish our stockholders with annual reports containing
consolidated financial statements certified by an independent accounting firm.
Our SEC filings will be available over the internet at the SEC's website at
http://www.sec.gov. You may also read, without charge, or copy, at prescribed
rates, any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at 1-800-
SEC-0330 for more information about the public reference rooms and their copy
charges. You may also inspect our SEC reports and other information at Nasdaq's
website at http://www.nasdaq.com.

99
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Nassau Broadcasting Partners, L.P.--Audited Financial Statements
Report of Independent Certified Public Accountants..................... F-5
Balance Sheets as of December 31, 1999 and 1998........................ F-6
Statements of Operations and Comprehensive Loss for the years ended
December 31, 1999, 1998 and 1997...................................... F-7
Statement of Partners' Capital (Deficit) for the years ended December
31, 1999, 1998 and 1997............................................... F-8
Statements of Cash Flows for the years ended December 31, 1999, 1998
and 1997.............................................................. F-9
Notes to Financial Statements.......................................... F-10
Nassau Broadcasting Partners, L.P.--Unaudited Interim Financial Statements
Balance Sheets as of March 31, 2000 and December 31, 1999.............. F-24
Statements of Operations and Comprehensive Loss for the three months
ended March 31, 2000 and 1999......................................... F-25
Statements of Cash Flows for the three months ended March 31, 2000 and
1999.................................................................. F-26
Notes to Financial Statements.......................................... F-27
Aurora Communications, LLC (A Limited Liability Company)--
Audited Consolidated Financial Statements
Report of Independent Auditors......................................... F-31
Consolidated Balance Sheet as of December 31, 1999..................... F-32
Consolidated Statement of Operations for the period from January 20,
1999
(commencement of operations) to December 31, 1999..................... F-33
Consolidated Statement of Members' Capital for the period from January
20, 1999 (commencement of operations) to December 31, 1999............ F-34
Consolidated Statement of Cash Flows for the period from January 20,
1999
(commencement of operations) to December 31, 1999..................... F-35
Notes to Consolidated Financial Statements............................. F-36
Aurora Communications, LLC (A Limited Liability Company)--
Unaudited Interim Financial Statements
Condensed Consolidated Balance Sheet as of March 31, 2000.............. F-43
Condensed Consolidated Statement of Operations for the three months
ended March 31, 2000.................................................. F-44
Condensed Consolidated Statement of Members' Capital as of March 31,
2000.................................................................. F-45
Condensed Consolidated Statement of Cash Flows for the three months
ended March 31, 2000.................................................. F-46
Notes to Condensed Consolidated Financial Statements................... F-47
Radio Stations WODE (FM) and WEEX (AM)--Audited Combined Financial
Statements
Report of Independent Auditors......................................... F-49
Combined Balance Sheets as of December 31, 1999 and 1998............... F-50
</TABLE>

F-1
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
Combined Statements of Operations for the year ended December 31, 1999 and
the period from January 29, 1998 (commencement of operations) to December
31, 1998................................................................. F-51
Combined Statements of Cash Flows for the year ended December 31, 1999 and
the period from January 29, 1998 (commencement of operations) to December
31, 1998................................................................. F-52
Notes to Combined Financial Statements.................................... F-53
WEBE and WICC Radio Stations (Divisions of ML Media Partners, L.P.)--
Audited Combined Financial Statements
Independent Auditors' Report.............................................. F-56
Combined Balance Sheet as of August 31, 1999.............................. F-57
Combined Statement of Operations and Accumulated Earnings for the period
from January 1, 1999 to August 31, 1999.................................. F-58
Combined Statement of Cash Flows for the period from January 1, 1999 to
August 31, 1999.......................................................... F-59
Notes to Combined Financial Statements.................................... F-60
WEBE and WICC Radio Stations (Divisions of ML Media Partners, L.P.)--
Audited Combined Financial Statements
Independent Auditors' Report.............................................. F-64
Combined Balance Sheets as of December 31, 1998 and 1997.................. F-65
Combined Statements of Operations and Accumulated Earnings (Deficit) for
the years ended December 31, 1998, 1997 and 1996......................... F-66
Combined Statements of Cash Flows for the years ended December 31, 1998,
1997 and 1996............................................................ F-67
Notes to Combined Financial Statements.................................... F-68
Capstar Trust (A Trust)--Audited Financial Statements
Independent Auditors' Report.............................................. F-72
Balance Sheet as of October 26, 1999...................................... F-73
Statement of Operations and Beneficiaries' Equity for the period from
January 1, 1999
to October 26, 1999...................................................... F-74
Statement of Cash Flows for the period from January 1, 1999 to October 26,
1999..................................................................... F-75
Notes to Financial Statements............................................. F-76
Capstar Trust (A Trust)--Audited Financial Statements
Independent Auditors' Report.............................................. F-80
Balance Sheet as of December 31, 1998..................................... F-81
Statement of Operations and Beneficiaries' Equity for the period from May
29, 1998
(date of inception) to December 31, 1998................................. F-82
Statement of Cash Flows for the period from May 29, 1998 (date of
inception) to December 31, 1998.......................................... F-83
Notes to Financial Statements............................................. F-84
</TABLE>

F-2
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
Westchester Radio, LLC--Audited Financial Statements
Independent Auditors' Report.......................................... F-88
Balance Sheet as of October 26, 1999.................................. F-89
Statement of Operations and Members' Deficiency for the period from
January 1, 1999 to
October 26, 1999..................................................... F-90
Statement of Cash Flows for the period from January 1, 1999 to October
26, 1999............................................................. F-91
Notes to Financial Statements......................................... F-92
Westchester Radio, LLC--Audited Financial Statements
Independent Auditors' Report.......................................... F-99
Balance Sheet as of December 31, 1998................................. F-100
Statement of Operations and Members' Deficiency for the period from
April 2, 1998
(date of inception) to December 31, 1998............................. F-101
Statement of Cash Flows for the period from April 2, 1998 (date of
inception) to December 31, 1998...................................... F-102
Notes to Financial Statements......................................... F-103
Commodore Media of Westchester, Inc.--Audited Financial Statements
Independent Auditors' Report.......................................... F-110
Balance Sheet as of April 1, 1998..................................... F-111
Statement of Operations and Retained Earnings for the period from
January 1, 1998 to April 1, 1998..................................... F-112
Statement of Cash Flows for the period from January 1, 1998 to April
1, 1998.............................................................. F-113
Notes to Financial Statements......................................... F-114
Commodore Media of Westchester, Inc.--Audited Financial Statements
Independent Auditors' Report.......................................... F-118
Balance Sheet as of December 31, 1997................................. F-119
Statement of Operations and Retained Earnings for the year ended De-
cember 31, 1997...................................................... F-120
Statement of Cash Flows for the year ended December 31, 1997.......... F-121
Notes to Financial Statements......................................... F-122
Commodore Media of Westchester, Inc.--Audited Financial Statements
Independent Auditors' Report.......................................... F-126
Balance Sheet as of December 31, 1996................................. F-127
Statement of Operations and Accumulated Deficit for the year ended
December 31, 1996.................................................... F-128
Statement of Cash Flows for the year ended December 31, 1996.......... F-129
Notes to Financial Statements......................................... F-130
</TABLE>

F-3
<PAGE>

<TABLE>
<CAPTION>
Page
----
<S> <C>
WRKI/WAXB/WPUT/WINE (Operating Divisions of Commodore Media of Norwalk,
Inc.)--Audited Combined Financial Statements
Independent Auditors' Report......................................... F-134
Combined Balance Sheet as of May 29, 1998............................ F-135
Combined Statement of Operations and Division Equity for the period
from January 1, 1998 to May 29, 1998................................ F-136
Combined Statement of Cash Flows for the period from January 1, 1998
to May 29, 1998..................................................... F-137
Notes to Financial Statements........................................ F-138
WRKI/WAXB/WPUT/WINE (Operating Divisions of Commodore Media of Norwalk,
Inc.)--Audited Combined Financial Statements
Independent Auditors' Report......................................... F-142
Combined Balance Sheet as of December 31, 1997....................... F-143
Combined Statement of Operations and Division Equity for the year
ended December 31, 1997............................................. F-144
Combined Statement of Cash Flows for the year ended December 31,
1997................................................................ F-145
Notes to Financial Statements........................................ F-146
WRKI/WAXB/WPUT/WZZN/WINE (Operating Divisions of Commodore Media of
Norwalk, Inc.)--Audited Combined Financial Statements
Independent Auditors' Report......................................... F-150
Combined Balance Sheet as of December 31, 1996....................... F-151
Combined Statement of Operations and Division Equity for the year
ended December 31, 1996............................................. F-152
Combined Statement of Cash Flows for the year ended December 31,
1996................................................................ F-153
Notes to Financial Statements........................................ F-154
</TABLE>

F-4
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To the Partners of
Nassau Broadcasting Partners, L.P.

We have audited the accompanying balance sheets of Nassau Broadcasting
Partners, L.P. as of December 31, 1999 and 1998 and the related statements of
operations and comprehensive loss, partners' capital (deficit) and cash flows
for each of the three years in the period ended December 31, 1999. 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 auditing standards generally
accepted in the United States. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Nassau Broadcasting
Partners, L.P. as of December 31, 1999 and 1998, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.

Grant Thornton LLP
Edison, New Jersey
March 1, 2000

F-5
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

BALANCE SHEETS

<TABLE>
<CAPTION>
December 31,
----------------------------------------
Pro forma
1999
(unaudited)
1999 (See Note O) 1998
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.......... $ 587,362 $ 587,362 $ 7,050,051
Marketable securities.............. 2,201,080 2,201,080 1,779,788
Due from broker.................... -- -- 762,710
Accounts receivable (net of
allowance for doubtful accounts of
$316,000 and $331,000 in 1999 and
1998, respectively)............... 6,645,514 6,645,514 5,257,065
Prepaid expenses and other current
assets............................ 223,664 223,664 206,308
Note receivable--officer........... 590,000 590,000 90,000
------------ ------------ ------------
Total current assets............. 10,247,620 10,247,620 15,145,922
PROPERTY AND EQUIPMENT, NET.......... 11,792,237 11,792,237 11,316,879
OTHER ASSETS
Certificates of deposit--
restricted........................ 77,586 77,586 39,913
Deferred costs..................... 805,436 805,436 1,230,923
Cost in excess of net assets
acquired.......................... 26,504,288 26,504,288 27,253,280
Deposits........................... 25,100,484 25,100,484 15,599,133
Note receivable--officer........... 100,000 100,000 36,000
Other assets....................... 140,129 140,129 72,331
------------ ------------ ------------
$ 74,767,780 $ 74,767,780 $ 70,694,381
============ ============ ============
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued
expenses.......................... $ 1,683,042 $ 1,683,042 $ 1,082,145
Loan payable--broker............... 805,270 805,270 769,846
Mortgages payable--current......... 127,340 127,340 115,824
Capitalized lease obligations--
current........................... 354,057 354,057 320,709
Distribution payable............... 10,500,000
------------ ------------ ------------
Total current liabilities........ 2,969,709 13,469,709 2,288,524
SENIOR DEBT.......................... 47,938,871 47,938,871 43,994,812
SUBORDINATED NOTES PAYABLE........... 39,099,013 39,099,013 35,091,620
MORTGAGES PAYABLE, LONG-TERM......... 2,099,363 2,099,363 2,226,703
CAPITALIZED LEASE OBLIGATIONS, LONG-
TERM................................ 826,376 826,376 1,058,754
DEFERRED INCOME...................... 282,000 282,000 --
DEFERRED GAIN........................ 1,062,000 1,062,000 1,629,000
COMMITMENTS AND CONTINGENCIES
PARTNERS' DEFICIT.................... (19,509,552) (30,009,552) (15,595,032)
------------ ------------ ------------
$ 74,767,780 $ 74,767,780 $ 70,694,381
============ ============ ============
</TABLE>

The accompanying notes are an integral part of these statements.

F-6
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
Year ended December 31,
--------------------------------------
1999 1998 1997
------------ ----------- -----------
<S> <C> <C> <C>
Gross revenues......................... $ 34,295,261 $27,349,044 $20,891,079
Less agency and outside commissions.... 2,893,603 2,352,913 1,811,723
------------ ----------- -----------
Net revenues....................... 31,401,658 24,996,131 19,079,356
------------ ----------- -----------
Operating expenses, excluding
depreciation, amortization, corporate
general and administrative expenses,
and local marketing agreement fees.... 20,793,685 17,226,676 13,437,147
Depreciation and amortization expense.. 2,634,479 2,363,711 2,138,981
Corporate general and administrative
expenses.............................. 2,280,157 1,825,305 1,995,151
Local marketing agreement fees......... 2,516,718 2,271,176 1,665,990
------------ ----------- -----------
28,225,039 23,686,868 19,237,269
------------ ----------- -----------
Operating income (loss)............ 3,176,619 1,309,263 (157,913)
------------ ----------- -----------
Other income (expenses)
Interest and dividend income......... 26,634 65,336 210,709
Realized gains on marketable
securities.......................... 2,536,577 926,531 319,269
Gain on sale of radio stations....... 567,000 3,176,496 --
Interest expense..................... (10,946,358) (8,781,184) (6,367,215)
Special management fee............... -- -- (744,140)
------------ ----------- -----------
(7,816,147) (4,612,821) (6,581,377)
------------ ----------- -----------
Loss before extraordinary item..... (4,639,528) (3,303,558) (6,739,290)
Extraordinary loss on early retirement
of debt............................... -- (676,514) --
------------ ----------- -----------
NET LOSS........................... (4,639,528) (3,980,072) (6,739,290)
------------ ----------- -----------
Unrealized gain on marketable
securities
Unrealized holding gains arising
during the year..................... 1,213,318 488,310 --
Less reclassification adjustment for
gains included in net income........ (488,310) -- --
------------ ----------- -----------
Other comprehensive income............. 725,008 488,310 --
------------ ----------- -----------
Comprehensive loss................. $ (3,914,520) $(3,491,762) $(6,739,290)
============ =========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-7
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

STATEMENT OF PARTNERS' CAPITAL (DEFICIT)

Years ended December 31, 1997, 1998 and 1999

<TABLE>
<CAPTION>
Accumulated
other Total
Accumulated comprehensive partners'
deficit income deficit
------------ ------------- ------------
<S> <C> <C> <C>
Balances, January 1, 1997........... $ (7,792,845) -- $ (7,792,845)
Net loss............................ (6,739,290) -- (6,739,290)
Increase attributable to
subordinated debt option........... 5,500,000 -- 5,500,000
------------ ---------- ------------
Balances, December 31, 1997......... (9,032,135) -- (9,032,135)
Net loss............................ (3,980,072) -- (3,980,072)
Unrealized gain on marketable
securities......................... -- $ 488,310 488,310
Distributions....................... (3,071,135) -- (3,071,135)
------------ ---------- ------------
Balances, December 31, 1998......... (16,083,342) 488,310 (15,595,032)
Net loss............................ (4,639,528) -- (4,639,528)
Unrealized gain on marketable
securities, net of reclassification
adjustment......................... -- 725,008 725,008
------------ ---------- ------------
Balances, December 31, 1999......... $(20,722,870) $1,213,318 $(19,509,552)
============ ========== ============
</TABLE>

The accompanying notes are an integral part of this statement.

F-8
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------
1999 1998 1997
----------- ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss............................. $(4,639,528) $ (3,980,072) $ (6,739,290)
Adjustments to reconcile net loss to
net cash used in operating
activities..........................
Extraordinary loss on early
retirement of debt................. -- 676,514 --
Depreciation........................ 1,192,000 1,090,478 660,554
Amortization of deferred costs...... 560,487 495,073 755,578
Amortization of subordinated debt
discount........................... 901,896 1,100,004 642,000
Amortization of costs in excess of
net assets acquired................ 881,992 778,160 722,849
Subordinated debt interest.......... 3,105,497 3,422,028 2,821,432
Deferred senior debt interest....... 1,459,059 494,812 --
Gain on sale of radio stations...... (567,000) (3,176,496) --
Gain on sale of marketable
securities......................... (2,536,577) (926,531) (319,269)
Changes in operating assets and
liabilities
Accounts receivable................. (1,388,449) (1,192,491) (940,486)
Prepaid expenses and other current
assets............................. (17,356) (92,545) (42,406)
Prepaid management fee.............. -- 400,000 50,000
Other assets........................ (67,798) (33,499) (207,141)
Accounts payable and accrued
expenses........................... 600,896 (96,459) (1,004,000)
Deferred income..................... 282,000 -- --
----------- ------------ ------------
Net cash used in operating
activities....................... (232,881) (1,041,024) (3,600,179)
----------- ------------ ------------
Cash flows from investing activities
Purchase of certificates of
deposit--restricted, net........... (37,673) (1,913) (38,000)
Purchases of property and
equipment.......................... (1,667,364) (911,579) (3,204,608)
Acquisition of radio stations....... -- -- (5,052,220)
Sale of radio stations, net of
selling costs...................... -- 6,778,716 --
Deposits for stations to be acquired
and other costs.................... (9,634,351) (4,292,721) (8,769,153)
Sale of marketable securities....... 13,684,826 5,623,832 10,458,768
Purchase of marketable securities... (10,081,818) (3,535,043) (11,728,851)
Loans to president and officer...... (564,000) (126,000) --
----------- ------------ ------------
Net cash (used in) provided by
investing activities............. (8,300,380) 3,535,292 (18,334,064)
----------- ------------ ------------
Cash flows from financing activities
Proceeds from senior debt........... 2,485,000 43,500,000 --
Payment of senior debt.............. -- (25,000,000) --
Payment of subordinated debt ....... -- (9,890,597) --
Proceeds from subordinated debt..... -- -- 17,500,000
Payments of other debt.............. (358,852) (384,499) (377,738)
Proceeds from other debt............ 79,424 -- 50,000
Increase in deferred costs.......... (135,000) (1,307,265) --
Distribution to Partners............ -- (3,071,135) --
----------- ------------ ------------
Net cash provided by financing
activities....................... 2,070,572 3,846,504 17,172,262
----------- ------------ ------------
NET (DECREASE) INCREASE IN CASH
AND CASH EQUIVALENTS............. (6,462,689) 6,340,772 (4,761,981)
Cash and cash equivalents at
beginning of year................... 7,050,051 709,279 5,471,260
----------- ------------ ------------
Cash and cash equivalents at end of
year................................ $ 587,362 $ 7,050,051 $ 709,279
=========== ============ ============
Supplemental disclosures of cash flow
information:
Cash paid during the year for
Interest........................... $ 4,952,226 $ 3,916,497 $ 2,621,972
=========== ============ ============
</TABLE>

Supplemental information on noncash investing and financing activities:

(1) Capital lease obligations of $1,016,594 and $50,000 were incurred during
the years ended December 31, 1998 and 1997, respectively. The Company
entered into leases for new broadcast equipment.
(2) Mortgage obligations of $2,575,000 were incurred in 1998.

The accompanying notes are an integral part of these statements.

F-9
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS

NOTE A--SUMMARY OF ACCOUNTING POLICIES

1. Business

Nassau Broadcasting Partners, L.P. (the "Company") is principally engaged
in the management and operation of radio broadcast stations in suburban markets
located between the New York and Philadelphia metropolitan areas. As of
December 31, 1999, the Company owns and/or operates nineteen radio stations.

Following are descriptions of the partners in the Company and certain
affiliates:

Nassau Broadcasting Company, Inc. ("NBC")--Limited partner which,
on a fully diluted basis, holds a 79% equity interest in the
Company. NBC is wholly owned by Nassau Broadcast Holdings, Inc.
("NBH"), in which the Company's President and Chief Executive
Officer of the Company, has a 90% interest. The remaining 10% of
NBH is owned by the estate of the Chief Executive Officer's
father.

Nassau Holdings, Inc. ("NHI")--Limited partner, which, on a fully
diluted basis, holds a 20% equity interest in the Company. NHI is
wholly owned by the President and Chief Executive Officer of the
Company.

Nassau Broadcasting Partners, Inc. ("NBPI")--General partner
which, on a fully diluted basis, holds a 1% equity interest and
100% of the voting rights in the Company. The President and Chief
Executive Officer of the Company has a 52.4% equity interest and
33.4% voting interest in NBPI.

2. Revenue Recognition

Revenues for commercial broadcasting advertisements are recognized when
the commercial is broadcast.

3. Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided on
a straight-line basis over the estimated useful lives of the related assets.
Leasehold improvements are amortized over the shorter of the lease term or
estimated useful lives of the assets. Depreciation for tax purposes is based
upon the original cost basis of all assets using accelerated methods.

4. Marketable Securities

The Company has evaluated its investment policies consistent with
Statement of Financial Accounting Standards No. 115 ("SFAS No. 115"),
"Accounting for Certain Investments in Debt and Equity Securities," and
determined that its investment securities, all of which are equity securities,
are to be classified as available-for-sale. Available-for-sale securities are
carried at fair value, with the unrealized gains and losses reported as a
component of partners' capital. The cost of securities sold is based on the
specific identification method.

5. Cost in Excess of Net Assets Acquired

The excess of cost over fair value of the net tangible assets acquired
consists of FCC licenses and goodwill, which are being amortized by the
straight-line method over a period of forty years. Accumulated amortization is
$2,468,000 and $1,719,000 at December 31, 1999 and 1998, respectively.

F-10
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

6. Deferred Costs

Deferred costs consist of legal and financing fees incurred in connection
with the issuance of the senior and subordinated notes and are being amortized
over the terms of the respective debt instruments.

7. Income Taxes

The Partnership does not pay income taxes on income; rather, the partners
are taxed on their share of partnership income. Accordingly, the Partnership
does not make any provisions in its accounts for income taxes.

8. Partners Distribution

On August 28, 1998, the Company entered into a senior loan agreement from
which a portion of the proceeds was used to repay subordinated notes held by
the Company and for distributions to the Company's Partners.

9. Cash and Cash Equivalents

The Company considers all highly liquid investments with an original
maturity of three months or less to be cash equivalents. These funds are
insured by the Federal Deposit Insurance Corporation up to an aggregate maximum
of $100,000 per institution. At various times throughout the year, the Company
maintains cash balances at banks in excess of $100,000.

10. Local Marketing Agreements

The Company enters into local marketing agreements ("LMAs") with respect
to certain radio stations it intends to acquire. The Company operates the
stations under the LMA whereby the Company agrees to purchase from the
broadcast station licensee certain broadcast time and provide programming to
and sell advertising on the stations during the purchased time. Fees incurred
pursuant to various local marketing agreements are recognized as station
operating expenses in the period the services received occur. The Company's
financial statements include broadcasting revenues and station operating
expenses of stations marketed under LMAs. Broadcasting revenues earned pursuant
to LMAs are recognized when advertisements are broadcast. Station operating
expenses are recognized when goods are received and services are obtained. The
broadcast station licensee retains responsibility for ultimate control of the
station in accordance with FCC policies. Such control includes, but is not
limited to, retaining control over policies, programming, advertisements and
operations of the station. When applicable, the LMA terminates upon the closing
of the acquisition of the station. The Company operated up to nine stations
under such agreements in 1999 and eight stations under such agreements in 1998
and 1997.

11. Impairment of Long Lived Assets and Identifiable Intangibles

Intangible assets consist principally of the value of FCC licenses and
the excess of the purchase price (including related acquisition costs) over the
fair value of net assets of acquired radio stations. These assets are amortized
on a straight-line basis over 40 years. The Company continually evaluates the
individual performance of all radio stations, including stations that were
underperforming when acquired. Intangible assets are evaluated when individual
station performance is not meeting the Company's expectations, or if other
events or circumstances indicate a possible inability to recover the related
intangible assets carrying amount.

F-11
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Such evaluation is based on various analyses, including identifiable cash flows
and profitability projections. If future expected undiscounted cash flows are
insufficient to recover the carrying amounts of the asset, then an impairment
loss is recognized based upon the excess of the carrying value of the asset
over the fair value of such assets, which is based upon the anticipated cash
flows on a discounted basis. The Company also evaluates the amortization and
depreciation periods of intangibles and other long-lived assets to determine
whether events or circumstances warrant revised estimates of useful lives.

12. Barter Transactions

Revenue from barter transactions (advertising provided in exchange for
goods and services) is recognized as income when commercials are broadcast, and
merchandise or services received are charged to expense when received or used.
Barter valuation is based upon management's estimates of fair value of goods or
services received. Barter revenue was approximately $1,353,000, $1,184,000 and
$1,075,000 for the years ended December 31, 1999, 1998 and 1997, respectively.
Available barter credits as of December 31, 1999 and 1998 are not material to
the Company's financial statements.

13. Concentrations of Credit Risk

Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of temporary cash
investments, marketable securities and accounts receivable. Concentrations of
credit risk with respect to accounts receivable are limited due to the large
number of customers comprising the Company's customer base.

14. 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.

15. Special Management Fee

The special management fee incurred in 1997, as approved by the Board of
Directors and in accordance with the management consulting agreement with NBH,
was in recognition of the successful completion of an acquisition plan
initiated in 1995.

16. Comprehensive (Income) Loss

Comprehensive income (loss) encompasses net income (loss) and other
comprehensive income (loss). The only item of other comprehensive income
presently applicable to the Company is the unrealized gain on the fair value of
marketable securities available for sale. Where applicable, reclassification
adjustments are made for realized gains or losses on such marketable securities
that were included in comprehensive income in prior years.

17. Advertising Expenses

Costs associated with advertising are expensed as incurred and amounted
to approximately $1.4 million, $1.0 million, and $700,000 for the years ended
December 31, 1999, 1998 and 1997, respectively.

F-12
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

18. Certificates of Deposit--Restricted

The Company purchased a $75,000 certificate of deposit in April 1999
which secures a standby letter of credit (see Note F-3). The certificate of
deposit bears interest at a rate of 4.93% and matures April 2001. The balance
at December 31, 1999, including accrued interest, is $77,586.

In December 1997, the Company purchased a $38,000 certificate of deposit
which secured a standby letter of credit. The letter of credit expired in
March 1999, at which time the certificate of deposit was redeemed for
approximately $40,000.

19. Deferred Income

In 1999, the Company received $350,000 pursuant to an agreement with an
advertising representation firm. This amount was recorded as deferred income
and is being recognized as a reduction of agency fees over thirty-six months.
The amount recognized in 1999 was $68,000.

20. Reclassification

Certain prior period amounts have been reclassified to conform to the
current period presentation.

21. Significant New Accounting Pronouncements

In September 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"),
"Accounting for Derivative Instruments and Hedging Activities," which requires
entities to recognize all derivatives in their financial statements as either
assets or liabilities measured as fair value. SFAS No. 133 also specifies new
methods of accounting for hedging transactions, prescribes the items and
transactions that may be hedged and specifies detailed criteria to be met to
qualify for hedge accounting. SFAS No. 133, as amended by SFAS No. 137, is
effective for fiscal years beginning after June 15, 2000. The Company is
evaluating the impact that this statement will have on its results of
operations, financial position and related disclosures.

In January 2000, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 99-17, "Accounting for Advertising Barter
Transactions," to be effective for transactions entered into after January 20,
2000. The consensus states that advertising barter transactions should be
accounted for at fair value and that the fair value recognized be disclosed in
the financial statements, if there is verifiable objective evidence provided
by sufficient cash transactions received by the seller of the advertising or
similar advertising. EITF No. 99-17 is not expected to have a material effect
on the Company's financial statements.

22. Use of Estimates

In preparing the Company's financial statements in conformity with
accounting principles generally accepted in the United States, management is
required 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, as well as the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

F-13
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE B--PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1999
and 1998:

<TABLE>
<CAPTION>
Depreciable life 1999 1998
----------------------- ----------- -----------
<S> <C> <C> <C>
Broadcast equipment........... 7 years $ 8,805,832 $ 7,868,697
Land and improvements......... 3,566,737 3,500,145
Buildings and improvements.... 10-31.5 years 1,803,423 1,397,643
Office equipment.............. 7 years 670,692 641,519
Computers..................... 5 years 528,094 463,163
Vehicles...................... 3 years 246,545 183,598
Lesser of term of
Leasehold improvements........ lease or life of assets 1,193,448 1,100,958
----------- -----------
16,814,771 15,155,723
Less accumulated
depreciation................. 5,022,534 3,838,844
----------- -----------
$11,792,237 $11,316,879
=========== ===========
</TABLE>

NOTE C--SENIOR DEBT

Senior debt represents notes payable to a financial institution in the
amounts of $43.5 and $2.485 million. The loans bear interest at 11% current
plus 3.25% deferred interest and are collateralized by all of the assets of the
Company. In addition, the partners, all of which are corporations, have pledged
their corporate stock as a guarantee. All principal and deferred interest are
due in full August 28, 2001.

The Company has $47 million available pursuant to these agreements, of
which $45.985 million has been borrowed.

Senior debt payable at December 31, 1999 and 1998 consists of the
following:

<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Original proceeds.................................... $43,500,000 $43,500,000
Additional proceeds.................................. 2,485,000 --
Deferred interest.................................... 1,953,871 494,812
----------- -----------
$47,938,871 $43,994,812
=========== ===========
</TABLE>

The term notes require that the Company achieve certain minimum annual
net revenues and broadcasting cash flows. The agreements also limit capital
expenditures, operating leases, corporate overhead expenses, and certain
acquisitions or loans. The Company obtained a waiver, dated February 22, 2000,
for the capital expenditure and corporate overhead limitations with which the
Company was not in compliance at December 31, 1999. The next compliance date
for these covenants is December 31, 2000.

F-14
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE D--SUBORDINATED DEBT

Subordinated debt represents 8% subordinated notes payable to an investor
group, due and payable in full, including all accrued interest, on March 27,
2002.

The subordinated debt holders have an option to purchase a majority
partnership interest. This option can be exercised at any time prior to the
expiration of the option on June 30, 2010. Subordinated debt discount in the
amount of $5,500,000 has been allocated to the value of the option based on the
relative fair values of the underlying debt and the option and is being
accreted over the term of the debt. In 1998, a portion of the subordinated debt
was repaid thereby giving rise to an extraordinary loss in writing off a pro
rata share of the subordinated debt discount.

