CHANCELLOR RADIO BROADCASTING CO, 8-K, 1997-02-06

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

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

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

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

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

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

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

33-80534 75-2544623
- ------------------------------ ------------------------------
(Commission File Number) (I.R.S. Employer
Identification No.)

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

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

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

<PAGE>

ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

As announced on January 23, 1997 in the press release filed
herewith as Exhibit 99, Chancellor Radio Broadcasting Company (the
"Company"), a Delaware corporation and the wholly-owned subsidiary of
Chancellor Broadcasting Company, a Delaware corporation, consummated
the acquisition (the "Colfax Acquisition") of twelve radio stations
(the "Colfax Stations") from Colfax Communications, Inc. and its
affiliates ("Colfax") pursuant to an asset purchase agreement. The
aggregate purchase price for the Colfax Stations, based upon an
appraisal of the assets purchased, was $365 million in cash, subject
to adjustment within 90 days of the closing to take into account the
amount of net working capital as of the closing, the apportionment of
certain costs and the amount of any Colfax Stations' net trade balance
as of the closing in excess of $25,000. The Colfax Acquisition has
been funded with the proceeds from (i) the sale of Chancellor Radio
Broadcasting Company's $200 million liquidation preference 12%
Exchangeable Preferred Stock due 2009, par value $0.01 per share, and
Chancellor Broadcasting Company's $100 million liquidation preference
7% Convertible Preferred Stock, par value $0.01 per share, and (ii)
the Company's new $345 million credit facility, all of which closed
concurrently with the Colfax Acquisition and were also announced in
the press release filed herewith as Exhibit 99. The Company plans to
operate ten of the twelve Colfax Stations and to divest the two Colfax
Stations located in Milwaukee, subject to the negotiation of a
definitive agreement. The financial statements of Colfax
Communications, Inc. are set forth herein under Item 7(a). Unaudited
pro forma financial information giving effect to the consummation of
the Colfax Acquisition is set forth herein under Item 7(b). Such
unaudited pro forma financial information differs from the unaudited
pro forma financial information presented under Item 5 hereof only in
that the unaudited pro forma financial information presented under
Item 5 hereof includes the Company's disposition of WWWW-FM and WDFN-
AM in Detroit (which was consummated on January 30, 1997) and the Omni
Transaction (as defined in Item 5 hereof) and the unaudited pro forma
financial information presented under Item 7(b) does not.

ITEM 5. OTHER EVENTS

In connection with the offering of 2,000,000 shares of its $200
million liquidation preference 12% Exchangeable Preferred Stock due
2009, par value $0.01 per share, referred to in Item 2 above and in
the attached press release, the Company prepared a final offering
memorandum that contained certain pro forma financial statements of
operations for the year ended December 31, 1995 and for the nine
months ended September 30,

<PAGE>

1995 and 1996, and a pro forma balance sheet as of September 30, 1996.
These pro forma financial statements are set forth below.

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

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

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

<PAGE>

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

<PAGE>

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

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

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

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

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

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

Income (loss) before provision
for income taxes . . . . . . . . . . . (7,731) (5,630) (121) 135 42 2,900 (720)
Provision for income taxes . . . . . . . 3,800 (1,287) (93) - - - -
--------- ------- ----- ------ ------- ------- ------

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

Dividends and accretion on
preferred stock . . . . . . . . . . . . -
---------

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

Deficiency of earnings to fixed charges
and preferred stock dividends and
accretion . . . . . . . . . . . . . . . . $ 7,731

</TABLE>

<PAGE>

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

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

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

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

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

Income (loss) before provision
for income taxes . . . . . . . . . 3,028 (235) (7,110) (15,442)
Provision for income taxes . . . . . . - - 8,505 (G) 10,925
------- ------ ------- --------

Net income (loss) . . . . . . . . . . $ 3,028 $ (235) $(15,615) (26,367)
======= ====== ========

Dividends and accretion on
preferred stock . . . . . . . . . . . $38,503 (H) $ 38,503
--------

Loss applicable to common shares . . . $(64,870)
========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 79,613

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

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

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

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

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

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

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

Income (loss) before provision
for income taxes . . . . . . . . (6,471) (5,745) (121) (8) (485) 1,551 (874)
Provision for income taxes . . . . . 2,829 (1,798) (93) - - - -
------- ------- ----- ------ ------- ------- ------

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

Dividends and accretion on
preferred stock . . . . . . . . . . -
-------

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

Deficiency of earnings to
fixed charges and preferred
stock dividends and accretion . . . $ 6,471

</TABLE>

<PAGE>

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

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

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

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

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

Income (loss) before provision
for income taxes . . . . . . . . . 2,517 208 (5,391) (14,819)
Provision for income taxes . . . . . . - 40 7,216 (G) 8,194
------- ------ ------- --------

Net income (loss) . . . . . . . . . . $ 2,517 $ 168 $(12,606) (23,013)
======= ====== ========

Dividends and accretion on
preferred stock . . . . . . . . . . . $28,550 (H) $ 28,550
--------

Loss applicable to common shares . . . $(51,563)
========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 62,402

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

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

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

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

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

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

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

Income (loss) before provision
for income taxes . . . . . . . . . . . . . . (614) (3,537) 2,515 2,422 3,159 51
Provision for income taxes . . . . . . . . . . . 2,201 - - - - -
-------- ------- ------ ------- ------- ------

Net income (loss) before extraordinary loss . . (2,815) (3,537) 2,515 2,422 3,159 51
Extraordinary loss on early extinguishment
of debt . . . . . . . . . . . . . . . . . . . . 5,609 - - - - -
-------- ------- ------ ------- ------- ------

Net income (loss) . . . . . . . . . . . . . . . (8,424) $(3,537) $2,515 $ 2,422 $ 3,159 $ 51
======= ====== ======= ======= ======

Dividends and accretion on preferred stock . . . 8,187
Loss on repurchase of preferred stock . . . . . . 16,570
--------

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

Deficiency of earnings to fixed charges and
preferred stock dividends and accretion . . . . $ 8,801

</TABLE>

<PAGE>

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

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

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

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

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

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

Net income (loss) before
extraordinary loss . . . . . . . . 1,066 3,327 (9,277) (3,089)
Extraordinary loss on early
extinguishment of debt . . . . . . . - - (5,609)(I) -
------- ------- ------- -------

Net income (loss) . . . . . . . . . . $ 1,066 $3,327 $(3,668) (3,089)
======= ====== =======

Dividends and accretion on
preferred stock . . . . . . . . . . . $23,847 (H) $ 32,034
Loss on repurchase of preferred stock . (16,570)(J) -
--------

Loss applicable to common shares . . . $(35,123)
========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 48,286

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

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

ASSETS

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

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

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

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

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

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

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

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

Total liabilities . . . . . . . . . . 399,453 62,136 55 440 91,206 553,290
Senior exchangeable preferred stock . . . . 103,853 - - - - 103,853
Exchangeable preferred stock . . . . . . . - 192,500 (P) 192,500
Common stockholder's equity . . . . . . . . 201,878 108,600 40,573 41,025 (4,870)(M) 308,008
(190,198)(Q)
111,000 (P)
-------- -------- ------- ------- --------- ----------

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

</TABLE>

See Accompanying Notes to Pro Forma Financial Information

<PAGE>

NOTES TO PRO FORMA FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS)

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

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

Houston Detroit Milwaukee Total
------- ------- --------- -----

<S> <C> <C> <C> <C>
Year Ended December 31, 1995
----------------------------
Net revenues . . . . . . . . . . . $4,125 $7,757 $8,047 $19,929
Station operating expenses . . . . 4,032 7,082 4,777 15,891

Nine Months Ended September 30, 1995
------------------------------------
Net revenues . . . . . . . . . . . 3,229 5,619 5,972 14,820
Station operating expenses . . . . 3,312 5,275 3,605 12,192

Nine Months ended September 30, 1996
------------------------------------
Net revenues . . . . . . . . . . . 1,464 2,980 6,310 10,754
Station operating expenses . . . . 726 1,361 3,847 5,934

</TABLE>

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

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

1995 1995 1996
------------- ------------- -------------

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

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

</TABLE>

<PAGE>

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

<PAGE>

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

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

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

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

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

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

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

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

(M) The adjustment reflects (i) the application of the restricted
cash ($20,000) and borrowings under the Company's new $345
million credit agreement ($254,449) to finance the acquisition of
the Colfax Stations and the Omni Stations, net of the proceeds of
the pending station swaps and dispositions, (ii) the repayment of
the existing credit agreement ($105,108) and (iii) the
elimination of $4,870 of the Company's deferred financing costs
associated with the

<PAGE>

existing credit agreement, which will be recognized as an
extraordinary loss in the period the refinancing occurs.

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

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

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

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

</TABLE>

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

(P) The adjustment reflects (i) the sale of the 12% Exchangeable
Preferred Stock due 2009, net of related transaction costs
($192,500), (ii) the capital contribution of the proceeds from
the concurrent sale of Chancellor Broadcasting Company's 7%
Convertible Preferred Stock, net of related transaction costs
($96,000) and (iii) the capital contribution resulting from the
issuance of Chancellor Broadcasting Company's Class A Common
Stock ($15,000) pursuant to the agreement relating to the
acquisition of the Omni Stations.

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

<PAGE>

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

(a) Financial Statements of Business Acquired

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

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

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

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

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

ARTHUR ANDERSEN LLP

Washington, D.C.,
September 24, 1996

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

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

CURRENT ASSETS

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

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

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

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

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

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

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

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

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

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

</TABLE>

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

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

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

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

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

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

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

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

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

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

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

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

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

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

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

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

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

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

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

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

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

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

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

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

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

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

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

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

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

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

</TABLE>

The accompanying notes are an integral part of these statements.

<PAGE>

COLFAX COMMUNICATIONS, INC. RADIO GROUP

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

1. BASIS OF PRESENTATION:

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

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

Classical Acquisition Limited Partnership

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

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

Radio 570 Limited Partnership

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

Effective January 1, 1993, certain Class B Limited Partners were
admitted to the partnership. On September 15, 1995, a Class

<PAGE>

B Limited Partner was redeemed of his partnership interest. At
December 31, 1995, the Class B Limited Partners have a 9.25 percent
interest and Equity Group Holdings has a 89.75 percent interest.

Radio 100 Limited Partnership

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

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

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

Radio 100 of Maryland Limited Partnership

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

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

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

Partnership Allocations

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

<PAGE>

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

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Accounting

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

Barter Transactions

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

Income Taxes

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

Buildings and Leasehold Improvements

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

Furniture, Fixtures and Equipment

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

Intangible Assets

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

<PAGE>

Useful Life
-----------

<S> <C>

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

</TABLE>

Land

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

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

Estimates

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

Fair Value of Financial Instruments

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

The carrying amount reported in the balance sheets for cash,
accounts receivable, accounts payable and accrued liabilities,
approximate their fair value due to the immediate or short-term
maturity of such instruments. The carrying amount reported for
long-term debt approximates fair value due to the debt being priced at
floating rates (see Note 7 for additional information).

New Pronouncements

In March 1995, the FASB issued No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be

<PAGE>

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

4. PROPERTY AND EQUIPMENT:

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

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

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

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

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

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

</TABLE>

5. INTANGIBLES AND OTHER NONCURRENT ASSETS:

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

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

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

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

51,089,752 52,043,351 53,522,788
Less -- Accumulated amortization . . (18,706,165) (14,389,548) 9,288,083)
----------- ----------- ----------

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

<PAGE>

</TABLE>

6. RELATED-PARTY TRANSACTIONS:

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

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

<PAGE>

for CALP and $36,000 for Radio 100 of Maryland. Colfax Towers, Inc. is
owned by the shareholders of Colfax Communications, Inc.

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

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

7. LONG-TERM DEBT:

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

<S> <C>

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

===========

</TABLE>

The proceeds were used to repay the indebtedness of CALP
(described below), to make certain permitted distributions to partners
of the Borrowers, and for working capital purposes in the operations
of the Borrowers. Borrowings under this agreement bear interest at
floating rates equal to prime and/or LIBOR (as defined in the loan
agreement) plus an applicable margin determined by a leverage ratio.
The expiration date of the loan agreement is December 31, 2002. Under
the loan agreement, the Borrowers are required to maintain a specific
leverage ratio and certain ratios pertaining to cash flow coverage.

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

<PAGE>

8. COMMITMENTS:

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

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

===========

</TABLE>

9. RESTRUCTURING CHARGES:

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

10. SUBSEQUENT EVENTS:

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

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

<PAGE>

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

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

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

</TABLE>

<PAGE>

(b) Pro Forma Financial Information

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

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

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

<PAGE>

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

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

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

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

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

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

Income (loss) before
provision for income
taxes . . . . . . . . . . (7,731) (5,630) (121) 135 42 2,900 (720) (2,842) (13,967)
Provision for income
taxes . . . . . . . . . . . 3,800 (1,287) (93) - - - - 4,918 (G) 7,338
--------- ------- ----- ------ ------- ------- ------ ------- --------

Net income (loss) . . . . (11,531) $(4,343) $ (28) $ 135 $ 42 $ 2,900 $ (720) $(7,760) (21,305)
======= ===== ====== ======= ======= ====== =======

Dividends and accretion
on preferred stock . . . . - $38,503 (H) $ 38,503
--------- --------

Loss applicable to common
shares . . . . . . . . . . $ (11,531) $(59,808)
========= ========

Deficiency of earnings to
fixed charges and preferred
stock dividends and
accretion . . . . . . . . . $ 7,731 $ 78,065

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

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

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

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

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

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

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

Income (loss) before
provision for income
taxes . . . . . . . . . . . . (6,471) (5,745) (121) (8) (485) 1,551 (874) (2,138) (14,236)
Provision for income
taxes . . . . . . . . . . . . 2,829 (1,798) (93) - - - - 4,565 (G) 5,503
------- ------- ----- ------ ------- ------- ------ ------- --------

Net income (loss) . . . . . (9,300) $(3,947) $ (28) $ (8)$ (485) $ 1,551 $ (874) $(6,703) (19,794)
======= ===== ====== ======= ======= ====== =======

Dividends and accretion on
preferred stock . . . . . . . - 28,550 (H) 28,550
------- --------

Loss applicable to
common shares . . . . . . . . $(9,300) $(48,345)
======= ========

Deficiency of earnings to
fixed charges and preferred
stock dividends and
accretion . . . . . . . . . . $ 6,471 $ 61,875

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

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

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

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

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

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

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

Income (loss) before
provision for income taxes . . . . (614) (3,537) 2,515 2,422 3,159 51 (769) 3,227
Provision for income taxes . . . . . 2,201 - - - - - 3,302 (G) 5,503
-------- ------- ------ ------- ------- ------ ------- --------

Net income (loss) before
extraordinary loss . . . . . . . . (2,815) (3,537) 2,515 2,422 3,159 51 (4,072) (2,277)
Extraordinary loss on early
extinguishment of debt . . . . . . . 5,609 - - - - - (5,609)(I) -
-------- ------- ------ ------- ------- ------ ------- --------

Net income (loss) . . . . . . . . . (8,424) $(3,537) $2,515 $ 2,422 $ 3,159 $ 51 $ 1,537 (2,277)
======= ====== ======= ======= ====== =======

Dividends and accretion on
preferred stock . . . . . . . . . . . 8,187 $23,847 (H) 32,034
Loss on repurchase of
preferred stock . . . . . . . . . . . 16,570 (16,570)(J) -
-------- --------

Loss applicable to common shares . . $(33,181) $(34,311)
======== ========

Deficiency of earnings to fixed
charges and preferred stock
dividends and accretion . . . . . . . $ 8,801 $ 50,164

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

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

ASSETS

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

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

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

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

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

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

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

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

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

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

</TABLE>

See Accompanying Notes to Pro Forma Financial Information.

<PAGE>

NOTES TO PRO FORMA FINANCIAL INFORMATION
(dollars in thousands)

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

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

1995 1995 1996
------------ ---------- ----------

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

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

</TABLE>

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

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

<PAGE>

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

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

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

[S] [C]

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

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

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

<PAGE>

(M) The adjustment reflects the issuance of the 12% Exchangeable
Preferred Stock due 2009 net of transaction costs ($192,500) and
the capital contribution of the proceeds from the concurrent sale
of Chancellor Broadcasting Company's 7% Convertible Preferred
Stock, net of related transaction costs ($96,000).

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

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

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

4.1 Certificate of Designation for 12% Exchangeable Preferred
Stock

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

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

99.1 Press release dated January 23, 1997

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

<PAGE>

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

CHANCELLOR RADIO BROADCASTING COMPANY

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

<PAGE>

INDEX TO EXHIBITS

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

4.1 Certificate of Designation for 12% Exchangeable Preferred
Stock

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

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

99.1 Press release dated January 23, 1997

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

<PAGE>

EXHIBIT 1.2

<PAGE>

2,000,000 SHARES

CHANCELLOR RADIO BROADCASTING COMPANY

12% EXCHANGEABLE PREFERRED STOCK

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

January 17, 1997

BT Securities Corporation
Credit Suisse First Boston Corporation
Goldman, Sachs & Co.
NationsBanc Capital Markets, Inc.
Smith Barney Inc.
c/o BT Securities Corporation
130 Liberty Street
New York, New York 10006

Ladies and Gentlemen:

Chancellor Radio Broadcasting Company (the "Company"), a
-------
Delaware corporation and a wholly-owned subsidiary of Chancellor
Broadcasting Company, a Delaware corporation ("Chancellor"), hereby
----------
confirms its agreement with you (the "Initial Purchasers"), as set
------------------
forth below.

1. The Securities. Subject to the terms and conditions
--------------
herein contained, the Company proposes to issue and sell to the
Initial Purchasers 2,000,000 shares of its Exchangeable Preferred
Stock, par value $.01 per share (the "Shares"). The Shares are to be
------
exchangeable at the option of the Company, in whole but not in part,
on any dividend payment date for the Company's 12% Subordinated
Exchange Debentures due 2009 (the "Debentures"). The Debentures are
----------
to be issued under an indenture (the "Indenture") dated as of
---------
January 23, 1997 between the Company and U.S. Trust Company of Texas,
N.A., as trustee (the "Trustee"). The Shares and the Debentures are
-------
referred to herein collectively as the "Securities."
----------
The Securities will be offered and sold to the Initial

<PAGE>

Purchasers without being registered under the Securities Act of 1933,
as amended (the "Act"), in reliance on exemptions therefrom.
---

In connection with the sale of the Securities, the Company
has prepared a preliminary offering memorandum dated January 3, 1997
(the "Preliminary Memorandum") and a final offering memorandum dated
----------------------
January 17, 1997 (the "Final Memorandum"; the Preliminary Memorandum
----------------
and the Final Memorandum each herein being referred to as a
"Memorandum") setting forth or including a description of the terms of
----------
the Securities, the terms of the offering of the Securities, a
description of the Company and any material developments relating to
the Company occurring after the date of the most recent historical
financial statements included therein.

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

Concurrently with the sale of the Securities, Chancellor is
offering up to $115 million liquidation preference of its 7%
Convertible Preferred Stock (the "Convertible Preferred Stock"), and
---------------------------
the Company is entering into an amended and restated Credit Agreement
(the "New Credit Agreement"), to be dated as of the Closing Date,
--------------------
among the Company, Bankers Trust Company, as administrative agent and
a lender thereunder, and the other institutions party thereto, which
will provide for loans to the Company of up to $345,000,000. In
addition, the Company has entered into an agreement to acquire eight
radio stations from OmniAmerica Group (the "Omni Acquisition")
----------------
pursuant to a purchase agreement between the Company and OmniAmerica
Group dated May 15, 1996 (the "Omni Agreement") and has entered into
---- ---------
an agreement to acquire twelve radio stations from Colfax
Communications, Inc. (the "Colfax Acquisition") pursuant to a purchase
------------------
agreement between the Company and Colfax Communications, Inc. dated
August 24, 1996 (the "Colfax Agreement"). In connection with the Omni
Acquisition, the Company (i) on June 24, 1996, entered into an
agreement (the "American Radio Agreement") with American Radio Systems
Corporation ("American Radio") for, among other things, the exchange
of a radio station being acquired pursuant to the

<PAGE>

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

(a) Neither the Preliminary Memorandum as of the date
thereof nor the Final Memorandum nor any amendment or supplement
thereto as of the date thereof and at all times subsequent thereto up
to the Closing Date (as defined in Section 3 below) contained or
contains any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth
in this Section 2(a) do not apply to statements or omissions made in
reliance upon and in conformity with information relating to any of
the Initial Purchasers furnished to the Company in writing by the
Initial Purchasers expressly for use in the Preliminary Memorandum,
the Final Memorandum or any amendment or supplement thereto.

(b) Each of Chancellor, the Company and the subsidiaries of
the Company set forth on Schedule B hereto (collectively, the
"Subsidiaries"), has been duly incorporated and is validly existing
------------
and in good standing as a corporation under the laws of its
jurisdiction of incorporation, with all requisite corporate power and
authority to own or lease its properties and conduct its businesses,
as described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions where the ownership or leasing of its properties or the
conduct of its

<PAGE>

businesses requires such qualification, except where the failure to be
so qualified would not have a material adverse effect on the business,
condition (financial or other) or results of operations of Chancellor,
the Company and the Subsidiaries, taken as a whole, or on the
validity or enforceability of the Securities; each of Chancellor and
the Company immediately after the Closing Date will have the
authorized, issued and outstanding capitalization set forth in the
Final Memorandum (on the bases as are set forth in the Final
Memorandum); the outstanding shares of capital stock of each of
Chancellor, the Company, and the Subsidiaries have been, and as of the
Closing Date will be, duly authorized and validly issued, are and will
be fully paid and nonassessable and were not and will not be issued in
violation of any preemptive or similar rights; and except as otherwise
set forth in the Final Memorandum, all of the outstanding shares of
capital stock (i) of the Company, excluding the Company's existing
shares of 12 1/4% Series A Cumulative Exchangeable Preferred Stock
(the "Senior Preferred Stock") and the Shares, are, and as of the
----------------------
Closing Date will be, owned by Chancellor and (ii) of each of the
Subsidiaries are, and as of the Closing Date will be, owned directly
or indirectly by the Company. Except for the stock of each of the
Subsidiaries owned by the Company, and partnership interests in
partnerships owning certain of the Company's transmitter facilities,
the Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity. No
holders of securities of the Company are entitled to have such
securities registered under the registration statement required to be
filed by the Company pursuant to the Registration Rights Agreement
other than as expressly permitted thereby.

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

<PAGE>

personal liability by reason of being such holders.

(d) The Debentures have been duly authorized by the Company
for issuance and conform in all material respects to the description
thereof in the Final Memorandum. The Debentures, when executed by the
Company and authenticated by the Trustee in accordance with the
provisions of the Indenture and delivered upon the exchange of the
Shares, will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the Company,
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except that the enforcement
thereof may be subject to (i) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and remedies
generally and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).

(e) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under the
Indenture; the Indenture has been duly authorized by the Company and
meets the requirements for qualification under the Trust Indenture Act
of 1939, as amended (the "TIA") and, when executed and delivered by
---
the Company (assuming the due authorization, execution and delivery by
the Trustee), will constitute a valid and legally binding agreement of
the Company, enforceable against it in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally and (ii) general principles of equity and the discretion of
the court before which any proceeding therefor may be brought
(regardless of whether such enforcement is considered in a proceeding
in equity or at law).

(f) The Company has all requisite corporate power and
authority to execute and deliver the Registration Rights Agreement;
the Registration Rights Agreement has been duly authorized by the
Company and, when executed and delivered by the Company (assuming due
authorization, execution and delivery by you), will constitute a valid
and legally binding agreement of the Company enforceable against it in
accordance with its terms, except that (A) the enforcement thereof may
be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and (ii) general

<PAGE>

principles of equity and the discretion of the court before which any
proceeding therefor may be brought (regardless of whether such
enforcement is considered in a proceeding in equity or at law) and
(B) any rights to indemnity or contribution thereunder may be limited
by federal and state securities laws and public policy considerations.

(g) The Company has all requisite corporate power and
authority to execute and deliver this Agreement and, subsequent to the
filing of the Certificate of Designation, to issue and deliver the
Securities, to consummate the transactions contemplated hereby and to
consummate each of the other Transactions. This Agreement has been
duly authorized, executed and delivered by the Company. No consent,
approval, authorization or order of any court or governmental agency
or body (including, without limitation, the Federal Communications
Commission (the "FCC")) is required for the performance of this
---
Agreement by the Company or the consummation by the Company of the
transactions contemplated hereby, or the consummation of any of the
other Transactions, except such as have been obtained and such as may
be required under state securities or "Blue Sky" laws in connection
with the purchase and resale of the Securities by the Initial
Purchasers. In addition, no consent, approval, authorization or order
of any court or governmental agency or body (except for such consents,
approvals or authorizations as are required by the FCC or under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976) is required for
the performance by the Company of the transactions contemplated by the
Pending Agreements, and the Company has no reasonable basis to believe
that the transactions contemplated by the Pending Agreements will not
be consummated in accordance with their terms.

(h) None of Chancellor, the Company, or any of the
Subsidiaries is (i) in violation of its certificate of incorporation
or by-laws, (ii) in violation of any statute, judgment, decree, order,
rule or regulation applicable to Chancellor, the Company or any of the
Subsidiaries, which violation would have a material adverse effect on
the business, condition (financial or other) or results of operations
of Chancellor, the Company and the Subsidiaries, taken as a whole, or
on the validity or enforceability of the Securities, as the case may
be, or (iii) in default in the performance or observance of any
obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, note, lease,
license, franchise agreement, permit, certificate, contract or other
agreement or instrument to which Chancellor, the Company or any of the
Subsidiaries is a party or to which Chancellor, the Company or any of
the Subsidiaries is subject,

<PAGE>

which default would have a material adverse effect on the business,
condition (financial or other) or results of operations of Chancellor,
the Company or the Subsidiaries taken as a whole, or on the validity
or enforceability of the Securities, as the case may be.

(i) Neither the issuance and sale of the Securities nor the
execution, delivery and performance by the Company of this Agreement
or the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby nor the consummation of
the other Transactions will conflict with or constitute or result in a
breach or violation of any of (i) the terms or provisions of, or
constitute a default by the Company under any indenture, mortgage,
deed of trust, loan agreement, note, lease, license, franchise
agreement, or other agreement or instrument to which the Company is a
party or to which the Company or its respective properties is subject,
which conflict, breach, violation or default would have a material
adverse effect on the business, condition (financial or other) or
results of operations of the Company or on the validity or
enforceability of the Securities, as the case may be, (ii) the
certificate of incorporation or by-laws of the Company, as the same
will be in effect on the Closing Date, or (iii) (assuming compliance
with all applicable state securities and "Blue Sky" laws and assuming
the accuracy of the representations and warranties of the Initial
Purchasers in Section 8 hereof) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or other body
applicable to the Company or any of its respective properties, which
conflict, breach, violation or default would have a material adverse
effect on the business, condition (financial or other) or results of
operations of the Company or on the validity or enforceability of the
Securities, as the case may be.

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

<PAGE>

on a consistent basis, except as otherwise stated therein. Coopers &
Lybrand L.L.P., which has examined certain of such consolidated
financial statements and schedules as set forth in its reports
included in the Final Memorandum, is an independent public accounting
firm within the meaning of the Act and the rules and regulations
promulgated thereunder.

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

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

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

<PAGE>

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

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

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

<PAGE>

independent public accounting firm within the meaning of the Act and
the rules and regulations promulgated thereunder.

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

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

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

(s) Each of Chancellor, the Company and the Subsidiaries,
owns or possesses adequate licenses or other rights to use all
patents, trademarks, service marks, trade names, copyrights and
know-how necessary to conduct the businesses operated by it, and on
the Closing Date will possess such licenses, rights and know-how
necessary to conduct the businesses

<PAGE>

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

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

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

(v) There are no legal or governmental proceedings that
would be required to be described in a prospectus pursuant to the Act
that are not described in the Final Memorandum, nor are there any
contracts or other documents that would be required to be described in
a prospectus pursuant to the Act that have not been described in the
Final Memorandum. Except as described in the Final Memorandum, none
of Chancellor, the Company or any Subsidiary, is in default under any
material contract, has received a notice or claim of any such default
or has knowledge of any breach of any such contract by the other party
or parties thereto, except such defaults or breaches as would not,
individually or in the aggregate, have a material adverse effect on
the business, condition (financial or other) or results of operations
of Chancellor, the Company and the Subsidiaries, taken as a whole, or
on the validity or enforceability of the Securities, as the case may
be.

(w) Each of Chancellor, the Company and the

<PAGE>

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

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

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

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

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

<PAGE>

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

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

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

3. Purchase, Sale and Delivery of the Securities. On the
---------------------------------------------
basis of the representations, warranties, agreements and covenants
herein contained and subject to the terms and conditions herein set
forth, the Company agrees to issue and sell to each of the Initial
Purchasers, and each of the Initial Purchasers severally agrees to
purchase from the Company, at a price of $96.50 per share, the number
of Shares set forth opposite their respective names on Schedule A
hereto. The obligations of the Initial Purchasers under this
Agreement are several and not joint.

One or more certificates in definitive form for the Shares
that the Initial Purchasers have agreed to purchase hereunder, and in
such denomination or denominations and registered in such name or
names as each Initial Purchaser

<PAGE>

requests upon notice to the Company at least 48 hours prior to the
Closing Date, shall be delivered by or on behalf of the Company to the
Initial Purchasers, against payment by or on behalf of the Initial
Purchasers of the purchase price therefor, by wire transfer payable to
or upon the order of the Company in immediately available funds. Such
delivery of and payment for the Shares shall be made at the offices of
Cahill Gordon & Reindel, 80 Pine Street, New York, New York on or
about 9:00 A.M., New York City time, on January 23, 1997 (the Company
having requested, and the Initial Purchasers having agreed to such
date in order for certain conditions to the Initial Purchasers'
obligations to be able to be satisfied) or at such other place, time
or date as the Initial Purchasers and the Company may agree upon, such
time and date of delivery against payment being herein referred to as
the "Closing Date." The Company will make such certificate or
------------
certificates for the Shares available for checking and packaging by
the Initial Purchasers at the offices in New York, New York of BT
Securities Corporation at least 24 hours prior to the Closing Date.

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

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

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

(b) The Company will cooperate with the Initial Purchasers
in arranging for the qualification of the Securities for offering and
sale under the securities or "Blue Sky" laws of such jurisdictions as
the Initial Purchasers may designate and will continue such
qualifications in effect for as long as may be necessary to complete
the resale of the Securities by the Initial Purchasers; provided,
--------
however, that in connection therewith the
-------

<PAGE>

Company shall be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.

(c) If, at any time prior to the completion of the
distribution by the Initial Purchasers of the Shares or the Private
Exchange Preferred Stock, any event occurs as a result of which the
Final Memorandum as then amended or supplemented would include an
untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement
the Final Memorandum in order to comply with applicable law, the
Company will promptly notify the Initial Purchasers thereof and will
prepare, at the Company's expense, an amendment to the Final
Memorandum that corrects such statement or omission or effects such
compliance.

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

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

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

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

(h) None of the Company or any of its Affiliates will sell,
offer for sale or solicit offers to buy or otherwise

<PAGE>

negotiate in respect of any "security" (as defined in the Act) which
could be integrated with the sale of the Securities in a manner which
would require the registration under the Act of the Securities.

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

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

(k) The Company will use its best efforts to (i) permit the
Shares to be designated PORTAL securities in accordance with the rules
and regulations adopted by the NASD relating to trading in the Private
Offerings, Resales and Trading through Automated Linkages market (the
"Portal Market") and (ii) permit the Shares to be eligible for
-------------
clearance and settlement through The Depository Trust Company.

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

<PAGE>

Securities and (vii) the fees and expenses of the Trustee, including
fees and expenses of its counsel. If the issuance and sale of the
Securities provided for herein is not consummated because any
condition to the obligations of the Initial Purchasers set forth in
Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 11 hereof or because of any failure,
refusal or inability on the part of the Company to perform all
obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by the Initial
Purchasers, the Company will reimburse the Initial Purchasers upon
demand for all reasonable out-of-pocket expenses (including
reasonable counsel fees and disbursements) that shall have been
incurred by the Initial Purchasers in connection with the proposed
purchase and sale of the Securities.

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

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

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

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

<PAGE>

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

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

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

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

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

<PAGE>

all material respects, all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date;

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

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

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

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

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

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

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

All such documents, opinions, certificates and schedules
or instruments delivered pursuant to this Agreement

<PAGE>

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

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

9. Indemnification and Contribution. (a)The Company
--------------------------------
agrees to indemnify and hold harmless each of the Initial Purchasers,
and each person, if any, who controls any of the Initial Purchasers
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which such Initial

<PAGE>

Purchaser or such controlling person may become subject under the Act,
the Exchange Act or otherwise, insofar as any such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon:

(i) any untrue statement or alleged untrue statement of
any material fact contained in (A) any Memorandum or any amendment or
supplement thereto or (B) any application or other document, or any
amendment or supplement thereto, executed by the Company or based
upon written information furnished by or on behalf of the Company
filed in any jurisdiction in order to qualify the Securities under the
securities or "Blue Sky" laws thereof or filed with any securities
association or securities exchange (each an "Application"); or
-----------
(ii) the omission or alleged omission to state, in any
Memorandum or any amendment or supplement thereto, or any Application,
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading,

and will reimburse, as incurred, each Initial Purchaser and each such
controlling person for any legal or other expenses reasonably incurred
by such Initial Purchaser or such controlling person in connection
with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or
action; provided, however, that the Company will not be liable in any
-------- -------
such case to the extent that any such loss, claim, damage, or
liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any
Memorandum or any amendment or supplement thereto, or any Application
in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchasers specifically for use therein;
and provided, further, that the Company will not be liable to an
-------- -------
Initial Purchaser or any person controlling such Initial Purchaser
with respect to any such untrue statement or omission made in any
Preliminary Memorandum that is corrected in the Final Memorandum if
the person asserting any such loss, claim, damage or liability
purchased Securities from such Initial Purchaser in reliance upon a
Preliminary Memorandum but was not sent or given a copy of the Final
Memorandum (as amended or supplemented) at or prior to the written
confirmation of the sale of such Securities to such person, unless
such failure to deliver the Final Memorandum (as amended or
supplemented) was a result of noncompliance by the Company with
Section 5(c) of this Agreement. This indemnity agreement will be in
addition to any liability that the Company may otherwise have to the
indemnified parties.

<PAGE>

The Company shall not be liable under this paragraph (a) for any
settlement of any claim or action effected without its consent, which
consent shall not be unreasonably withheld or delayed.

(b) Each Initial Purchaser will, not jointly but
severally in proportion to its Initial Purchaser obligation to
purchase Shares hereunder, indemnify and hold harmless the Company,
its directors, its officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act against any losses, claims, damages or liabilities to
which the Company or any such director, officer or controlling person
may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained
in any Memorandum or any amendments or supplement thereto, or any
Application or (ii) the omission or the alleged omission to state
therein a material fact required to be stated in any Memorandum or any
amendment or supplement thereto, or any Application, or necessary to
make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the
Company by such Initial Purchaser specifically for use therein; and,
subject to the limitation set forth immediately preceding this clause,
will reimburse, on a monthly basis, any reasonable legal or other
expenses incurred by the Company or any such director, officer or
controlling person in connection with investigating or defending
against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action in respect thereof.
This indemnity agreement will be in addition to any liability that the
Initial Purchasers may otherwise have to the indemnified parties.
None of the Initial Purchasers shall be liable under this paragraph
(b) for any settlement of any claim or action effected without its
consent, which consent shall not be unreasonably withheld or delayed.