The components of subordinated debt as of December 31, are as follows:

<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Balance at beginning of year, including accrued
interest........................................... $38,173,102 $44,641,675
Accrued interest.................................... 3,105,497 3,422,024
----------- -----------
41,278,599 48,063,699
Repayment........................................... -- (9,890,597)
----------- -----------
Subordinated debt................................... 41,278,599 38,173,102
----------- -----------
Subordinated debt discount
Original amount................................... 5,500,000 5,500,000
Amortization through end of year.................. (3,320,414) (1,742,004)
Write-off attributable to repayment............... -- (676,514)
----------- -----------
2,179,586 3,081,482
----------- -----------
Subordinated debt, net of discount.................. $39,099,013 $35,091,620
=========== ===========
</TABLE>

NOTE E--MORTGAGES PAYABLE

Mortgages payable at December 31, 1999 and 1998 are summarized below:

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Mortgage payable to a financial institution at 300 basis
points per annum in excess of weekly average yield on
US Treasury securities, fixed for five years,
collateralized by real property, guaranteed by the
President of the Company, and due June 1, 2013.
Principal and interest are payable monthly............. $1,035,702 $1,078,430
Mortgage payable to seller bearing interest at 10%,
collateralized by real property and due February 1,
2008. Principal and interest are payable monthly....... 876,801 944,006
Mortgage payable to sellers bearing interest at 10%,
collateralized by real property and due January 23,
2003. Principal and interest are payable monthly. The
mortgage was paid in full in February 2000............. 314,200 320,091
---------- ----------
2,226,703 2,342,527
Less current maturities................................. 127,340 115,824
---------- ----------
Mortgages payable--long-term portion.................... $2,099,363 $2,226,703
========== ==========
</TABLE>

F-15
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Maturities of mortgages payable as of December 31, 1999 are as follows:

<TABLE>
<S> <C>
2000.............................................................. $ 127,340
2001.............................................................. 139,842
2002.............................................................. 153,611
2003.............................................................. 168,744
2004.............................................................. 160,905
Thereafter........................................................ 1,476,261
----------
Total........................................................... $2,226,703
==========
</TABLE>

NOTE F--COMMITMENTS

1. Leases

The Company leases office, studio and tower space under noncancellable
operating leases expiring through 2018. The Company has an option to renew its
corporate office lease for four consecutive five-year periods commencing July
1, 2001. Rent expense for the years ended December 31, 1999, 1998 and 1997 was
approximately $610,000, $450,000 and $220,000, respectively. Future minimum
lease commitments are as follows:

<TABLE>
<S> <C>
2000............................................................. $1,021,000
2001............................................................. 986,000
2002............................................................. 783,000
2003............................................................. 770,000
2004............................................................. 766,000
Thereafter....................................................... 4,145,000
----------
Total minimum lease commitments................................ $8,471,000
==========
</TABLE>

The Company leases certain broadcast equipment under capitalized lease
agreements. The cost of leased equipment included in property and equipment was
approximately $1,697,000 and $1,675,000 at December 31, 1999 and 1998,
respectively, and the accumulated amortization was approximately $530,000 and
$330,000 at December 31, 1999 and 1998, respectively. Future minimum lease
payments for assets under capital leases at December 31, 1999 are as follows:

<TABLE>
<S> <C>
2000.............................................................. $ 380,444
2001.............................................................. 302,112
2002.............................................................. 12,405
2003.............................................................. 364,788
2004.............................................................. --
Thereafter........................................................ 467,689
---------
Total minimum lease payments.................................... 1,527,438
Less amount representing interest................................. 347,005
---------
Present value of net minimum lease payments....................... 1,180,433
Less current maturities........................................... 354,057
---------
Long-term obligation.............................................. $ 826,376
=========
</TABLE>

NHI and NBC have guaranteed a lease obligation of approximately $500,000.

F-16
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

2. Stock Option Plan

In prior years NBC approved the establishment of a non-statutory stock
option plan (the "Plan") that would entitle certain employees of the Company to
be eligible for options in NBC. Such Plan is to become effective upon the
filing of certain reorganization documents with the FCC, which is expected to
occur in March, 2000. The Plan will allow up to 2.5 million options on the
common stock of NBC to be given to employees of the Company. Such options will
vest and become exercisable upon a liquidating event as defined in the Plan
document. The term of the options will not exceed 10 years. As of December 31,
1999, NBC has agreed to grant 2,435,000 options with an exercise price of $.15
per share when FCC approval is obtained.

Upon FCC approval of the reorganization documents and the granting of the
options, the Company will account for the options pursuant to SFAS 123 and EITF
96-18. In accordance with EITF 96-18, the Company will recognize any cost of
the options in reporting periods prior to the measurement date at their lowest
aggregate fair value at each of the interim reporting dates prior to the
measurement date.

3. Letter of Credit

The Company has a $75,000 standby letter of credit, which relates to a
payment obligation to a vendor. The standby letter of credit is secured by a
certificate of deposit. (Note A-18.)

4. Other

The Company has agreed to compensate two officers of the Company a
minimum of $425,000 in 2000. In addition, these employees are eligible for
bonuses based on results of operations.

NOTE G--ACQUISITIONS

WOBM (FM) and WOBM (AM)

On July 1, 1996, the Company entered into an agreement to purchase all of
the issued and outstanding capital stock of Seashore Broadcasting Inc. and
Northshore Broadcasting Inc. ("Seashore") for $21 million, of which
approximately $5 million relates to the LMA. Seashore owns and operates WOBM
(FM) and WOBM (AM) located in the Toms River area in New Jersey. The Company
paid an irrevocable, nonrefundable deposit of $2 million and final closing is
scheduled for July 1, 2000, pending FCC approval.

In a related transaction, the Company entered into an LMA effective July
1, 1996 with Seashore pursuant to which the Company programs all of the
broadcast time of the stations and sells all of the commercial time during its
programming. Accordingly, the Company's financial statements include the
broadcasting revenues and station operating expenses of WOBM (FM) and WOBM
(AM). The Company has agreed to make monthly LMA payments of $83,333,
increasing in annual increments to maximum monthly payments of $108,333,
through the later of June 30, 2000 or the closing, and reimburse certain
operating expenses incurred during the term of the agreement. The agreement
expires on closing.

F-17
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

WSUS (FM)

On May 30, 1997, the Company acquired substantially all of the net
operating assets of WSUS Communications, Inc., which operated one radio
station, WSUS (FM), located in Franklin, New Jersey, for a purchase price of
approximately $5 million.

The above acquisition has been accounted for by the purchase method of
accounting. The purchase price has been allocated to the assets acquired,
principally intangible assets, and the liabilities assumed based on their
estimated fair values at the date of acquisition. The excess of the purchase
price over the estimated fair value of the net assets acquired has been
recorded as costs in excess of net assets acquired. The operating results of
this acquisition are included in the Company's results of operations from the
date of acquisition. Pro forma results of operations have not been included as
the amounts are not material to the Company's financial statements.

WNJO (FM) and WCHR (AM)

On June 1, 1996, the Company entered into an agreement, as amended, with
Great Scott Broadcasting ("Great Scott") to purchase substantially all of the
assets of WNJO (FM) and WCHR (AM), located in the Trenton, New Jersey area, for
a purchase price of $20,000,000. At December 31, 1999, the entire purchase
price had been paid and is reflected as deposits on the balance sheet.

The FCC has not yet approved the transaction. If the FCC fails to approve
the transaction and the Company is unsuccessful in appealing that decision, the
stations would be remarketed for a period of three years. Depending upon the
ultimate sales price to a third-party purchaser, the Company may or may not be
made whole in recovering its deposits.

Concurrently, the Company entered into an LMA with Great Scott pursuant
to which the Company has the right to program all of the broadcast time of the
stations and sell all of the commercial time during its programming beginning
June 1, 1997. The Company pays $75,000 per month pursuant to this agreement.
Effective February 8, 1999, the $75,000 per month payment was applied to the
final payment due under the Asset Purchase Agreement. These payments are
included in deposits on the accompanying balance sheet.

Upon a reduction of the payments pursuant to the LMA agreement in
September 1999, the Company continues to recognize revenues and expenses in
accordance with the terms of the LMA, and has commenced amortizing the deposits
on these stations over a period of 25 years. The amount amortized in 1999 was
approximately $130,000.

WTSX (FM) and WDLC (AM)

On August 7, 1998, the Company entered into an option agreement to
acquire the assets of Port Jervis Broadcasting Co., Inc. ("Port Jervis"), which
operates WTSX (FM) and WDLC (AM), licensed to broadcast in Port Jervis, New
York, for a purchase price of approximately $2,700,000. The option agreement
calls for an option payment of $550,000 plus monthly option payments of $12,500
and extends for a period of 36 months. Concurrently, the Company entered into
an LMA with Port Jervis for the operation of the stations requiring monthly
payments ranging from $10,000 at the outset to $25,000 commencing August 1,
2000.

F-18
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

WILT (AM)

In 1998, NBH submitted a Chapter 11 Plan of Reorganization for Tiab
Communications Corporation which owns the FCC license for WILT (AM) in Mt.
Pocono, Pennsylvania. An agreement between NBH and the Company provides that in
exchange for the funding of the bankruptcy plan and associated legal costs, the
Company has received an option to purchase TIAB or the FCC license from NBH for
a nominal amount. On February 12, 1999, the Plan of Reorganization was
confirmed and funded by the Company in the amount of $110,000. At December 31,
1999, WILT (AM) was not yet on the air and all amounts disbursed to date are
reflected as deposits on the accompanying balance sheet.

WJHR (AM)

On January 21, 1999, the Company entered into an agreement to purchase
all of the assets of WJHR-AM in Flemington, New Jersey for $2,500,000. Final
closing is scheduled for November 18, 2001. Concurrent with this transaction,
the Company entered into an LMA for the operation of the radio station until
November 18, 2001. The agreement calls for quarterly payments of $50,000 for
the term of the agreement.

WCHR (FM)

On August 18, 1999, the Company exercised its option to purchase for
$4,675,000 the stock of a corporation which owns the permit to construct an FM
radio station in Ocean County, New Jersey. The Company has paid approximately
$2.0 million of the purchase price as of the balance sheet date, of which
approximately $1.7 million is nonrefundable. Such amounts have been included in
deposits on the accompanying balance sheet. The closing of this acquisition is
pending FCC approval.

NOTE H--OTHER LOCAL MARKETING AGREEMENTS

On November 12, 1998, the Company sold all of the assets associated with
WSBG (FM) and WVPO (AM) in Stroudsburg, Pennsylvania for approximately $6.8
million. Concurrent with that transaction, the Company entered into an LMA for
its operation of the stations for a period of 36 months. The agreement requires
the Company to make quarterly payments in the amount of $175,000, which are
recorded as operating expenses of the radio stations. The Company has accounted
for these transactions as a sale-leaseback arrangement whereby $1,700,000 of
the gain on sale of the radio stations is being deferred and credited to gain
on sale of radio stations over the thirty-six months of that agreement. The
deferred gain recognized in 1999 and 1998 was $567,000 and $71,000,
respectively.

NOTE I--MARKETABLE SECURITIES

The following is a summary of marketable securities at December 31:

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Equity securities:
Fair value........................................... $2,201,080 $1,779,788
Cost................................................. 987,762 1,291,478
---------- ----------
Unrealized gain.................................... $1,213,318 $ 488,310
========== ==========
</TABLE>

F-19
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

At December 31, 1999 and 1998, the Company had loans from its broker
totaling $805,270 and $769,846, respectively. At December 31, 1999 and 1998,
the interest rate on the loans was 8.5% and 7.75%, respectively. The loans are
secured by the Company's marketable securities in the Company's investment
account.

NOTE J--SEGMENT INFORMATION

The Company manages and operates radio stations in the New York and
Philadelphia metropolitan areas. The Company considers its business to consist
of one reportable operating segment, based on radio stations operated, sharing
similar economic characteristics in the nature of the advertising sold, method
of broadcasting and listener base. All the Company's revenue is earned within
the Northeastern United States.

NOTE K--RELATED PARTY TRANSACTIONS

Certain investors in NBPI have purchased from the principal shareholder
in the majority partner, NBC ("Grantor"), an option to purchase a majority
partnership interest. The option is exercisable at any time at an exercise
price of $500,000 and expires June 10, 2010. The investors have the right to
require the Grantor to repurchase the unexercised option units upon the sale,
transfer, assignment or other disposition of all or substantially all of the
Company's assets. The repurchase price of the unexercised option units varies
based on terms specified in the partnership agreement.

In 1997, a special management fee of $744,140 was paid to NBH, as
approved by the Company's partners.

On January 23, 1998, NBH purchased twenty-five percent of the stock of a
corporation which owns an AM radio station license. In the same transaction,
NBH also acquired the real estate and broadcasting towers of the AM station and
an FM station. On February 1, 1998, NBH assigned, at cost, all rights and title
under the aforementioned transaction to the Company.

In 1996, the Company advanced $450,000 to NBH as a prepayment of a then
existing consulting agreement. $50,000 of the prepayment was expensed in 1997,
with the remaining $400,000 being repaid to the Company in 1998 upon
termination of the consulting agreement.

In 1998, the Company acquired a parcel of real property for approximately
$1 million that was owned by a partnership in which the president of the
Company was a partner.

At December 31, 1999 and 1998, the President and Chief Executive Officer
of the Company was indebted to the Company in the amount of $590,000 and
$90,000, respectively. These amounts bear interest at the rate of 8% and were
repaid in full, with interest, in February 2000 and March 1999, respectively.

At December 31, 1999 and 1998, the Company had notes receivable from an
officer totaling $100,000 and $36,000, respectively, which bear interest at 8%
per annum. Principal and interest are due in full on November 30, 2001.

F-20
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE L--EMPLOYEE BENEFIT PLAN

The Company maintains a defined contribution plan covering all employees
who have one year of service and are age twenty-one or older. Under the
provisions of the plan, the Company matches 25% of the first 8% of the
participant's compensation contributed as elective deferrals. The Company's
contribution in 1999, 1998 and 1997 amounted to $100,706, $76,497 and $87,350,
respectively.

NOTE M--ACCOUNTS PAYABLE AND ACCRUED EXPENSE

Accounts payable and accrued expenses consist of the following at
December 31,

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Accounts payable...................................... $ 767,519 $ 644,020
Accrued commissions................................... 281,875 268,891
Accrued interest...................................... 435,580 --
Other accrued expenses................................ 198,068 169,234
---------- ----------
$1,683,042 $1,082,145
========== ==========
</TABLE>

NOTE N--FAIR VALUE OF FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments," requires that the Company disclose
estimated fair values for its financial instruments. The following summary
presents a description of the methodologies and assumptions used to determine
such amounts:

Limitations

Fair value estimates are made at a specific point in time and are based
on relevant market information and information about the financial
instruments; they are subjective in nature and involve uncertainties and
matters of judgment, and, therefore, cannot be determined with precision.
These estimates do not reflect any premium or discounts that could result from
offering for sale at one time the Company's entire holdings of a particular
instrument. Changes in assumptions could significantly affect these estimates.

Since the fair value is estimated as of December 31, 1999 and 1998, the
amounts that will actually be realized or paid at settlement or maturity of
the instruments could be significantly different.

Cash Equivalents and Certificates of Deposit

The carrying amount is assumed to be the fair value because of the
liquidity of the instruments.

Marketable Securities

The carrying amount represents fair value based on quoted market price.

F-21
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Accounts Receivable and Notes Receivable

The carrying amount is assumed to be the fair value because of the short-
term maturity of the portfolio. The carrying amount of the noncurrent note
receivable is assumed to be the fair value because the note receivable earns
interest at prevailing rates.

Long-term Obligations

The fair values of the Company's notes payable, mortgages payable, senior
debt and other long-term obligations approximate the terms in the marketplace
at which they could be replaced in the aggregate. Therefore, the fair value
approximates the carrying value of these financial instruments in the
aggregate.

NOTE O--SUBSEQUENT EVENTS

On February 24, 2000, the Company sold its tower related broadcasting
assets and real property to affiliated entities controlled by the Company's
President and Chief Executive Officer for $10.0 million. These affiliated
entities then immediately sold the bulk of these assets to a third party, who
has leased tower space back to the Company.

On February 29, 2000, the Company entered into an asset purchase
agreement with Clear Channel Communications Inc. ("Clear Channel") to purchase
two Allentown, Pennsylvania stations for total consideration of $30 million
payable in cash. In March 2000, the Company has irrevocably deposited $6
million toward the purchase of these stations.

Unaudited

On March 24, 2000, the Company entered into a purchase and exchange
agreement with the owners of Aurora Communications, LLC ("Aurora") to purchase
all of their stock, and thereby acquire the nine stations owned by Aurora for
total consideration of $185 million, consisting of $35 million in common stock
of the Company, $85 million in cash and $65 million in assumption of debt. The
cash amount is subject to a working capital adjustment. In March 2000, the
Company irrevocably deposited $7 million toward the purchase of Aurora.

On March 1, 2000, the Company entered into an additional $10 million term
loan agreement with its Senior Lender. The proceeds from this loan were used
for deposits on the Aurora and Clear Channel acquisitions.

The Company's equity investors have committed financing for the Aurora
and Clearview Channel acquisitions.

The Company intends to conduct an initial public offering ("IPO") for a
yet to be determined number of shares of Class A common stock. Prior to the
IPO, the Company plans to issue $60 million aggregate principal of senior
discount notes due 2010. The Company has also entered into a commitment letter
with a lender for the arrangement of senior credit facilities in an amount of
up to $144 million. There is no assurance that these transactions will occur,
or that they will occur under the terms and amounts noted above.

Prior to the consummation of the IPO, the Company intends to convert to a
corporation, which will result in the Company being subject to Federal, state
and local corporate income taxes.

F-22
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

In connection with the transactions discussed above, the President and
Chief Executive Officer of the Company is eligible to receive $7.5 million for
a redemption of a partial equity interest as well as receive approximately $3
million as a distribution in accordance with the terms of the Company's
partnership agreement. These distributions will be paid out of the revolving
credit facility. The accompanying pro forma balance sheet reflects the partial
equity redemption and distribution as if they occurred on December 31, 1999.

Certain marketable equity securities held by the Company as of December
31, 1999 declined by approximately $800,000 as of April 25, 2000. Management of
the Company believes this decline to be temporary.

F-23
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

BALANCE SHEETS

<TABLE>
<CAPTION>
March 31, December
2000 31, 1999
----------- -----------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents.......................... $ 2,396,819 $ 587,362
Marketable securities.............................. 2,099,734 2,201,080
Accounts receivable (net of allowance for doubtful
accounts of $353,000 and $316,000 in 2000 and
1999, respectively)............................... 5,456,265 6,645,514
Prepaid expenses and other current assets.......... 450,848 223,664
Due from officer................................... 201,306 590,000
----------- -----------
Total current assets............................. 10,604,972 10,247,620
PROPERTY AND EQUIPMENT, NET.......................... 5,672,422 11,792,237
OTHER ASSETS
Certificates of deposit-restricted -- 77,586
Deferred costs..................................... 1,039,596 805,436
Cost in excess of net assets acquired.............. 26,317,040 26,504,288
Deposits........................................... 38,902,228 25,100,484
Note receivable-officer............................ 100,000 100,000
Other assets....................................... 50,250 140,129
----------- -----------
$82,686,508 $74,767,780
=========== ===========
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses.............. $ 1,705,265 $ 1,683,041
Loan payable-broker................................ -- 805,270
Mortgages payable-current.......................... -- 127,341
Capitalized lease obligations-current.............. 471,665 354,057
----------- -----------
Total current liabilities........................ 2,176,930 2,969,709
SENIOR DEBT.......................................... 56,138,603 47,938,871
SUBORDINATED NOTES PAYABLE........................... 40,159,232 39,099,013
MORTGAGES PAYABLE, LONG-TERM......................... 2,099,363
CAPITALIZED LEASE OBLIGATIONS, LONG-TERM............. 642,484 826,376
DEFERRED INCOME...................................... 252,834 282,000
DEFERRED GAIN........................................ 4,805,250 1,062,000
COMMITMENTS AND CONTINGENCIES
PARTNERS' DEFICIT.................................... (21,488,825) (19,509,552)
----------- -----------
$82,686,508 $74,767,780
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-24
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

<TABLE>
<CAPTION>
Three months ended
March 31,
------------------------
2000 1999
----------- -----------
(unaudited)
<S> <C> <C>
Gross revenues....................................... $ 7,893,311 $ 6,810,687
Less agency and outside commissions.................. 611,533 543,884
----------- -----------
Net revenues..................................... 7,281,778 6,266,803
----------- -----------
Operating expenses, excluding depreciation,
amortization, corporate general and administrative
expenses, and local marketing agreement fees........ 5,318,209 4,569,762
Depreciation and amortization expense................ 822,093 602,832
Corporate general and administrative expenses........ 587,050 500,435
Local marketing agreement fees....................... 639,571 725,261
----------- -----------
7,366,923 6,398,290
----------- -----------
Operating loss................................... (85,145) (131,487)
----------- -----------
Other income (expense)
Interest and dividend income....................... 11,099 --
Realized gains on marketable securities............ 441,457 153,665
Gain on sale of radio stations and tower assets.... 1,632,536 141,750
Interest expense................................... (3,024,268) (2,718,400)
----------- -----------
(939,176) (2,422,985)
----------- -----------
NET LOSS......................................... (1,024,321) (2,554,472)
----------- -----------
Unrealized gain on marketable securities
Unrealized holding losses arising during the
period............................................ (513,495) (335,332)
Less reclassification adjustment for gains included
in net income..................................... (441,457) (153,665)
----------- -----------
Other comprehensive loss............................. (954,952) (488,997)
----------- -----------
Comprehensive loss............................... $(1,979,273) $(3,043,469)
=========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-25
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Three months ended March
31,
-------------------------
2000 1999
------------ -----------
(unaudited)
<S> <C> <C>
Cash flows from operating activities
Net loss.......................................... $ (1,024,321) $(2,554,472)
Adjustments to reconcile net loss to net cash
provided by operating activities
Depreciation and amortization.................... 320,725 301,464
Amortization of deferred costs................... 114,120 114,120
Amortization of subordinated debt discount....... 225,474 275,001
Amortization of costs in excess of net assets
acquired........................................ 387,248 187,248
Subordinated debt interest....................... 834,745 772,648
Deferred senior debt interest.................... 377,779 353,438
Gain on sale of radio stations and tower assets.. (1,632,536) (141,750)
Gain on sale of securities....................... (441,457) (153,665)
Changes in operating assets and liabilities......
Accounts receivable............................. 1,189,249 714,025
Prepaid expenses and other current assets....... (227,184) (196,767)
Other assets.................................... (89,969) 12,863
Accounts payable and accrued expenses........... 22,224 433,041
Deferred income................................. (29,166) --
------------ -----------
Net cash provided by operating activities...... 26,931 117,194
------------ -----------
Cash flows from investing activities
Purchases of property and equipment............... (234,614) (178,260)
Sale of tower assets.............................. 9,890,000 --
Deposits for radio stations to be acquired and
other costs...................................... (14,123,021) (4,596,260)
Sale of marketable securities..................... 951,918 6,465,487
Purchase of marketable securities................. (1,359,581) (8,595,610)
Payments received on due from officer, net........ 388,694 --
------------ -----------
Net cash used in investing activities.......... (4,486,604) (6,904,643)
------------ -----------
Cash flows from financing activities
Proceeds from senior debt......................... 7,821,955 --
Proceeds of other debt............................ -- 585,704
Principal payments of other debt.................. (1,204,815) --
Increase in deferred costs........................ (348,280) (50,000)
------------ -----------
Net cash provided by financing activities...... 6,268,860 535,704
------------ -----------
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS................................... 1,809,187 (6,251,745)
Cash and equivalents at beginning of period......... 587,632 7,050,051
------------ -----------
Cash and equivalents at end of period............... $ 2,396,819 $ 798,306
============ ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-26
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS

March 31, 2000 and 1999

NOTE A--GENERAL

In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly Nassau
Broadcasting Partners, L.P.'s (the "Company") financial position at March 31,
2000 and the results of operations and cash flows for the three months ended
March 31, 2000 and 1999.

Certain financial information which is normally included in financial
statements prepared in accordance with generally accepted accounting
principles, but which is not required for interim reporting purposes, has been
condensed or omitted. The accompanying financial statements need to be read in
conjunction with the financial statements and notes thereto included elsewhere
in this prospectus.

Any adjustments that have been made to the financial statements are of a
normal recurring nature.

Significant New Accounting Pronouncements

In January 2000, the Emerging Issues Task Force ("EITF") reached a
consensus on Issue No. 99-17, "Accounting for Advertising Barter
Transactions," to be effective for transactions entered into after January 20,
2000. The consensus states that advertising barter transactions should be
accounted for at fair value and that the fair value recognized be disclosed in
the financial statements, if there is verifiable objective evidence provided
by sufficient cash transactions received by the seller of the advertising or
similar advertising. Adoption of EITF No. 99-17 did not have a material effect
on the Company's financial statements.

NOTE B--RELATED PARTY TRANSACTIONS

On February 24, 2000, the Company sold its tower-related broadcasting
assets and real property, net of liabilities to Nassau Tower Holdings, LLC
("NTH"), an entity controlled by the Company's President and Chief Executive
Officer for $10 million. This affiliated entity then immediately sold the bulk
of these assets to a third party.

In connection with the above transaction, the Company entered leases for
tower space with NTH for certain assets the Company sold to NTH. In addition,
the Company is also leasing tower space from the third party who purchased the
assets from NTH. The Company paid approximately $20,000 rent to NTH for the
three months ended March 31, 2000.

The initial terms of the leases are for ten years with options to renew
for four consecutive five-year periods. For the portion of the assets not
leased back, the Company has recorded a gain of $1,475,870. In

F-27
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

March 31, 2000 and 1999
addition, a portion of the assets have been accounted for as sales leaseback
arrangements and accordingly, the gain, approximately which amounted to $1.8
million, has been deferred and will be amortized over the lease terms. The
remainder of the realized gain which amounted to approximately $2.1 million,
will be recognized when the Company fulfills its obligations. The gain
recognized on the sales lease back assets was $15,000 for the three months
ended March 31, 2000.

During the first quarter of 2000, the Company advanced its President and
Chief Executive Officer approximately $200,000. This advance, which was
noninterest-bearing, was repaid in full in May 2000.

NOTE C--ACQUISITIONS AND DISPOSITION

On February 29, 2000, the Company entered into an asset purchase
agreement with Clear Channel Communications Inc. ("Clear Channel") to purchase
two Allentown, Pennsylvania, stations for total consideration of $30 million
payable in cash. In March 2000, the Company deposited $6 million toward the
purchase of these stations.

On March 24, 2000, the Company entered into a purchase and exchange
agreement with the owners of Aurora Communications, LLC ("Aurora") to purchase
all of their stock, and thereby acquire the nine stations owned by Aurora for
total consideration of $185 million, consisting of $35 million in common stock
of the Company, $85 million in cash and $65 million in assumption of debt. The
cash amount is subject to a working capital adjustment. In March 2000, the
Company deposited $7 million toward the purchase of Aurora.

NOTE D--SENIOR AND OTHER DEBT

Senior Debt

On March 1, 2000, the Company entered into an additional $10 million
term loan agreement with its Senior Lender. The proceeds from this loan were
used for deposits on the Aurora and Clear Channel acquisitions.

The loan bears interest at the rate of 11% current plus 3.25% deferred
interest. All principal and deferred interest are due in full on August 28,
2001.

In connection with the loan, the Company paid approximately $348,000 in
financing costs, which were deferred and are being amortized over the term of
the loan.

Mortgage Payable

In connection with the Tower sale, NTH assumed certain mortgage
obligations of the Company.

NOTE E--STOCK OPTION PLAN AND EMPLOYEE STOCK PURCHASE PLAN

Stock Option Plan:

F-28
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

March 31, 2000 and 1999
Company. Such options will vest and become exercisable upon a liquidating
event as defined in the Plan document. The term of the options will not exceed
10 years. In April, 2000, the Company received FCC approval of the
reorganization documents and NBC granted 2,435,000 options to employees of the
Company, with an exercise price of 15c.

NBC intends to cancel the Plan and options in June, 2000 prior to the
measurement date. Upon cancellation of the NBC option plan the Company intends
to establish an option plan and replace the cancelled NBC options with options
of the Partnership (50,000 units). The number of options, exercise price and
terms will effectively be the same as the NBC, except that the options will be
fully vested and exercisable upon grant. The options granted by the Company
will be accounted for pursuant to APB No. 25. Management estimates that the
compensation expense to be recorded at the time of grant will approximate $3.2
million. After the company converts to a corporation, the Company will cancel
the options in the partnership and issue new options with identical terms and
equivalent equity interests as the options for the partnership. Total shares
to be issued is expected to be approximately 205,707 options. These options
will be included in the Company's stock incentive plan. The Company's Stock
incentive plan will allow the company to issue up to 2 million shares of Class
A common stock. The exercise price will be determined at the time the options
are granted. The options will be exercisable at the times and upon the
conditions that are applicable for the option agreement. The Company expects
to issue 1,010,000 options in connection with the completion of the
contemplated initial public offering exercisable at the offering price of the
offering.

Employee Stock Purchase Plan

The Company intends to adopt an employee stock purchase plan which would
allow eligible employees to purchase shares up to 20% of an employee's
compensation for each payroll period. The total shares available under the
plan will be 2 million shares. The purchase price will be 85% of the fair
value at the beginning of each offering period or the end of each purchase
period within the offering period, whichever price is lower. The plan provides
for a series of consecutive, overlapping offering periods that will generally
be 24 months long.

NOTE F--SUBSEQUENT EVENTS

Senior Credit Facility

In May 2000, the Company entered into a senior credit facility for
approximately $144 million.

The credit facility consists of the following:

$33.0 million A1 term loan, which will finance a portion of the purchase
price of Aurora Communications in the form of repayment of debt of Aurora
Communications. This loan will amortize on a quarterly basis and matures on
June, 2006.

$26.0 million A2 term loan, $5 million of which will be used to repay
part of current senior credit facilities and the remainder of which will
finance part of the purchase price of stations we currently operate under
local marketing agreements. This loan will amortize on a quarterly basis and
matures on June, 2006.

$40.0 million B term loan, which will be used to repay borrowings under
the current senior credit facility and fund an equity redemption. This loan
will have minimal amortization over its life and matures on June, 2007, at
which time a balloon payment will be due.

F-29
<PAGE>

NASSAU BROADCASTING PARTNERS, L.P.

NOTES TO FINANCIAL STATEMENTS--(Continued)

March 31, 2000 and 1999

$25.0 million C term loan, which will pay part of the purchase price of
Aurora Communications in the form of repayment of debt of Aurora
Communications. This loan will have minimal amortization over its life and
matures on June, 2008, at which time a balloon payment will be due.

$20.0 million revolving credit facility, of which the Company has drawn
$4.6 million to date, which matures on June, 2006.

All of the above loans bear interest at an alternative base rate or
LIBOR, as more fully described in the Senior Credit Facility Agreement.

The credit facility contains events of default typical for these types of
facilities (subject in each case to certain grace periods and materiality
thresholds), including, without limitation, (i) nonpayment of amounts under the
credit facility, (ii) material misrepresentations, (iii) covenant defaults,
(iv) cross-defaults to their indebtedness, (v) judgment defaults, (vi)
bankruptcy and (vii) a change of control.

Senior Discount Notes

In May 2000, the Company issued $60.0 million aggregate principal amount
of 13% senior discount notes due 2010, along with limited partnership units in
the Company to several institutions.

In May 2000, the Company repaid $58.0 million in then-outstanding
borrowings under its current senior secured credit facility from borrowings
under the new credit facility and from proceeds of the senior discount notes.

Subordinated Notes, Preferred Distribution and Redemption of Equity Interest

In May 2000, the Company repaid all outstanding subordinated notes
payable, which amounted to $42.4 million, and made a preferred distribution to
the President and Chief Executive Officer of the Company under the partnership
agreement, in an amount of $2.9 million. In addition, the Company's President
and Chief Executive Officer is eligible to receive $7.5 million for a
redemption of a partial equity interest, of which he has received $2.5 million.

The Company intends to conduct an initial public offering ("IPO") for a
yet to be determined number of shares of Class A common stock. There is no
assurance that this transaction will occur.

Prior to the consummation of the IPO, the Company intends to convert to a
corporation, which will result in the Company being subject to Federal, state
and local corporate income taxes.

Markeable Securities

In May 2000, the Company sold Marketable Securities to it President and
Chief Executive Officer for approximately $1.9 million, which resulted in a
realized loss of approximately $350,000. The sales prices of the Marketable
Securities were based on quoted market prices for those securities on the date
of sale.

F-30
<PAGE>

REPORT OF INDEPENDENT AUDITORS

The Members
Aurora Communications, LLC

We have audited the accompanying consolidated balance sheet of Aurora
Communications, LLC as of December 31, 1999, and the related consolidated
statements of operations, members' capital and cash flows for the period
January 20, 1999 (commencement of operations) to December 31, 1999. 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 auditing standards generally
accepted in the United States. 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 consolidated financial position
of Aurora Communications, LLC at December 31, 1999 and the consolidated results
of its operations and its cash flows for the period January 20, 1999
(commencement of operations) to December 31, 1999, in conformity with
accounting principles generally accepted in the United States.

Ernst & Young LLP

New York, New York
February 25, 2000

F-31
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONSOLIDATED BALANCE SHEET

December 31, 1999

<TABLE>
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents..................................... $ 1,096,594
Accounts receivable, less allowance for doubtful accounts of
$43,789...................................................... 3,694,071
Prepaid expenses and other current assets..................... 164,477
------------
Total current assets........................................ 4,955,142
Property and equipment, at cost, less accumulated depreciation
of $157,829.................................................... 5,713,402
FCC licenses and goodwill, net of accumulated amortization of
$666,779....................................................... 92,012,735
Deferred financing costs, net of accumulated amortization of
$119,772....................................................... 2,179,283
------------
Total assets................................................ $104,860,562
============
LIABILITIES AND MEMBERS' CAPITAL
Current liabilities:
Accounts payable and accrued expenses......................... $ 1,105,550
Accrued wages and sales commissions........................... 277,897
Accrued interest payable...................................... 807,359
------------
Total current liabilities................................... 2,190,806
Long-term debt.................................................. 64,256,250
Other noncurrent liabilities.................................... 383,005
Commitments and contingencies................................... --
Members' capital:
Members interests............................................. 38,605,270
Accumulated deficit........................................... (574,769)
------------
Total members' capital...................................... 38,030,501
------------
Total liabilities and members' capital...................... $104,860,562
============
</TABLE>

See accompanying notes.

F-32
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONSOLIDATED STATEMENT OF OPERATIONS

For the period January 20, 1999 (commencement of operations) to December 31,
1999

<TABLE>
<S> <C>
Net revenues....................................................... $6,204,731
Operating expenses:
Selling.......................................................... 1,111,258
Programming and promotion........................................ 1,198,369
Technical........................................................ 113,594
General and administrative....................................... 682,963
Depreciation and amortization.................................... 824,608
Corporate expenses............................................... 743,766
----------
Total operating expenses....................................... 4,674,558
----------
Operating income................................................... 1,530,173
Interest income.................................................... 32,345
Interest expense................................................... 2,137,287
----------
Net loss........................................................... $ (574,769)
==========
</TABLE>

See accompanying notes.

F-33
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONSOLIDATED STATEMENT OF MEMBERS' CAPITAL

<TABLE>
<CAPTION>
Total
Preferred Units Common Units Additional
--------------------- --------------- Paid-in Accumulated
Units Value Units Value Capital Deficit Total
--------- ----------- --------- ----- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 20,
1999................... -- $ -- -- $ -- $ -- $ -- $ --
Issued in connection
with May 3, 1999
capitalization......... 52,500 525,000 2,743,678 -- -- -- 525,000
Issued in connection
with August 31, 1999
capitalization......... 3,807,500 38,075,000 1,898,572 -- -- -- 38,075,000
Other issuance.......... -- -- -- -- 5,270 5,270
Net loss................ -- -- -- -- -- (574,769) (574,769)
--------- ----------- --------- ----- ------ --------- -----------
Balance at December 31,
1999................... 3,860,000 $38,600,000 4,642,250 $ -- $5,270 $(574,769) $38,030,501
========= =========== ========= ===== ====== ========= ===========
</TABLE>

See accompanying notes.

F-34
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONSOLIDATED STATEMENT OF CASH FLOWS

For the period January 20, 1999 (commencement of operations) to December 31,
1999

<TABLE>
<S> <C>
Cash flows from operating activities
Net loss......................................................... $ (574,769)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization.................................. 824,608
Non-cash interest expense...................................... 502,777
Non-cash compensation expense.................................. 5,270
Changes in current assets and current liabilities:
Increase in accounts receivable.............................. (3,694,071)
Increase in prepaid expenses and other current assets........ (164,477)
Increase in accounts payable and accrued expenses............ 1,105,550
Increase in accrued wages and sales commissions.............. 277,897
Increase in accrued interest payable......................... 807,359
-----------
Total adjustments............................................ (335,087)
-----------
Net cash used in operating activities............................ (909,856)
-----------
Cash flows from investing activities
Payments for business acquisitions............................... (98,343,310)
Capital expenditures............................................. (207,435)
-----------
Net cash used in investing activities............................ (98,550,745)
-----------
Cash flows from financing activities
Proceeds from issuance of long-term debt, net.................... 64,256,250
Proceeds from issuance of membership interests................... 38,600,000
Debt issuance costs.............................................. (2,299,055)
-----------
Net cash provided by financing activities........................ 100,557,195
-----------
Net increase in cash and cash equivalents........................ 1,096,594
Cash and cash equivalents at beginning of period................. --
-----------
Cash and cash equivalents at end of period....................... $ 1,096,594
===========
</TABLE>

See accompanying notes.

F-35
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 1999

1. Nature of Business and Organization

Aurora Communications, LLC (the "Company") is a limited liability company
formed in January 1999 and is engaged in the acquisition and operation of radio
stations throughout the United States. The Company is a subsidiary of Aurora
Management, Inc., its majority owner and managing member. Pursuant to its
limited liability company agreement, the Company shall continue until the
earlier of its dissolution by its members or December 31, 2049.

2. Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts
of the Company and its subsidiaries. All material intercompany items and
transactions have been eliminated.

Depreciation

Property and equipment are recorded at cost and depreciated using the
straight-line method over the estimated useful lives of the assets, as follows:

<TABLE>
<S> <C>
Buildings......................................................... 39 years
Furniture and fixtures............................................ 5-7 years
Broadcasting equipment............................................ 3-15 years
Transportation equipment.......................................... 5 years
</TABLE>

Expenditures for maintenance and repairs are charged to operations as
incurred.

Intangible Assets

Deferred financing costs of $2.2 million are amortized over the term of
the related debt on a straight-line basis, which approximates the interest
method. FCC licenses and goodwill, in the amount of $92.0 million, represent
the excess of acquisition cost over the amounts assigned to other assets
acquired in the Company's acquisitions, and is amortized on a straight-line
basis over a 40-year period.

It is the Company's policy to account for FCC licenses, goodwill and all
other intangible assets at the lower of amortized cost or estimated realizable
value. As part of an ongoing review of the valuation and amortization of
intangible assets of the Company and its subsidiaries, management assesses the
carrying value of the intangible assets if facts and circumstances suggest that
there may be impairment. If this review indicates that the intangibles will not
be recoverable as determined by a non-discounted cash flow analysis of the
operating assets over the remaining amortization period, the carrying value of
the intangible assets would be reduced to estimated realizable value.

Barter Transactions

Revenue from barter transactions (advertising provided in exchange for
goods and services) is recognized when advertisements are broadcast, and
merchandise or services received are charged to expense (or

F-36
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

capitalized as appropriate) when received or used. Barter revenue and expense
reflected in the consolidated statement of operations for the period ended
December 31, 1999 was $490,791 and $412,269, respectively.

Revenue

The primary source of revenue is the sale of advertising to local,
regional and national customers. Revenue is presented net of agency commissions
of $719,134, and is recognized when advertisements are broadcast.

Cash Equivalents

Cash equivalents consist of short-term, highly liquid investments which
are readily convertible into cash and have an original maturity of three months
or less when purchased.

Advertising and promotion

Expenditures for advertising and promotion are charged to expense as
incurred and totaled $430,000 in 1999.

Income Taxes

No provision for federal, state or local income taxes or credits has been
reflected in the accompanying financial statements because such obligations or
credits are liabilities or benefits of the members.

Risks and Uncertainties

The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company 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 revenue and expenses during the reported
period. Actual results may differ from those estimates.

Financial instruments which potentially subject the Company to
concentrations of credit risk consist primarily of trade receivables. The
Company's revenue is derived primarily from local broadcast advertisers who are
impacted by the local economy. The Company routinely assesses the credit
worthiness of its customers and generally does not require collateral or other
security to support customer receivables.

3. Acquisitions

At December 31, 1999, the Company owned and operated five FM and four AM
radio stations.

On August 31, 1999, the Company acquired substantially all the assets of
radio stations WEBE-FM/WICC-AM, Bridgeport, Connecticut for $66.0 million plus
transaction costs.

On October 27, 1999, the Company acquired substantially all the assets of
radio stations WFAS-AM/WFAS-FM/WFAF-FM (formerly WZZN-FM), Westchester County,
New York for $20.25 million plus transaction costs.

F-37
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

On October 27, 1999, the Company acquired substantially all the assets of
radio stations WRKI-FM/WINE-AM, Danbury, Connecticut and WAXB-FM/WPUT-AM,
Patterson, New York for $11.25 million plus transaction costs.

All of the acquisitions have been accounted for using the purchase method
of accounting. Accordingly, the purchase price of each acquisition has been
allocated to the assets based upon their respective estimated fair values at
the date of acquisition. The results of operations of the properties acquired
are included in the Company's consolidated results of operations from the
respective dates of acquisition. The aggregate purchase prices have been
allocated to the assets acquired and liabilities assumed as follows:

<TABLE>
<S> <C>
Current assets.................................................. $ 63,507
Property and equipment.......................................... 5,663,796
FCC licenses and goodwill....................................... 92,679,514
-----------
98,406,817
-----------
Current liabilities........................................... (237,921)
-----------
$98,168,896
===========
</TABLE>

4. Pro Forma Financial Information (Unaudited)

<TABLE>
<S> <C>
Year ended December 31, 1999
Net revenues.................................................. $ 21,495,573
Net loss...................................................... $ (2,055,385)
</TABLE>

The unaudited pro forma information for the year ended December 31, 1999
assumes that the acquisitions described in Note 3, had occurred on January 1,
1999. The pro forma information is not necessarily indicative either of the
results of operations that would have occurred had these transactions been made
at the beginning of the period, or of future results of operations.

5. Long-Term Debt

A summary of long-term debt as of December 31, 1999 is as follows:

<TABLE>
<S> <C>
Term loan at the LIBOR rate plus 3.5%; interest payable
monthly; quarterly commitment reductions from March 31, 2000
through December 31, 2005 (A)(C)............................. $20,000,000
Revolving loan at the LIBOR rate plus 3.5%; interest payable
monthly; matures November 30, 2005 (A)(C).................... 30,756,250
Subordinated debentures; cash interest payable quarterly at
8%; payment-in-kind interest compounds quarterly at 9%;
principal due in September 2006 (B)(C)....................... 13,500,000
-----------
64,256,250
Less current portion.......................................... --
-----------
$64,256,250
===========
</TABLE>

(A) On August 31, 1999, Aurora Holding, LLC ("Holding"), a wholly-owned
subsidiary of the Company entered into credit facilities totaling $75.0 million
with Heller Financial, Inc. and Union Bank of California, N.A., as agents (the
"Senior Loans"). The Senior Loans consist of a $20.0 million term loan and a
$55.0 million revolving loan. The initial borrowings under the Senior Loans
were used to partially fund the

F-38
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Company's acquisitions, pay transaction costs and provide working capital. The
Senior Loans contain covenants which require, among other things, that Holding
and its subsidiaries maintain certain financial levels, principally with
respect to EBITDA (earnings before interest, income tax, depreciation and
amortization) and leverage ratios, and limit the amount of capital
expenditures. The Senior Loans also restrict the payment of cash dividends. The
Senior Loans are collateralized by pledges of the tangible and intangible
assets of Holding and its subsidiaries, as well as the membership interests of
Holding and its subsidiaries. At December 31, 1999, the Company has additional
availability under the revolving credit facility of $24.2 million, of which
$5.4 million may currently be borrowed. No amounts due under the term loan are
classified as current liabilities on the consolidated balance sheet at December
31, 1999 because the availability under the revolving facility is sufficient to
pay amounts scheduled to be repaid in 2000 under the term loan. The Company
pays an annual commitment fee of 0.5% of the unused commitment.

(B) On September 10, 1999, Holding entered into a subordinated loan
agreement with Allied Capital Corporation and Allied Investment Corporation
which provides for subordinated debentures totaling $13.5 million. Proceeds
from the debentures were used to partially fund the Company's acquisitions and
to pay transaction costs. The subordinated debentures mature in September 2006
and bear interest at 17%. From the date of issuance through the first
anniversary, interest is paid quarterly in cash at a rate of 8% per year. From
the first anniversary to the second anniversary, interest is paid quarterly in
cash at a rate of 9% per year. From the second anniversary through maturity,
interest is paid quarterly in cash at a rate of 10% per year. Deferred interest
accrues and compounds quarterly equal to the difference between 17% and the
cash pay rate and is payable at the maturity date. The subordinated loan
agreement contains covenants which require, among other things, that Holding
and its subsidiaries maintain certain financial levels, principally with
respect to EBITDA (earnings before interest, income tax, depreciation and
amortization) and leverage ratios, and limit the amount of capital
expenditures. The subordinated loan agreement also restricts the payment of
cash dividends. Payment of amounts owed under the debentures is guaranteed by
the Company and Holdings' subsidiaries.

(C) In the event of a default under the Senior Loans or the subordinated
debentures prior to June 29, 2000, upon notice by a lender, the members of the
Company shall be required to make additional capital contributions of an amount
up to 75% of the trailing twelve month broadcast cash flow of the Company's
radio stations measured at the date of acquisition. The proceeds from such
contributions shall be used to repay a portion of the Senior Loans' principal.
The obligation to make such additional capital contributions shall terminate
when certain conditions are met, principally with respect to completing
additional radio station acquisitions that provide greater geographic
diversity.

At December 31, 1999, exclusive of the Revolving loan, the aggregate
amounts of long-term debt due scheduled during the next five years are as
follows:

<TABLE>
<CAPTION>
Year: Amount
----- -----------
<S> <C>
2000............................................................. $ 2,000,000
2001............................................................. 2,500,000
2002............................................................. 3,000,000
2003............................................................. 3,500,000
2004............................................................. 4,000,000
Thereafter....................................................... 18,500,000
</TABLE>

Cash paid for interest during 1999 was approximately $827,000. The fair
value of the debt approximates net book value.

F-39
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

6. Property and Equipment

Property and equipment at December 31, 1999 consists of the following:

<TABLE>
<S> <C>
Land............................................................. $1,107,644
Buildings........................................................ 1,238,520
Equipment........................................................ 3,525,067
----------
5,871,231
Less accumulated depreciation.................................... (157,829)
----------
$5,713,402
==========
</TABLE>

At December 31, 1999, all property and equipment is pledged as collateral
for the debt disclosed in Note 5.

7. Commitments

The Company leases office and broadcast tower space, vehicles and office
equipment. Rental expense amounted to approximately $159,000 for the period
from commencement of operations through December 31, 1999.

The minimum aggregate annual rentals under non-cancelable operating
leases are payable as follows:

<TABLE>
<CAPTION>
Year: Amount
----- ----------
<S> <C>
2000.............................................................. $ 576,000
2001.............................................................. 261,000
2002.............................................................. 231,000
2003.............................................................. 184,000
2004.............................................................. 147,000
Thereafter........................................................ 219,000
----------
$1,618,000
==========
</TABLE>

8. Related Party Transactions

The Company pays Aurora Management, Inc., its managing member, a
management and monitoring fee at the annual rate of $150,000 per year.

Under the long-term debt agreements described in Note 5, the Company
borrowed funds from certain members of the Company or their affiliates.
Interest on the outstanding principal amounts and certain other fees are paid
to such members or their affiliates.

On October 27, 1999, the Company acquired substantially all the assets of
radio stations WFAS-AM/WFAS-FM/WFAF-FM (formerly WZZN-FM), Westchester County,
New York from Westchester Radio, LLC (see Note 3). At the time of the
acquisition, Frank G. Washington, a member of the Company, was a member of
Westchester Radio, LLC.

F-40
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

9. Members' Capital

The classes of the Company's membership interests consist of Preferred
Units and Common Units (which are further designated as Invested Common Units,
Callable Common Units and Promoted Common Units).

Preferred equity interests

The Company may issue Preferred Units, no par value, which are non-
convertible. During 1999, the Company had issued 3,860,000 preferred units for
an aggregate $38.6 million. The holders of Preferred Units are entitled to a
preferred return at the annual rate of 10%, compounded quarterly, cumulative to
the extent not distributed. Undistributed preferred dividends as of December
31, 1999 were approximately, $1,293,000.

Common equity interests

The Company may issue Common Units, no par value, which represent a
common profits percentage. Each holder of Preferred Units received an equal
number of Invested Common Units. At December 31, 1999, issued and outstanding
Invested Common Units, Callable Common Units, Promoted Common Units and Total
Common Units were 3,860,000; 255,238; 527,012; and 4,642,250, respectively.

Allocation of profits and losses/liquidation preference

After giving effect to tax distributions, if any, paid to the members,
the Company's net income is allocated to the members' capital accounts in the
following priority: (i) to the Preferred Unit holders until the aggregate net
income allocated equals the aggregate net losses previously allocated to the
Preferred Unit holders; (ii) to the Preferred Unit holders in an amount equal
to the cumulative preferred return; and (iii) to the members in accordance with
their respective common profits percentages.

Net losses of the Company, after giving effect to tax distributions, if
any, paid to the members, are allocated to the members' capital accounts in the
following priority: (i) to the members until the aggregate net losses allocated
to the members' Common Units equals the aggregate net income previously
allocated to the members with respect to their Common Units; (ii) to the
members in proportion to their respective adjusted common capital account
balances until the adjusted common account balances of all members have been
reduced to zero; (iii) to the Preferred Unit holders until the aggregate net
losses allocated to the Preferred Unit holders equals the excess, if any, of
the sum of aggregate net income allocated to the Preferred Units over the
amount of aggregate tax distributions and preferred return distributions made
to the Preferred Unit holders; and (iv) to the Preferred Unit holders in
proportion to their respective adjusted capital account balances until the
adjusted capital account balances of all Preferred Unit holders have been
reduced to zero.

Upon a liquidation of the Company, after all the Company's liabilities
have been paid, remaining proceeds shall be distributed as follows: (i) to the
Preferred Unit holders in an amount equal to the lesser of such Preferred Unit
holder's adjusted preferred capital contribution, and such Preferred Unit
holders positive capital account balance; (ii) to the Common Unit holders in
proportion to their positive capital account balances.

Optional equity contributions

On or prior to April 3, 2000, a member of the Company and director of
Aurora Management, Inc., may at his option make additional capital
contributions with an aggregate value of up to $900,000. During the first
quarter of 2000, the capital contribution was made by the member.

F-41
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

On or prior to May 3, 2004, the Company's President, Chief Executive
Officer and member, may make additional capital contributions at his option
with an aggregate value of up to approximately $1,652,000.

10. Impact of Year 2000 (Unaudited)

In late 1999, the Company completed its remediation and testing of
systems. As a result of its planning and implementation efforts, the Company
experienced no significant disruptions in mission critical information
technology and non-information technology systems and believes those systems
successfully responded to the Year 2000 date change. Costs incurred by the
Company in connection with remediating its systems were immaterial. The Company
is not aware of any material problems resulting from Year 2000 issues, either
with the programming of its radio stations, its internal systems, or the
products and services of third parties. The Company will continue to monitor
its mission critical computer applications and those of its significant
suppliers and vendors throughout the year 2000 to ensure that any latent Year
2000 matters that may arise are addressed promptly.

11. Subsequent Event (Unaudited)

On March 24, 2000, the Company's members entered into an agreement to
sell all the ownership interests in the Company to Nassau Broadcasting
Partners, L.P. for approximately $185.0 million less long-term debt, consisting
of approximately $150.0 million plus an ownership interest in Nassau
Broadcasting Partners, L.P. The transaction is subject to various regulatory
approvals.

F-42
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONDENSED CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
------------ ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents....................... $ 1,635,924 $ 1,096,594
Accounts receivable, less allowance for doubtful
accounts of $81,310 and $43,789, respectively.. 3,401,235 3,694,071
Prepaid expenses and other current assets....... 231,208 164,477
------------ ------------
Total current assets.............................. 5,268,367 4,955,142
Property and equipment, at cost, less accumulated
depreciation of $337,495 and $157, 829,
respectively..................................... 5,661,885 5,713,402
FCC licenses and goodwill, net of accumulated
amortization of $1,242,876 and $666,779,
respectively..................................... 91,459,424 92,012,735
Deferred financing costs, net of accumulated
amortization of $210,320 and $119, 772,
respectively..................................... 2,088,734 2,179,283
------------ ------------
Total assets...................................... $104,478,410 $104,860,562
============ ============
Liabilities and members' capital
Current liabilities:
Accounts payable and accrued expenses........... $ 929,614 $ 1,383,447
Accrued interest payable........................ 514,021 807,359
------------ ------------
Total current liabilities......................... 1,443,635 2,190,806
Long-term debt.................................... 64,373,115 64,256,250
Other noncurrent liabilities...................... 705,785 383,005
Commitments and contingencies..................... -- --
Members' capital:
Members interests................................. 39,505,270 38,605,270
Accumulated deficit............................... (1,549,395) (574,769)
------------ ------------
Total members' capital............................ 37,955,875 38,030,501
------------ ------------
Total liabilities and members' capital............ $104,478,410 $104,860,562
============ ============
</TABLE>

See notes to condensed consolidated financial statements

F-43
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)

<TABLE>
<S> <C>
Net revenues....................................................... $4,959,734
Operating expenses:
Selling.......................................................... 930,343
Programming and promotion........................................ 921,449
Technical........................................................ 101,795
General and administrative....................................... 685,448
Depreciation and amortization.................................... 756,047
Corporate expenses............................................... 567,758
----------
Total operating expenses........................................... 3,962,840
----------
Operating income................................................... 996,894
Interest income.................................................... 5,427
Interest expense................................................... 1,976,947
----------
Net loss........................................................... $ (974,626)
==========
</TABLE>

See notes to condensed consolidated financial statements

F-44
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONDENSED CONSOLIDATED STATEMENT OF MEMBERS' CAPITAL
(Unaudited)

<TABLE>
<CAPTION>
Preferred Units Total Common Units Additional
--------------------- ---------------------Paid-in Accumulated
Units Value Units Value Capital Deficit Total
--------- ----------- ----------- ------------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1999................... 3,860,000 $38,600,000 4,642,250 $-- $5,270 $ (574,769) $38,030,501
Preferred contribution.. 90,000 900,000 -- -- -- -- 900,000
Net loss................ -- -- -- -- -- (974,626) (974,626)
--------- ----------- ----------- ------ ------ ----------- -----------
Balance at March 31,
2000................... 3,950,000 $39,500,000 4,642,250 $-- $5,270 $(1,549,395) $37,955,875
========= =========== =========== ====== ====== =========== ===========
</TABLE>

See notes to condensed consolidated financial statements

F-45
<PAGE>

AURORA COMMUNICATIONS, LLC
(A Limited Liability Company)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2000
(Unaudited)

<TABLE>
<S> <C>
Cash flows from operating activities
Net loss.......................................................... $ (974,626)
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation and amortization................................... 756,047
Non-cash interest expense....................................... 413,329
Changes in current assets and current liabilities:
Decrease in accounts receivable............................... 292,836
Increase in prepaid expenses and other current assets......... (66,731)
Decrease in accounts payable and accrued expenses............. (453,833)
Decrease in accrued interest payable.......................... (293,338)
----------
Total adjustments................................................. 648,310
----------
Net cash used in operating activities............................. (326,316)
----------
Cash flows from investing activities
Payments for business acquisitions................................ (23,070)
Capital expenditures.............................................. (128,149)
----------
Net cash used in investing activities............................. (151,219)
----------
Cash flows from financing activities
Proceeds from issuance of long-term debt, net..................... 116,865
Proceeds from issuance of membership interests.................... 900,000
----------
Net cash provided by financing activities......................... 1,016,865
----------
Net increase in cash and cash equivalents......................... 539,330
Cash and cash equivalents at beginning of period.................. 1,096,594
----------
Cash and cash equivalents at end of period........................ $1,635,924
==========
</TABLE>

See notes to condensed consolidated financial statement.

F-46
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

March 31, 2000

1.Basis of Presentation

Aurora Communications, LLC (the "Company") is a limited liability company
formed in January 1999 and commencing operations in May 1999. The Company is
engaged in the acquisition and operation of radio stations throughout the
United States. The Company is a subsidiary of Aurora Management, Inc., its
majority owner and managing member.

The accompanying unaudited condensed consolidated financial statements
include Aurora Communications, LLC and its wholly owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated. The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. However, such information reflects all
adjustments (consisting solely of normal recurring adjustments) that are, in
the opinion of management, necessary for a fair presentation of the financial
position, results of operations, and cash flows for the interim periods
presented. Operating results for the period ended March 31, 2000 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 2000. For further information, refer to the consolidated financial
statements and footnotes thereto for the period ended December 31, 1999.

2.Acquisitions

At March 31, 2000, the Company owned and operated five FM and four AM
radio stations.

On August 31, 1999, the Company acquired substantially all the assets of
radio stations WEBE-FM/WICC-AM, Bridgeport, Connecticut for $66.0 million plus
transaction costs.

On October 27, 1999, the Company acquired substantially all the assets of
radio stations WFAS-AM/WFAS-FM/WFAF-FM, Westchester County, New York for $20.25
million plus transaction costs.

3.Members' Capital

In March 2000, a member of the Company and director of Aurora Management,
Inc., made a preferred capital contribution of $900,000.

4.Advertising and Promotion

Expenditures for advertising and promotion are charged to expense as
incurred and totaled $140,000 for the three months ended March 31, 2000.

F-47
<PAGE>

AURORA COMMUNICATIONS, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)--(Continued)

March 31, 2000

5.Related Party Transactions

The Company paid Aurora Management, Inc., its managing member, a
management and monitoring fee, totaling $37,500 for the three months ended
March 31, 2000.

Under its long-term debt agreements, the Company borrowed funds from
certain members of the Company or their affiliates. Interest on the outstanding
principal amounts and certain other fees are paid to such members or their
affiliates.

6.Subsequent Event

F-48
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Directors
Clear Channel Communications, Inc.

We have audited the accompanying combined balance sheets of Clear Channel
Communications, Inc.'s radio stations WODE(FM) and WEEX(AM) as of December 31,
1999 and 1998, and the related combined statements of operations and cash flows
for the year ended December 31, 1999 and the period from January 29, 1998
(commencement of operations by Clear Channel Communications, Inc.) to December
31, 1998. These financial statements are the responsibility of the management
of Clear Channel Communications, Inc. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the combined financial position of
Clear Channel Communications, Inc.'s radio stations WODE(FM) and WEEX(AM) at
December 31, 1999 and 1998, and the combined results of their operations and
their cash flows for the year ended December 31, 1999 and the period from
January 29, 1998 to December 31, 1998, in conformity with accounting principles
generally accepted in the United States.