(c) Promptly after receipt by an indemnified party under
paragraphs (a) or (b) above of notice of the commencement of any
action for which such indemnified party is entitled to indemnification
under this Section 9, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 9, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party (i) will
not relieve it from any liability under paragraph (a) or (b) above
unless and to the extent it did

<PAGE>

not otherwise learn of such action and such omission results in the
forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above.
In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however,
-------- -------
that if (i) the indemnifying party has failed to assume the defense
thereof and employ such counsel or (ii) the named parties to any such
action (including any impleaded parties) include both the indemnifying
party and the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that
representation of such indemnifying party and such indemnified party
by the same counsel would be inappropriate under applicable standards
of professional conduct due to differing interests between them, then,
in each such case, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party
or parties and such indemnified party or parties shall have the right
to select separate counsel to defend such action on behalf of such
indemnified party or parties. After notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel
appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 9 for any legal or
other expenses, other than reasonable costs of investigation,
subsequently incurred by such indemnified party in connection with the
defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the immediately
preceding sentence (it being understood, however, that in connection
with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local
counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general
allegations or circumstances, designated by the Initial Purchasers in
the case of paragraph (a) of this Section 9 or the Company in the case
of paragraph (b) of this Section 9, representing the indemnified
parties under such paragraph (a) or paragraph (b), as the case may be,
who are parties to such action or actions) or (ii) the indemnifying
party has authorized in writing the employment of counsel for the
indemnified party at the expense of the indemnifying party. After
such notice from the indemnifying

<PAGE>

party to such indemnified party, the indemnifying party will not be
liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the consent of the
indemnifying party, unless such indemnified party waived in writing
its rights under this Section 9, in which case the indemnified party
may effect such a settlement without such consent.

(d) In circumstances in which the indemnity agreement
provided for in the preceding paragraphs of this Section 9 is
unenforceable although available by its terms, each indemnifying
party, in order to provide for just and equitable contribution, shall
contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect (i)
the relative benefits received by the indemnifying party or parties on
the one hand and the indemnified party on the other from the offering
of the Securities or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, not only such relative
benefits but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in
connection with the statements or omissions or alleged statements or
omissions that resulted in such losses, claims, damages or liabilities
(or actions in respect thereof). The relative benefits received by
the Company on the one hand and the Initial Purchasers on the other
shall be deemed to be in the same proportion as the total proceeds
from the offering (before deducting expenses) received by the Company
bear to the total discounts and commissions received by the Initial
Purchasers. The relative fault of the parties shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company,
on the one hand, or the Initial Purchasers, on the other, the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances. The Company and the
Initial Purchasers agree that it would not be equitable if the amount
of such contribution were determined by pro rata or per capita
allocation or by any other method of allocation that does not take
into account the equitable considerations referred to in the first
sentence of this paragraph (d). Notwithstanding any other provision
of this paragraph (d), the Initial Purchasers shall not be obligated
to make contributions hereunder that in the aggregate exceed the total
discounts and commissions received by the Initial Purchasers under
this Agreement, less the aggregate

<PAGE>

amount of any damages that the Initial Purchasers have otherwise been
required to pay by reason of the untrue or alleged untrue statements
or the omissions or alleged omissions to state a material fact, and no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For
purposes of this paragraph (d), each person, if any, who controls
either Initial Purchaser within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act shall have the same rights to
contribution as the Initial Purchasers, and each director of the
Company, each officer of the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to
contribution as the Company.

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

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

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

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

(iii) there shall have occurred any outbreak or escalation
of hostilities or other international or domestic

<PAGE>

calamity, crisis or change in political, financial or economic
conditions, the effect of which on the financial markets of the United
States is such as to make it, in the judgment of the Initial
Purchasers, impracticable or inadvisable to commence or continue the
offering of the Securities as contemplated by the Final Memorandum, as
amended as of the date hereof; or

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

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

12. Notices. All communications hereunder shall be in
-------
writing and, if sent to the Initial Purchasers, shall be mailed or
delivered or telecopied and confirmed in writing to BT Securities
Corporation, One Bankers Trust Plaza, 130 Liberty Street, New York,
New York 10006, Attention: Corporate Finance Department; if sent to
the Company, shall be mailed or delivered or telecopied and confirmed
in writing to the Company at 12655 North Central Expressway, Suite
405, Dallas, Texas 75243, Attention: Jacques Kerrest.

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

14. APPLICABLE LAW. THE VALIDITY AND
--------------

<PAGE>

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

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

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

<PAGE>

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

Very truly yours,

CHANCELLOR RADIO BROADCASTING COMPANY

By: /s/ STEVEN DINETZ
---------------------------------------
Name: Steven Dinetz
Title: President and Chief Financial
Officer

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

BT SECURITIES CORPORATION

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

CREDIT SUISSE FIRST BOSTON CORPORATION

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

GOLDMAN, SACHS & CO.

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

NATIONSBANC CAPITAL MARKETS, INC.

By: /s/ AUTHORIZED SIGNATORY OF
NATIONSBANC CAPITAL MARKETS, INC.
----------------------------------------

SMITH BARNEY INC.

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

<PAGE>

SCHEDULE A

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

BT Securities Corporation . . . . . . . . 800,000

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

Goldman, Sachs & Co. . . . . . . . . . . . 300,000

NationsBanc Capital Markets, Inc. . . . . 300,000

Smith Barney Inc. . . . . . . . . . . . . 300,000
_________
Total . . . . . . . . . . . . . . . . 2,000,000

=========

</TABLE>

<PAGE>

SCHEDULE B

Subsidiaries of Chancellor Radio
Broadcasting Company

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

<PAGE>

EXHIBIT 4.1

<PAGE>

<PAGE>
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL AND OTHER SPECIAL RIGHTS OF 12%
EXCHANGEABLE PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF

----------------------------------------------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

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

Chancellor Radio Broadcasting Company (the "Corporation"), a
corporation organized and existing under the General Corporation Law
of the State of Delaware, does hereby certify that, pursuant to
authority conferred upon the board of directors of the Corporation
(the "Board of Directors") by its Certificate of Incorporation, as
amended (hereinafter referred to as the "Certificate of
Incorporation"), and pursuant to the provisions of Section 151 of the
General Corporation Law of the State of Delaware, said Board of
Directors, by unanimous written consent dated January 10, 1997, duly
approved and adopted the following resolution (the "Resolution"):

RESOLVED, that, pursuant to the authority vested in the
Board of Directors by its Certificate of Incorporation, the
Board of Directors does hereby create, authorize and provide
for the issuance of 12% Exchangeable Preferred Stock, par
value $.01 per share, with a stated value of $100.00 per
share, consisting initially of 2,000,000 shares, having the
designations, preferences, relative, participating, optional
and other special rights and the qualifications, limitations
and restrictions thereof that are set forth in the
Certificate of Incorporation and in this Resolution as
follows:

(a) Designation. There is hereby created out of the
-----------
authorized and unissued shares of Preferred Stock of the Corporation a
class of Preferred Stock designated as the "12% Exchangeable Preferred
Stock". The number of shares constituting such class shall be
3,600,000, and are referred to as the "Exchangeable Preferred Stock."
The liquidation preference of the Exchangeable Preferred Stock shall
be $100.00 per share.

(b) Rank. The Exchangeable Preferred Stock shall, with
----
respect to dividends and distributions upon liquidation, winding-up
and dissolution of the Corporation, rank (i) senior to all classes of
common stock of the Corporation (including, without limitation, the
Common Stock) and to each other class of Capital Stock of the
Corporation or series of Preferred Stock of the Corporation hereafter
created the terms of which expressly provide that it ranks junior to
the Exchangeable Preferred Stock as to dividends and distributions
upon liquidation, winding-up and dissolution of the Corporation
(collectively referred to,

<PAGE>

<PAGE>
together with all classes of common stock of the Corporation, as
"Junior Stock"); (ii) on a parity with any class of Capital Stock of
the Corporation or series of Preferred Stock of the Corporation
hereafter created the terms of which expressly provide that such class
or series will rank on a parity with the Exchangeable Preferred Stock
as to dividends and distributions upon liquidation, winding-up and
dissolution (collectively referred to as "Parity Stock"); provided
that any such Parity Stock that was not approved by the Holders in
accordance with paragraph (f)(ii)(A) hereof (to the extent such
approval is required) shall be deemed to be Junior Stock and not
Parity Stock; and (iii) junior to the 12 1/4 % Series A Cumulative
Exchangeable Preferred Stock (the "Senior Exchangeable Preferred
Stock") and each class of Capital Stock of the Corporation or series
of Preferred Stock of the Corporation hereafter created that has been
approved by the Holders in accordance with paragraph (f)(ii)(B) hereof
and the terms of which do not expressly provide that such class or
series will rank junior to, or on a parity with, the Exchangeable
Preferred Stock as to dividends and distributions upon liquidation,
winding-up and dissolution of the Company (collectively referred to as
"Senior Stock").

(i) Beginning on the Issue Date, the Holders of the
outstanding shares of Exchangeable Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, distributions
in the form of cash dividends on each share of Exchangeable
Preferred Stock, at a rate per annum equal to 12% of the
--- -----
liquidation preference per share of the Exchangeable Preferred
Stock, payable semi-annually; provided that such rate per annum
--------
is subject to increase as provided for in clause (viii) below.
No interest shall be payable in respect of any dividends that may
be in arrears. All dividends shall be cumulative, whether or not
earned or declared, on a daily basis from the date of issuance of
the Exchangeable Preferred Stock and shall be payable semi-
annually in arrears on each Dividend Payment Date, commencing on
the first Dividend Payment Date after the Issue Date, provided
--------
that if any dividend (including Additional Dividends, if any)
payable on any Dividend Payment Date on or before January 15,
2002 is not declared and paid in full in cash on such Dividend
Payment Date, the amount payable as dividends on such Dividend
Payment Date that is not paid in cash on such Dividend Payment
Date shall be paid in additional whole shares of Exchangeable
Preferred Stock (calculated by dividing (x) the amount of the
cash dividend payable to each holder of record of the
Exchangeable Preferred Stock on the basis of all shares held of
record by such holder, whether evidenced by one or more
certificates, by (y) $100.00, with amounts in respect of any
partial shares to be paid in cash by the Corporation) on such
Dividend Payment Date and shall be deemed paid in full and shall
not accumulate. Each dividend shall be payable to Holders of
record of the Exchangeable Preferred Stock as

<PAGE>

<PAGE>
they appear on the stock books of the Corporation on the Dividend
Record Date immediately preceding the related Dividend Payment
Date. Dividends shall cease to accumulate in respect of the
Exchangeable Preferred Stock on the Exchange Date or on the date
of their earlier redemption unless the Corporation shall have
failed to issue the appropriate aggregate principal amount of
Exchange Debentures in respect of the Exchangeable Preferred
Stock on such Exchange Date or shall have failed to pay the
relevant redemption price on the date fixed for redemption.

(ii) All dividends paid with respect to shares of the
Exchangeable Preferred Stock pursuant to paragraph (c)(i) shall
be paid pro rata to the Holders entitled thereto.
--- ----
(iii) Nothing herein contained shall in any way or under any
circumstances be construed or deemed to require the Board of
Directors to declare, or the Corporation to pay or set apart for
payment, any dividends on shares of the Exchangeable Preferred
Stock at any time.

(iv) Dividends on account of arrears for any past Dividend
Period and dividends in connection with any optional redemption
pursuant to paragraph (e)(i) may be declared and paid at any
time, without reference to any regular Dividend Payment Date, to
Holders of record on such date, not more than forty-five (45)
days prior to the payment thereof, as may be fixed by the Board
of Directors of the Corporation.

(v) No full dividends shall be declared by the Board of
Directors or paid or set apart for payment by the Corporation on
any Parity Stock for any period unless full cumulative dividends
have been or contemporaneously are declared and paid (or are
deemed declared and paid) in full, or declared and, if payable in
cash, a sum in cash set apart sufficient for such payment, on the
Exchangeable Preferred Stock for all Dividend Periods terminating
on or prior to the date of payment of such full dividends on such
Parity Stock. If any dividends are not so paid, all dividends
declared upon shares of the Exchangeable Preferred Stock and any
other Parity Stock shall be declared pro rata so that the amount
--- ----
of dividends declared per share on the Exchangeable Preferred
Stock and such Parity Stock shall in all cases bear to each other
the same ratio that accrued and unpaid dividends per share on the
Exchangeable Preferred Stock and such Parity Stock bear to each
other.

(vi) (A) Holders of shares of the Exchangeable Preferred
Stock shall be entitled to receive the dividends provided for in
paragraph (c)(i) hereof in preference to and in priority over any
dividends upon any of the Junior Stock.

(B) So long as any share of the Exchangeable Preferred
Stock is outstanding, the Corporation shall not declare, pay or
set apart for payment any dividend on any of the Junior Stock or
make any payment on account of, or set apart for

<PAGE>

<PAGE>
payment money for a sinking or other similar fund for, the
purchase, redemption or other retirement of, any of the Junior
Stock or any warrants, rights, calls or options exercisable for
or convertible into any of the Junior Stock whether in cash,
obligations or shares of the Corporation or other property (other
than dividends in Junior Stock to the holders of Junior Stock),
and shall not permit any corporation or other entity directly or
indirectly controlled by the Corporation to purchase or redeem
any of the Junior Stock or any such warrants, rights, calls or
options unless full cumulative dividends determined in accordance
herewith on the Exchangeable Preferred Stock have been paid (or
are deemed paid) in full or declared and, if payable in cash, a
sum in cash set apart sufficient for such payment on the
Exchangeable Preferred Stock for all Dividend Periods terminating
on or prior to the date of such dividends or payments on such
Junior Stock.

(C) So long as any share of the Exchangeable Preferred
Stock is outstanding, the Corporation shall not make any payment
on account of, or set apart for payment money for a sinking or
other similar fund for, the purchase, redemption or other
retirement of, any of the Parity Stock or any warrants, rights,
calls or options exercisable for or convertible into any of the
Parity Stock, and shall not permit any corporation or other
entity directly or indirectly controlled by the Corporation to
purchase or redeem any of the Parity Stock or any such warrants,
rights, calls or options unless full cumulative dividends
determined in accordance herewith on the Exchangeable Preferred
Stock have been paid (or are deemed paid) in full.

(vii) Dividends payable on the Exchangeable Preferred Stock
for any period less than a year shall be computed on the basis of
a 360-day year of twelve 30-day months and the actual number of
days elapsed in the period for which payable. The amount of
Additional Dividends will be determined consistent with the
preceding sentence and by multiplying the applicable Additional
Dividends by a fraction, the numerator of which is the number of
days such rate was applicable during any Interest Period and the
denominator of which is 360.

(viii) (A) If the Corporation fails to file an Exchange Offer
Registration Statement or a Shelf Registration Statement (in the
circumstances described below) within 90 days of the Issue Date,
or such Exchange Offer Registration Statement or Shelf
Registration Statement fails to become effective within 180 days
of the Issue Date or the Exchange Offer is not consummated within
225 days of the Issue Date, then, as liquidated damages,
additional dividends (the "Additional Dividends") shall become
payable with respect to the Exchangeable Preferred Stock as set
forth in paragraphs (B), (C) and (D) below, respectively.

(B) If the Exchange Offer Registration Statement is not
filed within 90 days of the Issue Date, or if requested

<PAGE>

<PAGE>
to be filed on behalf of (1) a Holder who is unable to
participate in the Exchange Offer or who, after the Exchange
Offer, would not receive freely transferable shares of preferred
stock in the Exchange Offer (the obligation of a broker-dealer to
deliver a prospectus in connection with sales of such preferred
stock being deemed not to affect the free transferability of such
shares of preferred stock) or (2) Holders of not less than a
majority of Exchangeable Preferred Stock who have determined
based on advice of counsel that their interests would be
adversely affected by consummation of the Exchange Offer, the
Shelf Registration Statement is not filed within 90 days
following the Issue Date, Additional Dividends shall be payable
on the Exchangeable Preferred Stock by increasing the dividend
rate set forth in paragraph (c)(i) hereof by 0.5% per annum on
the liquidation preference for the first 90 days commencing on
the 91st day after the Issue Date, such Additional Dividends
increasing by an additional 0.5% per annum on the liquidation
preference at the beginning of each subsequent 90-day period.

(C) If the Exchange Offer Registration Statement is not
effective within 180 days of the Issue Date or, if requested to
be filed on behalf of Holders in the circumstances set forth in
clauses (1) or (2) of paragraph (viii)(B) above, the Shelf
Registration Statement is not declared effective within 180 days
following the Issue Date, Additional Dividends shall be payable
on the Exchangeable Preferred Stock by increasing the dividend
rate set forth in paragraph (c)(i) hereof by 0.5% per annum on
the then effective liquidation preference for the first 90 days
commencing on the 181st day after the Issue Date, such Additional
Dividends increasing by an additional 0.5% per annum on the then
effective liquidation preference at the beginning of each
subsequent 90-day period.