Ernst & Young LLP

San Antonio, Texas
May 26, 2000

F-49
<PAGE>

RADIO STATIONS WODE(FM)/WEEX(AM)

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
December 31
-----------------------
March 31 2000 1999 1998
------------- ----------- -----------
(Unaudited)
<S> <C> <C> <C>
Assets
Current assets:
Cash and cash equivalents............. $ 3,237 $ 3,300 $ 2,821
Accounts receivable, net.............. 544,294 459,258 763,393
----------- ----------- -----------
Total current assets.................... 547,531 462,558 766,214
Property, plant, and equipment:
Land, building, and improvements...... 517,550 517,550 458,823
Transmitter and studio equipment...... 729,678 708,450 682,664
Furniture and other equipment......... 150,722 149,637 156,541
Construction in progress.............. -- 19,098 53,946
----------- ----------- -----------
1,397,950 1,394,735 1,351,974
Less accumulated depreciation......... 278,286 241,411 107,688
----------- ----------- -----------
1,119,664 1,153,324 1,244,286
Intangible assets:
Licenses and goodwill................. 27,773,651 27,773,651 27,773,651
Less accumulated amortization......... 2,417,306 2,138,387 1,022,707
----------- ----------- -----------
25,356,345 25,635,264 26,750,944
----------- ----------- -----------
Total assets............................ $27,023,540 $27,251,146 $28,761,444
=========== =========== ===========
Liabilities and Parent Company
Investment Account
Current liabilities:
Accounts payable...................... $ 84,400 $ 55,943 $ 301
Accrued expenses...................... 19,638 17,796 25,858
----------- ----------- -----------
Total current liabilities............... 104,038 73,739 26,159
Parent company investment account....... 26,919,502 27,177,407 28,735,285
----------- ----------- -----------
Total liabilities and parent company
investment account..................... $27,023,540 $27,251,146 $28,761,444
=========== =========== ===========
</TABLE>

See accompanying notes.

F-50
<PAGE>

RADIO STATIONS WODE(FM)/WEEX(AM)

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Three Months Ended Period From
March 31 Year Ended January 29 to
-------------------- December 31 December 31
2000 1999 1999 1998
--------- --------- ----------- -------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenue:
Gross revenue................ $ 944,342 $ 959,376 $4,115,008 $4,717,270
Less agency commissions...... 76,029 95,579 367,742 425,956
--------- --------- ---------- ----------
Net revenue.................... 868,313 863,797 3,747,266 4,291,314
Expenses:
Operating expenses........... 515,348 494,531 2,281,254 2,032,836
Depreciation and
amortization................ 315,795 311,881 1,259,093 1,130,395
Corporate general and
administrative expenses..... 27,384 36,538 103,269 128,959
--------- --------- ---------- ----------
Total expenses................. 858,527 842,950 3,643,616 3,292,190
--------- --------- ---------- ----------
Operating income............... 9,786 20,847 103,650 999,124
Interest expense............... (293,310) (379,113) (1,473,888) (1,520,608)
Loss on disposal of assets..... -- -- (29,060) --
--------- --------- ---------- ----------
Loss before income taxes....... (283,524) (358,266) (1,399,298) (521,484)
Income tax benefit............. 127,586 161,220 629,684 234,668
--------- --------- ---------- ----------
Net loss....................... $(155,938) $(197,046) $ (769,614) $ (286,816)
========= ========= ========== ==========
</TABLE>

See accompanying notes.

F-51
<PAGE>

RADIO STATIONS WODE(FM)/WEEX(AM)

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Three Months Ended Period From
March 31 Year Ended January 29 to
-------------------- December 31 December 31
2000 1999 1999 1998
--------- --------- ----------- -------------
(Unaudited)
<S> <C> <C> <C> <C>
Operating Activities
Net loss...................... $(155,938) $(197,046) $(769,614) $ (286,816)
Adjustments to reconcile net
loss to net cash provided by
operating activities:
Depreciation................ 36,875 32,962 143,413 107,688
Amortization of
intangibles................ 278,920 278,919 1,115,680 1,022,707
Loss on disposal of fixed
assets -- -- 29,060 --
Changes in operating assets
and liabilities:
(Increase) decrease in
accounts receivable...... (85,036) 149,099 304,135 (763,393)
Increase (decrease) in
accounts payable and
accrued expenses......... 30,299 (1,261) 47,580 26,159
--------- --------- --------- -----------
Net cash provided by operating
activities................... 105,120 262,673 870,254 106,345
Investing Activities
Purchases of property, plant,
and equipment................ (3,216) (8,386) (81,511) (80,252)
Acquisition of broadcasting
assets....................... -- -- -- (29,023,663)
--------- --------- --------- -----------
Net cash used in investing
activities................... (3,216) (8,386) (81,511) (29,103,915)
Financing Activities
Net advances from (repayments
to) parent company........... (101,967) (245,379) (788,264) 29,000,391
--------- --------- --------- -----------
Net cash (used in) provided by
financing activities......... (101,967) (245,379) (788,264) 29,000,391
--------- --------- --------- -----------
Net (decrease) increase in
cash and cash equivalents.... (63) 8,908 479 2,821
Cash and cash equivalents at
beginning of period.......... 3,300 2,821 2,821 --
--------- --------- --------- -----------
Cash and cash equivalents at
end of period................ $ 3,237 $ 11,729 $ 3,300 $ 2,821
========= ========= ========= ===========
</TABLE>

See accompanying notes.

F-52
<PAGE>

RADIO STATIONS WODE(FM)/WEEX(AM)

NOTES TO COMBINED FINANCIAL STATEMENTS

March 31, 2000 and December 31, 1999 and 1998

1. Summary of Significant Accounting Policies

Nature of Business

Clear Channel Communications, Inc. (Clear Channel) is a diversified media
company which was incorporated in Texas in 1974. Clear Channel owns, programs,
or sells airtime for radio and television stations, and is one of the world's
largest outdoor advertising companies based on total advertising display
inventory in the United States and internationally.

Clear Channel owns and operates radio stations WODE(FM) and WEEX(AM) (the
Stations) located in Allentown, Pennsylvania. These combined financial
statements have been prepared in connection with the proposed sale of the
Stations to Nassau Broadcasting Partners, L.P. These combined financial
statements present the operations of the Stations on a "carved-out" basis. The
combined financial statements have been prepared as if the Stations had
operated as a stand-alone entity for all periods presented, and include only
those assets, liabilities, revenues, and expenses directly attributable to the
Stations' operation. Corporate expenses, interest expense, and income taxes
have been allocated to the Stations as indicated in Note 3. The financial
information included herein does not necessarily reflect the financial position
and results of operations of what the Stations would have been had they
operated as a stand-alone entity during the periods covered, and may not be
indicative of future operations or financial position.

The financial statements for the three months ended March 31, 2000 and
1999 are unaudited, but in the opinion of management, such financial statements
have been presented on the same basis as the audited financial statements for
the year ended December 31, 1999, and include all adjustments, consisting only
of normal recurring adjustments necessary for a fair presentation of the
financial position and results of operations and cash flows for these periods.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an
original maturity of three months or less.

Accounts Receivable

Accounts receivable are stated net of agency commissions, as well as any
applicable allowance for uncollectible accounts. Allowances for uncollectible
accounts at March 31, 2000 and December 31, 1999 and 1998 were approximately
$42,400, $32,900, and $27,000, respectively. The provision for uncollectible
accounts and write-offs of uncollectible accounts were as follows:

<TABLE>
<CAPTION>
Three Months
Ended Period From
March 31 Year Ended January 29 to
-------------- December 31 December 31
2000 1999 1999 1998
------ ------- ----------- -------------
<S> <C> <C> <C> <C>
Provision for
uncollectible
accounts.............. $9,400 $10,500 $22,800 $28,900
Write-offs of
uncollectible
accounts.............. -- -- 16,800 1,900
</TABLE>

F-53
<PAGE>

RADIO STATIONS WODE(FM)/WEEX(AM)

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

March 31, 2000 and December 31, 1999 and 1998

Property, Plant, and Equipment

Property, plant, and equipment are stated at cost. Depreciation is
computed principally by the straight-line method at rates that, in the opinion
of management, are adequate to allocate the cost of such assets over their
estimated useful lives, which are as follows:

<TABLE>
<S> <C>
Buildings......................................... 10 to 30 years
Transmitter and studio equipment.................. 7 to 15 years
Furniture and other equipment..................... 2 to 10 years
Leasehold improvements............................ generally life of lease
</TABLE>

Expenditures for maintenance and repairs are charged to operations as
incurred, whereas expenditures for renewal and betterments are capitalized.

Intangible Assets

Intangible assets are stated at cost and are being amortized using the
straight-line method. Excess cost over the fair value of net assets acquired
(goodwill) and FCC licenses are amortized over 25 years. The periods of
amortization are evaluated annually to determine whether circumstances warrant
revision.

The carrying value of intangible assets is reviewed on a regular basis
for the existence of facts or circumstances, both internally and externally,
that may suggest impairment. If such impairment is identified, the impairment
loss will be measured by comparing the estimated future undiscounted cash flows
to the asset's carrying value. To date, no such impairment has been indicated.

Parent Company Investment Account

The Stations were acquired by Clear Channel for cash through an asset
purchase agreement. As such, the Stations are not a legal entity and have no
separate capital accounts. The parent company investment account contains the
accumulated deficit from operations, offset by nonmaturing advances from and
repayments to Clear Channel.

Income Taxes

The Stations are included in the consolidated federal income tax return
of Clear Channel. For purposes of the accompanying financial statements, income
tax benefits have been calculated on a separate-company basis at the federal
and state statutory rates. Tax assets are included in the parent company
investment account.

Revenue Recognition

Broadcasting revenue, which consists primarily of the sale of airtime to
local, regional, and national customers, is recognized as advertisements or
programs are broadcast and is generally billed monthly.

Revenue from barter transactions is recognized when advertisements are
broadcast. Merchandise or services received are charged to expense when
received or used. For the three months ended March 31, 2000 and 1999, the year
ended December 31, 1999, and the period from January 29, 1998 through December
31, 1998, the Stations recognized barter revenue of approximately $69,000, $-0-
, $207,700, and $105,000, respectively. Barter expense approximated barter
revenue in those same periods.

F-54
<PAGE>

RADIO STATIONS WODE(FM)/WEEX(AM)

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

March 31, 2000 and December 31, 1999 and 1998

Advertising and Promotion

Expenditures for advertising and promotion are charged to expense as
incurred and totaled approximately $2,000, $1,300, $152,800, and $181,000 for
the three months ended March 31, 2000 and 1999, the year ended December 31,
1999, and the period from January 29, 1998 through December 31, 1998,
respectively.

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 reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.

2. Commitments

Clear Channel leases certain equipment and tower space under long-term
operating leases. At March 31, 2000, the Stations' future minimum rental
commitments, under non-cancelable lease agreements with terms in excess of one
year, consist of the following:

<TABLE>
<S> <C>
Remaining 2000 payments.......................................... $ 6,500
2001............................................................. 8,000
-------
$14,500
=======
</TABLE>

Rent expense charged to operations for the three months ended March 31,
2000 and 1999, the year ended December 31, 1999, and the period from January
29, 1998 through December 31, 1998 was approximately $2,300, $2,800, $11,300,
and $9,900, respectively.

3. Corporate Allocations

As described in Note 1, the combined financial statements present the
operations of the Stations on a "carved-out" basis. Certain expenses, including
corporate general and administrative expenses, interest expense, and income tax
benefits, have been allocated to the Stations.

Corporate general and administrative expenses have been allocated to the
Stations based on their proportionate share of broadcast net revenues. Interest
has been allocated to the Stations based upon management's estimate of the
total Clear Channel debt attributable to the acquisition and operation of the
Stations, using Clear Channel's weighted-average interest rate of 4.56%, 5.51%,
and 5.86% for the three months ended March 31, 2000, the year ended December
31, 1999, and the period from January 29, 1998 through December 31, 1998,
respectively. Income tax benefits have been allocated to the Stations based on
net loss before income taxes at federal and state statutory tax rates.
Corporate allocations of general and administrative expenses, interest expense,
and income tax benefits are included in the parent company investment account.

4. Pending Sale of Stations (Unaudited)

On February 29, 2000, Nassau Broadcasting Partners, L.P. entered into an
asset purchase agreement with Clear Channel to purchase the FCC licenses and
certain operating assets of the Stations for approximately $30 million. The
transaction is subject to consummation of the merger between AMFM, Inc. and
Clear Channel, and FCC approvals.

F-55
<PAGE>

INDEPENDENT AUDITORS' REPORT

WEBE and WICC Radio Stations
(Divisions of ML Media Partners, L.P.)

We have audited the accompanying combined balance sheet of WEBE and WICC
Radio Stations (Divisions of ML Media Partners, L.P.) (collectively, the
"Combined Group") as of August 31, 1999, and the related combined statements of
operations and accumulated earnings, and cash flows for the period January 1,
1999 to August 31, 1999. These financial statements are the responsibility of
the Combined Group'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, such combined financial statements present fairly, in all
material respects, the financial position of WEBE and WICC Radio Stations
(Divisions of ML Media Partners, L.P.) at August 31, 1999, and the results of
their operations and their cash flows for the period January 1, 1999 to August
31, 1999 in conformity with generally accepted accounting principles.

Deloitte & Touche LLP

New York, New York
December 10, 1999
(March 24, 2000 as to Note 8)

F-56
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

COMBINED BALANCE SHEET
AUGUST 31, 1999

<TABLE>
<S> <C>
Assets
Current assets:
Cash and cash equivalents........................................ $ 7,058,468
Accounts receivable--trade, less allowance for doubtful accounts
of $ 130,823.................................................... 2,487,258
Prepaid barter expense........................................... 90,204
-----------
Total current assets............................................... 9,635,930
-----------
Property:
Building......................................................... 76,368
Towers and antennas.............................................. 755,291
Broadcasting equipment........................................... 1,250,000
Furniture, fixtures and office equipment......................... 390,858
Leasehold improvements........................................... 155,232
-----------
Total.............................................................. 2,627,749
Less accumulated depreciation and amortization................... 2,539,910
-----------
Property--Net...................................................... 87,839
-----------
Other assets:
Goodwill......................................................... 14,777,376
Other intangible assets.......................................... 761,624
-----------
Total.............................................................. 15,539,000
Less accumulated amortization.................................... 4,612,184
-----------
OTHER ASSETS--Net................................................ 10,926,816
-----------
Total assets....................................................... $20,650,585
===========
Liabilities and Divisional Equity
Current liabilities:
Accounts payable................................................. $ 84,416
Deferred barter revenue.......................................... 79,102
Accrued liabilities--other....................................... 280,936
-----------
Total current liabilities.......................................... 444,454
-----------
Divisional equity:
Division capital................................................. 4,500,000
Payable to affiliates............................................ 6,649,463
Accumulated earnings............................................. 9,056,668
-----------
Total.............................................................. 20,206,131
-----------
Total liabilities and divisional equity............................ $20,650,585
===========
</TABLE>

See notes to combined financial statements.

F-57
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

COMBINED STATEMENT OF OPERATIONS AND ACCUMULATED EARNINGS
FOR THE PERIOD JANUARY 1, 1999 TO AUGUST 31, 1999

<TABLE>
<S> <C>
Revenue:
Local............................................................. $6,160,981
National.......................................................... 2,238,107
Trades............................................................ 388,564
Other............................................................. 318,481
----------
Total............................................................... 9,106,133
Less commissions of agencies........................................ 1,083,443
----------
Net revenue......................................................... 8,022,690
----------
Operating expenses before depreciation and amortization:
Direct............................................................ 426,318
Technical......................................................... 171,769
Programming....................................................... 660,051
News.............................................................. 163,141
Selling........................................................... 1,467,576
Promotion......................................................... 303,344
General and administrative........................................ 920,936
Corporate administrative.......................................... 532,500
Management fee.................................................... 1,334,216
----------
Total............................................................... 5,979,851
----------
Operating income before depreciation and amortization............... 2,042,839
Depreciation and amortization....................................... 274,650
----------
Income before extraordinary item.................................... 1,768,189
Extraordinary item--forgiveness of indebtedness..................... 1,688,693
----------
Net income.......................................................... 3,456,882
Accumulated earnings, beginning of period........................... 5,599,786
----------
Accumulated earnings, end of period................................. $9,056,668
==========
</TABLE>

See notes to combined financial statements.

F-58
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

COMBINED STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 1, 1999 TO AUGUST 31, 1999

<TABLE>
<S> <C>
Cash flows from Operating Activities:
Net income....................................................... $3,456,882
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation................................................... 18,873
Amortization................................................... 255,777
Bad debt expense............................................... 34,870
Forgiveness of indebtedness.................................... (1,688,693)
Changes in operating assets (increase) decrease:
Accounts receivable.......................................... (318,493)
Prepaid barter expense....................................... (40,428)
Other current assets......................................... 28,209
Changes in operating liabilities increase (decrease):
Accounts payable and other accrued liabilities............... 6,154
Deferred barter revenue...................................... (15,073)
----------
Net cash provided by operating activities.................. 1,738,078
----------
Cash flows from Investing Activities:
----------
Capital expenditures............................................. (5,287)
----------
Cash flows from Financing Activities:
Net decrease in payable to parent and affiliates................. 1,405,215
----------
Net increase in cash and cash equivalents.......................... 3,138,006
Cash and cash equivalents, beginning of period..................... 3,920,462
----------
Cash and cash equivalents, end of period........................... $7,058,468
==========
</TABLE>

See notes to combined financial statements.

F-59
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.

NOTES TO COMBINED FINANCIAL STATEMENTS

For the Period January 1, 1999 to August 31, 1999

1. Organization, Ownership and Operations

WEBE and WICC radio stations (collectively, the "Combined Group") are
divisions of ML Media Partners, L.P. ("ML"). Both of the radio stations are
located in Fairfield County, Connecticut. On April 22, 1999, ML Media Partners
L.P. entered into an asset purchase agreement to sell the assets of WEBE and
WICC to Aurora Communications LLC for $66 million. The effective closing date
for this transaction is August 31, 1999. Based upon regular assessments of the
Combined Group's operations performed by key management, the Combined Group has
determined that its reportable segment is commercial radio broadcasting. The
economic characteristics, services, production process, customer type and
distribution methods for the Combined Group's two radio stations are
substantially similar and have therefore been aggregated as one reportable
segment.

2. Summary of Significant Accounting Policies

Principles of Combination--The accompanying combined financial statements
include the accounts of the Combined Group. All significant intercompany
balances and transactions have been eliminated in combination.

Property--Property is stated at cost less accumulated depreciation and
amortization. Leasehold improvements are amortized over their estimated useful
lives or the length of the lease, whichever is shorter. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets as follows:

<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings............................................................ 20-30
Towers and antennas.................................................. 7-20
Broadcasting equipment............................................... 7-8
Furniture, fixtures, and office equipment............................ 3-7
Vehicles............................................................. 5
</TABLE>

Asset Impairment--The individual entities within the Combined Group
assess the impairment of their respective long-lived assets on a regular basis
or immediately upon the occurrence of a significant event in the marketplace or
an event that directly impacts such assets. The methodology varies depending on
the type of asset but typically consists of comparing the net book value of the
asset to either: (1) the undiscounted expected future cash flows generated by
the asset, and/or (2) the current market values obtained from industry sources.

If the net book value of a particular asset is materially higher than the
estimated net realizable value, and the asset is considered to be permanently
impaired, the radio stations will write down the net book value of the asset
accordingly. The Combined Group relies on industry sources and its experience
in the particular marketplace to determine whether an asset impairment is other
than temporary. As of August 31, 1999, based on the opinion of management, no
such impairments had occurred.

Intangible Assets--Intangible assets consist of advertiser lists,
favorable market area, favorable program format, permits, agreements,
contracts, goodwill and organizational costs which are stated at cost, less
accumulated amortization, as determined by management for WICC and by
independent appraisal for WEBE. These intangible assets are being amortized
over the shorter of their respective expiration dates or 40 years.

F-60
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

For the Period January 1, 1999 to August 31, 1999

Revenue Recognition--Local and national advertising revenues are recorded
when the corresponding commercial spots are aired.

Barter Transactions--As is customary in the broadcasting industry, the
Combined Group engages in the bartering of commercial air time for various
goods and services. The goods and services are capitalized or expensed as
appropriate, when received or utilized. Revenues are recognized when the
commercial spots are aired. At August 31, 1999, the Combined Group had prepaid
barter expense (net of deferred barter revenue) of $11,102. For the period
January 1, 1999 to August 31, 1999, the Combined Group had expenses of
$333,062, and revenues of $388,564, respectively, in connection with barter
transactions.

Cash Equivalents--Cash equivalents represent liquid investments with an
original maturity of 90 days or less.

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.

3. Allocated Borrowings

On July 19, 1989, ML and Wincom Broadcasting Corporation and its wholly-
owned subsidiary Win Communications, Inc. (collectively, "Wincom" which is
wholly-owned by ML ) entered into an amended and restated credit, security and
pledge agreement (the "Wincom-WEBE-WICC Loan") with Chemical Bank (currently
doing business as Chase Manhattan Bank and subsequently referred to herein as
"Chase") which was used to replace and repay other debt agreements and finance
the acquisition of WICC. The Combined Group had been allocated a portion of the
Wincom-WEBE-WICC Loan based on each station's percentage of broadcast cashflow
to the total broadcast cashflow of Wincom Communications and WEBE and WICC. On
January 28, 1999, ML paid the remaining allocated borrowings of $1,688,693 on
behalf of the Combined Group and forgave the indebtedness of the Combined
Group. This forgiveness of indebtedness is recorded as an extraordinary item on
the combined statement of operations and accumulated earnings.

The Wincom-WEBE-WICC Loan was structured as a revolving credit line that
provided for borrowings of up to $35,000,000 through December 31, 1990. The
Wincom-WEBE-WICC Loan converted to a term loan on December 31, 1990. Principal
payments were scheduled to commence on March 31, 1991 and to continue quarterly
through June 30, 1997. ML, if no event of default had occurred, had options to
elect to pay interest on the Wincom-WEBE-WICC Loan based upon the bank's
reference rate or London Interbank Offered Rates, plus applicable margins. As a
result of defaults under the Wincom-WEBE-WICC Loan, the lender has restricted
interest rate options to reference rate only.

The Wincom-WEBE-WICC Loan required that the Wincom-WEBE-WICC group
maintain minimum covenant levels of certain ratios such as debt to operating
profit and debt service coverage, and restrict such items as: cash
disbursements; the payment of management fees; distributions or dividends;
additional indebtedness; or asset sales by or at Wincom, WEBE or WICC. The
Wincom-WEBE-WICC Loan also included other standard and usual loan covenants.
Borrowings under the Wincom-WEBE-WICC Loan were nonrecourse to ML and are
collateralized with substantially all of the assets of the Wincom-WEBE-WICC
Group.

F-61
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

For the Period January 1, 1999 to August 31, 1999

On July 30, 1993, ML and Chase executed a Second Amendment to the Wincom-
WEBE-WICC Loan (the "Restructuring Agreement"), effective January 1, 1993,
which cured all previously outstanding defaults pursuant to the Wincom-WEBE-
WICC Loan. In addition, as part of the restructuring process, ML agreed to sell
substantially all of the assets of Indianapolis Stations owned by Wincom, WRZX-
FM and WCKN-AM. Such sale was consummated on October 1, 1993.

The Restructuring Agreement provided for the outstanding principal and
interest due Chase as of December 31, 1992 (approximately $24.7 million and
$2.0 million, respectively) to be divided into three notes as follows: a Series
A Term Loan in the amount of $13 million; a Series B Term Loan in the amount of
approximately $11.7 million; and a Series C Term Loan in the amount of
approximately $2.0 million.

As a result of the payment of the Series B Term Loan from the net
proceeds of the sale of the Indianapolis Stations exceeding $6 million
(described above), the full principal amount of the Series C Term Loan was
forgiven by Chase on October 1, 1993 pursuant to the terms of the Restructuring
Agreement.

The Series A Term Loan was paid in full as of December 31, 1998. On
January 28, 1999, the remaining principal and interest of the Series B term
loan was paid in full by ML on behalf of the Combined Group and recorded as a
forgiveness of indebtedness by the Combined Group.

4. Operating Leases

The Combined Group leases broadcast facilities and certain other
equipment under operating lease agreements. Several of the leases contain
renewal options and require payment for real estate taxes and other operating
costs. There were no minimum future rental commitments at August 31, 1999 under
noncancelable operating leases in excess of one year.

Total rent expense for the period January 1, 1999 to August 31, 1999 was
$188,616.

5. Income Taxes

As operating divisions of ML, WEBE and WICC are included in the tax
returns of ML. ML is not subject to income taxes because all income and
expenses are allocated to the individual partners of ML for inclusion in their
respective tax returns. Accordingly, no income tax provision is recorded for
WEBE and WICC in the accompanying combined statements of operations.

6. Related Party Transactions

The payable to affiliates represents the amount payable by the Combined
Group, principally to ML. ML does not assess interest to the Combined Group on
its outstanding intercompany balances.

The Combined Group is charged management fees by ML. These fees amounted
to $1,334,216 for the period January 1, 1999 to August 31, 1999. The Combined
Group also incurred corporate administrative fees to RP Radio LLC. (which took
over management of the radio station in 1996). Amounts incurred for the period
January 1, 1999 to August 31, 1999 were $532,500.

F-62
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

For the Period January 1, 1999 to August 31, 1999

The activity in the payable to affiliates account for the period January
1, 1999 to August 31, 1999 is as follows:

<TABLE>
<S> <C>
Balance, beginning of period................................... $5,244,248
Transfers from ML and affiliates--net.......................... 1,405,215
----------
Balance, end of period......................................... $6,649,463
==========
</TABLE>

7. Fair Value of Financial Instruments

SFAS No. 107, Disclosures about Fair Value of Financial Instruments,
requires companies to report the fair value of certain on- and off-balance-
sheet assets and liabilities which are defined as financial instruments.

Assets, including cash and cash equivalents and accounts receivable, and
liabilities, such as accounts payable and amounts payable to parent and
affiliates, are carried at amounts which approximate fair value.

8. Subsequent Event

On March 24, 2000, Aurora Communications LLC entered into an agreement to
sell the assets of WEBE and WICC along with the remaining ownership interest of
Aurora Communications LLC to Nassau Broadcasting Partners, L.P. for
approximately $185 million, less long-term debt consisting of approximately
$150 million plus an ownership interest in Nassau Broadcasting Partners, L.P.
The transaction is subject to various regulatory approvals.

F-63
<PAGE>

INDEPENDENT AUDITORS' REPORT

WEBE and WICC Radio Stations
(Divisions of ML Media Partners, L.P.)

We have audited the accompanying combined balance sheets of WEBE and WICC
Radio Stations (Divisions of ML Media Partners, L.P.) (collectively, the
"Combined Group") as of December 31, 1998 and 1997, and the related combined
statements of operations and accumulated earnings (deficit), and cash flows for
each of the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Combined Group'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, such combined financial statements present fairly, in all
material respects, the financial position of WEBE and WICC Radio Stations
(Divisions of ML Media Partners, L.P.) at December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998 in conformity with generally accepted
accounting principles.

Deloitte & Touche LLP

New York, New York
August 27, 1999

F-64
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

COMBINED BALANCE SHEETS
December 31, 1998 and 1997

<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents............................ $ 3,920,462 $ 555,002
Accounts receivable--trade, less allowance for
doubtful accounts of $115,841 in 1998 and $78,572 in
1997................................................ 2,203,635 1,902,249
Prepaid barter expense............................... 49,776 84,342
Other current assets................................. 28,209 21,329
----------- -----------
Total current assets............................... 6,202,082 2,562,922
----------- -----------
PROPERTY:
Building............................................. 76,368 76,368
Towers and antennas.................................. 751,881 750,096
Broadcasting equipment............................... 1,250,000 1,314,502
Furniture, fixtures and office equipment............. 388,981 385,457
Leasehold improvements............................... 155,232 155,232
Vehicles............................................. -- 20,790
----------- -----------
Total.............................................. 2,622,462 2,702,445
Less accumulated depreciation and amortization....... 2,521,037 2,597,617
----------- -----------
PROPERTY--Net.......................................... 101,425 104,828
----------- -----------
OTHER ASSETS:
Goodwill............................................. 14,777,376 14,777,376
Other intangible assets.............................. 761,624 761,624
----------- -----------
Total.............................................. 15,539,000 15,539,000
Less accumulated amortization........................ 4,356,407 3,972,745
----------- -----------
OTHER ASSETS--Net...................................... 11,182,593 11,566,255
----------- -----------
TOTAL ASSETS........................................... $17,486,100 $14,234,005
=========== ===========
LIABILITIES AND DIVISIONAL EQUITY
CURRENT LIABILITIES:
Accounts payable..................................... $ 31,278 $ 15,982
Deferred barter revenue.............................. 94,175 147,207
Accrued liabilities--other........................... 327,920 450,736
Payable to affiliates................................ 1,688,693 2,874,228
----------- -----------
Total current liabilities.......................... 2,142,066 3,488,153
----------- -----------
COMMITMENTS (Note 4)
DIVISIONAL EQUITY:
Division capital..................................... 4,500,000 4,500,000
Payable to affiliates................................ 5,244,248 4,869,581
Accumulated earnings................................. 5,599,786 1,376,271
----------- -----------
Total.............................................. 15,344,034 10,745,852
----------- -----------
TOTAL LIABILITIES AND DIVISIONAL EQUITY................ $17,486,100 $14,234,005
=========== ===========
</TABLE>

See notes to combined financial statements.