(D) If (1) the Corporation has not exchanged all of the
shares of Exchangeable Preferred Stock validly tendered in
accordance with the terms of the Exchange Offer on or prior to
225 days after the Issue Date or (2) the Exchange Offer
Registration Statement ceases to be effective at any time prior
to the time that the Exchange Offer is consummated or (3) the
Shelf Registration Statement has been declared effective, if
requested to be filed on behalf of Holders in the circumstances
set forth in clauses (1) or (2) of paragraph (viii)(B) above, and
the Shelf Registration Statement subsequently ceases to be
effective at any time prior to the third anniversary of the Issue
Date (unless all of the Exchangeable Preferred Stock registered
thereunder has been sold thereunder or all such shares may be
transferred in accordance with Rule 144(k) (or any successor
rule) under the Securities Act of 1933, as amended), then
Additional Dividends shall be payable on the Exchangeable
Preferred Stock by increasing the dividend rate set forth in
paragraph (c)(i) hereof by 0.5% per annum on the liquidation
preference for the first 90 days commencing on (I) the 226th day
after the Issue Date with respect to the Exchangeable

<PAGE>

<PAGE>
Preferred Stock validly tendered and not exchanged by the
Corporation, in the case of (1) above, or (II) the day the
Exchange Offer Registration Statement ceases to be effective or
usable for its intended purpose in the case of (2) above, or
(III) the day such Shelf Registration Statement ceases to be
effective in the case of (3) above, such Additional Dividends
increasing by an additional 0.5% per annum on the liquidation
preference at the beginning of each subsequent 90-day period.

(E) Notwithstanding paragraphs (A)-(D) of this para-
graph (c), the aggregate amount of all Additional Dividends
payable hereunder shall not exceed in the aggregate 1.0% per
annum on the liquidation preference. In addition (1) upon the
filing of the Exchange Offer Registration Statement or Shelf
Registration Statement (in the case of paragraph (B) above),
(2) upon the effectiveness of the Exchange Offer Registration
Statement or Shelf Registration Statement (in the case of
paragraph (C) above), or (3) upon the exchange of Exchange
Preferred for the Exchangeable Preferred Stock tendered (in the
case of paragraph (D)(1) above), or upon the effectiveness of the
Exchange Offer Registration Statement that had ceased to remain
effective (in the case of paragraph (D)(2) above), or upon the
effectiveness of the Shelf Registration Statement that had ceased
to remain effective (in the case of paragraph (D)(3) above), the
dividend rate on the Exchangeable Preferred Stock shall revert to
the dividend rate set forth in paragraph (c)(i) hereof and
Additional Dividends on the Exchangeable Preferred Stock shall
cease to be payable.

(d) Liquidation Preference.
----------------------

(i) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the Holders of shares of Exchangeable Preferred
Stock then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its
stockholders an amount in cash equal to the liquidation
preference for each share outstanding, plus an amount in cash
equal to accrued and unpaid dividends thereon to the date fixed
for liquidation, dissolution or winding up (including an amount
equal to a prorated dividend for the period from the last
Dividend Payment Date to the date fixed for liquidation,
dissolution or winding up) before any payment shall be made or
any assets distributed to the holders of any of the Junior Stock
including, without limitation, common stock of the Corporation.
Except as provided in the preceding sentence, Holders of
Exchangeable Preferred Stock shall not be entitled to any
distribution in the event of any liquidation, dissolution or
winding up of the affairs of the Corporation. If the assets of
the Corporation are not sufficient to pay in full the liquidation
payments payable to the Holders of outstanding shares of the
Exchangeable Preferred Stock and all Parity Stock, then the
holders of all such shares shall share equally and ratably in
such distribution of assets in

<PAGE>

<PAGE>
proportion to the full liquidation preference, including all
accrued and unpaid dividends to which each is entitled.

(ii) For the purposes of this paragraph (d), neither the
sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially
all of the property or assets of the Corporation nor the
consolidation or merger of the Corporation with or into one or
more entities shall be deemed to be a liquidation, dissolution or
winding up of the affairs of the Corporation.

(e) Redemption.
----------
(i) Optional Redemption. (A) The Corporation may, at the
-------------------
option of the Board of Directors, redeem at any time on or after
January 15, 2002, subject to contractual and other restrictions
with respect thereto and from any source of funds legally
available therefor, in whole or in part, in the manner provided
for in paragraph (e)(iii) hereof, any or all of the shares of the
Exchangeable Preferred Stock, at the redemption prices (expressed
as a percentage of the liquidation preference) set forth below
plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share (including an amount
in cash equal to a prorated dividend for the period from the
Dividend Payment Date immediately prior to the Redemption Date to
the Redemption Date) (the "Optional Redemption Price") if
redeemed during the 12-month period beginning January 15 of each
of the years set forth below:

2002 . . . . . . . . . . . . . . . . . . 106.00%
2003 . . . . . . . . . . . . . . . . . . 104.80%
2004 . . . . . . . . . . . . . . . . . . 103.60%
2005 . . . . . . . . . . . . . . . . . . 102.40%
2006 . . . . . . . . . . . . . . . . . . 101.20%
2007 and thereafter . . . . . . . . . . . 100.00%

</TABLE>

; provided that no redemption pursuant to this paragraph
(e)(i)(A) shall be authorized or made unless prior thereto full
accrued and unpaid dividends are declared and paid in full, or
declared and a sum in cash set apart sufficient for such payment,
on the Exchangeable Preferred Stock for all Dividend Periods
terminating on or prior to the Redemption Date.

(B) In addition to the foregoing paragraph (e)(i)(A), on or
prior to January 15, 2000, the Corporation may, at its option,
use the net cash proceeds of one or more Public Equity Offerings
to redeem from any source of funds legally available therefor, in
the manner provided for in paragraph (e)(iii) hereof, the
Exchangeable Preferred Stock, in part, at a redemption price of
112% of the liquidation preference thereof plus an amount in cash
equal to all accumulated and unpaid dividends to the redemption
date (including an amount in cash equal to a prorated dividend
for the period from the Dividend Payment Date immediately

<PAGE>

<PAGE>
prior to the redemption date to the redemption date) (the "Cash
Proceeds Redemption Price"); provided, however, that after any
-------- -------
such redemption, there must be at least $150,000,000 aggregate
liquidation preference of Exchangeable Preferred Stock
outstanding. Any such redemption pursuant to this paragraph
(e)(i)(B) must occur on or prior to 60 days after the receipt by
the Corporation of the proceeds of each Public Equity Offering.

(C) In the event of a redemption pursuant to para-
graph (e)(i)(A) or (e)(i)(B) hereof of only a portion of the then
outstanding shares of the Exchangeable Preferred Stock, the
Corporation shall effect such redemption on a pro rata basis
--- ----
according to the number of shares held by each Holder of the
Exchangeable Preferred Stock, except that the Corporation may
redeem such shares held by Holders of fewer than 100 shares (or
shares held by Holders who would hold less than 100 shares as a
result of such redemption), as may be determined by the
Corporation.

(D) In addition to the foregoing paragraphs (e)(i)(A), and
(e)(i)(B), prior to January 15, 1999, upon the occurrence of a
Change of Control, the Company will have the option to redeem the
Exchangeable Preferred Stock in whole but not in part (a "Change
of Control Redemption") at a redemption price equal to 112% of
the liquidation preference thereof (the "Change of Control
Redemption Price"), together with accrued and unpaid dividends to
the date of redemption. In order to effect a Change of Control
Redemption, the Company must send a notice to each Holder within
30 days following the date the Change of Control occurred,
stating that the Company is effecting a Change of Control
Redemption in lieu of a Change of Control Offer.

(ii) Mandatory Redemption. On January 15, 2009, the
--------------------
Corporation shall redeem, to the extent of funds legally
available therefor, in the manner provided for in paragraph
(e)(iii) hereof, all of the shares of the Exchangeable Preferred
Stock then outstanding at a redemption price equal to 100% of the
liquidation preference per share, plus, without duplication, an
amount in cash equal to all accumulated and unpaid dividends per
share (including an amount equal to a prorated dividend for the
period from the Dividend Payment Date immediately prior to the
Redemption Date to the Redemption Date) (the "Mandatory
Redemption Price").

(iii) Procedures for Redemption. (A) At least thirty (30)
--------------------------
days and not more than sixty (60) days prior to the date fixed
for any redemption of the Exchangeable Preferred Stock, written
notice (the "Redemption Notice") shall be given by first class
mail, postage prepaid, to each Holder of record on the record
date fixed for such redemption of the Exchangeable Preferred
Stock at such Holder's address as it appears on the stock books
of the Corporation, provided that no failure to give such notice
--------
nor any deficiency therein shall affect the validity of the
procedure for the

<PAGE>

<PAGE>
redemption of any shares of Exchangeable Preferred Stock to be
redeemed except as to the Holder or Holders to whom the
Corporation has failed to give said notice or except as to the
Holder or Holders whose notice was defective. The Redemption
Notice shall state:

(1) whether the redemption is pursuant to paragraph
(e)(i)(A), (e)(i)(B),(e)(i)(D) or (e)(ii) hereof;

(2) the Optional Redemption Price, the Mandatory
Redemption Price, the Change of Control Redemption Price or
the Cash Proceeds Redemption Price, as the case may be;

(3) whether all or less than all the outstanding
shares of the Exchangeable Preferred Stock are to be
redeemed and the total number of shares of the Exchangeable
Preferred Stock being redeemed;

(4) the date fixed for redemption;

(5) that the Holder is to surrender to the
Corporation, in the manner, at the place or places and at
the price designated, his certificate or certificates
representing the shares of Exchangeable Preferred Stock to
be redeemed; and

(6) that dividends on the shares of the Exchangeable
Preferred Stock to be redeemed shall cease to accumulate on
such Redemption Date unless the Corporation defaults in the
payment of the Optional Redemption Price, the Mandatory
Redemption Price, the Change of Control Redemption Price or
the Cash Proceeds Redemption Price, as the case may be.

(B) Each Holder of Exchangeable Preferred Stock called for
redemption shall surrender the certificate or certificates
representing such shares of Exchangeable Preferred Stock to the
Corporation, duly endorsed (or otherwise in proper form for
transfer, as determined by the Corporation), in the manner and at
the place designated in the Redemption Notice, and on the
Redemption Date the full Optional Redemption Price, Mandatory
Redemption Price, the Change of Control Redemption Price or Cash
Proceeds Redemption Price, as the case may be, for such shares
shall be payable in cash to the Person whose name appears on such
certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the
event that less than all of the shares represented by any such
certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares.

(C) On and after the Redemption Date, unless the
Corporation defaults in the payment in full of the applicable
redemption price, dividends on the Exchangeable Preferred Stock
called for redemption shall cease to

<PAGE>

<PAGE>
accumulate on the Redemption Date, and all rights of the Holders
of redeemed shares shall terminate with respect thereto on the
Redemption Date, other than the right to receive the Optional
Redemption Price, the Mandatory Redemption Price, the Change of
Control Redemption Price or the Cash Proceeds Redemption Price,
as the case may be, without interest; provided, however, that if
-------- -------
a notice of redemption shall have been given as provided in
paragraph (iii)(A) above and the funds necessary for redemption
(including an amount in respect of all dividends that will accrue
to the Redemption Date) shall have been irrevocably deposited in
trust for the equal and ratable benefit for the Holders of the
shares to be redeemed, then, at the close of business on the day
on which such funds are segregated and set aside, the Holders of
the shares to be redeemed shall cease to be stockholders of the
Corporation and shall be entitled only to receive the Optional
Redemption Price, the Mandatory Redemption Price, the Change of
Control Redemption Price or the Cash Redemption Price, as the
case may be, without interest.

(f) Voting Rights.
-------------

(i) The Holders of Exchangeable Preferred Stock, except as
otherwise required under Delaware law or as set forth in
paragraphs (ii), (iii) and (iv) below, shall not be entitled or
permitted to vote on any matter required or permitted to be voted
upon by the stockholders of the Corporation.

(ii) (A) So long as any shares of the Exchangeable Preferred
Stock are outstanding, the Corporation shall not authorize any
class of Senior Stock without the affirmative vote or consent of
Holders of at least a majority of the outstanding shares of
Exchangeable Preferred Stock, voting or consenting, as the case
may be, as one class, given in person or by proxy, either in
writing or by resolution adopted at an annual or special meeting.

(B) So long as any shares of the Exchangeable
Preferred Stock are outstanding, the Corporation shall not
authorize any class of Parity Stock without the affirmative vote
or consent of Holders of at least a majority of the then
outstanding shares of Exchangeable Preferred Stock, voting or
consenting, as the case may be, as one class, given in person or
by proxy, either in writing or by resolution adopted at an annual
or special meeting; provided, however, that no such vote or
-------- -------
consent shall be necessary in connection with the authorization
of the Exchange Preferred Stock with an aggregate number of
authorized shares not to exceed the aggregate authorized number
of shares of Exchangeable Preferred Stock. Notwithstanding the
foregoing sentence, the Corporation may authorize up to
$50,000,000 initial liquidation preference of other Parity Stock
(plus Parity Stock payable as dividends thereon in lieu of cash
dividends) without the vote described in the foregoing sentence.

<PAGE>

(C) So long as any shares of the Exchangeable Preferred
Stock are outstanding, the Corporation shall not amend this
Certificate of Designation so as to affect adversely the
specified rights, preferences, privileges or voting rights of the
Exchangeable Preferred Stock or to authorize the issuance of any
additional shares of Exchangeable Preferred Stock without the
affirmative vote or consent of Holders of at least a majority of
the issued and outstanding shares of Exchangeable Preferred
Stock, voting or consenting, as the case may be, as one class,
given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting.

(D) Prior to the exchange of Exchangeable Preferred Stock
for Exchange Debentures, the Corporation shall not amend or
modify the Indenture for the Exchange Debentures in the form as
executed on the Issue Date (the "Indenture") (except as expressly
provided therein in respect of amendments without the consent of
Holders of Exchange Debentures) without the affirmative vote or
consent of Holders of at least a majority of the shares of
Exchangeable Preferred Stock then outstanding, voting or
consenting, as the case may be, as one class, given in person or
by proxy, either in writing or by resolution adopted at an annual
or special meeting.

(E) Except as set forth in paragraphs (f)(ii)(A),
(f)(ii)(B) and (f)(ii)(C) above, (x) the creation, authorization
or issuance of any shares of any Junior Stock, Parity Stock or
Senior Stock or (y) the increase or decrease in the amount of
authorized Capital Stock of any class, including Preferred Stock,
shall not require the consent of Holders of Senior Exchangeable
Preferred Stock and shall not be deemed to affect adversely the
rights, preferences, privileges or voting rights of shares of
Exchangeable Preferred Stock.

(iii) Without the affirmative vote or consent of Holders of a
majority of the issued and outstanding shares of Exchangeable
Preferred Stock, voting or consenting, as the case may be, as one
class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting, the
Corporation shall not, in a single transaction or series of
related transactions, consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, another Person or adopt a
plan of liquidation unless: (A) either (1) the Corporation is
the surviving or continuing Person or (2) the Person (if other
than the Corporation) formed by such consolidation or into which
the Corporation is merged or the Person that acquires by
conveyance, transfer or lease the properties and assets of the
Corporation substantially as an entirety or in the case of a plan
of liquidation, the Person to which assets of the Corporation
have been transferred, shall be a corporation, partnership or
trust organized and existing under the laws of the United States
or any State thereof or the District of

<PAGE>

<PAGE>
Columbia; (B) the Exchangeable Preferred Stock shall be converted
into or exchanged for and shall become shares of such successor,
transferee or resulting Person, having in respect of such
successor, transferee or resulting Person the same powers,
preferences and relative, participating, optional or other
special rights and the qualifications, limitations or
restrictions thereon, that the Exchangeable Preferred Stock had
immediately prior to such transaction; (C) immediately after
giving effect to such transaction and the use of the proceeds
therefrom (on a pro forma basis, including giving effect to any
Indebtedness incurred or anticipated to be incurred in connection
with such transaction), the Corporation (in the case of
clause (1) of the foregoing clause (A)) or such Person (in the
case of clause (2) of the foregoing clause (A)) shall be able to
incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under paragraph (l)(i) hereof;
(D) immediately after giving effect to such transactions, no
Voting Rights Triggering Event shall have occurred or be
continuing; and (E) the Corporation has delivered to the transfer
agent for the Exchangeable Preferred Stock prior to the
consummation of the proposed transaction an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation,
merger or transfer complies with the terms hereof and that all
conditions precedent herein relating to such transaction have
been satisfied.

For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series
of related transactions) of all or substantially all of the
properties or assets of one or more Subsidiaries of the
Corporation, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Corporation
shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.

(iv) (A) If (1) after January 15, 2002 cash dividends on the
Exchangeable Preferred Stock are in arrears and unpaid for three
or more Dividend Periods (whether or not consecutive) (a
"Dividend Default"); (2) the Corporation fails to redeem all of
the then outstanding shares of Exchangeable Preferred Stock on
January 15, 2009 or otherwise fails to discharge any redemption
obligation with respect to the Exchangeable Preferred Stock; (3)
the Corporation fails to make a Change of Control Offer (whether
pursuant to the terms of paragraph (h)(v) or otherwise) following
a Change of Control if such Change of Control Offer is required
by paragraph (h) hereof or fails to purchase shares of
Exchangeable Preferred Stock from Holders who elect to have such
shares purchased pursuant to the Change of Control Offer (unless,
in either case, the Corporation has decided to effect a Change of
Control Redemption in lieu of such Change of Control Offer
pursuant to the terms of paragraph (e)(i)(D)); (4) the
Corporation breaches or violates one of the provisions set forth
in any of paragraphs (l)(i), (l)(ii) or (l)(iii) hereof and the

<PAGE>

<PAGE>
breach or violation continues for a period of 30 days or more
after the Corporation receives notice thereof specifying the
default from the holders of at least 25% of the shares of
Exchangeable Preferred Stock then outstanding or (5) the
Corporation fails to pay at the final stated maturity (giving
effect to any extensions thereof) the principal amount of any
Indebtedness of the Corporation or any Subsidiary of the
Corporation, or the final stated maturity of any such
Indebtedness is accelerated, if the aggregate principal amount of
such Indebtedness, together with the aggregate principal amount
of any other such Indebtedness in default for failure to pay
principal at the final stated maturity (giving effect to any
extensions thereof) or that has been accelerated, aggregates
$5,000,000 or more at one time, in each case, after a 10-day
period during which such default shall not have been cured or
such acceleration rescinded, then in the case of any of clauses
(1)-(5) the number of directors constituting the Board of
Directors shall be adjusted by the number, if any, necessary to
permit the Holders of Exchangeable Preferred Stock, voting
separately and as one class (together with the holders of any
Parity Stock having similar rights), to elect the lesser of two
directors or 25% of the members of the Board of Directors. Each
such event described in clauses (1), (2), (3), (4) and (5) is a
"Voting Rights Triggering Event." Holders of a majority of the
issued and outstanding shares of Exchangeable Preferred Stock,
voting separately and as one class (together with the holders of
any Parity Stock having similar rights), shall have the exclusive
right to elect the lesser of two directors or 25% of the members
of the Board of Directors at a meeting therefor called upon
occurrence of such Voting Rights Triggering Event, and at every
subsequent meeting at which the terms of office of the directors
so elected by the Holders of the Exchangeable Preferred Stock
expire (other than as described in (f)(iv)(B) below). The voting
rights provided herein shall be the exclusive remedy at law or in
equity of the holders of the Exchangeable Preferred Stock for any
Voting Rights Triggering Event.