F-65
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

COMBINED STATEMENTS OF OPERATIONS AND ACCUMULATED EARNINGS (DEFICIT)

Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
REVENUE:
Local................................ $ 9,496,654 $ 9,063,957 $ 7,467,180
National............................. 2,777,925 2,194,956 1,753,774
Trades............................... 445,752 614,201 572,519
Other................................ 571,863 426,240 443,473
----------- ----------- -----------
Total.............................. 13,292,194 12,299,354 10,236,946
Less commissions of agencies......... 1,632,323 1,478,419 1,223,346
----------- ----------- -----------
NET REVENUE............................ 11,659,871 10,820,935 9,013,600
----------- ----------- -----------
OPERATING EXPENSES BEFORE DEPRECIATION
AND AMORTIZATION:
Direct............................... 602,410 590,407 494,376
Technical............................ 240,970 231,854 247,733
Programming.......................... 990,498 994,339 816,721
News................................. 259,388 248,508 273,873
Selling.............................. 2,052,515 1,994,603 1,701,447
Promotion............................ 610,757 717,685 455,956
General and administrative........... 1,334,684 1,401,451 1,337,873
Corporate administrative............. 271,218 298,284 327,868
Management fee....................... 450,488 1,068,552 650,965
----------- ----------- -----------
Total.............................. 6,812,928 7,545,683 6,306,812
----------- ----------- -----------
OPERATING INCOME BEFORE DEPRECIATION
AND AMORTIZATION...................... 4,846,943 3,275,252 2,706,788
DEPRECIATION AND AMORTIZATION.......... (410,373) (538,887) (561,945)
----------- ----------- -----------
OPERATING INCOME....................... 4,436,570 2,736,365 2,144,843
INTEREST EXPENSE....................... (213,055) (204,363) (458,369)
----------- ----------- -----------
NET INCOME............................. 4,233,515 2,532,002 1,686,474
ACCUMULATED EARNINGS (DEFICIT),
BEGINNING OF YEAR..................... 1,376,271 (1,155,731) (2,842,205)
----------- ----------- -----------
ACCUMULATED EARNINGS (DEFICIT), END OF
YEAR.................................. $ 5,599,786 $ 1,376,271 $(1,155,731)
=========== =========== ===========
</TABLE>

See notes to combined financial statements.

F-66
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

COMBINED STATEMENTS OF CASH FLOWS

Years Ended December 31, 1998, 1997 and 1996

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................... $4,223,515 $2,532,002 $1,686,474
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation........................... 26,711 95,760 118,104
Amortization........................... 383,662 443,127 443,841
Bad debt expense....................... 56,026 45,336 64,633
Changes in operating assets (increase)
decrease:
Accounts receivable.................. (357,412) (248,784) (269,555)
Prepaid barter expense............... 34,566 43,014 (126,011)
Other current assets................. (6,880) 18,937 (9,605)
Changes in operating liabilities
increase (decrease):
Accounts payable and other accrued
liabilities......................... (107,519) (116,776) (40,514)
Deferred barter revenue.............. (53,032) 22,766 124,258
---------- ---------- ----------
Net cash provided by operating
activities........................ 4,199,637 2,835,382 1,991,625
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES--
Capital expenditures..................... (23,309) (29,663) (16,419)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES--
Net decrease in payable to parent and
affiliates.............................. (810,868) (3,135,510) (1,332,044)
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................... 3,365,460 (329,791) 643,162
CASH AND CASH EQUIVALENTS, BEGINNING OF
YEAR...................................... 555,002 884,793 241,631
---------- ---------- ----------
CASH AND CASH EQUIVALENTS, END OF YEAR..... $3,920,462 $ 555,002 $ 884,793
========== ========== ==========
</TABLE>

See notes to combined financial statements.

F-67
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

NOTES TO COMBINED FINANCIAL STATEMENTS

Years Ended December 31, 1988, 1997 and 1996

1. ORGANIZATION, OWNERSHIP AND OPERATIONS

WEBE and WICC radio stations (collectively, the "Combined Group") are
divisions of ML Media Partners, L.P. ("ML"). Both of the radio stations are
located in Fairfield County, Connecticut. Based upon regular assessments of the
Combined Group's operations performed by key management, the Combined Group has
determined that is reportable segment is commercial radio broadcasting. The
economic characteristics, services, production process, customer type and
distribution methods for the Combined Group's two radio statements are
substantially similar and have therefore been aggregated as one reportable
segment.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

If the net book value of a particular asset is materially higher than the
estimated net realizable value, and the asset is considered to be permanently
impaired, the radio stations will write down the net book value of the asset
accordingly. The Combined Group relies on industry sources and its experience
in the particular marketplace to determine whether an asset impairment is other
than temporary. As of December 31, 1998, based on the opinion of management, no
such impairments had occurred.

Intangible Assets--Intangible assets consist of advertiser lists,
favorable market area, favorable program format, permits, agreements,
contracts, goodwill and organizational costs which are stated at cost, less
accumulated amortization, as determined by management for WICC and by
independent appraisals for WEBE. These intangible assets are being amortized
over the shorter of their respective expiration dates for 40 years.

Revenue Recognition--Local and national advertising revenues are recorded
when the corresponding commercials spots are aired.

F-68
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1998, 1997 and 1996

Barter Transactions--As is customary in the broadcasting industry, the
Combined Group engages in the bartering of commercial air time for various
goods and services. The goods and services are capitalized or expensed as
appropriate, when received or utilized. Revenues are recognized when the
commercial spots are aired. At December 31, 1998 and 1997, the Combined Group
had deferred barter revenue (net of prepaid barter expense) of $44,399 and
$62,865, respectively. During 1998, 1997 and 1996 the Combined Group had
expenses of $424,287, $676,288 and $597,548, respectively, and revenues of
$445,752, $614,201 and $572,519, respectively, in connection with barter
transactions.

Cash Equivalents--Cash equivalents represent liquid investments with an
original maturity of 90 days or less.

3. ALLOCATED BORROWINGS

On July 19, 1989, ML and Wincom Broadcasting Corporation and its wholly-
owned subsidiary Win Communications, Inc. (collectively, "Wincom" which is
wholly-owned by ML) entered into an amended and restated credit, security and
pledge agreement (the "Wincom-WEBE-WICC Loan") with Chemical Bank (currently
doing business as Chase Manhattan Bank and subsequently referred to herein as
"Chase") which was used to replace and repay other debt agreements and finance
the acquisition of WICC. The Combined Group has been allocated a portion of the
Wincom-WEBE-WICC Loan based on each station's percentage of broadcast cashflow
to the total broadcast cash flow of Wincom Communications and WEBE and WICC.
The Combined Group's allocated portion of the related obligations was
$1,688,693 and $2,874,228 at December 31, 1998 and 1997, respectively and is
included in payable to affiliates--current on the combined balance sheets.

On July 30, 1993, ML and Chase executed a Second Amendment to the Wincom-
WEBE-WICC Loan (the "Restructuring Agreement"), effective January 1, 1993,
which cured all previously outstanding defaults

F-69
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1998, 1997 and 1996

pursuant to the Wincom-WEBE-WICC Loan. In addition, as part of the
restructuring process, ML agreed to sell substantially all of the assets of
Indianapolis Stations owned by Wincom, WRZX-FM and WCKN-AM. Such sale was
consummated on October 1, 1993.

The Series A Term Loan was paid in full as of December 31, 1998. On
January 28, 1999, the remaining principal and interest of the Series B term
loan was paid in full. The Combined Group's allocated portion of this loan is
included in payable to affiliates - current on the combined balances sheets.

4. OPERATING LEASES

The Combined Group leases broadcast facilities and certain other
equipment under operating lease agreements. Several of the leases contain
renewal options and require payment for real estate taxes and other operating
costs. Minimum future rental commitments at December 31, 1998 under all
noncancelable operating leases in excess of one year, are as follows:

<TABLE>
<CAPTION>
Year Amount
---- --------
<S> <C>
1999.............................................................. $205,656
========
</TABLE>

Total rent expense for the years ended December 31, 1998, 1997 and 1996
was $210,906, $256,902 and $355,232, respectively.

5. INCOME TAXES

As operating divisions of ML, WEBE, and WICC are included in the tax
returns of ML. ML is not subject to income taxes because all income and
expenses are allocated to the individual partners of ML for inclusion in their
respective tax returns. Accordingly, no income tax provision is recorded for
WEBE and WICC in the accompanying combined statements of operations.

6. RELATED PARTY TRANSACTIONS

The payable to affiliates represents the amount payable by the Combined
Group, principally to ML. ML does not assess interest to the Combined Group on
its outstanding intercompany balances.

The Combined Group is charged management fees by ML. These fees amounted
to $450,488, $1,068,552 and $650,965 in 1998, 1997 and 1996, respectively. The
Combined Group also incurred corporate

F-70
<PAGE>

WEBE AND WICC RADIO STATIONS
(Divisions of ML Media Partners, L.P.)

NOTES TO COMBINED FINANCIAL STATEMENTS--(Continued)

Years Ended December 31, 1998, 1997 and 1996

administrative fees to RP Radio LLC., (which took over management of the radio
station in 1996). Amounts incurred in 1998, 1997 and 1996 were $271,218,
$298,284 and $327,868, respectively.

The activity in the payable to affiliates account for the years ended
December 31, 1998, 1997, and 1996 is as follows:

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Balance, beginning of year............... $4,869,581 $3,579,610 $3,044,486
Transfers from ML and affiliates--net.... 374,667 1,289,971 535,124
---------- ---------- ----------
Balance, end of year..................... $5,244,248 $4,869,581 $3,579,610
========== ========== ==========
</TABLE>

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

8. SUBSEQUENT EVENT

On April 22, 1999, ML Media Partners L.P. entered into an asset purchase
agreement to sell the assets of WEBE and WICC for $66 million. The effective
closing date for this transaction is August 31, 1999.

F-71
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Trustee
Capstar Trust

We have audited the accompanying balance sheet of Capstar Trust (a trust)
as of October 26, 1999, and the related statements of operations and
beneficiaries' equity and cash flows for the period of January 1, 1999 to
October 26, 1999. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Capstar Trust as of
October 26, 1999, and the results of its operations and its cash flows for the
period of January 1, 1999 to October 26, 1999 in conformity with generally
accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP

Bridgewater, New Jersey
January 21, 2000

F-72
<PAGE>

CAPSTAR TRUST

BALANCE SHEET

October 26, 1999

<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents....................................... $ 567,697
Accounts receivable, less allowance for doubtful accounts of
$71,838........................................................ 585,355
Other current assets............................................ 31,350
------------
Total Current Assets.......................................... 1,184,402
Property, Plant and Equipment--Net................................ 1,943,749
Intangible Assets--Net............................................ 7,464,336
Security Deposits................................................. 2,005
------------
Total assets...................................................... $ 10,594,492
============
LIABILITY AND BENEFICIARIES' EQUITY
Current Liability:
Accounts payable and accrued expenses........................... $ 247,834
Beneficiaries' Equity........................................... 10,346,658
------------
Total liabilities and beneficiaries' equity................... $ 10,594,492
============
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-73
<PAGE>

CAPSTAR TRUST

STATEMENT OF OPERATIONS AND BENEFICIARIES' EQUITY

For the period of January 1, 1999 to October 26, 1999

<TABLE>
<S> <C>
Revenues:
Broadcast revenue................................................ $ 3,578,756
Less: agency commissions......................................... (249,121)
-----------
Net Broadcast Revenue.......................................... 3,329,635
Other Non-broadcast Revenue...................................... 7,734
-----------
Total Revenue.................................................. 3,337,369
Expenses:
Programming and technical........................................ 638,370
Sales and advertising............................................ 1,096,967
Administrative................................................... 640,153
-----------
Total Expenses................................................. 2,375,490
-----------
Income from Operations............................................. 961,879
Other (Income) Expenses:
Depreciation..................................................... 144,592
Amortization..................................................... 172,174
Other expenses................................................... 47,693
Interest income.................................................. (13,731)
-----------
Total Other (Income) Expenses.................................. 350,728
-----------
Net Income......................................................... 611,151
Beneficiaries' Equity at Beginning of Period....................... 10,485,507
Distributions to Beneficiary....................................... (750,000)
-----------
Beneficiaries' Equity at End of Period............................. $10,346,658
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-74
<PAGE>

CAPSTAR TRUST

STATEMENT OF CASH FLOWS

For the period of January 1, 1999 to October 26, 1999

<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net income....................................................... $ 611,151
Adjustments to Reconcile Net income to Net Cash Provided by
Operating Activities:
Depreciation and amortization.................................... 316,766
Bad debt (recovery).............................................. (41,519)
Increase in accounts receivable.................................. (74,106)
Decrease in other current asset.................................. 6,553
Increase in accounts payable..................................... 158,874
---------
Total Adjustments.............................................. 366,568
---------
Net cash provided by operating activities.......................... 977,719
Cash Flows From Investing Activities:
Purchase of property and equipment............................... (159,953)
Cash Flows from Financing Activities:
Distributions to beneficiary..................................... (750,000)
---------
Net Increase in Cash and Cash Equivalents.......................... 67,766
Cash and Cash Equivalents at Beginning of Period................... 499,931
---------
Cash and Cash Equivalents at End of Period......................... $ 567,697
=========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-75
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Capstar Trust (the Company) operates several radio stations in Putnam
County, New York and Fairfield County, Connecticut. The Company commenced
operations on May 29, 1999 upon the contribution of the assets by the Grantor.
The sole assets and operations of the Company are limited to the operation of
the four radio stations contributed by the Grantor. The stations are known by
the call letters of WRKI-FM, WAXB-FM, WINE-AM and WPUT-AM. The Company derives
its revenue primarily from the sale of radio advertising.

Contribution of Assets

On May 29, 1999, Capstar Broadcasting Corporation (the Grantor)
contributed all of the rights, title, interest and obligations in all of the
assets, properties, contracts, leases and agreements of four radio stations
known by the call letters WRKI, WAXB, WPUT and WINE to the Company.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of
program time and commercial announcements to local, regional and national
advertisers. Revenue is recognized when the program and commercial
announcements are broadcast.

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These are expensed as incurred.

Use of Estimates

The process of preparing financial statements in conformity with
generally accepted accounting principles requires the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues and
expenses. Such estimates primarily relate to unsettled transactions and events
as of the date of the financial statements. Accordingly, upon settlement,
actual results may differ from those estimates.

Concentration of Credit Risk

The Company maintains balances in a money market fund. Such balances are
not FDIC insured.

The Company periodically maintains cash balances in excess of the FDIC
insurance limit in its financial institution.

The radio broadcasting industry is subject to federal regulation by the
Federal Communications Commission. These governmental regulations and policies
could change over time and there can be no assurance that such changes would
not have a material impact upon the Company.

F-76
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS--(Continued)

customers' financial condition and, generally requires no collateral from its
customers. Credit losses have been within management's expectations and
adequate allowances for any uncollectible accounts receivable are maintained.

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight-line method for financial
reporting purposes and double declining balance method for income tax purposes.

Maintenance and repairs are charged to operations when incurred.
Betterments and renewals are capitalized. When property and equipment are sold
or otherwise disposed of, the asset account and related accumulated
depreciation account are relieved, and any gain or loss is included in
operations.

The useful lives of property and equipment for purposes of computing
depreciation are:

<TABLE>
<S> <C>
Office equipment.............................................. 3-7 years
Studio equipment.............................................. 7-10 years
Leasehold improvements........................................ 10-20 years
Buildings and broadcast tower................................. 20 years
</TABLE>

Income Taxes

The Company is treated as a grantor trust for tax purposes. Accordingly,
the items of income, loss and credit are taxed directly to the beneficiary.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

There were no cash payments for interest and income taxes.

Barter Transactions

The Company barters unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast,
and related expenses are recorded when the bartered product or service is used.

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations were as follows:

<TABLE>
<S> <C>
Trade sales....................................................... $ 484,938
Trade expense..................................................... (526,372)
---------
Net Trade Out................................................... $ (41,434)
=========
</TABLE>

F-77
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at October 26, 1999:

<TABLE>
<S> <C>
Land, building and improvements.................................. $ 999,636
Vehicles......................................................... 3,290
Studio and transmission equipment................................ 1,206,141
Office equipment and fixtures.................................... 193,599
----------
Total.......................................................... 2,402,666
Less: accumulated depreciation (458,917)
----------
Net Property and Equipment....................................... $1,943,749
==========
</TABLE>

Depreciation expense changed to operations amounted to $144,592 for the
period.

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at October 26, 1999:

<TABLE>
<CAPTION>
Amortization
Period
------------
<S> <C> <C>
FCC license......................................... 40 years $8,003,448
Goodwill............................................ 40 years 32,000
Favorable lease..................................... 9 years 56,108
-------- ----------
Total............................................... 8,091,556
Less: accumulated amortization...................... (627,220)
-------- ----------
Net Intangible Assets............................... $7,464,336
======== ==========
</TABLE>

Amortization expense changed to operations amounted to $172,174 for the
period.

The Company periodically evaluates intangible assets for potential
impairment by analyzing the operating results, future cash flows on an
undiscounted basis, trends and prospects of the Company's stations, as well as
by comparing them to their competitors. The Company also takes into
consideration recent acquisition patterns within the broadcast industry, the
impact of recently enacted or potential FCC rules and regulations and any other
events or circumstances which might indicate potential impact. At this time, in
the opinion of management, no impairment has occurred.

NOTE 4--COMMITMENTS

Operating Leases

The Company leases office equipment under an operating lease expiring in
2003.

The Company also leases various tower facilities under operating leases
which do not currently have a definitive expiration date.

F-78
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS--(Continued)

The Company also contracts for a variety of services and equipment
through short term agreements and leases under cash or barter arrangements.
These agreements and leases are renewed or replaced at the end of their term at
the discretion of management.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended October 26,
2000............................................................ $ 233,765
2001............................................................ 144,928
2002............................................................ 141,832
2003............................................................ 150,066
2004............................................................ 50,793
---------
Total Minimum Lease Payments.................................. $ 721,384
=========
</TABLE>

NOTE 6--PENSION PLAN

The Company has a 401(k) Profit Sharing Plan covering all full time
employees meeting eligibility requirements. The Company matches fifty percent
of the employees contributions up to six percent of compensation. For the
period ended October 26, 1999, the Company contributed $14,148.

NOTE 7--SUBSEQUENT SALE OF CAPSTAR TRUST

On October 27, 1999, the assets, excluding cash, and equivalents, and
accounts receivable, of the Capstar Trust were purchased by Aurora
Communications, LLC. The gross proceeds from the sale were $11,273,787.

F-79
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Trustee
Capstar Trust

We have audited the accompanying balance sheet of Capstar Trust (a trust)
as of December 31, 1998, and the related statements of operations and
beneficiaries' equity and cash flows for the period May 29, 1998 (date of
inception) to December 31, 1998. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Capstar Trust as of
December 31, 1998, and the results of its operations and its cash flows for the
period of May 29, 1998 (date of inception) to December 31, 1998 in conformity
with generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP

Bridgewater, New
Jersey
February 11, 1999
(except for Note 6, as to
which the date is October
27, 1999)

F-80
<PAGE>

CAPSTAR TRUST

BALANCE SHEET

December 31, 1998

<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents........................................ $ 499,931
Accounts receivable, less allowance for doubtful accounts of
$113,357........................................................ 469,730
Other current assets............................................. 37,903
-----------
Total Current Assets........................................... 1,007,564
Property, Plant and Equipment--Net................................. 1,927,705
Intangible Assets--Net............................................. 7,637,193
Security Deposits.................................................. 2,005
-----------
TOTAL ASSETS..................................................... $10,574,467
===========
LIABILITY AND BENEFICIARIES' EQUITY
Current Liability:
Accounts payable and accrued expenses............................ 88,960
Beneficiaries' Equity............................................ 10,485,507
-----------
TOTAL LIABILITIES AND BENEFICIARIES' EQUITY.................... $10,574,467
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-81
<PAGE>

CAPSTAR TRUST

STATEMENT OF OPERATIONS AND BENEFICIARIES' EQUITY

For the period of May 29, 1998 (date of inception) to December 31, 1998

<TABLE>
<S> <C>
Revenues:
Broadcast revenue................................................ $ 2,329,270
Less: agency commissions......................................... (155,879)
-----------
Net Broadcast Revenue.......................................... 2,173,391
Other Non-broadcast Revenue...................................... 6,016
Total Revenue.................................................. 2,179,407
Expenses:
Programming and technical........................................ 398,393
Sales and advertising............................................ 807,306
Administrative................................................... 420,998
-----------
Total Expenses................................................. 1,626,697
-----------
Income from Operations............................................. 552,710
Other (Income) Expenses:
Corporate Expense................................................ 33,112
Depreciation..................................................... 87,606
Amortization..................................................... 121,236
Interest income.................................................. (8,348)
-----------
Total Other (Income) Expenses.................................. 233,606
-----------
Net Income......................................................... 319,104
Beneficiaries' Equity at Beginning of Period....................... --
Contributed Capital................................................ 10,416,403
Distributions to Beneficiary....................................... (250,000)
-----------
Beneficiaries' Equity at End of Period............................. $10,485,507
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-82
<PAGE>

CAPSTAR TRUST

STATEMENT OF CASH FLOWS

For the period May 29, 1998 (date of inception) to December 31, 1998

<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net income....................................................... $ 319,104
Adjustments to Reconcile Net income to Net Cash Provided by
Operating Activities:
Depreciation and amortization.................................. 208,842
Bad debt provision (recovery).................................. 20,009
Decrease in accounts receivable................................ 173,358
Increase in other current assets............................... (22,785)
Payment of security deposits................................... (380)
Increase in accounts payable................................... 88,960
-----------
Total Adjustments............................................ 468,004
-----------
NET CASH PROVIDED BY OPERATING ACTIVITIES.................... 787,108
Cash Flows From Investing Activities:
Organization costs............................................. (3,442)
Purchase of property and equipment............................. (34,535)
-----------
NET CASH USED BY INVESTING ACTIVITIES........................ (37,977)
Cash Flows from Financing Activities:
Payment of distribution to beneficiary......................... (250,000)
-----------
Net Increase in Cash and Cash Equivalents...................... 499,131
Cash and Cash Equivalents at Beginning of Period............... 800
-----------
Cash and Cash Equivalents at End of Period..................... $ 499,931
===========
Summary of Noncash Financing Activities:
Contribution of assets by grantor.............................. $10,416,403
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-83
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Capstar Trust (the Company) operates several radio stations in Putnam
County, New York and Fairfield County, Connecticut. The Company commenced
operations on May 29, 1998 upon the contribution of the assets by the grantor.
The sole assets and operations of the Company are limited to the operation of
the four radio stations contributed by the Grantor. The stations are known by
the call letters of WRKI-FM, WAXB-FM, WINE-AM and WPUT-AM. The Company derives
its revenue primarily from the sale of radio advertising.

Contribution of Assets

On May 29, 1998, Capstar Broadcasting Corporation (the Grantor)
contributed all of the rights, title, interest and obligations in all of the
assets, properties, contracts, leases and agreements of four radio stations
known by the call letters WRKI, WAXB, WPUT and WINE to the Company.

Revenue Recognition

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

The Company maintains balances in a money market fund. Such balances are
not FDIC insured.

The Company periodically maintains cash balances in excess of the FDIC
insurance limit in its financial institution.

The Company's revenue and accounts receivable primarily relates to
advertising of products and services within the radio stations' broadcast
areas. The Company performs ongoing credit evaluations of its customers'
financial condition and, generally requires no collateral from its customers.
Credit losses have been

F-84
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS--(Continued)

within management's expectations and adequate allowances for any uncollectible
accounts receivable are maintained.

Property and Equipment

The useful lives of property and equipment for purposes of computing
depreciation are:

<TABLE>
<S> <C>
Office equipment................................................. 3-7 years
Studio equipment................................................. 7-10 years
Leasehold improvements........................................... 10-20 years
Buildings and broadcast tower.................................... 20 years
</TABLE>

Income Taxes

The Company is treated as a grantor trust for tax purposes. Accordingly,
the items of income, loss and credit are taxed directly to the beneficiary.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

Cash paid for interest and income taxes are as follows:

<TABLE>
<S> <C>
Interest............................................................... $ --
Income taxes........................................................... --
</TABLE>

Barter Transactions

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations were as follows:

<TABLE>
<S> <C>
Trade sales....................................................... $ 359,909
Trade expense..................................................... (423,317)
---------
Net Trade Out................................................... $ (63,408)
=========
</TABLE>

F-85
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1998:

<TABLE>
<S> <C>
Land, building and improvements.................................. $ 992,917
Vehicles......................................................... 3,290
Studio and transmission equipment................................ 1,124,535
Office equipment and fixtures.................................... 121,971
----------
Total.......................................................... 2,242,713
Less: accumulated depreciation................................... (315,008)
----------
Net Property and Equipment....................................... $1,927,705
==========
</TABLE>

Depreciation charged to operations amounted to $87,606.

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 1998:

<TABLE>
<S> <C>
FCC license...................................................... $8,003,448
Goodwill......................................................... 32,000
Favorable lease.................................................. 56,108
Organization costs............................................... 3,442
----------
Total.......................................................... 8,094,998
Less: accumulated amortization................................... (457,805)
----------
$7,637,193
==========
</TABLE>

Amortization charged to operations amount to $121,236.

NOTE 4--COMMITMENTS

Operating Leases

The Company leases office equipment under an operating lease expiring in
2003.

The Company also leases various tower facilities under operating leases
which do not currently have a definitive expiration date.

F-86
<PAGE>

CAPSTAR TRUST

NOTES TO FINANCIAL STATEMENTS--(Continued)

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

Year ended December 31,
<TABLE>
<S> <C>
1999............................................................ $ 40,427
2000............................................................ 41,017
2001............................................................ 42,029
2002............................................................ 43,094
2003............................................................ 43,605
--------
Total Minimum Lease Payments.................................. $210,172
========
</TABLE>

NOTE 5--PENSION PLAN

NOTE 6--SUBSEQUENT SALE OF CAPSTAR TRUST

On October 27, 1999, the tangible assets, FCC license and goodwill of
Capstar Trust were purchased by Aurora of Danbury, L.L.C. The total cost of the
acquisition was $11,250,000.

F-87
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Members
Westchester Radio, LLC

We have audited the accompanying balance sheet of Westchester Radio, LLC
(a limited liability company) as of October 26, 1999, and the related
statements of operations and members' deficiency and cash flows for the period
of January 1, 1999 to October 26, 1999. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Westchester Radio,
LLC as of October 26, 1999, and the results of its operations and its cash
flows for the period of January 1, 1999 to October 26, 1999 in conformity with
generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP
Bridgewater, New Jersey
January 4, 2000

F-88
<PAGE>

WESTCHESTER RADIO, LLC

BALANCE SHEET

October 26, 1999

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................................... $ 256,496
Accounts receivable, less allowance for doubtful accounts of
$55,000....................................................... 836,822
Other current assets........................................... 20,428
------------
Total current assets......................................... 1,113,746
PROPERTY, PLANT AND EQUIPMENT--NET............................... 2,440,304
Intangible assets--net......................................... 18,178,136
Security deposits.............................................. 7,732
------------
Total assets................................................. $ 21,739,918
============
LIABILITY AND MEMBERS' DEFICIENCY
CURRENT LIABILITIES:
Current maturities of long-term debt........................... $ 1,963,873
Accounts payable and accrued expenses.......................... 406,761
------------
Total current liabilities.................................... 2,370,634
LONG-TERM DEBT................................................... 38,167,660
MEMBERS' DEFICIENCY.............................................. (18,798,376)
------------
TOTAL LIABILITIES AND MEMBERS' DEFICIENCY.................... $ 21,739,918
============
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-89
<PAGE>

WESTCHESTER RADIO, LLC

STATEMENT OF OPERATIONS AND MEMBERS' DEFICIENCY

For the Period of January 1, 1999 to October 26, 1999

<TABLE>
<S> <C>
Revenues:
Broadcast revenue.............................................. $ 4,228,178
Less: agency commissions....................................... (396,621)
------------
Net broadcast revenue........................................ 3,831,557
Other non broadcast revenue...................................... 120,071
------------
Total revenue................................................ 3,951,628
Expenses:
Programming and technical...................................... 623,392
Sales and advertising.......................................... 1,133,766
Administrative................................................. 899,211
------------
Total expenses............................................... 2,656,369
------------
Income from operations........................................... 1,295,259
Other (income) expenses:
Partnership administration..................................... 204,584
Depreciation................................................... 124,838
Amortization................................................... 783,090
Loss on impairment of intangible assets........................ 13,250,000
Interest expense............................................... 3,376,846
Interest income................................................ (6,851)
------------
Total other (income) expenses................................ 17,732,507
------------
NET LOSS..................................................... (16,437,248)
Members' deficiency at beginning of period....................... (2,361,128)
------------
Members' deficiency at end of period............................. $(18,798,376)
============
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-90
<PAGE>

WESTCHESTER RADIO, LLC

STATEMENT OF CASH FLOWS

For the Period of January 1, 1999 to October 26, 1999

<TABLE>
<S> <C>
Cash flows from operating activities:
Net loss........................................................ $(16,437,248)
Adjustments to reconcile net loss to net cash used by operating
activities:
Depreciation and amortization................................. 907,928
Loss on impairment of intangible assets....................... 13,250,000
Noncash interest accrued on long-term obligations............. 1,740,921
Decrease in accounts receivable............................... 135,340
Decrease in other current assets.............................. 25,590
Increase in accounts payable.................................. 97,699
Recovery of security deposits................................. 695
------------
Total adjustments........................................... 16,158,173
------------
Net cash used by operating activities....................... (279,075)
Cash flows from investing activities:
Purchase of property and equipment............................ (81,496)
Cash flows from financing activities:
Proceeds from member loans.................................... 1,359,548
Repayment of bank loans....................................... (937,500)
Principle payments on installment obligation.................. (2,952)
------------
Net cash provided by financing activities................... 419,096
NET INCREASE IN CASH AND CASH EQUIVALENTS................... 58,525
Cash and cash equivalents at beginning of period................ 197,971
------------
Cash and cash equivalents at end of period...................... $ 256,496
============
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-91
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Westchester Radio, LLC (the Company) operates several radio stations in
Westchester County, New York. The Company commenced operations on April 2, 1998
with the contribution of the assets of WFAS-FM, WFAS-AM and WZZN-FM from
Commodore Media of Westchester, Inc. The assets and operations of the Company
were solely comprised from WFAS-FM; WFAS-AM and WZZN-FM. The Company derives
its revenue primarily from the sale of radio advertising.