(B) The right of the Holders of Exchangeable Preferred
Stock voting separately and as a class (together with the holders
of any Parity Stock then having similar rights) to elect members
of the Board of Directors as set forth in subparagraph (f)(iv)(A)
above shall continue until such time as (x) in the event such
right arises due to a Dividend Default, all accumulated dividends
that are in arrears on the Exchangeable Preferred Stock are paid
in full in cash; and (y) in all other cases, the failure, breach
or default giving rise to such Voting Rights Triggering Event is
remedied or waived by the holders of at least a majority of the
shares of Exchangeable Preferred Stock then outstanding and
entitled to vote thereon, at which time (1) the special right of
the Holders of Exchangeable Preferred Stock so to vote as a class
for the election of directors and (2) the term of office of the
directors elected by the Holders of the Exchangeable Preferred
Stock shall each terminate and

<PAGE>

<PAGE>
the directors elected by the holders of Common Stock shall
constitute the entire Board of Directors. At any time after
voting power to elect directors shall have become vested and be
continuing in the Holders of Exchangeable Preferred Stock
pursuant to paragraph (f)(iv) hereof, or if vacancies shall exist
in the offices of directors elected by the Holders of
Exchangeable Preferred Stock, a proper officer of the Corporation
may, and upon the written request of the Holders of record of at
least twenty-five percent (25%) of the shares of Exchangeable
Preferred Stock then outstanding addressed to the secretary of
the Corporation shall, call a special meeting of the Holders of
Exchangeable Preferred Stock, for the purpose of electing the
directors which such Holders are entitled to elect. If such
meeting shall not be called by a proper officer of the
Corporation within twenty (20) days after personal service of
said written request upon the secretary of the Corporation, or
within twenty (20) days after mailing the same within the United
States by certified mail, addressed to the secretary of the
Corporation at its principal executive offices, then the Holders
of record of at least twenty-five percent (25%) of the
outstanding shares of Exchangeable Preferred Stock may designate
in writing one of their number to call such meeting at the
expense of the Corporation, and such meeting may be called by the
Person so designated upon the notice required for the annual
meetings of stockholders of the Corporation and shall be held at
the place for holding the annual meetings of stockholders. Any
Holder of Exchangeable Preferred Stock so designated shall have,
and the Corporation shall provide, access to the lists of
stockholders to be called pursuant to the provisions hereof.

(C) At any meeting held for the purpose of electing
directors at which the Holders of Exchangeable Preferred Stock
shall have the right, voting together as a separate class, to
elect directors as aforesaid, the presence in person or by proxy
of the Holders of at least a majority of the outstanding shares
of Exchangeable Preferred Stock shall be required to constitute a
quorum of such Exchangeable Preferred Stock.

(D) Any vacancy occurring in the office of a director
elected by the Holders of Exchangeable Preferred Stock may be
filled by the remaining directors elected by the Holders of
Exchangeable Preferred Stock unless and until such vacancy shall
be filled by the Holders of Senior Exchangeable Preferred Stock.

(v) In any case in which the Holders of Exchangeable
Preferred Stock shall be entitled to vote pursuant to this
paragraph (f) or pursuant to Delaware law, each Holder of
Exchangeable Preferred Stock entitled to vote with respect to
such matter shall be entitled to one vote for each share of
Exchangeable Preferred Stock held.

<PAGE>

<PAGE>
(g) Exchange.
--------

(i) Requirements. The outstanding shares of Exchangeable
------------
Preferred Stock are exchangeable as a whole but not in part, at
the option of the Corporation and subject to the terms and
conditions of the Credit Agreement, the Note Indenture, the
Existing Note Indenture and the certificate of designation for
the Senior Exchangeable Preferred Stock, at any time on any
Dividend Payment Date for the Corporation's 12% Subordinated
Exchange Debentures due 2009 (the "Exchange Debentures") to be
substantially in the form of Exhibit A to the form of Indenture,
a copy of which is on file with the secretary of the Corporation,
provided that any such exchange may only be made if on or prior
--------
to the date of such exchange (i) the Corporation has paid (or is
deemed to have paid) all accumulated dividends on the
Exchangeable Preferred Stock (including the dividends payable on
the date of exchange) and there shall be no contractual
impediment to such exchange; (ii) there shall be funds legally
available sufficient therefor; and (iii) immediately after giving
effect to such exchange, no Default or Event of Default (as
defined in the Indenture) would exist under the Indenture and no
default or event of default would exist under the Credit
Agreement, the Note Indenture or the Existing Note Indenture.
The exchange rate shall be $1.00 principal amount of Exchange
Debentures for each $1.00 of liquidation preference of
Exchangeable Preferred Stock, including, to the extent necessary,
Exchange Debentures in principal amounts less than $1,000,
provided that the Corporation shall have the right, at its
--------
option, to pay cash in an amount equal to the principal amount of
that portion of any Exchange Debenture that is not an integral
multiple of $1,000 instead of delivering an Exchange Debenture in
a denomination of less than $1,000.

(ii) Procedure for Exchange. (A) At least thirty (30) days
----------------------
and not more than sixty (60) days prior to the date fixed for
exchange, written notice (the "Exchange Notice") shall be given
by first-class mail, postage prepaid, to each Holder of record on
the record date fixed for such exchange of the Exchangeable
Preferred Stock at such Holder's address as the same appears on
the stock books of the Corporation, provided that no failure to
--------
give such notice nor any deficiency therein shall affect the
validity of the procedure for the exchange of any shares of
Exchangeable Preferred Stock to be exchanged except as to the
Holder or Holders to whom the Corporation has failed to give said
notice or except as to the Holder or Holders whose notice was
defective. The Exchange Notice shall state:

(1) the date fixed for exchange;

(2) that the Holder is to surrender to the
Corporation, in the manner and at the place or places
designated, his certificate or certificates representing the
shares of Exchangeable Preferred Stock to be exchanged;

<PAGE>

<PAGE>
(3) that dividends on the shares of Exchangeable
Preferred Stock to be exchanged shall cease to accrue on
such Exchange Date whether or not certificates for shares of
Exchangeable Preferred Stock are surrendered for exchange on
such Exchange Date unless the corporation shall default in
the delivery of Exchange Debentures; and

(4) that interest on the Exchange Debentures shall
accrue from the Exchange Date whether or not certificates
for shares of Exchangeable Preferred Stock are surrendered
for exchange on such Exchange Date.

(B) On or before the Exchange Date, each Holder of
Exchangeable Preferred Stock shall surrender the certificate or
certificates representing such shares of Exchangeable Preferred
Stock, in the manner and at the place designated in the Exchange
Notice. The Corporation shall cause the Exchange Debentures to
be executed on the Exchange Date and, upon surrender in
accordance with the Exchange Notice of the certificates for any
shares of Exchangeable Preferred Stock so exchanged, duly
endorsed (or otherwise in proper form for transfer, as determined
by the Corporation), such shares shall be exchanged by the
Corporation into Exchange Debentures. The Corporation shall pay
interest on the Exchange Debentures at the rate and on the dates
specified therein from the Exchange Date.

(C) If notice has been mailed as aforesaid, and if before
the Exchange Date specified in such notice (1) the Indenture
shall have been duly executed and delivered by the Corporation
and the trustee thereunder and (2) all Exchange Debentures
necessary for such exchange shall have been duly executed by the
Corporation and delivered to the trustee under the Indenture with
irrevocable instructions to authenticate the Exchange Debentures
necessary for such exchange, then the rights of the Holders of
Exchangeable Preferred Stock so exchanged as stockholders of the
Corporation shall cease (except the right to receive Exchange
Debentures, an amount in cash equal to the amount of accrued and
unpaid dividends to the Exchange Date and, if the Corporation so
elects, cash in lieu of any Exchange Debenture not an integral
multiple of $1,000), and the Person or Persons entitled to
receive the Exchange Debentures issuable upon exchange shall be
treated for all purposes as the registered Holder or Holders of
such Exchange Debentures as of the Exchange Date.

(iii) No Exchange in Certain Cases. Notwithstanding the
----------------------------
foregoing provisions of this paragraph (g), the Corporation shall
not be entitled to exchange the Exchangeable Preferred Stock for
Exchange Debentures if such exchange, or any term or provision of
the Indenture or the Exchange Debentures, or the performance of
the Corporation's obligations under the Indenture or the Exchange
Debentures, shall materially violate or conflict with any
applicable law or agreement or instrument then binding on the
Corporation or if, at the

<PAGE>

<PAGE>
time of such exchange, the Corporation is insolvent or if it
would be rendered insolvent by such exchange.

(h) Change of Control.
-----------------

(i) In the event of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Corporation
shall notify the Holders of the Exchangeable Preferred Stock in
writing of such occurrence and shall make an offer to purchase
(the "Change of Control Offer") all then outstanding shares of
Exchangeable Preferred Stock at a purchase price of 101% of the
then effective liquidation preference thereof plus, without
duplication, an amount in cash equal to all accumulated and
unpaid dividends per share (including an amount in cash equal to
a prorated dividend for the period from the Dividend Payment Date
immediately prior to the Change of Control Payment Date to the
Change of Control Payment Date).

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

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

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

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

(E) that Holders electing to have any shares of
Exchangeable Preferred Stock purchased pursuant to a Change
of Control Offer will be required to surrender the
certificate or certificates representing such shares,
properly endorsed for transfer together with

<PAGE>

<PAGE>
such customary documents as the Corporation and the transfer
agent may reasonably require, in the manner and at the place
specified in the notice prior to the close of business on
the Business Day prior to the Change of Control Payment
Date;

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

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

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

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

(iv) On the Change of Control Payment Date the Corporation
shall (A) accept for payment the shares of Exchangeable Preferred
Stock validly tendered pursuant to the Change of Control Offer,
(B) pay to the Holders of shares so accepted the purchase price
therefor in cash and (C) cancel and retire each surrendered
certificate. Unless the Corporation defaults in the payment for
the shares of Exchangeable Preferred Stock tendered pursuant to
the Change of Control Offer, dividends will cease to accrue with
respect to the shares of Exchangeable Preferred Stock tendered
and all rights of Holders of such tendered shares will terminate,
except for the right to receive payment therefor, on the Change
of Control Payment Date.

(v) If the purchase of the Exchangeable Preferred Stock
would violate or constitute a default under the certificate of
designation for the Senior Exchangeable Preferred Stock, the
Credit Agreement, the Note Indenture, the Existing Note Indenture
or other Indebtedness of the Corporation, then, notwithstanding
anything to the contrary contained above, prior to complying with
the foregoing provisions, but in any event within 30 days
following the Change of Control Date, the Corporation shall
either (A) repay in full all such Indebtedness and terminate all
commitments outstanding under the Credit Agreement or (B) obtain
the requisite consents, if any, under the Credit Agreement, the
Note Indenture, the Existing Note Indenture

<PAGE>

<PAGE>
or such Indebtedness required to permit the repurchase of
Exchangeable Preferred Stock required by this paragraph (h).
Until the requirements of the immediately preceding sentence are
satisfied, the Corporation shall not make, and shall not be
obligated to make, any Change of Control Offer; provided that the
--------
Corporation's failure to comply with the provisions of this
paragraph (h)(v) shall constitute a Voting Rights Triggering
Event.

(vi) Paragraphs (i)-(v) of this Section (h) notwithstanding,
the Corporation shall not be required to make a Change of Control
Offer if, instead, the Corporation elects to effect a Change of
Control Redemption pursuant to the provisions of and in
compliance with paragraph (e)(i)(D) hereof.

(i) Conversion or Exchange. The Holders of shares of
----------------------
Exchangeable Preferred Stock shall not have any rights hereunder to
convert such shares into or exchange such shares for shares of any
other class or classes or of any other series of any class or classes
of Capital Stock of the Corporation.

(j) Reissuance of Exchangeable Preferred Stock. Shares of
------------------------------------------
Exchangeable Preferred Stock that have been issued and reacquired in
any manner, including shares purchased or redeemed or exchanged, shall
(upon compliance with any applicable provisions of the laws of
Delaware) have the status of authorized and unissued shares of
Preferred stock undesignated as to series and may be redesignated and
reissued as part of any series of Preferred Stock, provided that any
--------
issuance of such shares as Exchangeable Preferred Stock must be in
compliance with the terms hereof.

(k) Business Day. If any payment, redemption or exchange
------------
shall be required by the terms hereof to be made on a day that is not
a Business Day, such payment, redemption or exchange shall be made on
the immediately succeeding Business Day.

(l) Certain Additional Provisions.
-----------------------------

(i) Limitation on Incurrence of Additional Indebtedness.
---------------------------------------------------
Neither the Corporation nor any of its Subsidiaries shall,
directly or indirectly, create, incur, assume, guarantee, acquire
or become liable for, contingently or otherwise (collectively,
"incur"), any Indebtedness other than Permitted Indebtedness.
Notwithstanding the foregoing limitation, the Corporation or any
Subsidiary may incur Indebtedness if, on the date of the
incurrence of such Indebtedness, after giving effect to the
incurrence of such Indebtedness and the receipt and application
of the proceeds thereof, the Corporation's Leverage Ratio is less
than 7.0 to 1.

(ii) Limitation on Restricted Payments. (A) Neither the
---------------------------------
Corporation nor any of its Subsidiaries shall, directly

<PAGE>

<PAGE>
or indirectly, make any Restricted Payment if immediately after
giving effect thereto:

(1) any Voting Rights Triggering Event shall have
occurred and be continuing; or

(2) the Corporation is not able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness)
in compliance with paragraph (l)(i) above; or

(3) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such
purposes, if other than in cash, being the fair market value
of such property as determined by the Board of Directors in
good faith) exceeds the sum of (I) (x) 100% of the aggregate
Consolidated EBITDA of the Corporation (or, in the event
such Consolidated EBITDA shall be a deficit, minus 100% of
such deficit) accrued subsequent to the Issue Date to the
most recent date for which financial information is
available to the Corporation, taken as one accounting
period, less (y) 1.4 times Consolidated Interest Expense for
the same period, plus (II) 100% of the aggregate net
proceeds, including the fair market value of property other
than cash as determined by the Board of Directors in good
faith, received by the Corporation from any Person (other
than a Subsidiary of the Corporation) from the issuance and
sale on or subsequent to February 14, 1996 of Qualified
Capital Stock of the Corporation (excluding any net proceeds
from issuances and sales financed directly or indirectly
using funds borrowed from the Corporation or any Subsidiary
of the Corporation, until and to the extent such borrowing
is repaid, but including the proceeds from the issuance and
sale of any securities convertible into or exchangeable for
Qualified Capital Stock to the extent such securities are so
converted or exchanged and including any additional proceeds
received by the Corporation upon such conversion or
exchange), plus (III) without duplication of any amount
included in clause (3)(II) above, 100% of the aggregate net
proceeds, including the fair market value of property other
than cash (valued as provided in clause (3)(II) above),
received by the Corporation as a capital contribution on or
subsequent to February 14, 1996 (excluding the net proceeds
from a Public Equity Offering by Chancellor to the extent
used to redeem the Exchangeable Preferred Stock); plus
(IV) $2,500,000.

(B) Notwithstanding the foregoing, these provisions will
not prohibit: (1) the payment of any dividend or the making of
any distribution within 60 days after the date of its declaration
if such dividend or distribution would have been permitted on the
date of declaration; (2) the acquisition of any Capital Stock of
the Corporation or any warrants, options or other rights to
acquire shares of any

<PAGE>

<PAGE>
class of such Capital Stock either (I) solely in exchange for
shares of Qualified Capital Stock or other rights to acquire
Qualified Capital Stock or (II) through the application of the
net proceeds of a substantially concurrent sale for cash (other
than to a Subsidiary of the Corporation) of shares of Qualified
Capital Stock or warrants, options or other rights to acquire
Qualified Capital Stock; (3) payments by the Corporation to fund
the operating expenses of Chancellor in an amount not to exceed
$500,000 per annum; (4) payments by the Corporation to Chancellor
to enable Chancellor to make payments pursuant to (x) the
Financial Monitoring and Oversight Agreement or (y) the Tax
Sharing Agreement; (5) payments by the Corporation to repurchase,
or enable Chancellor to repurchase, Capital Stock or other
securities of Chancellor from employees of Chancellor or the
Corporation in an aggregate amount not to exceed $5,000,000;
(6) payments to enable Chancellor to redeem or repurchase stock
purchase or similar rights in an aggregate amount not to exceed
$500,000; (7) payments, not to exceed $100,000 in the aggregate,
to enable the Corporation to make cash payments to holders of its
Capital Stock in lieu of the issuance of fractional shares of its
Capital Stock; and (8) payments made pursuant to any merger,
consolidation or sale of assets effected in accordance with
paragraph (f)(iii) above; provided, however, that no such payment
-------- -------
may be made pursuant to this clause (8) unless, after giving
effect to such transaction (and the incurrence of any
Indebtedness in connection therewith and the use of the proceeds
thereof), the Corporation would be able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with paragraph (l)(i) above such that after incurring
that $1.00 of additional Indebtedness, the Leverage Ratio would
be less than 6.0 to 1; provided, further, however, that in the
case of clauses (4)(x), (5), (6), (7) and (8), no Voting Rights
Triggering Event shall have occurred or be continuing at the time
of such payment or as a result thereof. In determining the
aggregate amount of Restricted Payments made subsequent to the
Issue Date, amounts expended pursuant to clauses (1), (2),
(4)(x), (5), (6), (7) and (8) shall be included in such
calculation.

(iii) Limitation on Preferred Stock of Subsidiaries. The
---------------------------------------------
Corporation shall not permit any of its Subsidiaries to issue any
Preferred Stock (other than to the Corporation or to a Wholly
Owned Subsidiary of the Corporation) or permit any Person (other
than to the Corporation or a Wholly Owned Subsidiary of the
Corporation) to own any Preferred Stock of a Subsidiary of the
Corporation (other than Acquired Preferred Stock; provided that
at the time the issuer of such Acquired Preferred Stock becomes a
Subsidiary of the Corporation or merges with the Corporation or
any of its Subsidiaries, and after giving effect to such
transaction, the Corporation shall be able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with paragraph (l)(i) above).

<PAGE>

<PAGE>
(iv) Reports. So long as any shares of Exchangeable
-------
Preferred Stock are outstanding, the Corporation will provide to
the holders of Exchangeable Preferred Stock, within 15 days after
it files them with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by
rules and regulations prescribe) which the Corporation files with
the Commission pursuant to Section 13 or 15(d) of the Exchange
Act. In the event that the Corporation is no longer required to
furnish such reports to its securityholders pursuant to the
Exchange Act, the Corporation will cause its consolidated
financial statements, comparable to those which would have been
required to appear in annual or quarterly reports, to be
delivered to the Holders of Exchangeable Preferred Stock.

(m) Definitions. As used in this Certificate of
-----------
Designation, the following terms shall have the following meanings
(with terms defined in the singular having comparable meanings when
used in the plural and vice versa), unless the context otherwise
----
requires:

"Acquired Preferred Stock" means Preferred Stock of any
------------------------
Person at the time such Person becomes a Subsidiary of the
Corporation or at the time it merges or consolidates with the
Corporation or any of its Subsidiaries and not issued by such
Person in connection with, or in anticipation or contemplation
of, such Person becoming a Subsidiary of the Corporation or such
acquisition, merger or consolidation.

"Additional Dividends" shall have the meaning ascribed to it
--------------------
in paragraph (c) hereof.

"Affiliate" means a Person who, directly or indirectly,
---------
through one or more intermediaries, controls, or is controlled
by, or is under common control with, the Corporation. The term
"control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

"Asset Acquisition" means (i) an Investment by the
-----------------
Corporation or any Subsidiary of the Corporation in any other
Person pursuant to which such Person shall become a Subsidiary of
the Corporation or shall be consolidated or merged with the
Corporation or any Subsidiary of the Corporation or (ii) the
acquisition by the Corporation or any Subsidiary of the
Corporation of assets of any Person comprising a division or line
of business of such Person.

"Asset Sale" means any direct or indirect sale, issuance,
----------
conveyance, transfer, lease (other than operating leases entered
into in the ordinary course of business), assignment or other
transfer for value by the Corporation or any of its Subsidiaries
(excluding any Sale and Leaseback

<PAGE>

<PAGE>
Transaction or any pledge of assets or stock by the Corporation
or any of its Subsidiaries) to any Person other than the
Corporation or a Wholly Owned Subsidiary of the Corporation of
(i) any Capital Stock of any Subsidiary of the Corporation or
(ii) any other property or assets of the Corporation or any
Subsidiary of the Corporation other than in the ordinary course
of business.

"Board of Directors" shall have the meaning ascribed to it
------------------
in the first paragraph of this Resolution.

"Business Day" means any day except a Saturday, a Sunday, or
------------
any day on which banking institutions in New York, New York are
required or authorized by law or other governmental action to be
closed.

"Capital Stock" means (i) with respect to any Person that is
-------------
a corporation, any and all shares, interests, participations or
other equivalents (however designated) of capital stock of such
Person and (ii) with respect to any Person that is not a
corporation, any and all partnership or other equity interests of
such Person.

"Capitalized Lease Obligation" means, as to any Person, the
----------------------------
obligation of such Person to pay rent or other amounts under a
lease to which such Person is a party that is required to be
classified and accounted for as a capital lease obligation under
GAAP, and for purposes of this definition, the amount of such
obligation at any date shall be the capitalized amount of such
obligation at such date, determined in accordance with GAAP.

"Cash Equivalents" means (i) marketable direct obligations
----------------
issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing
within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within one year
from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable
from either Standard & Poor's Corporation or Moody's Investors
Service, Inc.; (iii) commercial paper maturing no more than one
year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from Standard &
Poor's Corporation or at least P-1 from Moody's Investors
Service, Inc.; (iv) certificates of deposit or bankers'
acceptances maturing within one year from the date of acquisition
thereof issued by any commercial bank organized under the laws of
the United States of America or any state thereof or the District
of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined capital and surplus of not
less than $200,000,000; (v) repurchase obligations with a term of
not more than seven days for underlying securities of the types
described

<PAGE>

<PAGE>
in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and
(vi) investments in money market funds which invest substantially
all their assets in securities of the types described in clauses
(i) through (v) above.

"Chancellor" means Chancellor Broadcasting Company, a
----------
Delaware corporation, and its successors.

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

"Change of Control Date" shall have the meaning ascribed to
----------------------
it in paragraph (h) hereof.

"Change of Control Payment Date" shall have the meaning
------------------------------
ascribed to it in paragraph (h) hereof.

"Change of Control Offer" shall have the meaning ascribed to
-----------------------
it in paragraph (h) hereof.

"Commission" means the Securities and Exchange Commission.
----------
"Commodity Agreement" means any commodity futures contract,
-------------------
commodity option or other similar agreement or arrangement
entered into by the Corporation or any of its Subsidiaries
designed to protect the Corporation or any of its Subsidiaries
against fluctuations in the price of commodities actually used in
the ordinary course of business of the Corporation and its
Subsidiaries.

"Consolidated EBITDA" means, with respect to any Person, for
-------------------
any period, the sum (without duplication) of (i) Consolidated Net
Income and (ii) to the extent Consolidated Net Income has been
reduced thereby, (a) all income taxes of such Person and its
Subsidiaries paid or accrued in accordance with GAAP for such
period (other than income taxes attributable to extraordinary or
nonrecurring gains or losses), (b) Consolidated Interest Expense
and (c) Consolidated Non-Cash Charges, all as determined on a

<PAGE>

<PAGE>
consolidated basis for such Person and its Subsidiaries in
conformity with GAAP.

"Consolidated Interest Expense" means, with respect to any
-----------------------------
Person for any period, without duplication, the sum of (i) the
interest expense of such Person and its Subsidiaries for such
period as determined on a consolidated basis in accordance with
GAAP, including, without limitation, (a) any amortization of debt
discount, (b) the net cost under Interest Swap Obligations
(including any amortization of discounts), (c) the interest
portion of any deferred payment obligation, (d) all commissions,
discounts and other fees and charges owed with respect to letters
of credit, bankers' acceptance financing or similar facilities,
and (e) all accrued interest and (ii) the interest component of
Capitalized Lease Obligations paid or accrued by such Person and
its Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP.

"Consolidated Net Income" of any Person means, for any
-----------------------
period, the aggregate net income (or loss) of such Person and its
Subsidiaries for such period on a consolidated basis, determined
in accordance with GAAP; provided that there shall be excluded
therefrom, without duplication, (i) gains and losses from Asset
Sales or abandonments or reserves relating thereto and the
related tax effects, (ii) items classified as extraordinary or
nonrecurring gains and losses, and the related tax effects
according to GAAP, (iii) the net income (or loss) of any Person
acquired in a pooling of interests transaction accrued prior to
the date it becomes a Subsidiary of such first referred to Person
or is merged or consolidated with it or any of its Subsidiaries,
(iv) the net income of any Subsidiary to the extent that the
declaration of dividends or similar distributions by that
Subsidiary of that income is restricted by contract, operation of
law or otherwise and (v) the net income of any Person, other than
a Subsidiary, except to the extent of the lesser of (a) dividends
or distributions paid to such first referred to Person or its
Subsidiary by such Person and (b) the net income of such Person
(but in no event less than zero), and the net loss of such Person
shall be included only to the extent of the aggregate Investment
of the first referred to Person or a consolidated Subsidiary of
such Person.

"Consolidated Non-Cash Charges" means, with respect to any
-----------------------------
Person for any period, the aggregate depreciation, amortization
and other non-cash expenses of such Person and its Subsidiaries
reducing Consolidated Net Income of such Person and its
Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP (excluding any such charges constituting
an extraordinary or nonrecurring item).

"Continuing Director" means, as of the date of
-------------------
determination, any Person who (i) was a member of the Board of
Directors of Chancellor or the Corporation on the Issue

<PAGE>

<PAGE>
Date, (ii) was nominated for election or elected to the Board of
Directors of Chancellor or the Corporation with the affirmative
vote of a majority of the Continuing Directors who were members
of such Board of Directors at the time of such nomination or
election, or (iii) is a representative of a Permitted Holder.

"Credit Agreement" means the amended and restated Credit
----------------
Agreement to be dated on or about the Issue Date among
Chancellor, the Corporation, the lenders from time to time party
thereto and Bankers Trust Company as administrative agent,
Goldman Sachs Credit Partners, L.P., as documentation agent and
Nations Bank, N.A., as syndication agent, together with the
related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case as
such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of,
refinancing, replacing or otherwise restructuring (including by
way of adding subsidiaries of the Corporation as additional
borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or
group of lenders.

"Currency Agreement" means any foreign exchange contract,
------------------
currency swap agreement or other similar agreement or arrangement
designed to protect the Corporation or any of its Subsidiaries
against fluctuations in currency values.

"Disqualified Capital Stock" means any Capital Stock which,
--------------------------
by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the
happening of any event, matures (excluding any maturity as the
result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the sole option of the holder
thereof (except, in each case, upon the occurrence of a Change of
Control), in whole or in part, on or prior to January 15, 2009.

"Dividend Payment Date" means January 15 and July 15 of each
---------------------
year.

"Dividend Period" means the Initial Dividend Period and,
---------------
thereafter, each Semi-Annual Dividend Period.

"Dividend Record Date" means January 1 and July 1 of each
--------------------
year.

"Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations promulgated thereunder.

<PAGE>

<PAGE>
"Exchange Date" means a date on which shares of Exchangeable
-------------
Preferred Stock are exchanged by the Corporation for Exchange
Debentures.

"Exchange Debentures" shall have the meaning ascribed to it
-------------------
in paragraph (g) hereof.

"Exchange Notice" shall have the meaning ascribed to it in
---------------
paragraph (g) hereof.

"Exchange Offer" means a registered offer to exchange any
--------------
and all shares of the Exchangeable Preferred Stock for a like
number of shares (with a liquidation preference equal to that of
the surrendered shares) of another series of the Corporation's
exchangeable preferred stock that has terms identical in all
material respects to the Exchangeable Preferred Stock except that
(i) the Exchange Preferred Stock shall have been registered
pursuant to an effective registration statement under the
Securities Act and the certificates therefor shall contain no
restrictive legends thereon and (ii) the certificate of
designation governing such Exchange Preferred Stock does not need
to contain provisions with respect to Additional Dividends,
including, without limitation, those contained in paragraph
(c)(viii) hereof.

"Exchange Offer Registration Statement" means the
-------------------------------------
registration statement filed by the Corporation with the
Commission with respect to an Exchange Offer.

"Exchange Preferred Stock" means the series of the
------------------------
Corporation's exchangeable preferred stock publicly offered in
exchange for the Exchangeable Preferred Stock.

"Exchangeable Preferred Stock" shall have the meaning
----------------------------
ascribed to it in paragraph (a) hereof.

"Existing Notes" means the Corporation's $80 million
--------------
aggregate principal amount of 12 1/2% Senior Subordinated Notes
due 2004 as the same may be modified or amended from time to time
and future refinancings thereof.

"Existing Indenture" means the Indenture governing the
------------------
Existing Notes as such Indenture may be amended or supplemented
from time to time in accordance with the terms thereof.

"Federal Reserve Board" means the Board of Governors of the
---------------------
Federal Reserve System, or any successor thereto.

"Financial Monitoring and Oversight Agreement" means,
--------------------------------------------
collectively, the Financial Monitoring and Oversight Agreement
among Hicks, Muse & Co. Partners, L.P., the Corporation and
Chancellor, as in effect on the Issue Date, and the Financial
Advisory Agreement among HM/2 Management Partners, L.P., the
Corporation and Chancellor, as in effect on the Issue Date.

<PAGE>

<PAGE>
"GAAP" means generally accepted accounting principles as in
----
effect in the United States of America as of the Preferred Stock
Issue Date.

"Holder" means a holder of shares of Exchangeable Preferred
------
Stock as reflected in the stock books of the Corporation.

"Indebtedness" means with respect to any Person, without
------------
duplication, any liability of such Person (i) for borrowed money,
(ii) evidenced by bonds, debentures, notes or other similar
instruments, (iii) constituting Capitalized Lease Obligations,
(iv) incurred or assumed as the deferred purchase price of
property, or pursuant to conditional sale obligations and title
retention agreements (but excluding trade accounts payable
arising in the ordinary course of business), (v) for the
reimbursement of any obligor on any letter of credit, banker's
acceptance or similar credit transaction, (vi) for Indebtedness
of others guaranteed by such Person, (vii) for Interest Swap
Obligations, Commodity Agreements and Currency Agreements and
(viii) for Indebtedness of any other Person of the type referred
to in clauses (i) through (vii) which is secured by any Lien on
any property or asset of such first referred to Person, the
amount of such Indebtedness being deemed to be the lesser of the
value of such property or asset or the amount of the Indebtedness
so secured. The amount of Indebtedness of any Person at any date
shall be the outstanding principal amount of all unconditional
obligations described above, as such amount would be reflected on
a balance sheet prepared in accordance with GAAP, and the maximum
liability at such date of such Person for any contingent
obligations described above.

"Initial Dividend Period" means the dividend period
-----------------------
commencing on the Issue Date and ending on the first Dividend
Payment Date to occur thereafter.

"Interest Swap Obligations" means the obligations of any
-------------------------
Person under any interest rate protection agreement, interest
rate future, interest rate option, interest rate swap, interest
rate cap or other interest rate hedge or arrangement.

"Investment" means (i) any transfer or delivery of cash,
----------
stock or other property of value in exchange for Indebtedness,
stock or other security or ownership interest in any Person by
way of loan, advance, capital contribution, guarantee or
otherwise and (ii) an investment deemed to have been made by the
Corporation at the time any entity which was a Subsidiary of the
Corporation ceases to be such a Subsidiary in an amount equal to
the value of the loans and advances made, and any remaining
ownership interest in, such entity immediately following such
entity ceasing to be a Subsidiary of the Corporation. The amount
of any non-cash Investment shall be the fair market value of such
Investment, as determined conclusively in good faith by

<PAGE>

<PAGE>
management of the Corporation unless the fair market value of
such Investment exceeds $1,000,000, in which case the fair market
value shall be determined conclusively in good faith by the Board
of Directors at the time such Investment is made.

"Issue Date" means the date of original issuance of the
----------
Exchangeable Preferred Stock.

"Junior Stock" shall have the meaning ascribed to it in
------------
paragraph (b) hereof.

"Leverage Ratio" shall mean, as to any Person, the ratio of
--------------
(i) the sum of the aggregate outstanding amount of Indebtedness
of such Person and its Subsidiaries as of the date of calculation
on a consolidated basis in accordance with GAAP to (ii) the
Consolidated EBITDA of such Person for the four full fiscal
quarters (the "Four Quarter Period") ending on or prior to the
date of determination.

For purposes of this definition, the aggregate outstanding
principal amount of Indebtedness of the Person and its
Subsidiaries for which such calculation is made shall be
determined on a pro forma basis as if the Indebtedness giving
rise to the need to perform such calculation had been incurred
and the proceeds therefrom had been applied, and all other
transactions in respect of which such Indebtedness is being
incurred had occurred, on the last day of the Four Quarter
Period. In addition to the foregoing, for purposes of this
definition, "Consolidated EBITDA" shall be calculated on a pro
forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and its Subsidiaries (and the
application of the proceeds therefrom) giving rise to the need to
make such calculation and any incurrence (and the application of
the proceeds therefrom) or repayment of other Indebtedness, other
than the incurrence or repayment of Indebtedness pursuant to
working capital facilities, at any time subsequent to the
beginning of the Four Quarter Period and on or prior to the date
of determination, as if such incurrence (and the application of
the proceeds thereof), or the repayment, as the case may be,
occurred on the first day of the Four Quarter Period and (ii) any
Asset Sales or Asset Acquisitions (including, without limitation,
any Asset Acquisition giving rise to the need to make such
calculation as a result of such Person or one of its Subsidiaries
(including any Person that becomes a Subsidiary as a result of
such Asset Acquisition) incurring, assuming or otherwise becoming
liable for Indebtedness) at any time on or subsequent to the
first day of the Four Quarter Period and on or prior to the date
of determination, as if such Asset Sale or Asset Acquisition
(including the incurrence, assumption or liability for any such
Indebtedness and also including any Consolidated EBITDA
associated with such Asset Acquisition) occurred on the first day
of the Four Quarter Period. Furthermore, in calculating
"Consolidated Interest Expense" for purposes of the calculation
of "Consolidated

<PAGE>

<PAGE>
EBITDA," (i) interest on Indebtedness determined on a fluctuating
basis as of the date of determination (including Indebtedness
actually incurred on the date of the transaction giving rise to
the need to calculate the Leverage Ratio) and which will continue
to be so determined thereafter shall be deemed to have accrued at
a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (ii)
notwithstanding (i) above, interest determined on a fluctuating
basis, to the extent such interest is covered by Interest Swap
Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such
agreements.