Acquisition of Assets

On April 2, 1998, the Company acquired the net assets and FCC license of
WFAS-FM, WFAS-AM and WZZN-FM (the Stations) from Commodore Media of
Westchester, Inc. in a business combination accounted for as a purchase. The
total cost of the acquisition was $35,500,000, which exceeded the fair value of
the net assets of the stations by $32,332,961, which has been allocated to the
stations FCC license and goodwill. The excess is being amortized on the
straight line method over forty years. (See note 3 and 9)

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These costs are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

In the ordinary course of business, the Company maintains cash balances
in a money market fund. Such balances are not FDIC insured.

The Company periodically maintains cash balances with financial
institutions in excess of the $100,000 FDIC insurance limit.

The Company's business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

F-92
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

customers' financial condition and generally requires no collateral from its
customers. Credit losses have been within management's expectations and
adequate allowances for any uncollectible accounts receivables are maintained.

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight line method for financial
reporting purposes and double declining balance method for income tax purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

<TABLE>
<S> <C>
Office equipment................................................. 5-7 years
Studio equipment................................................. 7 years
Building, leasehold improvements and tower....................... 10-40 years
</TABLE>

Debt Acquisition Costs

Legal and banking fees and other expenses associated with acquisition of
the bank financing are being amortized using the interest method over the term
of the underlying note. Amortization expense charged to operations for the
period was $109,487.

Income Taxes

The Company, a limited liability company, has elected to be treated as a
partnership for income tax purposes. Accordingly, the items of income, loss and
credit are taxed directly to the members.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

Cash paid for interest and income taxes are as follows:

<TABLE>
<S> <C>
Interest.......................................................... $1,458,846
Income taxes...................................................... --
</TABLE>

F-93
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

Barter Transactions

The Company barters unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast
and related expenses are recorded when the bartered product or service is used.

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations were as follows for the period of January 1, 1999 to October 26,
1999:

<TABLE>
<S> <C>
Trade sales...................................................... $ 753,875
Trade expense.................................................... (809,810)
---------
Net Trade Out Transactions....................................... $ (55,935)
=========
</TABLE>

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at October 26, 1999:

<TABLE>
<S> <C>
Land............................................................. $ 573,900
Buildings and leasehold improvements............................. 975,469
Studio and transmission equipment................................ 827,714
Music library.................................................... 3,500
Office equipment and fixtures.................................... 235,120
Property held under capital lease................................ 21,215
----------
Total.......................................................... 2,636,918
Less: accumulated depreciation................................... (196,614)
----------
Net Property and Equipment....................................... $2,440,304
==========
</TABLE>

Depreciation charged to operations amounted to $124,838 for the period.

Property and equipment are pledged as collateral for bank loans (See Note
4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at October 26, 1999:

<TABLE>
<S> <C>
FCC license..................................................... $16,832,961
Goodwill........................................................ 2,250,000
Debt acquisition costs.......................................... 580,500
-----------
Total......................................................... 19,663,461
Less: accumulated amortization.................................. (1,485,325)
-----------
Net Intangible Assets........................................... $18,178,136
===========
</TABLE>

Amortization charged to operations amounted to $783,090 for the period.

F-94
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

During the period, certain intangible assets (Goodwill) that was acquired
in 1998 were deemed to be impaired. This impairment arouse due to the
subsequent sale of the stations assets, which is more fully described in note
9. As a result, Goodwill has been written down by $13,250,000. The write off of
Goodwill is included in the Financial Statement as Loss on Impairment.

NOTE 4--LONG-TERM DEBT

Long-term debt consists of the following at October 26, 1999:

<TABLE>
<S> <C>
Line of credit--bank
Interest payable quarterly in arrears at 10%, matures April
2004, Secured by all assets of the company and guaranteed by
the parent corporation of a member; maximum available credit
$1,000,000..................................................... $ 397,500
Term obligation--bank
Interest at 10% payable quarterly in arrears, quarterly payments
of principal which are currently $312,500. Matures April 2004,
secured by all assets of the company and guaranteed by the
parent corporation of a member................................. 23,125,000
Loan payable
This obligation is the result of the payments by the guarantor
of the bank obligations above of interest and principle on
behalf of the Company. This obligation has no stated interest
and no maturity date (see note 7).............................. 3,290,241
Note payable--This note has a face value in the amount of
$56,884,769 due April 2008. Interest accrues on this obligation
at 18% per annum through April 2008. (See Note 7)................ 13,302,279
Capital Lease Obligation.......................................... 16,513
-----------
Total Long-term Debt.......................................... 40,131,533
Less: Current Portion......................................... (1,963,873)
-----------
Long-term Debt................................................ $38,167,660
===========
</TABLE>

The following are the maturities of long-term debt for each of the next
five years:

<TABLE>
<S> <C>
Year Ending October 26,
2000............................................................ $ 1,960,000
2001............................................................ 1,875,000
2002............................................................ 2,187,500
2003............................................................ 9,375,000
2004............................................................ 8,125,000
-----------
$23,522,500
===========
</TABLE>

At October 26, 1999, the Company had $602,500 of unused lines of credit
with a bank to be drawn upon as needed.

F-95
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

On October 27, 1999 the bank obligations were repaid from the proceeds of
the sale (Note 9) and payments by a member under their guarantee obligation.

The bank loan agreements contain various covenants pertaining to the
maintenance of various record keeping, reporting and ratio requirements.

Specifically, at October 26, 1999, the Company was in default of the
covenants related to the maintenance of its leverage ratio, interest coverage
ratio, and net broadcast earnings.

Under the terms of the agreement, the bank may call the loan if the
Company is in violation of any restrictive covenant. However, the obligations
have subsequently been fully repaid.

Capital Lease

The Company is the lessee of office equipment under capital leases
expiring in various years through 2003. The assets and liabilities under
capital leases are recorded at the lower of the present value of the minimum
lease payments or the fair value of the asset. The assets are depreciated over
the lower of their related lease terms or their estimated productive lives.
Depreciation of assets under capital leases is included in depreciation expense
for the period.

Depreciation on assets under capital leases charged to expense for the
period was $4,690.

Following is a summary of property held under capital leases:

<TABLE>
<S> <C>
Phone System...................................................... $21,215
Less: Accumulated depreciation.................................... (6,205)
-------
Net............................................................... $15,010
=======
</TABLE>

Minimum future lease payments under capital leases as of October 26, 1999
for each of the next five years and in the aggregate are:

<TABLE>
<S> <C>
Year Ended October 26, 1999:
2000............................................................ $ 5,352
2001............................................................ 5,352
2002............................................................ 5,352
2003............................................................ 3,122
-------
Total minimum lease payments.................................. 19,178
Less: Amount representing interest................................ (2,665)
-------
Present value of net minimum lease payments....................... $16,513
=======
</TABLE>

Interest rates on this capitalized lease is 14.35% and is imputed based
on the lower of company's incremental borrowing rate at the inception of the
lease or the lessor's implicit rate of return.

F-96
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 5--COMMITMENTS

Guarantee of Indebtedness

The Company has guaranteed the 13 1/4% senior subordinated notes dated
April 2, 1995 which have a principal value of $76,808,000 of Capstar Radio
Broadcasting Partners, Inc., the parent corporation of the Company's nonvoting
member.

Employment Contract

The Company has entered into an employment contract with its managing
member through April 2000 that provides for a minimum annual salary. At
October 26, 1999, the total commitment was $150,000 per annum.

Operating Leases

The Company leases various tower facilities under operating leases which
have various expiration dates.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended October 26,
2000............................................................ $ 7,500
2001............................................................ 7,500
2002............................................................ 7,500
2003............................................................ 7,500
2004............................................................ 7,500
-------
Total Minimum Lease Payments.................................. $37,500
=======
</TABLE>

NOTE 6--PENSION PLAN

NOTE 7--RELATED PARTIES

As part of the acquisition of the stations, the Company borrowed from the
parent corporation of one of its members, moneys to complete the acquisition.
The note has a face value of $56,884,769 and is due in April 2008. The note
has been discounted to its present value at the rate of 18% and was,
accordingly, assigned a value of $10,150,000 and is subordinate to the bank
obligations.

During 1998, the Company, subsequent to the contribution of the net
assets of Commodore Media of Westchester Inc., refinanced those assets and
distributed $35,000,000 of the proceeds to its member.

F-97
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

The note including accumulated interest is convertible at the option of
the holder at any time, into a maximum of 13,000 member interests in the
company based on a prescribed formula (See Note 8).

The Company, as a result of its inability to cover principal and interest
payments on its bank lines as they came due, relied on the guarantee of a
member to meet the obligations. At October 26, 1999, the member had advanced a
total of $3,290,241 to the Company to meet its obligations.

NOTE 8--MEMBERS' EQUITY

The members of the Company have liability for the debts, obligations and
liabilities of the Company up to the amount of capital contributed to the
Company.

The Company is authorized to issue up to 14,000 limited liability company
interests which may be designated as voting interests or nonvoting interests
upon issuance. Subject to obtaining necessary consent, outstanding nonvoting
interests are convertible, at any time, upon the election of the holder into a
like number of voting interests.

At October 26, 1999, the Company had a total of 1,000 interests
outstanding, of which 700 were voting interests.

NOTE 9--SUBSEQUENT SALE OF THE COMPANY

On October 27, 1999, the tangible assets, FCC license and goodwill of the
company were purchased by Aurora of Westchester L.L.C. The total selling price
was $20,250,000.

F-98
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Members
Westchester Radio, LLC

We have audited the accompanying balance sheet of Westchester Radio, LLC
(a limited liability company) as of December 31, 1998, and the related
statements of operations and members' deficiency and cash flows for the period
April 2, 1998 (date of inception) to December 31, 1998. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Westchester Radio,
LLC as of December 31, 1998, and the results of its operations and its cash
flows for the period of April 2, 1998 (date of inception) to December 31, 1998
in conformity with generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP

Bridgewater, New Jersey
February 19, 1999
(except for Note 9, as to which the date is October 27, 1999)

F-99
<PAGE>

WESTCHESTER RADIO, LLC

BALANCE SHEET

December 31, 1998

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................................... $ 197,971
Accounts receivable, less allowance for doubtful accounts of
$111,673....................................................... 972,162
Other current assets............................................ 46,018
-----------
Total current assets.......................................... 1,216,151
PROPERTY, PLANT AND EQUIPMENT--NET................................ 2,483,646
Intangible assets--net............................................ 32,211,227
Security deposits................................................. 8,427
-----------
Total assets.................................................. $35,919,451
===========
LIABILITY AND MEMBERS' DEFICIENCY
CURRENT LIABILITIES:
Current maturities of long-term debt............................ $ 1,253,479
Accounts payable and accrued expenses........................... 309,062
-----------
Total current liabilities..................................... 1,562,541
LONG-TERM DEBT.................................................... 36,718,038
MEMBERS' DEFICIENCY............................................... (2,361,128)
-----------
Total liabilities and members' deficiency..................... $35,919,451
===========
</TABLE>

The notes to financial statements are an integral part of this statement.

F-100
<PAGE>

WESTCHESTER RADIO, LLC

STATEMENT OF OPERATIONS AND MEMBERS' DEFICIENCY

For the Period of April 2, 1998 (date of inception) to December 31, 1998

<TABLE>
<S> <C>
Revenues:
Broadcast revenue.............................................. $ 4,036,192
Less: agency commissions....................................... (385,014)
------------
Net broadcast revenue........................................ 3,651,178
------------
Other non broadcast revenue...................................... 118,873
------------
Total revenue................................................ 3,770,051
------------
Expenses:
Programming and technical...................................... 605,440
Sales and advertising.......................................... 1,009,839
Administrative................................................. 777,257
------------
Total expenses............................................... 2,392,536
------------
Income from operations........................................... 1,377,515
Other (income) expenses:
Reorganization/start up cost................................... 67,246
Depreciation................................................... 71,776
Amortization................................................... 702,234
Interest expense............................................... 3,248,178
Interest income................................................ (791)
------------
Total other (income) expenses................................ 4,088,643
------------
NET LOSS..................................................... (2,711,128)
Members' equity at beginning of period........................... --
Contributed capital.............................................. 35,350,000
Member Distribution.............................................. (35,000,000)
------------
Members' deficiency at end of period............................. $ (2,361,128)
============
</TABLE>

The notes to financial statements are an integral part of this statement.

F-101
<PAGE>

WESTCHESTER RADIO, LLC

STATEMENT OF CASH FLOWS

For the Period April 2, 1998 (date of inception) to December 31, 1998

<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net Loss....................................................... $(2,711,128)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization.................................. 774,010
Bad debt provision (recovery).................................. (19,173)
Noncash interest accrued on long-term obligations.............. 1,411,358
Increase in accounts receivable................................ (135,834)
Increase in other current assets............................... (22,935)
Increase in accounts payable................................... 116,236
-----------
Total adjustments............................................ 2,123,662
-----------
Net cash used by operating activities........................ (587,466)
Cash flows from investing activities:
Acquisition of stations........................................ (35,500,000)
Purchase of property and equipment............................. (23,417)
-----------
Net cash used by investing activities........................ (35,523,417)
-----------
Cash flows from financing activities:
Proceeds from bank loans....................................... 25,580,000
Proceeds from member loans..................................... 12,080,778
Proceeds from capital contributions............................ 350,000
Repayment of bank loans........................................ (1,120,500)
Principle payments on installment obligation................... (1,624)
Payment of debt acquisition costs.............................. (580,000)
-----------
Net cash provided by financing activities.................... 36,308,654
-----------
NET INCREASE IN CASH AND CASH EQUIVALENTS.................... 197,771
Cash and cash equivalents at beginning of period................. 200
-----------
Cash and cash equivalents at end of period....................... $ 197,971
===========
Noncash financing activities:
Financing under capital lease.................................. $ 21,215
===========
</TABLE>

The notes to financial statements are an integral part of this statement.

F-102
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Westchester Radio, LLC (the Company) operates several radio stations in
Westchester county, New York. The Company commenced operations on April 2, 1998
with the contribution of the assets of WFAS-FM, WFAS-AM and WZZN-FM from
Commodore Media of Westchester, Inc. The assets and operations of the Company
were solely comprised from WFAS-FM, WFAS-AM and WZZN-FM. The Company derives
its revenue primarily from the sale of radio advertising.

Contribution of Assets

On April 2, 1998, the Company acquired the net assets and FCC license of
WFAS-FM, WFAS-AM and WZZN-FM (the Stations) from Commodore Media of
Westchester, Inc. in a business combination accounted for as a purchase. The
results of operations of the acquired stations are included in the accompanying
financial statements since the date of acquisition. The total cost of the
acquisition was $35,500,000, which exceeded the fair value of the net assets of
the stations by $32,332,961, which has been allocated to the stations FCC
license and goodwill. The excess is being amortized on the straight line method
over forty years.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

In the ordinary course of business, the Company maintains cash balances
in a money market fund. Such balances are not FDIC insured.

The Company periodically maintains cash balances with financial
institutions in excess of the $100,000 FDIC insurance limit.

The Company's business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

F-103
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

The Company's revenue and accounts receivable primarily relates to
advertising of products and services within the radio stations' broadcast
areas. The Company performs ongoing credit evaluations of its customers'
financial condition and generally requires no collateral from its customers.
Credit losses have been within management's expectations and adequate
allowances for any uncollectible accounts receivables are maintained.

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight line method for financial
reporting purposes and double declining balance method for income tax purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

Debt Acquisition Costs

Income Taxes

The Company, a limited liability company, has elected to be treated as a
partnership for income tax purposes. Accordingly, the items of income, loss and
credit are taxed directly to the members.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

Cash paid for interest and income taxes are as follows:

<TABLE>
<S> <C>
Interest.......................................................... $1,836,820
Income taxes...................................................... --
</TABLE>

F-104
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

Barter Transactions

The Company barters unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast
and related expenses are recorded when the bartered product or service is used.

<TABLE>
<S> <C>
Trade sales...................................................... $ 650,240
Trade expense.................................................... (712,658)
---------
Net trade out transactions..................................... $ (62,418)
=========
</TABLE>

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1998:

<TABLE>
<S> <C>
Land............................................................. $ 573,900
Buildings and leasehold improvements............................. 954,623
Studio and transmission equipment................................ 802,518
Music library.................................................... 3,500
Office equipment and fixtures.................................... 199,666
Property held under capital lease................................ 21,215
----------
Total.......................................................... 2,555,422
Less: accumulated depreciation................................... (71,776)
----------
Net property and equipment....................................... $2,483,646
==========
</TABLE>

Depreciation charged to operations amounted to $71,776 for the period
April 2, 1998 to December 31, 1998.

Property and equipment are pledged as collateral for bank loans (See Note
4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 1998:

<TABLE>
<S> <C>
FCC license..................................................... $16,832,961
Goodwill........................................................ 15,500,000
Debt acquisition costs.......................................... 580,500
-----------
Total......................................................... 32,913,461
Less: accumulated amortization.................................. (702,234)
-----------
Net intangible assets........................................... $32,211,227
===========
</TABLE>

Amortization charged to operations amounted to $702,234 for the period
April 2, 1998 to December 31, 1998.

F-105
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 4--LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1998:

<TABLE>
<S> <C>
Line of credit--bank
Interest payable quarterly in arrears at 8.0625%, matures April
2004, Secured by all assets of the company and guaranteed by
the parent corporation of a member; maximum available credit
$1,000,000..................................................... $ 397,500
Term obligation--bank
Interest at 8.0625% payable quarterly in arrears, quarterly
payments of principal which are currently $312,500. Matures
April 2004, secured by all assets of the company and guaranteed
by the parent corporation of a member.......................... 24,062,500
Loan payable
This obligation is the result of the payments by the guarantor
of the bank obligations above of interest and principle on
behalf of the Company. This obligation has no stated interest
and no maturity date (see note 7).............................. 1,930,693
Note payable--This note has a face value in the amount of
$56,884,769 due April 2008. Interest accrues on this obligation
at 18% per annum through April 2008. (See Note 7)................ 11,561,358
-----------
Total long-term debt.......................................... 37,952,051
Less: Current Portion......................................... (1,250,000)
-----------
Long-term Debt................................................ $36,702,051
===========
</TABLE>

The following are the maturities of long-term debt for each of the next
five years:

<TABLE>
<S> <C>
Year Ending December 31,
1999........................................................... $ 1,250,000
2000........................................................... 1,718,750
2001........................................................... 1,875,000
2002........................................................... 2,343,750
2003........................................................... 12,812,125
-----------
$19,999,625
===========
</TABLE>

At December 31, 1998, the Company had $602,500 of unused lines of credit
with a bank to be drawn upon as needed.

The bank loan agreements contain various covenants pertaining to the
maintenance of various record keeping, reporting and ratio requirements.

F-106
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

Specifically, at December 31, 1998, the Company was in default of the
covenants related to the maintenance of its leverage ratio, interest coverage
ratio, and net broadcast earnings.

Under the terms of the agreement, the bank may call the loan if the
Company is in violation of any restrictive covenant. As of February 19, 1999,
the bank had not waived the requirement.

Capital Lease

Depreciation on assets under capital leases charged to expense in 1998
was $1,515.

Following is a summary of property held under capital leases:

<TABLE>
<S> <C>
Phone System........................................................ $21,215
Less: Accumulated depreciation...................................... (1,515)
-------
Net................................................................. $19,700
=======
</TABLE>

Minimum future lease payments under capital leases as of December 31,
1998 for each of the next five years and in the aggregate are:

<TABLE>
<S> <C>
Year Ended December 31:
1999.............................................................. $ 5,352
2000.............................................................. 5,352
2001.............................................................. 5,352
2002.............................................................. 5,352
2003.............................................................. 2,230
-------
Total minimum lease payments.................................... 23,638
Less: Amount representing interest.................................. (4,257)
-------
Present value of net minimum lease payments......................... $19,381
=======
</TABLE>

Interest rates on this capitalized lease is 14.35% and is imputed based
on the lower of company's incremental borrowing rate at the inception of the
lease or the lessor's implicit rate of return.

NOTE 5--COMMITMENTS

Guarantee of Indebtedness

F-107
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

Employment Contract

The Company has entered into an employment contract with its managing
member through April 2000 that provides for a minimum annual salary. At
December 31, 1998, the total commitment was $150,000 per annum.

Operating Leases

The Company leases various tower facilities under operating leases which
does not currently have various expiration dates.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended December 31,
1999.............................................................. $16,182
2000.............................................................. 7,500
2001.............................................................. 7,500
2002.............................................................. 7,500
2003.............................................................. 7,500
-------
Total minimum lease payments.................................... $46,182
=======
</TABLE>

NOTE 6--PENSION PLAN

NOTE 7--RELATED PARTIES

As part of the acquisition of the stations, the Company borrowed from the
parent corporation of one of its members, moneys to complete the acquisition.
The note has a face value of $56,884,769 and is due in April 2008. The note has
been discounted to its present value at the rate of 18% and was, accordingly,
assigned a value of $10,150,000 and is subordinate to the bank obligations.

Commodoro Media of Westchester contributed $35,350,000 to the Company,
$35,000,000 in property and equipment and $350,000 in cash. The Company
subsequent to the contribution of the net assets of Commodore Media of
Westchester Inc. refinanced those assets and distributed $35,000,000 of the
proceeds to its member.

The note including accumulated interest is convertible at the option of
the holder at any time, into a maximum of 13,000 member interests in the
company based on a prescribed formula (See Note 8).

F-108
<PAGE>

WESTCHESTER RADIO, LLC

NOTES TO FINANCIAL STATEMENTS--(Continued)

The Company, as a result of its inability to cover principal and interest
payments on its bank lines as they came due, relied on the guarantee of a
member to meet the obligations. At December 31, 1998, the member had advanced
$1,930,693 to the Company to meet its obligations.

NOTE 8--MEMBERS' EQUITY

The members of the Company have liability for the debts, obligations and
liabilities of the Company up to the amount of capital contributed to the
Company.

At December 31, 1998, the Company had a total of 1,000 interests
outstanding, of which 700 were voting interests.

NOTE 9--SUBSEQUENT SALE OF THE COMPANY

On October 27, 1999, the tangible assets, FCC license and goodwill of the
company were purchased by Aurora of Westchester L.L.C. The total cost of the
acquisition was $22,250,000.

F-109
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders
Commodore Media of Westchester, Inc.

We have audited the accompanying balance sheet of Commodore Media of
Westchester, Inc. as of April 1, 1998 and the related statements of operations
and retained earnings and cash flows for the period of January 1, 1998 to April
1, 1998. 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 financial statements referred to above present
fairly, in all material respects, the financial position of Commodore Media of
Westchester, Inc. as of April 1, 1998, and the results of its operations and
its cash flows for the period of January 1, 1998 to April 1, 1998 in conformity
with generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw, LLP
Bridgewater, New Jersey
July 29, 1999

F-110
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

BALANCE SHEET

April 1, 1998

<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents........................................ $ 9,681
Accounts receivable, less allowance for doubtful accounts of
$130,846........................................................ 817,154
Other current assets............................................. 17,306
-----------
Total Current Assets........................................... 844,141
Property, Plant and Equipment--Net................................. 1,683,789
Intangible Assets--Net............................................. 31,979,119
Security Deposits.................................................. 8,427
-----------
Total Assets................................................... $34,515,476
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liability:
Accounts payable and accrued expenses............................ $ 179,554
Due to Parent Corporation and Affiliates......................... 9,029,851
Stockholders Equity:
Common stock, 100 shares authorized, issued, and outstanding..... 100
Additional paid-in-capital....................................... 23,596,134
Retained earnings................................................ 1,709,837
-----------
Total Stockholders Equity...................................... 25,306,071
-----------
Total Liabilities and Stockholders' Equity..................... $34,515,476
===========
</TABLE>

Notes to Financial Statements are an Integral Part of this Statement

F-111
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

STATEMENT OF OPERATIONS AND RETAINED EARNINGS

For the period of January 1, 1998 to April 1, 1998

<TABLE>
<S> <C>
Revenues:
Broadcast revenue................................................ $ 1,163,673
Less: agency commissions......................................... (101,200)
-----------
Net Broadcast Revenue.......................................... 1,062,473
Other non-broadcast revenue...................................... 44,684
-----------
Total Revenue.................................................. 1,107,157
Expenses:
Programming and technical........................................ 193,364
Sales and advertising............................................ 283,875
Administrative................................................... 285,088
-----------
Total Expenses................................................. 762,327
-----------
Income from Operations............................................. 344,830
Other Expenses:
Depreciation..................................................... 30,000
Amortization..................................................... 208,489
-----------
Total Other Expenses........................................... 238,489
-----------
Net Income......................................................... 106,341
Retained Earnings at Beginning of Period........................... 1,603,496
-----------
Retained Earnings at End of Period................................. $ 1,709,837
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-112
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

STATEMENT OF CASH FLOWS

For the period of January 1, 1998 to April 1, 1998

<TABLE>
<S> <C>
Cash Flows from Operating Activities:
Net Income....................................................... $ 106,341
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization.................................... 238,489
Bad debt provision (recovery).................................... (34,184)
Decrease in accounts receivable.................................. 437,821
Decrease in other current assets................................. 48,894
Decrease in security deposits.................................... 480
Decrease in accounts payable..................................... (201,611)
---------
Total Adjustments.............................................. 489,889
---------
Net cash provided by operating activities...................... 596,230
Cash Flows From Investing Activities:
Purchase of property and equipment............................... (44,502)
Cash Flows from Financing Activities:
Net repayment of advances to parent corporation and affiliates... (625,614)
---------
Net Decrease in Cash and Cash Equivalents........................ (73,886)
Cash and Cash Equivalents at Beginning of Period................. 83,567
---------
Cash and Cash Equivalents at End of Period....................... $ 9,681
=========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-113
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS

Note 1--Significant Accounting Policies

Organization and Nature of Business

Commodore Media of Westchester, Inc. (the Company) operates several radio
stations in Westchester county, New York. The signals licensed by the Federal
Communications Commission (FCC) include WFAS-FM, WFAS-AM and WZZN-FM (the
Stations). The Company derives its revenue primarily from the sale of radio
advertising. Commodore Media of Westchester, Inc. is a wholly owned subsidiary
of Capstar Broadcasting Corporation.

Sale of Stations

On April 2, 1998, the Company contributed all of its net assets and its
related licenses to Westchester Radio, LLC. in exchange for a 100% membership
interest. The company's membership interest was comprised of 700 voting and 300
nonvoting shares.

Westchester Radio, LLC. subsequently refinanced the assets of the station
and made a distribution back to the company in the amount of $35,000,000.

The company subsequently sold its voting interests and retained its 30%
nonvoting interest of the Limited Liability Company.

The business combination has been accounted for as a purchase. This
financial statement contains the results of operations and the financial
position of the company immediately before the contribution of assets to
Westchester Radio, LLC.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

The Company's business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

F-114
<PAGE>

COMMODORE MEDIA OF WESTCHESTER,INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight line method for financial
reporting purposes and double declining balance for income tax purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

Income Taxes

The Company files a consolidated income tax return with its corporate
parent.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

There was no cash paid for interest and income taxes.

Barter Transactions

The Company barters unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast
and related expenses are recorded when the bartered product or service is used.

F-115
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations were as follows:

<TABLE>
<S> <C>
Trade sales...................................................... $ 245,893
Trade expense.................................................... (163,592)
---------
Net Trade Transactions......................................... $ 82,301
=========
</TABLE>

Note 2--Property, Plant and Equipment

Property and equipment consisted of the following at April 1, 1998:

<TABLE>
<S> <C>
Land............................................................. $ 420,000
Buildings and leasehold improvements............................. 685,762
Studio and transmission equipment................................ 565,797
Music library.................................................... 2,556
Office equipment and fixtures.................................... 151,396
----------
Total.......................................................... 1,825,511
Less: accumulated depreciation................................... (141,722)
----------
Net Property and Equipment....................................... $1,683,789
==========
</TABLE>

Depreciation charged to operations amounted to $30,000.

Property and equipment are pledged as collateral for various obligations
of the company's corporate parent. (See Note 4).

Note 3--Intangible Assets

Intangible assets consisted of the following at April 1, 1998:

<TABLE>
<S> <C>
FCC license..................................................... $33,157,140
Goodwill........................................................ 32,000
-----------
Total......................................................... 33,189,140
Less: accumulated amortization.................................. (1,210,021)
-----------
Net Intangible Assets........................................... $31,979,119
===========
</TABLE>

Amortization charged to operations amounted to $208,489.

F-116
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Note 4--Related Parties

The company receives advances from and pays advances to its parent
corporation and other related affiliated companies. In addition the Parent
Corporation allocates expenses, based on revenue, to the company, which are
related to corporate overhead and other costs related to the management and
operation of the stations.

The company has pledged substantially all of its assets as a cross
guarantor on a variety of corporate obligations.

Note 5--Commitments

Operating Leases

The Company leases various tower facilities under operating leases, which
do not currently have expiration dates.

The Company also contracts for a variety of services and equipment
through short-term agreements and leases under cash or barter arrangements.
These agreements and leases are renewed or replaced at the end of their term at
the discretion of management.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended April 1,
1999............................................................. $ 16,182
2000............................................................. 7,500
2001............................................................. 7,500
2002............................................................. 7,500
2003............................................................. 7,500
--------
Total Minimum Lease Payments................................... $ 46,182
========
</TABLE>

Note 6--Pension Plan

The Company has a 401(k) Profit Sharing Plan covering all full time
employees meeting eligibility requirements. The Company matches fifty percent
of the employee's contributions up to six percent of compensation. For the
period ended April 1, 1998, the Company contributed $8,760.

F-117
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders:
Commodore Media of Westchester, Inc.