"Lien" means any lien, mortgage, deed of trust, pledge,
----
security interest, charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any
lease in the nature thereof and any agreement to give any
security interest).

"Mandatory Redemption Price" shall have the meaning ascribed
--------------------------
to it in paragraph (e) hereof.

"Note Indenture" means the Indenture governing the Notes as
--------------
such Indenture may be amended or supplemented from time to time
in accordance with the terms thereof.

"Notes" means the Corporation's $200.0 million aggregate
-----
principal amount of 9 3/8% Senior Subordinated Notes due 2004 of
the Corporation as the same may be modified or amended from time
to time and future refinancings thereof.

"Obligations" means all obligations for principal, premium,
-----------
interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the documentation
governing, or otherwise relating to, any Indebtedness.

"Officers' Certificate" means a certificate signed by two
---------------------
officers or by an officer and either an Assistant Treasurer or an
Assistant Secretary of the Corporation which certificate shall
include a statement that, in the opinion of such signers all
conditions precedent to be performed by the Corporation prior to
the taking of any proposed action have been taken. In addition,
such certificate shall include (i) a statement that the
signatories have read the relevant covenant or condition, (ii) a
brief statement of the nature and scope of such examination or
investigation upon which the statements are based, (iii) a
statement that, in the opinion of such signatories, they have
made such examination or investigation as is reasonably necessary
to express an informed opinion and (iv) a statement as to whether
or not, in the opinion of the signatories, such relevant
conditions or covenants have been complied with.

<PAGE>

<PAGE>
"Opinion of Counsel" means an opinion of counsel that, in
------------------
such counsel's opinion, all conditions precedent to be performed
by the Corporation prior to the taking of any proposed action
have been taken. Such opinion shall also include the statements
called for in the second sentence under "Officers' Certificate".

"Optional Redemption Price" shall have the meaning ascribed
-------------------------
to it in paragraph (e)(i) hereof.

"Parity Stock" shall have the meaning ascribed to it in
------------
paragraph (b) hereof.

"Permitted Indebtedness" means, without duplication, (i)
----------------------
Indebtedness outstanding on the Issue Date, including, without
limitation, the Notes, the Existing Notes, and guarantees
thereof; (ii) Indebtedness of the Corporation incurred pursuant
to the Credit Agreement in an aggregate principal amount at any
time outstanding not to exceed the sum of the aggregate
commitments pursuant to the Credit Agreement as initially in
effect reduced by the aggregate principal amount permanently
repaid with the proceeds of Asset Sales; (iii) Indebtedness
evidenced by the Exchange Debentures, including any Exchange
Debentures issued in accordance with the Exchange Indenture as
the payment of interest on the Exchange Debentures; (iv) Interest
Swap Obligations; provided that such Interest Swap Obligations
are entered into to protect the Corporation from fluctuations in
interest rates of its Indebtedness; (v) additional Indebtedness
of the Corporation or any of its Subsidiaries not to exceed
$10,000,000 in principal amount outstanding at any time (which
amount may, but need not, be incurred under the Credit
Agreement); (vi) Refinancing Indebtedness; (vii) Indebtedness
owed by the Corporation to any Wholly Owned Subsidiary or by any
Subsidiary to the Corporation or any Wholly Owned Subsidiary of
the Corporation; and (viii) guarantees by Subsidiaries of any
Indebtedness permitted to be incurred pursuant to the terms of
paragraph (1)(i) hereof.

"Permitted Investments" means (i) Investments by the
---------------------
Corporation or any Subsidiary to acquire the stock or assets of
any Person (or Indebtedness of such Person acquired in connection
with a transaction in which such Person becomes a Subsidiary of
the Corporation) engaged in the broadcast business or businesses
reasonably related thereto; provided that if any such Investment
or series of related Investments involves an Investment by the
Corporation in excess of $5,000,000, the Corporation is able, at
the time of such investment and immediately after giving effect
thereto, to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with
paragraph (l)(i) hereof, (ii) Investments received by the
Corporation or its Subsidiaries as consideration for a sale of
assets, (iii) Investments by the Corporation or any Wholly Owned
Subsidiary of the Corporation in any Wholly Owned Subsidiary of
the Corporation (whether existing on the Issue Date or

<PAGE>

<PAGE>
created thereafter) or any Person that after such Investments,
and as a result thereof, becomes a Wholly Owned Subsidiary of the
Corporation and Investments in the Corporation by any Wholly
Owned Subsidiary of the Corporation, (iv) cash and Cash
Equivalents, (v) Investments in securities of trade creditors,
wholesalers or customers received pursuant to any plan of
reorganization or similar arrangement and (vi) additional
Investments in an aggregate amount not to exceed $2,500,000 at
any time outstanding.

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

"Preferred Stock" of any Person means any Capital Stock of
---------------
such Person that has preferential rights to any other Capital
Stock of such Person with respect to dividends or redemptions or
upon liquidation.

"pro forma" means, unless otherwise provided herein, with
--- -----
respect to any calculation made or required to be made pursuant
hereto, a calculation in accordance with Article II of
Regulation S-X under the Securities Act.

"Public Equity Offering" means an underwritten public
----------------------
offering of Capital Stock (other than Disqualified Capital Stock)
of the Corporation or Chancellor, pursuant to an effective
registration statement filed with the Commission in accordance
with the Securities Act; provided, however, that, in the case of
a Public Equity Offering by Chancellor, Chancellor contributes to
the capital of the Corporation net cash proceeds in an amount
sufficient to redeem the Exchangeable Preferred Stock called for
redemption in accordance with the terms hereof.

"Qualified Capital Stock" means any Capital Stock that is
-----------------------
not Disqualified Capital Stock.

"Redemption Date", with respect to any shares of
---------------
Exchangeable Preferred Stock, means the date on which such shares
of Exchangeable Preferred Stock are redeemed by the Corporation.

"Redemption Notice" shall have the meaning ascribed to it in
-----------------
paragraph (e) hereof.

"Refinancing Indebtedness" means any refinancing by the
------------------------
Corporation of Indebtedness of the Corporation or any of its
Subsidiaries incurred in accordance with paragraph (l)(i) hereof
(other than pursuant to clause (ii) or (iv) of the definition of
Permitted Indebtedness) that does not (i) result in an increase
in the aggregate principal amount of Indebtedness (such principal
amount to include, for purposes of this definition, any premiums,
penalties or accrued interest paid with the proceeds of the
Refinancing Indebtedness) of such Person or (ii) create
Indebtedness

<PAGE>

<PAGE>
with (a) a Weighted Average Life to Maturity that is less than
the Weighted Average Life to Maturity of the Indebtedness being
refinanced or (b) a final maturity earlier than the final
maturity of the Indebtedness being refinanced.

"Restricted Payment" means (i) the declaration or payment of
------------------
any dividend or the making of any other distribution (other than
dividends or distributions payable in Qualified Capital Stock) on
shares of Junior Stock, (ii) any purchase, redemption, retirement
or other acquisition for value of any Junior Stock, or any
warrants, rights or options to acquire shares of Junior Stock,
other than through the exchange of such Junior Stock or any
warrants, rights or options to acquire shares of any class of
such Junior Stock for Qualified Capital Stock or warrants, rights
or options to acquire Qualified Capital Stock or (iii) the making
of any Investment (other than a Permitted Investment).

"Sale and Leaseback Transaction" means any direct or
------------------------------
indirect arrangement with any Person or to which any such Person
is a party, providing for the leasing to the Corporation or a
Subsidiary of any property, whether owned by the Corporation or
any Subsidiary at the Issue Date or later acquired, which has
been or is to be sold or transferred by the Corporation or such
Subsidiary to such Person or to any other Person from whom funds
have been or are to be advanced by such Person on the security of
such property.

"Securities Act" means the Securities Act of 1933, as
--------------
amended, and the rules and regulations promulgated thereunder.

"Semi-Annual Dividend Period" shall mean the semi-annual
---------------------------
period commencing on each January 16 and July 16 and ending
on the next succeeding Dividend Payment Date, respectively.

"Senior Stock" shall have the meaning ascribed to it in
------------
paragraph (b) hereof.

"Shelf Registration Statement" means a registration
----------------------------
statement filed by the Corporation with the Commission for an
offering to be made on a continuous basis pursuant to rule 415
promulgated under the Securities Act covering all of the
Exchangeable Preferred Stock.

"Subsidiary," with respect to any Person, means (i) any
----------
corporation of which the outstanding Capital Stock having at
least a majority of the votes entitled to be cast in the election
of directors under ordinary circumstances shall at the time be
owned, directly or indirectly, by such Person or (ii) any other
Person of which at least a majority of the voting interest under
ordinary circumstances is at the time, directly or indirectly,
owned by such Person.

<PAGE>

<PAGE>
Notwithstanding anything contained herein to the contrary, all
references to the Corporation and its consolidated Subsidiaries
or to financial information prepared on a consolidated basis in
accordance with GAAP shall be deemed to include the Corporation
and its Subsidiaries as to which financial statements are
prepared on a combined basis in accordance with GAAP and to
financial information prepared on such a combined basis.
Notwithstanding anything herein to the contrary, an Unrestricted
Subsidiary shall not be deemed to be a Subsidiary for purposes
hereof.

"Tax Sharing Agreement" means the Tax Sharing Agreement
---------------------
between the Corporation and Chancellor, as in effect on the Issue
Date.

"Unrestricted Subsidiary" means a Subsidiary of the
-----------------------
Corporation created after the Preferred Stock Issue Date and so
designated by a resolution adopted by the Board of Directors,
provided that (i) neither the Corporation nor any of its other
Subsidiaries (other than Unrestricted Subsidiaries) (a) provides
any credit support for any Indebtedness of such Subsidiary
(including any undertaking, agreement or instrument evidencing
such Indebtedness) or (b) is directly or indirectly liable for
any Indebtedness of such Subsidiary, (ii) the creditors with
respect to Indebtedness for borrowed money of such Subsidiary,
having a principal amount in excess of $5,000,000, have agreed in
writing that they have no recourse, direct or indirect, to the
Corporation or any other Subsidiary of the Corporation (other
than Unrestricted Subsidiaries), including, without limitation,
recourse with respect to the payment of principal of or interest
on any Indebtedness of such Subsidiary and (iii) at the time of
designation of such Subsidiary such Subsidiary has no property or
assets (other than de minimis assets resulting from the initial
capitalization of such Subsidiary). Any such designation by the
Board of Directors shall be evidenced by a resolution of the
Board of Directors giving effect to such designation.

"Voting Rights Triggering Event" shall have the meaning
------------------------------
ascribed to it in paragraph f(iv) hereof.

"Weighted Average Life to Maturity" means, when applied to
---------------------------------
any Indebtedness at any date, the number of years obtained by
dividing (a) the then outstanding aggregate principal amount of
such Indebtedness into (b) the total of the product obtained by
multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect
thereof, by (ii) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making
of such payment.

"Wholly Owned Subsidiary" of any Person means any Subsidiary
-----------------------
of such Person of which all the outstanding voting securities
(other than directors' qualifying shares)

<PAGE>

<PAGE>
which normally have the right to vote in the election of
directors are owned by such Person.

<PAGE>

<PAGE>
IN WITNESS WHEREOF, said Chancellor Radio Broadcasting
Company, has caused this Certificate to be signed by Jacques Kerrest,
its Senior Vice President, this 23rd day of January, 1997.

CHANCELLOR RADIO BROADCASTING COMPANY

By: /s/ JACQUES KERREST
----------------------------------------
Name: Jacques Kerrest
Title: Senior Vice President

<PAGE>

EXHIBIT 4.2

<PAGE>

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

REGISTRATION RIGHTS AGREEMENT

Dated as of January 23, 1997

Among

CHANCELLOR RADIO BROADCASTING COMPANY
as Issuer

and

BT SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
NATIONSBANC CAPITAL MARKETS, INC.
SMITH BARNEY INC.
as Initial Purchasers

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

<PAGE>

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (the "Agreement") is
---------
dated as of January 23, 1997, among Chancellor Radio Broadcasting
Company, a Delaware corporation (the "Company"), and BT Securities
-------
Corporation, Credit Suisse First Boston Corporation, Goldman, Sachs &
Co., NationsBanc Capital Markets, Inc. and Smith Barney Inc.
(individually, an "Initial Purchaser"; together, the "Initial
----------------- -------
Purchasers").
----------
This Agreement is entered into in connection with the
Purchase Agreement, dated as of January 17, 1997, among the Company
and the Initial Purchasers (the "Purchase Agreement"), which provides
------------------
for the issuance and sale by the Company to the Initial Purchasers of
the Company's 12% Exchangeable Preferred Stock, par value $.01 per
share (the "Exchangeable Preferred Stock"). In order to induce the
----------------------------
Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this
Agreement for the benefit of the Initial Purchasers and their direct
and indirect transferees and assigns. The execution and delivery of
this Agreement is a condition to the Initial Purchasers' obligation to
purchase the Exchangeable Preferred Stock under the Purchase
Agreement.

The parties hereby agree as follows:

1. Definitions
-----------
As used in this Agreement, the following terms shall have
the following meanings:

Additional Dividends: See Section 4 hereof.
--------------------
Advice: See Section 5 hereof.
------
Agreement: See the introductory paragraphs hereto.
---------
Applicable Period: See Section 2 hereof.
-----------------
Certificate of Designation: The Certificate of Designation
--------------------------
governing the Exchangeable Preferred Stock as filed with the Secretary
of State of the State of Delaware, as amended from time to time.

<PAGE>

Certificate Shares: See Section 10 hereof.
------------------
Closing Date: The Closing Date as defined in the Purchase
------------
Agreement.

Company: See the introductory paragraphs hereto.
-------
Depositary: The Depository Trust Company until a successor
----------
is appointed by the Company and the Transfer Agent.

Effectiveness Date: The 180th day after the Issue Date.
------------------
Effectiveness Period: See Section 3 hereof.
--------------------
Event Date: See Section 4 hereof.
----------
Exchange Act: The Securities Exchange Act of 1934, as
------------
amended, and the rules and regulations of the SEC promulgated
thereunder.

Exchange Preferred Stock: See Section 2 hereof.
------------------------
Exchange Offer: See Section 2 hereof.
--------------
Exchange Registration Statement: See Section 2 hereof.
-------------------------------
Filing Date: Within 90 days after the Issue Date.
-----------
Global Certificate: See Section 10 hereof.
------------------
Holder: Any holder of shares of Registrable Preferred
------
Stock.

Indemnified Person: See Section 7(c) hereof.
------------------
Indemnifying Person: See Section 7(c) hereof.
-------------------
Initial Purchaser: See the introductory paragraphs hereto.
-----------------
Initial Purchasers: See the introductory paragraphs hereto.
------------------
Initial Shelf Registration: See Section 3(a) hereof.
--------------------------
Inspectors: See Section 5(n) hereof.
----------

<PAGE>

Issue Date: The date on which the original Exchangeable
----------
Preferred Stock was issued and sold to the Initial Purchasers pursuant
to the Purchase Agreement.

NASD: See Section 5(r) hereof.
----
Participant: See Section 7(a) hereof.
-----------
Participating Broker-Dealer: See Section 2 hereof.
---------------------------
Person: An individual, partnership, corporation, limited
------
liability company, unincorporated association, trust or joint venture,
or a governmental agency or political subdivision thereof.

Private Exchange: See Section 2 hereof.
----------------
Private Exchange Certificate: See Section 2 hereof.
----------------------------
Private Exchange Preferred Stock: See Section 2 hereof.
--------------------------------
Prospectus: The prospectus included in any Registration
----------
Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities
Act), as amended or supplemented by any prospectus supplement, and all
other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.

Purchase Agreement: See the introductory paragraphs hereto.
------------------
Records: See Section 5(n) hereof.
-------
Registrable Preferred Stock: Each share of Exchangeable
---------------------------
Preferred Stock upon original issuance thereof and at all times
subsequent thereto, each share of Exchange Preferred Stock as to which
Section 2(c)(v) hereof is applicable upon original issuance and at all
times subsequent thereto and each share of Private Exchange Preferred
Stock upon original issuance thereof and at all times subsequent
thereto, until in the case of any such shares of Exchangeable
Preferred Stock, Exchange Preferred Stock or Private Exchange
Preferred Stock, as the case

<PAGE>

may be, the earliest to occur of (i) a Registration Statement (other
than, with respect to any Exchange Preferred Stock as to which Section
2(c)(v) hereof is applicable, the Exchange Registration Statement)
covering such shares of Exchangeable Preferred Stock, Exchange
Preferred Stock or such Private Exchange Preferred Stock, as the case
may be, have been declared effective by the SEC and such shares of
Exchangeable Preferred Stock, Exchange Preferred Stock or Private
Exchange Preferred Stock, as the case may be, have been disposed of in
accordance with such effective Registration Statement, (ii) such
shares of Exchangeable Preferred Stock, Exchange Preferred Stock or
Private Exchange Preferred Stock, as the case may be, are sold in
compliance with Rule 144 or could be sold in compliance with
paragraph (k) of such Rule 144, (iii) such shares of Exchangeable
Preferred Stock have been exchanged for shares of Exchange Preferred
Stock pursuant to an Exchange Offer that may be resold without
restriction under state and federal securities laws, or (iv) such
shares of Exchangeable Preferred Stock, Exchange Preferred Stock or
Private Exchange Preferred Stock, as the case may be, cease to be
outstanding. For purposes of this Agreement and the registration
requirements contained herein, Registrable Preferred Stock shall be
deemed to include, and all Registration Statements required to be
filed in accordance with the terms of this Agreement shall cover, the
Exchange Debentures (as defined in the Purchase Agreement) into which
the Exchangeable Preferred Stock, Exchange Preferred Stock or Private
Exchange Preferred Stock that is Registrable Preferred Stock is
exchangeable.