We have audited the accompanying balance sheet of Commodore Media of
Westchester, Inc. as of December 31, 1997, and the related statements of
operations, retained earnings 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 financial statements referred to above present
fairly, in all material respects, the financial position of Commodore Media of
Westchester, Inc. as of December 31, 1997, and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP

Bridgewater, New Jersey
July 29, 1999

F-118
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

BALANCE SHEET

December 31, 1997

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....................................... $ 83,567
Accounts receivable, less allowance for doubtful accounts of
$165,030....................................................... 1,220,791
Other current assets............................................ 66,200
------------
Total Current Assets.......................................... 1,370,558
PROPERTY, PLANT AND EQUIPMENT--NET................................ 1,669,287
Intangible Assets--Net............................................ 32,187,608
Security Deposits................................................. 8,907
------------
Total Assets.................................................. $ 35,236,360
============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITY:
Accounts payable and accrued expenses........................... $ 381,165
Due to Parent Corporation and Affiliates.......................... 9,655,465
Stockholders' Equity:
Common stock, 100 shares authorized, issued, and outstanding.... 100
Additional paid-in-capital...................................... 23,596,134
Retained earnings............................................... 1,603,496
------------
Total Stockholders' Equity.................................... 25,199,730
------------
Total Liabilities and Stockholders' Equity.................... $ 35,236,360
============
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-119
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

STATEMENT OF OPERATIONS AND RETAINED EARNINGS

For the year ended December 31, 1997

<TABLE>
<S> <C>
Revenues:
Broadcast
revenue........ $ 6,142,742
Less: agency
commissions.... (596,167)
-----------
Net Broadcast
Revenue...... 5,546,575
Other non-
broadcast
revenue........ 156,398
-----------
Total
Revenue...... 5,702,973
Expenses:
Programming and
technical...... 1,000,691
Sales and
advertising.... 830,649
Administrative.. 1,258,264
-----------
Total
Expenses..... 3,089,604
-----------
Income from
Operations....... 2,613,369
Other Expenses:
Depreciation.... 103,640
Amortization.... 829,729
-----------
Total Other
Expenses..... 933,369
-----------
Net Income........ 1,680,000
Accumulated
Deficit at
beginning of
year, as
previously
reported......... (96,656)
Contribution of
net assets of
station WZZN by
parent company... 20,152
-----------
Accumulated
Deficit at
beginning of
year, as
restated......... (76,504)
-----------
Retained Earnings
at End of Year... $ 1,603,496
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-120
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

STATEMENT OF CASH FLOWS

For the year ended December 31, 1997

<TABLE>
<S> <C>
Cash Flows from Operating Activities:
Net Income....................................................... $ 1,680,000
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization.................................. 933,369
Bad debt provision (recovery).................................. (11,980)
Increase in accounts receivable................................ (240,722)
Increase in other current assets............................... (66,200)
Increase in security deposits.................................. (793)
Increase in accounts payable................................... 56,683
-----------
Total Adjustments............................................ 670,357
-----------
Net cash provided by operating activities.................... 2,350,357
Cash Flows from Investing Activities:
Purchase of property and equipment............................. (76,948)
Cash Flows from Financing Activities:
Net repayment of advances from parent corporation and
affiliates.................................................... (2,228,542)
-----------
Net Increase in Cash and Cash Equivalents........................ 44,867
Cash and Cash Equivalents at Beginning of Period................. 38,700
-----------
Cash and Cash Equivalents at End of Period....................... $ 83,567
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-121
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Commodore Media of Westchester, Inc. (the Company) operates several radio
stations in Westchester county, New York. The signals licensed by the Federal
Communications Commission (FCC) include WFAS-FM, WFAS-AM and WZZN-FM (the
Stations). The Company derives its revenue primarily from the sale of radio
advertising. The company is a wholly owned subsidiary of Capstar Broadcasting.

Purchase and Sale of Stations

On January 1, 1997 the net assets of WZZN-FM were transferred to the
company by its parent corporation.

In April 1998, the Company was sold to Westchester Radio LLC., who
acquired the net assets and FCC license of the Stations from Commodore Media of
Westchester, Inc. in a business combination accounted for as a purchase.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

The Company's business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

F-122
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on straight line method for financial
reporting purposes and double declining balance method for income tax purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

<TABLE>
<S> <C>
Office equipment............................................... 5-7 years
Studio equipment............................................... 7 years
Building, leasehold improvements and tower..................... 10-40 years
</TABLE>

Income Taxes

The Company files a consolidated income tax return with its corporate
parent.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

There was no cash paid for interest and income taxes.

Barter Transactions

The Company barters unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast
and related expenses are recorded when the bartered product or service is used.

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations were as follows:

<TABLE>
<S> <C>
Trade sales..................................................... $ 792,021
Trade expense................................................... (725,383)
---------
Net Trade Revenue............................................. $ 66,638
=========
</TABLE>

F-123
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1997:

<TABLE>
<S> <C>
Land............................................................. $ 420,000
Buildings and leasehold improvements............................. 669,900
Studio and transmission equipment................................ 565,797
Music library.................................................... 2,556
Office equipment and fixtures.................................... 122,755
----------
Total.......................................................... 1,781,008
Less: accumulated depreciation................................... (111,721)
----------
Net Property and Equipment....................................... $1,669,287
==========
</TABLE>

Depreciation charged to operations amounted to $103,640.

Property and equipment are pledged as collateral for various obligations
of the company's corporate parent. (See Note 4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 1997:

<TABLE>
<S> <C>
FCC license..................................................... $33,157,140
Goodwill........................................................ 32,000
-----------
Total......................................................... 33,189,140
Less: accumulated amortization.................................. (1,001,532)
-----------
Net Intangible Assets........................................... $32,187,608
===========
</TABLE>

Amortization charged to operations amounted to $829,729.

NOTE 4--RELATED PARTIES

The company has pledged substantially all of its assets as a cross
guarantor on a variety of corporate obligations.

F-124
<PAGE>

COMMODORE MEDIA OF WESTCHESTER,INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 5--COMMITMENTS

Operating Leases

The Company leases various tower facilities under operating leases, which
do not currently have expiration dates.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended December 31,
1998............................................................... $16,152
1999............................................................... 16,182
2000............................................................... 7,500
2001............................................................... 7,500
2002............................................................... 7,500
-------
Total Minimum Lease Payments..................................... $54,834
=======
</TABLE>

NOTE 6--PENSION PLAN

F-125
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Stockholders
Commodore Media of Westchester, Inc.

We have audited the accompanying balance sheet of Commodore Media of
Westchester, Inc. as of December 31, 1996, and the related statements of
operations and accumulated deficit 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 financial statements referred to above present
fairly, in all material respects, the financial position of Commodore Media of
Westchester, Inc. as of December 31, 1996, and the results of its operations
and its cash flows for the year then ended in conformity with generally
accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP
Bridgewater, New Jersey
July 29, 1999

F-126
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

BALANCE SHEET

December 31, 1996

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash............................................................ $ 38,700
Accounts receivable, less allowance for doubtful accounts of
$153,050....................................................... 968,089
-----------
Total current assets.......................................... 1,006,789
PROPERTY, PLANT AND EQUIPMENT--NET................................ 1,695,979
INTANGIBLE ASSETS--NET............................................ 33,017,337
SECURITY DEPOSITS................................................. 8,114
-----------
Total assets.................................................. $35,728,219
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITY:
Accounts payable and accrued expenses........................... $ 324,482
DUE TO PARENT CORPORATION AND AFFILIATES.......................... 11,904,159
STOCKHOLDERS' EQUITY:
Common stock, 100 shares authorized, issued, and outstanding.... 100
Additional paid in capital...................................... 23,596,134
Accumulated deficit............................................. (96,656)
-----------
Total stockholders' equity.................................... 23,499,578
-----------
Total liabilities and stockholders' equity.................... $35,728,219
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-127
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT

For the year ended December 31, 1996

<TABLE>
<S> <C>
REVENUES:
Broadcast revenue................................................ $4,684,186
Less: agency commissions......................................... (413,135)
----------
Net broadcast revenue.......................................... 4,271,051
Other non-broadcast revenue...................................... 132,530
----------
Total revenue.................................................. 4,403,581
EXPENSES:
Programming and technical........................................ 730,283
Sales and advertising............................................ 1,214,288
Administrative................................................... 749,771
----------
Total expenses................................................. 2,694,342
----------
INCOME FROM OPERATIONS............................................. 1,709,239
OTHER EXPENSES:
Corporate management and overhead allocation..................... 1,146,542
Depreciation..................................................... 103,085
Amortization..................................................... 266,502
Interest expense................................................. 921,757
----------
Total other expenses........................................... 2,437,886
----------
NET LOSS........................................................... (728,647)
RETAINED EARNINGS AT BEGINNING OF YEAR............................. 631,991
----------
ACCUMULATED DEFICIT AT END OF YEAR................................. $ (96,656)
==========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-128
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

STATEMENT OF CASH FLOWS

For the year ended December 31, 1996

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss......................................................... $(728,647)
ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH USED BY OPERATING
ACTIVITIES:
Depreciation and amortization.................................... 369,586
Bad debt provision (recovery).................................... (29,850)
Decrease in accounts receivable.................................. 90,290
Decrease in other current assets................................. 21,948
Increase in accounts payable..................................... 60,419
---------
Total adjustments.............................................. 512,393
---------
Net cash used by operating activities.......................... (216,254)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment............................... (139,917)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net advances from parent corporation and affiliates.............. 366,402
---------
NET INCREASE IN CASH AND CASH EQUIVALENTS.......................... 10,231
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD................... 28,469
---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......................... $ 38,700
=========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-129
<PAGE>

COMMODORE MEDIA OF WESTCHESTER, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Commodore Media of Westchester, Inc. (the Company) operates several radio
stations in Westchester County, New York. The signals licensed by the Federal
Communications Commission (FCC) included in this presentation, operate by the
call letters of WFAS-FM and WFAS-AM. The Company derives its revenue primarily
from the sale of radio advertising.

Sale of Stations

In October 1996 the stations were purchased by Capstar Broadcasting in a
business combination which was accounted for as a purchase. The result of the
transaction is that the company is a wholly owned subsidiary of Capstar
Broadcasting.

The results of operations of the acquired stations are included in the
accompanying financial statements for the entire period. The total cost of the
acquisition, exceeded the fair value of the net assets of the stations by
approximately $33,200,000 which has been allocated to the stations FCC license
and goodwill. The excess in being amortized on the straight-line method over
forty years.

On April 2, 1998, the Company was sold to Westchester Radio LLC. who
acquired the net assets and FCC license of WFAS-FM, WFAS-AM and WZZN-FM (the
Stations) from Commodore Media of Westchester, Inc. in a business combination
accounted for as a purchase.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Company incurs various marketing and promotional costs to add and
maintain listenership. These are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

The Company's business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

F-130
<PAGE>

COMMODORE MEDIA OF WESTCHESTER,INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on straight line method for financial
reporting purposes and double declining balance method for income tax purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

Income Taxes

The Company files its income tax return on a consolidated basis with its
parent company.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less.

Cash paid for interest and income taxes are as follows:

<TABLE>
<S> <C>
Interest........................................................... $ 921,757
Income taxes....................................................... --
</TABLE>

Barter Transactions

The Company barters unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast
and related expenses are recorded when the bartered product or service is used.

F-131
<PAGE>

COMMODORE MEDIA OF WESTCHESTER,INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations were as follows:

<TABLE>
<S> <C>
Trade sales....................................................... $ 671,622
Trade expense..................................................... (566,740)
---------
Net Trade Revenue Transactions.................................. $ 104,882
=========
</TABLE>

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1996:

<TABLE>
<S> <C>
Land............................................................. $ 420,000
Buildings and leasehold improvements............................. 639,766
Studio and transmission equipment................................ 536,162
Music library.................................................... 2,556
Office equipment and fixtures.................................... 118,862
----------
Total.......................................................... 1,717,346
Less: accumulated depreciation................................... (21,367)
----------
Net Property and Equipment....................................... $1,695,979
==========
</TABLE>

Depreciation charged to operations amounted to $103,085.

Property and equipment are pledged as collateral for various obligation
of the company's corporate parent. (See Note 4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 1996:

<TABLE>
<S> <C>
FCC license..................................................... $33,157,140
Goodwill........................................................ 32,000
-----------
Total......................................................... 33,189,140
Less: accumulated amortization.................................. (171,803)
-----------
Net Intangible Assets........................................... $33,017,337
===========
</TABLE>

Amortization charged to operations amounted to $266,502.

F-132
<PAGE>

COMMODORE MEDIA OF WESTCHESTER,INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 4--RELATED PARTIES

The company receives advances from and pays advances to its parent
corporation and other related affiliated companies. In addition the parent
corporation allocates expenses, based on revenue, to the company, which are
related to corporate overhead and other costs related to the management and
operation of the stations. During 1996 these allocations amounted to
approximately $834,000.

The company has pledged substantially all of its assets as a cross
guarantor on a variety of corporate obligations.

NOTE 5--COMMITMENTS

Operating Leases

The Company leases various tower facilities under operating leases, which
do not currently have expiration dates.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended December 31,
1997.............................................................. $11,710
1998.............................................................. 16,152
1999.............................................................. 16,182
2000.............................................................. 7,500
2001.............................................................. 7,500
-------
Total Minimum Lease Payments...................................... $59,044
=======
</TABLE>

NOTE 6--PENSION PLAN

F-133
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Division Manager of WRKI, WAXB, WPUT, WINE

We have audited the accompanying combined balance sheet of WRKI, WAXB,
WPUT, and WINE (Operating Divisions of Commodore Media of Norwalk, Inc.) (the
Divisions) as of May 29, 1998, and the related combined statements of
operations and division equity and cash flows for the period of January 1, 1998
to May 29, 1998. These financial statements are the responsibility of the
Divisions' 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 financial statements referred to above present
fairly, in all material respects, the combined financial position of WRKI,
WAXB, WPUT, and WINE as of May 29, 1998, and the results of their combined
operations and their combined cash flows for the period of January 1, 1998 to
May 29, 1998 in conformity with generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw, LLP

Bridgewater, New Jersey
August 11, 1999
(except for Note 7, as to
which the date is October
27, 1999)

F-134
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED BALANCE SHEET

May 29, 1998

<TABLE>
<S> <C>
ASSETS
Current Assets:
Cash............................................................. $ 800
Accounts receivable, less allowance for doubtful accounts of
$129,800........................................................ 663,099
-----------
Total Current Assets........................................... 663,899
Property, Plant and Equipment, net................................. 1,980,776
Intangible Assets, net............................................. 7,754,987
Other Assets....................................................... 16,743
-----------
Total Assets..................................................... $10,416,405
===========
LIABILITIES AND DIVISION EQUITY
Accounts payable and accrued expenses.............................. $ 129,385
Division Equity.................................................... 10,287,020
-----------
Total Liabilities and Division Equity.......................... $10,416,405
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-135
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED STATEMENT OF OPERATIONS AND DIVISION EQUITY

For the period of January 1, 1998 to May 29, 1998

<TABLE>
<S> <C>
Revenues:
Broadcast revenue................................................ $ 1,466,199
Less: agency commissions......................................... (102,647)
-----------
Net Broadcast Revenue.......................................... 1,363,552
Other non-broadcast revenue...................................... 11,894
-----------
Total Revenue.................................................. 1,375,446
Expenses:
Programming and technical........................................ 172,226
Sales and advertising............................................ 573,055
Administrative................................................... 322,743
-----------
Total Expenses................................................. 1,068,024
-----------
Income from Operations............................................. 307,422
Other Expenses:
Depreciation..................................................... 60,515
Amortization..................................................... 86,300
-----------
Total Other Expenses........................................... 146,815
-----------
Net Income..................................................... 160,607
Division Equity at Beginning of Period............................. 10,346,902
Net Advances to Parent & Affiliates................................ (220,489)
-----------
Division Equity at End of Period................................... $10,287,020
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-136
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED STATEMENT OF CASH FLOWS

For the period of January 1, 1998 to May 29, 1998

<TABLE>
<S> <C>
Cash Flows from Operating Activities:
Net Income........................................................ $160,607
Adjustments to Reconcile Net Income to Net Cash Provided by
Operating Activities:
Depreciation and amortization..................................... 146,473
Bad debt provision................................................ (102,102)
Decrease in accounts receivable................................... 32,689
Decrease in other current assets.................................. 25,653
Decrease in accounts payable...................................... (40,785)
--------
Total Adjustments................................................. 61,928
--------
Net Cash Provided by Operating Activities....................... 222,535
Cash Flows from Investing Activities:
Purchase of property and equipment................................ (2,046)
Cash Flows from Financing Activities:
Net repayment of advances from parent corporation................. (220,489)
--------
Net Decrease in Cash and Cash Equivalents......................... --
Cash and Cash Equivalents at Beginning of Period.................. 800
--------
Cash and Cash Equivalents at End of Period........................ $ 800
========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-137
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Commodore Media of Norwalk, Inc. (the Company) operates several radio
stations in Connecticut and New York. The signals licensed by the FCC included
in this presentation operate under the call letters of WRKI, WAXB, WPUT, and
WINE (the Divisions). The Divisions derive their revenue primarily from the
sale of radio advertising. Commodore Media of Norwalk, Inc. is a wholly owned
subsidiary of Capstar Broadcasting.

Contributions of Station Assets to Grantor Trust

On May 29, 1998, Capstar Broadcasting Corporation contributed all of the
rights, title, interest and obligations in all of the assets, properties,
contracts, leases and agreements of the Divisions to the Capstar Trust. The
company is the sole beneficiary of the trust.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Divisions incur various marketing and promotional costs to add and
maintain listenership. These costs are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

The Divisions' business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

The Divisions' revenue and accounts receivable primarily relate to
advertising of products and services within the radio stations' broadcast
areas. The Divisions' perform ongoing credit evaluations of its customers'
financial condition and, generally requires no collateral from its customers.
Credit losses have been within management's expectations and adequate
allowances for any uncollectible accounts receivables are maintained.

F-138
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight line method for financial
reporting purposes and the double-declining balance method for income tax
purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

Income Taxes

The Divisions' file their income tax return on a consolidated basis with
their parent company.

Cash Flows

For purposes of the statement of cash flows, cash equivalents include
time deposits, certificates of deposits, and all highly liquid debt instruments
with original maturities of three months or less. The Divisions incurred no
interest expense or income taxes in the reporting period.

Barter Transactions

The Divisions barter unsold advertising time for products and services.
Such transactions are recorded at the estimated fair value of the products or
services received. Barter revenue is recorded when commercials are broadcast
and related expenses are recorded when the bartered product or service is used.

<TABLE>
<S> <C>
Trade sales...................................................... $ 256,669
Trade expense.................................................... (258,173)
---------
Net trade expense transactions................................. $ (1,504)
=========
</TABLE>

F-139
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at May 29, 1998:

<TABLE>
<S> <C>
Land............................................................. $ 339,214
Buildings and leasehold improvements............................. 644,746
Studio and transmission equipment................................ 1,117,583
Music library.................................................... 2,283
Office equipment and fixtures.................................... 101,998
----------
Total.......................................................... 2,205,824
Less: accumulated depreciation................................... (225,048)
----------
Net Property and Equipment....................................... $1,980,776
==========
</TABLE>

Property and equipment are pledged as collateral for various obligation
of the divisions' corporate parent. (See Note 4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at May 29, 1998:

<TABLE>
<S> <C>
FCC license...................................................... $8,003,448
Transmitter Site Lease........................................... 56,108
Goodwill......................................................... 32,000
----------
Total.......................................................... 8,091,556
Less: accumulated amortization................................... (336,569)
----------
Net Intangible Assets............................................ $7,754,987
==========
</TABLE>

The Divisions periodically evaluate intangible assets for potential
impairment by analyzing the operating results, future cash flows on an
undiscounted basis, trends and prospects of the Divisions, as well as by
comparing them to their competitors. The Divisions also take into consideration
recent acquisition patterns within the broadcast industry, the impact of
recently enacted or potential FCC rules and regulations and any other events or
circumstances which might indicate potential impact. At this time, in the
opinion of management, no impairment has occurred.

NOTE 4--RELATED PARTIES

The Divisions receive advances from and pays advances to its parent
corporation and other related affiliated companies. In addition, the parent
corporation allocates expenses to the divisions based on revenue, which are
related to corporate overhead and other costs related to the management and
operation of the stations.

The net assets of the station have been pledged on guarantees of various
obligations of the corporate parent.

F-140
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 5--COMMITMENTS

Operating Leases

The Divisions lease various tower facilities under operating leases,
which do not currently have expiration dates.

The Divisions also contract for a variety of services and equipment
through short-term agreements and leases under cash or barter arrangements.
These agreements and leases are renewed or replaced at the end of their term at
the discretion of management.

Total rent expense for the period of January 1, 1998 to May 29, 1998 was
approximately $16,000. Minimum future rentals under noncancelable operating
leases having remaining terms in excess of one year for each of the next five
years and in the aggregate are as follows:

<TABLE>
<S> <C>
Year ended December 31,
1999............................................................. $ 40,427
2000............................................................. 41,017
2001............................................................. 42,029
2002............................................................. 43,094
2003............................................................. 43,605
--------
Total Minimum Lease Payments................................... $210,172
========
</TABLE>

NOTE 6--PENSION PLAN

The Divisions have a 401(k) Profit Sharing Plan covering all full time
employees meeting eligibility requirements. The Company matches fifty percent
of the employee's contributions up to six percent of compensation.

NOTE 7--SUBSEQUENT SALE OF CAPSTAR TRUST

On October 27, 1999, the tangible assets, FCC license and goodwill of
Capstar Trust were purchased by Aurora of Danbury, L.L.C. The total cost of the
acquisition was $11,250,000.

F-141
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Division Manager of WRKI, WAXB, WPUT, WINE

We have audited the accompanying combined balance sheet of WRKI, WAXB,
WPUT, and WINE (Operating Divisions of Commodore Media of Norwalk, Inc.) as of
December 31, 1997, and the related combined statements of operations and
division equity and cash flows for the year then ended. These financial
statements are the responsibility of the Divisions' 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 financial statements referred to above present
fairly, in all material respects, the combined financial position of WRKI,
WAXB, WPUT, and WINE as of December 31, 1997, and the results of their combined
operations and their combined cash flows for the year then ended in conformity
with generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP

Bridgewater, New Jersey
August 11, 1999
(except for Note 7, as to
which the date is October
27, 1999)

F-142
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED BALANCE SHEET
December 31, 1997

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash............................................................. $ 800
Accounts receivable, less allowance for doubtful accounts of
$231,902........................................................ 593,685
-----------
Total current assets........................................... 594,485
PROPERTY, PLANT AND EQUIPMENT, NET................................. 2,038,905
INTANGIBLE ASSETS, NET............................................. 7,841,285
OTHER ASSETS....................................................... 42,397
-----------
Total assets................................................... $10,517,072
===========
LIABILITIES AND DIVISION EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES.............................. $ 170,170
DIVISION EQUITY.................................................... 10,346,902
-----------
Total liabilities and division equity.......................... $10,517,072
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-143
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED STATEMENT OF OPERATIONS AND DIVISION EQUITY

For the year ended December 31, 1997

<TABLE>
<S> <C>
Revenues:
Broadcast revenue................................................ $ 3,975,767
Less: agency commissions......................................... (275,662)
-----------
Net broadcast revenue.......................................... 3,700,105
Other non-broadcast revenue...................................... 15,754
-----------
Total revenue.................................................. 3,715,859
Expenses:
Programming and technical........................................ 833,852
Sales and advertising............................................ 1,161,616
Administrative................................................... 1,069,475
-----------
Total expenses................................................. 3,064,943
-----------
Income from operations............................................. 650,916
Other expenses:
Depreciation..................................................... 137,724
Amortization..................................................... 207,120
-----------
Total other expenses........................................... 344,844
-----------
Net income......................................................... 306,072
Division equity at beginning of year............................... 10,891,563
Net advances to parent and affiliates.............................. (850,733)
-----------
Division equity at end of year..................................... $10,346,902
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-144
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED STATEMENT OF CASH FLOWS

For the year ended December 31, 1997

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income......................................................... $ 306,072
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................... 344,745
Bad debt provision............................................... 11,384
Decrease in accounts receivable.................................. 190,802
Increase in other current assets................................. (11,778)
Decrease in accounts payable..................................... (19,796)
---------
Total adjustments.............................................. 515,357
---------
Net cash provided by operating activities...................... 821,429
Cash flows from investing activities:
Purchase of property and equipment............................... (97,118)
Cash flows from financing activities:
Net repayment of advances to parent and affiliates............... (850,733)
---------
NET DECREASE IN CASH AND CASH EQUIVALENTS...................... (126,422)
Cash and cash equivalents at beginning of period................... 127,222
---------
Cash and cash equivalents at end of period......................... $ 800
=========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-145
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Transfer of Signals and Assets to Grantor Trust

On January 1, 1997, the net assets of WZZN were transferred by the parent
corporation to Commodore Media of Westchester, Inc.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Divisions incur various marketing and promotional costs to add and
maintain listenership. These costs are expensed as incurred.

Use of Estimates

Concentration of Credit Risk

The Divisions' business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

The Divisions' revenue and accounts receivable primarily relates to
advertising of products and services within the radio stations' broadcast
areas. The Divisions perform ongoing credit evaluations of its customers'
financial condition and, generally requires no collateral from its customers.
Credit losses have been within management's expectations and adequate
allowances for any uncollectible accounts receivables are maintained.

F-146
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight line method for financial
reporting purposes and the double declining balance method for income tax
purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

Income Taxes

The Divisions file their income tax return on a consolidated basis with
their parent company.

Cash Flows

Barter Transactions

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations for the year ended December 31, 1997 were as follows:

<TABLE>
<S> <C>
Trade sales....................................................... $ 514,208
Trade expense..................................................... (482,143)
---------
Net Trade Revenue Transactions.................................. $ 32,065
=========
</TABLE>

F-147
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1997:

<TABLE>
<S> <C>
Land............................................................. $ 339,214
Buildings and leasehold improvements............................. 644,746
Studio and transmission equipment................................ 1,115,975
Music library.................................................... 2,283
Office equipment and fixtures.................................... 101,560
----------
Total.......................................................... 2,203,778
Less: accumulated depreciation................................... (164,873)
----------
Net Property and Equipment....................................... $2,038,905
==========
</TABLE>

Property and equipment are pledged as collateral for various obligation
of the divisions' corporate parent. (See Note 4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 1997:

<TABLE>
<S> <C>
FCC license...................................................... $8,003,448
Transmitter site lease........................................... 56,108
Goodwill......................................................... 32,000
----------
Total.......................................................... 8,091,556
Less: accumulated amortization................................... (250,271)
----------
Net Intangible Assets............................................ $7,841,285
==========
</TABLE>

NOTE 4--RELATED PARTIES

The divisions receive advances from and pays advances to its parent
corporation and other related affiliated companies. In addition the parent
corporation allocates expenses to the divisions based on revenue, which are
related to corporate overhead and other costs related to the management and
operation of the stations.

The net assets of the Station have been pledged on guarantees of various
obligations of the corporate parent.

F-148
<PAGE>

WRKI/WAXB/WPUT/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 5--COMMITMENTS

Operating Leases

The Divisions lease various tower facilities under operating leases,
which do not currently have expiration dates.

Total rent expense for 1997 was approximately $35,500. The Divisions also
contract for a variety of services and equipment through short-term agreements
and leases under cash or barter arrangements. These agreements and leases are
renewed or replaced at the end of their term at the discretion of management.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended December 31,
1998............................................................. $ 37,625
1999............................................................. 40,427
2000............................................................. 41,017
2001............................................................. 42,029
2002............................................................. 43,094
--------
Total Minimum Lease Payments................................... $204,192
========
</TABLE>

NOTE 6--PENSION PLAN

NOTE 7--SUBSEQUENT SALE OF CAPSTAR TRUST

On October 27, 1999, the tangible assets, FCC license and goodwill of
Capstar Trust were purchased by Aurora of Danbury, L.L.C. The total cost of the
acquisition was $11,250,000.

F-149
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Division Manager of
WRKI, WAXB, WPUT, WZZN, WINE

We have audited the accompanying combined balance sheet of WRKI, WAXB,
WPUT, WZZN and WINE (Operating Divisions of Commodore Media of Norwalk, Inc.)
(the Divisions) as of December 31, 1996, and the related combined statements of
operations and division equity and cash flows for the year then ended. These
financial statements are the responsibility of the Divisions' 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 financial statements referred to above present
fairly, in all material respects, the combined financial position of WRKI,
WAXB, WPUT, WZZN, and WINE as of December 31, 1996, and the results of their
combined operations and their combined cash flows for the year then ended in
conformity with generally accepted accounting principles.

Weeks Holderbaum Huber & DeGraw LLP

Bridgewater, New Jersey
August 11, 1999
(except for Note 7, as to
which the date is October
27, 1999)

F-150
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED BALANCE SHEET

December 31, 1996

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash............................................................. $ 127,222
Accounts receivable, less allowance for doubtful accounts of
$220,518........................................................ 795,871
-----------
Total current assets........................................... 923,093
PROPERTY, PLANT AND EQUIPMENT, NET................................. 2,079,411
INTANGIBLE ASSETS, NET............................................. 8,048,406
OTHER ASSETS....................................................... 30,619
-----------
Total assets................................................... $11,081,529
===========
LIABILITIES AND DIVISION EQUITY
Accounts payable and accrued expenses.............................. $ 189,966
Division equity.................................................... 10,891,563
-----------
Total liabilities and division equity.......................... $11,081,529
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-151
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED STATEMENT OF OPERATIONS AND DIVISION EQUITY

For the year ended December 31, 1996

<TABLE>
<S> <C>
Revenues:
Broadcast revenue................................................ $ 4,151,424
Less: agency commissions......................................... (304,903)
-----------
Net broadcast revenue.......................................... 3,846,521
Other non-broadcast revenue...................................... 41,410
-----------
Total revenue.................................................. 3,887,931
Expenses:
Programming and technical........................................ 925,407
Sales and advertising............................................ 1,436,296
Administrative................................................... 1,098,778
-----------
Total expenses................................................. 3,460,481
-----------
Income from operations............................................. 427,450
Other expenses:
Depreciation..................................................... 137,724
Amortization..................................................... 207,120
-----------
Total other expenses........................................... 344,844
-----------
Net income......................................................... 82,606
Division equity at beginning of year............................... 10,808,957
-----------
Division equity at end of year..................................... $10,891,563
===========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-152
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

COMBINED STATEMENT OF CASH FLOWS

For the year ended December 31, 1996

<TABLE>
<S> <C>
Cash flows from operating activities:
Net income......................................................... $ 82,606
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization.................................... 344,844
Bad debt provision............................................... 162,696
Increase in accounts receivable.................................. (489,817)
Increase in other current assets................................. (29,081)
Increase in accounts payable..................................... 138,875
---------
Total adjustments.............................................. 127,517
---------
Net cash provided by operating activities...................... 210,123
Cash flows from investing activities:
Purchase of property and equipment............................... (10,879)
Cash flows from financing activities:
Net repayment of advances from equity holder..................... (231,407)
---------
Net decrease in cash and cash equivalents.......................... (32,163)
Cash and cash equivalents at beginning of period................... 159,385
---------
Cash and cash equivalents at end of period......................... $ 127,222
=========
</TABLE>

The Notes to Financial Statements are an Integral Part of this Statement

F-153
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Business

Commodore Media of Norwalk, Inc. (the Company) operates several radio
stations in Connecticut and New York. The signals licensed by the FCC included
in this presentation operate under the call letters of WRKI, WAXB, WPUT, WZZN,
and WINE (the Divisions). The Divisions derive their revenue primarily from the
sale of radio advertising.

Sale of Stations

In October 1996, Commodore Media of Norwalk, Inc. was purchased by
Capstar Broadcasting in a business combination which was accounted for as a
purchase. Pursuant to this transaction the Company became a wholly owned
subsidiary of Capstar Broadcasting.

During 1997, the net assets of WZZN were transferred by the parent
corporation to Commodore Media of Westchester, Inc., an entity affiliated by
common ownership.

The results of operations of the acquired Divisions are included in the
accompanying financial statements for the entire year. The total cost of the
acquisition, exceeded the fair value of the net assets of the stations by
approximately $8,100,000, which has been allocated to the stations FCC license
and goodwill. The excess is being amortized on the straight-line method over
forty years.

On May 29, 1998, Capstar Broadcasting contributed all of the rights,
title, interest and obligations in all of the assets, properties, contrasts,
leases and agreements of the Divisions to Capstar Trust.

Revenue Recognition

Broadcasting operations derive revenue primarily from the sale of program
time and commercial announcements to local, regional and national advertisers.
Revenue is recognized when the program and commercial announcements are
broadcast.

Advertising Costs

The Divisions incur various marketing and promotional costs to add and
maintain listenership. These costs are expensed as incurred.

Use of Estimates

F-154
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

Concentration of Credit Risk

The Divisions' business activity is with customers located within the
immediate geographic area. Blocks of advertising time are generally sold on
credit on standard business terms.

The Divisions' revenue and accounts receivable primarily relate to
advertising of products and services within the radio stations' broadcast
areas. The Divisions perform ongoing credit evaluations of their customers'
financial condition and, generally requires no collateral from its customers.
Credit losses have been within management's expectations and adequate
allowances for any uncollectible accounts receivables are maintained.

Property and Equipment

The cost of property and equipment is depreciated over the estimated
useful lives of the related assets. Leasehold improvements are depreciated over
the lesser of the term of the related lease or the estimated useful lives of
the assets. Depreciation is computed on the straight line method for financial
reporting purposes and the double-declining balance method for income tax
purposes.

The useful lives of property and equipment for purposes of computing
depreciation are:

<TABLE>
<S> <C>
Office equipment and fixtures.................................... 5-7 years
Studio equipment................................................. 7 years
Building, leasehold improvements and tower....................... 10-40 years
</TABLE>

Income Taxes

The Divisions file their income tax return on a consolidated basis with
their parent company.

Cash Flows

Barter Transactions

F-155
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

The fair value of barter and trade-out transactions is included in
broadcasting revenue and broadcasting expense. Barter transactions charged to
operations for the period ended December 31, 1996 were as follows:

<TABLE>
<S> <C>
Trade sales....................................................... $ 484,265
Trade expense..................................................... (413,279)
---------
Net trade revenue transactions.................................. $ 70,986
=========
</TABLE>

NOTE 2--PROPERTY, PLANT AND EQUIPMENT

Property and equipment consisted of the following at December 31, 1996:

<TABLE>
<S> <C>
Land............................................................. $ 339,214
Buildings and leasehold improvements............................. 642,306
Studio and transmission equipment................................ 1,026,649
Music library.................................................... 2,217
Office equipment and fixtures.................................... 96,274
----------
Total.......................................................... 2,106,660
Less: accumulated depreciation................................... (27,249)
----------
Net property and equipment....................................... $2,079,411
==========
</TABLE>

Property and equipment are pledged as collateral for various obligation
of the divisions' corporate parent. (See Note 4).

NOTE 3--INTANGIBLE ASSETS

Intangible assets consisted of the following at December 31, 1996:

<TABLE>
<S> <C>
FCC license...................................................... $8,003,448
Goodwill......................................................... 32,000
Transmitter site lease........................................... 56,108
----------
Total.......................................................... 8,091,556
Less: accumulated amortization................................... (43,150)
----------
Net intangible assets............................................ $8,048,406
==========
</TABLE>

The Divisions periodically evaluate intangible assets for potential
impairment by analyzing the operating results, future cash flows on an
undiscounted basis, trends and prospects of the Divisions stations, as well as
by comparing them to their competitors. The Divisions also take into
consideration recent acquisition patterns within the broadcast industry, the
impact of recently enacted or potential FCC rules and regulations and any other
events or circumstances which might indicate potential impact. At this time, in
the opinion of management, no impairment has occurred.

F-156
<PAGE>

WRKI/WAXB/WPUT/WZZN/WINE
(Operating Divisions of Commodore Media of Norwalk, Inc.)

NOTES TO FINANCIAL STATEMENTS--(Continued)

NOTE 4--RELATED PARTIES

The Divisions receive advances from and pay advances to their parent
corporation and other related affiliated companies. In addition the parent
corporation allocates expenses to the divisions based on revenue, which are
related to corporate overhead and other costs related to the management and
operation of the stations.

The net assets of the stations have been pledged as guarantees of various
obligations of the corporate parent.

NOTE 5--COMMITMENTS

Operating Leases

The Divisions lease various tower facilities under operating leases,
which do not currently have expiration dates.

Total Rent expense for 1996 was approximately $30,000. The Divisions also
contracts for a variety of services and equipment through short-term agreements
and leases under cash or barter arrangements. These agreements and leases are
renewed or replaced at the end of their term at the discretion of management.

Minimum future rentals under noncancelable operating leases having
remaining terms in excess of one year for each of the next five years and in
the aggregate are as follows:

<TABLE>
<S> <C>
Year ended December 31,
1997............................................................. $ 35,453
1998............................................................. 37,625
1999............................................................. 40,427
2000............................................................. 41,017
2001............................................................. 42,029
--------
Total minimum lease payments................................... $196,551
========
</TABLE>

NOTE 6--PENSION PLAN

The Divisions have a 401(k) Profit Sharing Plan covering all full time
employees meeting eligibility requirements. The Divisions matches fifty percent
of the employee's contributions up to six percent of compensation.

NOTE 7--SUBSEQUENT SALE OF CAPSTAR TRUST

On October 27, 1999, the tangible assets, FCC license and goodwill of
Capstar Trust were purchased by Aurora of Danbury, L.L.C. The total cost of the
acquisition was $11,250,000.

F-157
<PAGE>

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

Through and including , 2000 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
-----------------
PROSPECTUS
-----------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

12,425,000 Shares

[LOGO OF NASSAU BROADCASTING CORPORATION]

Class A Common Stock

Merrill Lynch & Co.

Salomon Smith Barney

Banc of America Securities LLC

Lazard

Prudential Volpe Technology
a unit of Prudential Securities

, 2000
<PAGE>

Alternative Page for International Prospectus

Subject to Completion

Preliminary Prospectus dated July 10, 2000

P R O S P E C T U S

12,425,000 Shares

[LOGO OF NASSAU BROADCASTING CORPORATION APPEARS HERE]

Class A Common Stock

-----------

This is Nassau's initial public offering. Nassau is selling all of the
shares. The international managers are offering 2,485,000 shares outside the
U.S. and Canada and the U.S. underwriters are offering 9,940,000 shares in the
U.S. and Canada.

Investing in the class A common stock involves risks that are described in
the "Risk Factors" section beginning on page 11 of this prospectus.

-----------

The international managers may also purchase up to an additional 372,750
shares from Nassau at the public offering price, less the underwriting
discount, within 30 days from the date of this prospectus to cover over-
allotments. The U.S. underwriters may similarly purchase up to an additional
1,419,000 shares from Nassau.

The shares of class A common stock will be ready for delivery on or about
, 2000.

-----------

Merrill Lynch International Schroder Salomon Smith Barney

-----------

Bank of America International Limited

Lazard

Prudential-Bache International

The date of this prospectus is , 2000.
<PAGE>
Alternative Page for International Prospectus

UNDERWRITING

We intend to offer the shares outside the U.S. and Canada through the
international managers and in the U.S. and Canada through the U.S.
underwriters. Merrill Lynch International, Salomon Brothers International
Limited, Bank of America International Limited, Lazard Capital Markets and
Prudential-Bache International Limited are acting as lead managers for the
international managers named below. Subject to the terms and conditions
described in an international purchase agreement among us and the international
managers, and concurrently with the sale of 9,940,000 shares to the U.S.
underwriters, we have agreed to sell to the international managers, and the
international managers severally have agreed to purchase from us, the number of
shares listed opposite their names below.
<TABLE>
<CAPTION>
Number
International Manager of Shares
--------------------- ---------
<S> <C>
Merrill Lynch International.....................................
Salomon Brothers International Limited..........................
Bank of America International Limited...........................
Lazard Capital Markets..........................................
Prudential-Bache International Limited..........................
---------
Total...................................................... 2,485,000
=========
</TABLE>

We have also entered into a U.S. purchase agreement with the U.S.
underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Smith Barney Inc., Banc of America Securities LLC, Lazard Freres & Co.
LLC and Prudential Securities Incorporated are acting as U.S. representatives,
for sale of the shares in the U.S. and Canada. Subject to the terms and
conditions in the U.S. purchase agreement, and concurrently with the sale of
2,485,000 shares to the international managers pursuant to the international
purchase agreement, we have agreed to sell to the U.S. underwriters, and the
U.S. underwriters severally have agreed to purchase 9,940,000 shares from us.
The initial public offering price per share and the total underwriting discount
per share are identical under the international purchase agreement and the U.S.
purchase agreement.

The international managers and the U.S. underwriters have agreed to
purchase all of the shares sold under the international and U.S. purchase
agreements if any of these shares are purchased. If an underwriter defaults,
the international and U.S. purchase agreements provide that the purchase
commitments of the nondefaulting underwriters may be increased or the purchase
agreements may be terminated. The closings for the sale of shares to be
purchased by the international managers and the U.S. underwriters are
conditioned on one another.

We have agreed to indemnify the international managers and the U.S.
underwriters against certain liabilities, including liabilities under the
Securities Act, or to contribute to payments the international managers and
U.S. underwriters may be required to make in respect of those liabilities.

Schroders is a trademark of Schroders Holdings plc and is used under
license by Salomon Smith Barney.

Commissions and Discounts

The lead managers have advised us that the international managers propose
initially to offer the shares to the public at the initial public offering
price on the cover page of this prospectus and to dealers at that price less a
concession not in excess of $ per share. The international managers may
allow, and the dealers may reallow, a discount not in excess of $ per share
to other dealers. After the initial public offering, the public offering price,
concession and discount may be changed.

87
<PAGE>
Alternative Page for International Prospectus

The following table shows the initial public offering price, underwriting
discount and proceeds before expenses to Nassau. In addition, the table
includes certain other items considered by the NASD to be underwriting
compensation for purposes of the NASD's Conduct Rules. The information assumes
either no exercise or full exercise by the international managers and the U.S.
underwriters of their over-allotment options.

Merrill Lynch Capital Corporation, an affiliate of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, owns 26,473 shares of our class A common stock
which were received upon conversion of limited partnership units acquired in
connection with our recapitalization. The compensation in the table above in
the line titled "other items" was computed based on the difference between the
$ initial public offering price and $ , the price deemed to be paid for
the shares of class A common stock held by Merrill Lynch Capital Corporation.

The expenses of the offering, not including the underwriting discount,
are estimated at $1,920,000 and are payable by us, as set forth in the
following table.

Over-allotment Option

We have granted an option to the international managers to purchase up to
372,750 additional shares at the public offering price less the underwriting
discount. The international managers may exercise this option for 30 days from
the date of this prospectus solely to cover any over-allotments. If the
international managers exercise this option, each will be obligated, subject to
conditions contained in the purchase agreements, to purchase a number of
additional shares proportionate to that international manager's initial amount
reflected in the above table.

We have also granted an option to the U.S. underwriters, exercisable for
30 days from the date of this prospectus, to purchase up to 1,491,000
additional shares to cover any over-allotments on terms similar to that granted
to the international managers.

Intersyndicate Agreement

The international managers and the U.S. underwriters have entered into an
intersyndicate agreement that provides for the coordination of their
activities. Under the intersyndicate agreement, the international managers and
the U.S. underwriters may sell shares to each other for purposes of resale at
the initial public

88
<PAGE>
Alternative Page for International Prospectus

offering price, less an amount not greater than the selling concession. Under
the intersyndicate agreement, the international managers and any dealer to whom
they sell shares will not offer to sell or sell shares to persons who are U.S.
or Canadian persons or to persons they believe intend to resell to persons who
are U.S. or Canadian persons, except in the case of transactions under the
intersyndicate agreement. Similarly, the U.S. underwriters and any dealer to
whom they sell shares will not offer to sell or sell shares to non-U.S. persons
or non-Canadian persons or to persons they believe intend to resell to non-U.S.
or non-Canadian persons, except in the case of transactions under the
intersyndicate agreement.

Reserved Shares

No Sales of Similar Securities

. offer, pledge, sell or contract to sell any common stock, other than
common stock issued by us in connection with our purchase of Aurora
Communications;

. sell any option or contract to purchase any common stock;

. purchase any option or contract to sell any common stock;

. grant any option, right or warrant for the sale of any common stock,
other than pursuant to our stock incentive plan;

. lend or otherwise dispose of or transfer any common stock;

. request or demand that we file a registration statement related to
any common stock; or

Quotation on the Nasdaq National Market

We expect the shares to be approved for quotation on The Nasdaq National
Market, subject to notice of issuance, under the symbol "NBCR."

89
<PAGE>
Alternative Page for International Prospectus

. the valuation multiples of publicly traded companies that the U.S.
representatives and the lead managers believe to be comparable to us;

. our financial information;

. the history of, and the prospects for, our company and the industry
in which we compete;

. an assessment of our management, its past and present operations, and
the prospects for, and timing of, our future revenues;

. the present state of our development;

. the general condition of the securities market at the time of this
offering; and

. the above factors in relation to market values and various valuation
measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also
possible that after the offering the shares will not trade in the public market
at or above the initial public offering price.

UK Selling Restrictions

Each international manager has agreed that

. it has not offered or sold and will not offer or sell any shares of
shares of our class A common stock to persons in the United Kingdom,
except to persons whose ordinary activities 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 do not constitute an offer to the public in
the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;

. it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in
relation to the class A common stock in, from or otherwise involving
the United Kingdom; and

. it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the
issuance of class A common stock to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986
(Investment Advertisements) (Exemptions) Order 1996 as amended by the
Financial Services Act 1986 (Investment Advertisements) (Exemptions)
Order 1997 or is a person to whom such document may otherwise
lawfully be issued or passed on.

No Public Offering Outside the United States

No action has been or will be taken in any jurisdiction (except in the
United States) that would permit a public offering of the shares of class A
common stock, or the possession, circulation or distribution of this prospectus
or any other material relating to us or shares of our class A common stock in
any jurisdiction where action for that purpose is required. Accordingly, the
shares of our class A common stock may not be offered or sold, directly or
indirectly, and neither this prospectus nor any other offering material or
advertisements in connection with the shares of our class A common stock may be
distributed or published, in or from any country or jurisdiction except in
compliance with any applicable rules and regulations of that country or
jurisdiction.

90
<PAGE>

You 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 on the cover of this prospectus.

Price Stabilization, Short Positions and Penalty Bids

Neither we nor any of the underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the class A common stock. In addition,
neither we nor any of the underwriters makes any representation that the U.S.
representatives or the lead managers will engage in these transactions or that
these transactions, once commenced, will not be discontinued without notice.
These transactions may be effected on the Nasdaq National Market, in the over-
the-counter market or otherwise.

Other Relationships

Merrill Lynch, Pierce, Fenner & Smith Incorporated has acted as our
financial advisor in connection with our pending acquisition of Aurora
Communications and our reorganization. In addition, Merrill Lynch, Pierce,
Fenner & Smith Incorporated has acted as sole placement agent with respect to
our units consisting of 13% senior discount notes due 2010 and limited
partnership units, and as sole lead arranger, book running manager and
syndication agent with respect to our new credit facility. Merrill Lynch,
Pierce, Fenner & Smith Incorporated has received customary fees and commissions
for these transactions. Merrill Lynch Capital Corporation, an affiliate of
Merrill Lynch, Pierce, Fenner & Smith Incorporated, owns $20.0 million
aggregate principal amount of our senior discount notes and 26,473 shares of
our class A common stock. Merrill Lynch Capital Corporation is also a lender
under our new credit facility. We will issue shares of our class C common stock
to BancAmerica Capital Investors SBIC I, L.P., an affiliate of Banc of America
Securities LLC, in connection with the satisfaction of $35.0 million of the
purchase price payable with respect to the Aurora acquisition. The number of
shares of class C common stock that we will issue will be based on the market
value of our class A common stock at the date of closing of the acquisition.
Assuming a market value equal to $17.50, the midpoint of the price range set
forth on the cover page of this prospectus, we expect to issue 2,000,000 shares
of class C common stock to BancAmerica Capital Investors SBIC I, LLC. Merrill
Lynch Capital Corporation has agreed that it will not, with limited exceptions,
sell, transfer, assign, pledge or hypothecate any shares of class A common
stock for one year after the date of this prospectus.

91
<PAGE>

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Alternative Page for International Prospectus

Through and including , 2000 (the 25th day after the date of this
prospectus), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealers' obligation to deliver a prospectus when
acting as underwriters and with respect to their unsold allotments or
subscriptions.
---------------
PROSPECTUS
---------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

12,425,000 Shares

[LOGO OF NASSAU BROADCASTING CORPORATION APPEARS HERE]

Class A Common Stock

Merrill Lynch International

Schroder Salomon Smith Barney

Bank of America International Limited

Lazard

Prudential-Bache International

, 2000
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

Set forth below is a table of the registration fee for the Securities and
Exchange Commission, the filing fee for the National Association of Securities
Dealers, Inc., the listing fee for the Nasdaq National Market and estimates of
all other expenses to be incurred in connection with the issuance and
distribution of the securities described in this registration statement, other
than underwriting discounts and commissions:

<TABLE>
<S> <C>
SEC registration fee........................................... $ 62,324
NASD filing fee................................................ 22,300
Nasdaq National Market listing fee............................. 87,000
Printing and engraving expenses................................ 400,000
Legal fees and expenses........................................ 600,000
Accounting fees and expenses................................... 550,000
Blue sky fees and expenses..................................... 7,500
Transfer agent and registrar fees and expenses................. 3,500
Premiums for director and officer insurance.................... 175,883
Miscellaneous expenses......................................... 11,493
----------
Total........................................................ $1,920,000
==========
</TABLE>

Item 14. Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law allows for the
indemnification of officers, directors and any corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities, including reimbursement for expenses incurred arising under the
Securities Act. Our certificate of incorporation and our by-laws provide for
indemnification of our directors, officers, employees and other agents to the
extent and under the circumstances permitted by the Delaware General
Corporation Law. We also expect to enter into agreements with our directors and
executive officers that require, among other things, that we indemnify them
against certain liabilities that may arise by reason of their status or service
as directors and executive officers to the fullest extent permitted by Delaware
law. We expect to purchase directors and officers liability insurance, which
provides coverage against certain liabilities, including liabilities under the
Securities Act.

Item 15. Recent Sales of Unregistered Securities

Within the past three years, we have issued and sold securities to
accredited investors or qualified institutional buyers on the dates and for the
consideration set forth below in transactions exempt from registration under
the Securities Act of 1933, as amended.

1. From 1995 to 1997, we issued 8.0% subordinated discount notes
to our existing stockholders, all of whom are accredited investors,
pursuant to Section 4(2) of the Securities Act 1933. On May 4, 2000, we
repaid all of these subordinated discount notes for aggregate
consideration of $42.4 million.

2. On May 4, 2000, we issued and sold units consisting of senior
discount notes and limited partnership units to qualified institutional
buyers for gross proceeds of $60.0 million, pursuant to Section 4(2) of
the Securities Act 1933.

3. Immediately prior to this offering, we effected a
reorganization in which all the equity interests in Nassau Broadcasting
Partners, L.P., were exchanged for shares of our common stock, pursuant
to Section 4(2) of the Securities Act 1933. See the section
"Reorganization" in the prospectus.

II-1
<PAGE>

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits:

<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
1.1* Form of U.S. purchase agreement.
1.2* Form of international purchase agreement.
2.1** Purchase and Exchange Agreement dated March 24, 2000 relating to the
acquisition of Aurora Communications, LLC.
2.2** Amendment No. 1 to the Purchase and Exchange Agreement dated May 4,
2000.
2.3** Asset Purchase Agreement dated February 29, 2000 among Nassau
Broadcasting Partners, L.P. and Clear Channel Communications, Inc. and
Clear Channel Broadcasting Licenses, Inc.
2.4** Stock Purchase Agreement dated July 1, 1996 between Nassau
Broadcasting Partners, L.P. and Joseph E. Buckelew, Jean M. Kvistad,
Steven V. Lane, Edward Levy and Roy G. Simmons.
2.5** Asset Purchase Agreement dated January 21, 1999 between Nassau
Broadcasting Partners, L.P. and Multicultural Radio Broadcasting, Inc.
2.6** Asset Purchase Agreement dated August 30, 1996 between Nassau
Broadcasting Partners, L.P. and Great Scott Broadcasting Ltd.
2.7** Amendment to Asset Purchase Agreement and Escrow Agreement dated
January 17, 1997 between Nassau Broadcasting Partners, L.P. and Great
Scott Broadcasting, Ltd.
2.8** Second Amendment to Asset Purchase Agreement and Escrow Agreement
dated June 1, 1997 between Nassau Broadcasting Partners, L.P. and
Great Scott Broadcasting, Ltd.
2.9** Third Amendment to Asset Purchase Agreement dated February 17, 1998
between Nassau Broadcasting Partners, L.P. and Great Scott
Broadcasting, Ltd.
2.10** Fourth Amendment to Asset Purchase Agreement dated November 25, 1998
between Nassau Broadcasting Partners, L.P. and Great Scott
Broadcasting, Ltd.
2.11** Asset Purchase Agreement dated August 7, 1998 between Nassau
Broadcasting Partners, L.P. and Port Jervis Broadcasting Co., Inc.
2.12** Stock Purchase Agreement dated June 8, 1999 among Nassau Broadcasting
Partners L.P., Jersey Devil Broadcasting Co., Southern Ocean
Broadcasting, Inc., Great American Communications Co. and Manahawkin
Communications Corp.
3.1* Certificate of incorporation of the registrant.
3.2* By-laws of the registrant.
4.1* Specimen certificate for shares of class A common stock.
4.2* Specimen certificate for shares of class B common stock.
4.3* Specimen certificate for shares of class C common stock.
4.4** Units Purchase Agreement, dated May 4, 2000 relating to $60,000,000
senior discount notes
4.5** Form of senior discount note (see Exhibit 4.4)
4.6** Credit agreement, dated May 4, 2000 among Nassau Broadcasting
Partners, L.P., Merrill Lynch Capital Corporation and the other
lenders.
5.1* Opinion of Skadden, Arps, Slate, Meagher & Flom LLP as to the legality
of the securities being offered.
10.1** Time Brokerage Agreement dated July 1, 1996 among North Shore
Broadcasting Corporation and Seashore Broadcasting Corporation and
Nassau Broadcasting Partners, L.P.
10.2** Time Brokerage Agreement dated January 21, 1999 between Multicultural
Radio Broadcasting, Inc. and Nassau Broadcasting Partners, L.P.
</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.3** Time Brokerage Agreement dated November 12, 1998 between Multicultural
Radio Broadcasting, Inc. and Nassau Broadcasting Partners, L.P.
10.4** Local Marketing Agreement dated June 1, 1997 between Great Scott
Broadcasting, Ltd. and Nassau Broadcasting Partners, L.P.
10.5** Time Brokerage Agreement dated August 1, 1998 between Port Jervis
Broadcasting Co., Inc. and Nassau Broadcasting Partners, L.P.
10.6** Time Brokerage Agreement dated February 12, 1997 among Manahawkin
Communications Corporation, Jersey Devil Broadcasting, Inc., Southern
Ocean Broadcasting, Inc., Great American Communications Co. and Nassau
Broadcasting Partners, L.P.
10.7** First Amendment to Time Brokerage Agreement dated June 15, 1999 among
Manahawkin Communications Corporation, Jersey Devil Broadcasting,
Inc., Southern Ocean Broadcasting, Inc., Great American Communications
Co. and Nassau Broadcasting Partners, L.P.
10.8** Loan Agreement among Nassau Broadcasting Partners, L.P. and Amresco
Commercial Finance, Inc. and Lenders dated August 28, 1998.
10.9* Employee Stock Purchase Plan
10.10* 2000 Stock Incentive Plan
10.11* Employment agreement with Louis F. Mercatanti, Jr., dated , 2000.
10.12* Employment agreement with Michael S. Libretti, dated , 2000.
10.13* Employment agreement with Peter D. Tonks, dated , 2000.
10.14* Registration Rights Agreement dated May 4, 2000 among Nassau
Broadcasting Partners, L.P., Spectrum Equity Investors, L.P., Spectrum
Equity Investors II, L.P., Grotech Partners IV, L.P., Toronto Dominion
(U.S.A.), Inc, Nassau Holdings, Inc., Noel P. Rahn and Nassau
Broadcasting Company
10.15** Common Stock Registration Rights dated May 4, 2000 among Nasssau
Broadcasting Partners, L.P., Merrill Lynch Capital Corporation, Bank
of Montreal, The Bank of Nova Scotia, OZ Master Fund, Ltd. and Caisse
de Depot et Placement du Quebec.
10.16** Form of Registration Rights Agreement to be entered into among Nassau
Broadcasting Corporation and some of the selling stockholders in
Aurora Communications, LLC.
10.17** Agreement dated January 31, 1999 by and between Nassau Broadcasting,
Inc. and Nassau Broadcasting Partners, L.P.
11.1* Statement regarding computation of per share earnings.
12.1* Statement regarding computation of ratios.
21.1** Subsidiaries of the registrant.
23.1** Consent of Grant Thornton LLP.
23.2** Consent of Ernst & Young LLP (New York).
23.3** Consent of Ernst & Young LLP (Texas).
23.4** Consent of Deloitte & Touche LLP.
23.5** Consent of Weeks Holderbaum Huber & Degraw, LLP
23.6* Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in
Exhibit 5.1).
24** Power of attorney.
</TABLE>
--------
*To be filed by amendment.
**Previously filed

II-3
<PAGE>

Report of Independent Certified Public Accountants on Schedule

The Partners of
Nassau Broadcasting Partners, L.P.

In connection with our audit of the financial statements of Nassau Broadcasting
Partners, L.P. referred to in our report dated March 1, 2000, which is included
in the Prospectus constituting Part I of this Registration Statement, we also
audited Schedule II for each of the three years in the period ended December
31, 1999. In our opinion, this schedule presents fairly, in all material
respects, the information required to be set forth therein.

Grant Thornton LLP
Edison, NJ
March 1, 2000

Nassau Broadcasting Partners, L.P.
Schedule II--Valuation and Qualifying Accounts
Years Ended December 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
Balance at Charged
beginning to Costs Deductions Balance End
Description of Period and Expenses (A) of Period
----------- ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
1999
Allowance for
doubtful accounts $331,000 $904,000 $(919,000) $316,000
======== ======== ========= ========
1998
Allowance for
doubtful accounts $135,000 $470,000 $(274,000) $331,000
======== ======== ========= ========
1997
Allowance for
doubtful accounts $169,000 $508,000 $(542,000) $135,000
======== ======== ========= ========
</TABLE>

(A) Represents write-offs

II-4
<PAGE>

Item 17. Undertakings

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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
Securities 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 whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

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.

The Registrant undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, 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.

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Princeton,
State of New Jersey, on July 10, 2000.

Nassau Broadcasting Corporation

/s/ Michael S. Libretti
By: _________________________________
Name: Michael S. Libretti
Title: Director

Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on July 10, 2000.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* President, Chief Executive July 10, 2000
______________________________________ Officer, Director and
Louis F. Mercatanti, Jr. Principal Executive
Officer

/s/ Michael S. Libretti Executive Vice President, July 10, 2000
______________________________________ Operations and Finance,
Michael S. Libretti Chief Financial Officer,
and Director

* Director of Accounting & July 10, 2000
______________________________________ Human Resources and
Peter D. Tonks Principal Accounting
Officer

* Director July 10, 2000
______________________________________
Brion B. Applegate

* Director July 10, 2000
______________________________________
William B. Collatos

* Director July 10, 2000
______________________________________
Stuart D. Frankel

*/s/ Michael S. Libretti
______________________________________
Michael S. Libretti,
Attorney-in-fact
</TABLE>

II-6
<PAGE>

EXHIBIT INDEX

<PAGE>