Registration Statement: Any registration statement of the
----------------------
Company, including, but not limited to, the Exchange Registration
Statement, filed with the SEC pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to
such registration statement, including post-effective amendments, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.

Rule 144: Rule 144 promulgated under the Securities Act, as
--------
such Rule may be amended from time to time, or any similar rule (other
than Rule 144A) or regulation hereafter adopted by the SEC providing
for offers and sales of securities made in compliance therewith
resulting in offers and sales by subsequent holders that are not
affiliates of an issuer of such securities being free of the
registration and prospectus delivery requirements of the Securities
Act.

Rule 144A: Rule 144A promulgated under the Securities Act,
---------
as such Rule may be amended from time to time, or any

<PAGE>

similar rule (other than Rule 144) or regulation hereafter adopted by
the SEC.

Rule 415: Rule 415 promulgated under the Securities Act, as
--------
such Rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the SEC.

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

Shelf Notice: See Section 2 hereof.
------------
Shelf Registration: See Section 3(b) hereof.
------------------
Subsequent Shelf Registration: See Section 3(b) hereof.
-----------------------------
Transfer Agent. The Transfer Agent for the Exchangeable
--------------
Preferred Stock, the Exchange Preferred Stock and/or the Private
Exchange Preferred Stock, as the context may require.

Underwritten registration or underwritten offering: A
--------------------------------------------------
registration in which securities of the Company are sold to an
underwriter for reoffering to the public.

2. Exchange Offer
--------------
(a) The Company shall file with the SEC no later than the
Filing Date, an offer to exchange (the "Exchange Offer") any and all
--------------
shares of the Exchangeable Preferred Stock for a like number of shares
(with a liquidation preference equal to that of the surrendered
shares) of another series of exchangeable preferred stock of the
Company that will have terms identical in all material respects to the
Exchangeable Preferred Stock (the "Exchange Preferred Stock"), except
------------------------
that (i) the Exchange Preferred Stock shall have been registered
pursuant to an effective Registration Statement under the Securities
Act and the certificates therefor shall contain no restrictive legend
thereon and (ii) the certificate of designation governing such
Exchange Preferred Stock does not need to contain the provisions set
forth in the Certificate of Designation concerning Additional
Dividends including, without limitation, paragraph (c)(viii) thereof.
The Exchange Offer shall be registered under the Securities Act on the
appropriate form (the "Exchange Registration Statement") and shall
-------------------------------
comply with all applicable tender offer rules and

<PAGE>

regulations under the Exchange Act. The Company agrees to use its
best efforts to (x) cause the Exchange Registration Statement to be
declared effective under the Securities Act on or before the
Effectiveness Date; (y) keep the Exchange Offer open for at least 20
business days (or longer if required by applicable law) after the date
that notice of the Exchange Offer is mailed to Holders; and (z) con-
summate the Exchange Offer on or prior to the 225th day following the
Issue Date. If after such Exchange Registration Statement is
initially declared effective by the SEC, the Exchange Offer or the
issuance of the Exchange Preferred Stock thereunder is interfered with
by any stop order, injunction or other order or requirement of the SEC
or any other governmental agency or court, such Exchange Registration
Statement shall be deemed not to have become effective for purposes of
this Agreement. Each Holder who participates in the Exchange Offer
will be required to represent that any Exchange Preferred Stock
received by it will be acquired in the ordinary course of its
business, that at the time of the consummation of the Exchange Offer
such Holder will have no arrangement or understanding with any Person
to participate in the distribution of the Exchange Preferred Stock in
violation of the provisions of the Securities Act, and that such
Holder is not an affiliate of the Company within the meaning of the
Securities Act. Upon consummation of the Exchange Offer in accordance
with this Section 2, the provisions of this Agreement shall continue
to apply, mutatis mutandis, solely with respect to Registrable
------- --------
Preferred Stock that is Private Exchange Preferred Stock and Exchange
Preferred Stock held by Participating Broker-Dealers, and the Company
shall have no further obligation to register Registrable Preferred
Stock (other than Private Exchange Preferred Stock and other than in
respect of any Exchange Preferred Stock as to which clause 2(c)(v)
hereof applies) pursuant to Section 3 hereof. No securities other
than the Exchange Preferred Stock shall be included in the Exchange
Registration Statement.

(b) The Company shall include within the Prospectus
contained in the Exchange Registration Statement a section entitled
"Plan of Distribution," reasonably acceptable to the Initial
Purchasers, that shall contain a summary statement of the positions
taken or policies made by the Staff of the SEC with respect to the
potential "underwriter" status of any broker-dealer that is the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of
Exchange Preferred Stock received by such broker-dealer (a
"Participating Broker-Dealer") in the Exchange Offer (other than with
---------------------------
respect to any shares of Exchangeable Preferred Stock acquired by them
and having, or that is reasonably likely to be determined to have, the
status of an

<PAGE>

unsold allotment in the initial distribution), whether such positions
or policies have been publicly disseminated by the Staff of the SEC or
such positions or policies, in the judgment of the Initial Purchasers,
represent the prevailing views of the Staff of the SEC. Such "Plan of
Distribution" section shall also expressly permit the use of the
Prospectus by all Persons subject to the prospectus delivery
requirements of the Securities Act, including all Participating
Broker-Dealers, and include a statement describing the means by which
Participating Broker-Dealers may resell the Exchange Preferred Stock.

The Company shall use its reasonable best efforts to keep
the Exchange Registration Statement effective and to amend and
supplement the Prospectus contained therein, in order to permit such
Prospectus to be lawfully delivered by all Persons subject to the
prospectus delivery requirements of the Securities Act for such period
of time as is necessary to comply with applicable law in connection
with any resale of the Exchange Preferred Stock; provided, however,
-------- -------
that such period shall not exceed 180 days after the Exchange
Registration Statement is declared effective (or such longer period if
extended pursuant to the last paragraph of Section 5 hereof) (the
"Applicable Period").
-----------------
If, prior to consummation of the Exchange Offer, the Initial
Purchasers hold any shares of Exchangeable Preferred Stock acquired by
them and having, or that is reasonably likely to be determined to
have, the status of an unsold allotment in the initial distribution,
the Company shall, upon the request of any of the Initial Purchasers
simultaneously with the delivery of the Exchange Preferred Stock in
the Exchange Offer, issue and deliver to the Initial Purchasers in
exchange (the "Private Exchange") for such shares of Exchangeable
----------------
Preferred Stock held by the Initial Purchasers exchangeable preferred
stock having a liquidation preference equal to that of the surrendered
shares of the Exchangeable Preferred Stock and having terms identical
in all material respects to the Exchangeable Preferred Stock (the
"Private Exchange Preferred Stock"); provided, however, that the
-------------------------------- -------- -------
certificate of designation governing such Private Exchange Preferred
Stock (the "Private Exchange Certificate") shall provide that
----------------------------
Additional Dividends with respect thereto shall be paid, if required,
through the issuance of additional shares of Private Exchange
Preferred Stock. The Private Exchange Preferred Stock shall bear the
same CUSIP number as the Exchange Preferred Stock.

Dividends on the Exchange Preferred Stock and the Private
Exchange Preferred Stock will accumulate from the last

<PAGE>

dividend payment date on which dividends were paid on the Exchangeable
Preferred Stock surrendered in exchange therefor or, if no dividends
have been paid (or deemed to have been paid in accordance with the
terms of the Certificate of Designation) on the Exchangeable Preferred
Stock, from the Issue Date.

In connection with the Exchange Offer, the Company shall:

(1) mail to each Holder a copy of the Prospectus forming
part of the Exchange Registration Statement, together
with an appropriate letter of transmittal and related
documents;

(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The
City of New York;

(3) permit Holders to withdraw tendered shares of
Exchangeable Preferred Stock at any time prior to the
close of business, New York time, on the last business
day on which the Exchange Offer shall remain open; and

(4) otherwise comply in all material respects with all
applicable laws, rules and regulations.

As soon as practicable after the close of the Exchange Offer
or the Private Exchange, as the case may be, the Company shall:

(1) accept for exchange all shares of Exchangeable
Preferred Stock tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;

(2) deliver to the Transfer Agent for cancellation and
retirement certificates representing all shares of
Exchangeable Preferred Stock so accepted for exchange;
and

(3) cause the Transfer Agent to countersign and deliver
promptly to each Holder of shares of Exchangeable
Preferred Stock, certificates for the shares of
Exchange Preferred Stock or Private Exchange Preferred
Stock, as the case may be, equal in liquidation
preference to the shares of Exchangeable Preferred
Stock of such Holder so

<PAGE>

accepted for exchange.

The certificate of designation for the Exchange Preferred
Stock and the Private Exchange Certificate, if any, shall each provide
that the shares of Exchange Preferred Stock and Private Exchange
Preferred Stock shall vote as a class on all matters submitted to them
to vote, including, but not limited to, changes in the respective
certificates of incorporation and election of directors.

(c) If, (i) because of any change in law or in currently
prevailing interpretations of the Staff of the SEC, the Company is not
permitted to effect an Exchange Offer, (ii) the Exchange Offer is not
consummated within 225 days of the date of original issuance of the
Exchangeable Preferred Stock, (iii) any holder of Private Exchange
Preferred Stock so requests at any time after the consummation of the
Private Exchange, (iv) the Holders of not less than a majority of
shares of the Registrable Preferred Stock determine that the interests
of the Holders would be adversely affected by consummation of the
Exchange Offer, or (v) in the case of any Holder that participates in
the Exchange Offer, such Holder does not receive Exchange Preferred
Stock on the date of the exchange that may be sold without restriction
under state and federal securities laws (other than due solely to the
status of such Holder as an affiliate of the Company within the
meaning of the Securities Act), in the case of each of clauses (i) to
and including (v) of this sentence, then the Company shall promptly
deliver to the Holders written notice thereof (the "Shelf Notice") and
------------
shall file a Shelf Registration pursuant to Section 3 hereof.

3. Shelf Registration
------------------
If a Shelf Notice is delivered as contemplated by
Section 2(c) hereof, then:

(a) Shelf Registration. The Company shall as promptly as
------------------
reasonably practicable file with the SEC a Registration Statement for
an offering to be made on a continuous basis pursuant to Rule 415
covering all of the Registrable Preferred Stock (the "Initial Shelf
-------------
Registration"). If the Company shall not have yet filed an Exchange
------------
Registration Statement, the Company shall use its best efforts to file
with the SEC the Initial Shelf Registration on or prior to the Filing
Date. Otherwise, the Company shall use its best efforts to file with
the SEC the Initial Shelf Registration within 30 days of the delivery
of the Shelf Notice. The Initial Shelf Registration shall be on Form
S-1 or another appropriate form permitting

<PAGE>

registration of such Registrable Preferred Stock for resale by Holders
in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings). The Company shall
not permit any securities other than the Registrable Preferred Stock
to be included in the Initial Shelf Registration or any Subsequent
Shelf Registration (as defined below).

The Company shall use its best efforts to cause the Initial
Shelf Registration to be declared effective under the Securities Act
on or prior to the Effectiveness Date and to keep the Initial Shelf
Registration continuously effective under the Securities Act until the
date that is 36 months from the Effectiveness Date, subject to
extension pursuant to the last paragraph of Section 5 hereof (the
"Effectiveness Period"), or such shorter period ending when (i) all
--------------------
the shares of Registrable Preferred Stock covered by the Initial Shelf
Registration have been sold in the manner set forth and as
contemplated in the Initial Shelf Registration or (ii) a Subsequent
Shelf Registration covering all of the Registrable Preferred Stock has
been declared effective under the Securities Act.

(b) Subsequent Shelf Registrations. If the Initial Shelf
------------------------------
Registration or any Subsequent Shelf Registration ceases to be
effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), the Company shall use its reasonable best efforts to
obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within 45 days of such cessation of
effectiveness amend the Initial Shelf Registration in a manner to
obtain the withdrawal of the order suspending the effectiveness
thereof, or file an additional "shelf" Registration Statement pursuant
to Rule 415 covering all of the Registrable Preferred Stock (a
"Subsequent Shelf Registration"). If a Subsequent Shelf Registration
-----------------------------
is filed, the Company shall use its reasonable best efforts to cause
the Subsequent Shelf Registration to be declared effective under the
Securities Act as soon as practicable after such filing and to keep
such Registration Statement continuously effective for a period equal
to the number of days in the Effectiveness Period less the aggregate
number of days during which the Initial Shelf Registration or any
Subsequent Shelf Registration was previously continuously effective.
As used herein the term "Shelf Registration" means the Initial Shelf
------------------
Registration and any Subsequent Shelf Registration.

(c) Supplements and Amendments. The Company shall promptly
--------------------------
supplement and amend the Shelf Registration if required

<PAGE>

by the rules, regulations or instructions applicable to the
registration form used for such Shelf Registration, if required by the
Securities Act, or if reasonably requested by the Holders of a
majority of shares of the Registrable Preferred Stock covered by such
Registration Statement or by any underwriter of such Registrable
Preferred Stock.

4. Additional Dividends
--------------------
The Company and the Initial Purchasers agree that the
Holders of Exchangeable Preferred Stock will suffer damages if the
Company fails to fulfill its obligations under Section 2 or Section 3
hereof and that it would not be feasible to ascertain the extent of
such damages with precision. Accordingly, the Company agrees to pay,
as liquidated damages, additional dividends on the Exchangeable
Preferred Stock or the Private Exchange Preferred Stock (in either
case, "Additional Dividends") under the circumstances and to the
--------------------
extent set forth in the Certificate of Designation and the Private
Exchange Certificate, respectively. The Company shall notify the
Transfer Agent within one business day after each and every date on
which an event occurs in respect of which Additional Dividends are
required to be paid (an "Event Date"). Any Additional Dividends will
----------
be payable in accordance with the Certificate of Designation and the
Private Exchange Certificate on the next following dividend payment
date. The Company agrees to make available to the Transfer Agent
certificates representing additional shares of Private Exchange
Preferred Stock to be paid as Additional Dividends on or prior to the
interest payment date.

5. Registration Procedures
-----------------------
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Company shall effect such
registrations to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof,
and pursuant thereto and in connection with any Registration Statement
filed by the Company hereunder the Company shall:

(a) Prepare and file with the SEC prior to the Filing Date,
a Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use its best efforts to cause each such
Registration Statement to become effective and remain effective as
provided herein; provided, however, that, if (1) such filing is
-------- -------
pursuant to Section 3 hereof, or (2) a Prospectus contained in an
Exchange Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under

<PAGE>

the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Preferred Stock during the Applicable Period, before
filing any Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall furnish to and afford the
Holders of the Registrable Preferred Stock covered by such
Registration Statement or each such Participating Broker-Dealer, as
the case may be, their counsel and the managing underwriters, if any,
a reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed (in each case
at least five business days prior to such filing). The Company shall
not file any Registration Statement or Prospectus or any amendments or
supplements thereto if the Holders of a majority in aggregate
principal amount of the shares of Registrable Preferred Stock covered
by such Registration Statement, or any such Participating
Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object.

(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to
keep such Registration Statement continuously effective for the
Effectiveness Period or the Applicable Period, as the case may be;
cause the related Prospectus to be supplemented by any Prospectus
supplement required by applicable law, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force)
promulgated under the Securities Act; and comply with the provisions
of the Securities Act and the Exchange Act applicable to it with
respect to the disposition of all securities covered by such
Registration Statement as so amended or in such Prospectus as so
supplemented and with respect to the subsequent resale of any
securities being sold by a Participating Broker-Dealer covered by any
such Prospectus. The Company shall be deemed not to have used its
reasonable best efforts to keep a Registration Statement effective
during the Applicable Period if it voluntarily takes any action that
would result in selling Holders of the Registrable Preferred Stock
covered thereby or Participating Broker-Dealers seeking to sell
Exchange Preferred Stock not being able to sell such Registrable
Preferred Stock or such Exchange Preferred Stock during that period
unless such action is required by applicable law or unless the Company
complies with this Agreement, including without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of this
Section 5.

<PAGE>

Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, notify the selling Holders of shares of Registrable
Preferred Stock, or each such Participating Broker-Dealer, as the case
may be, their counsel and the managing underwriters, if any, promptly
(but in any event within two business days), and confirm such notice
in writing, (i) when a Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same
has become effective under the Securities Act (including in such
notice a written statement that any Holder may, upon request, obtain,
at the sole expense of the Company, one conformed copy of such
Registration Statement or post-effective amendment including financial
statements and schedules, documents incorporated or deemed to be
incorporated by reference and exhibits), (ii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a prospectus is required by the
Securities Act to be delivered in connection with sales of the
Registrable Preferred Stock or resales of Exchange Preferred Stock by
Participating Broker-Dealers the representations and warranties of the
Company contained in any agreement (including any underwriting
agreement), contemplated by Section 5(m) hereof cease to be true and
correct, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of a Registration Statement or any of the Registrable
Preferred Stock or the Exchange Preferred Stock to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or
the initiation or threatening of any proceeding for such purpose,
(v) of the happening of any event, the existence of any condition or
any information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in
or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in

<PAGE>

the light of the circumstances under which they were made, not
misleading and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be
appropriate.

(d) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, use its reasonable best efforts to prevent the
issuance of any order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of a
Prospectus or suspending the qualification (or exemption from
qualification) of any of the Registrable Preferred Stock or the
Exchange Preferred Stock to be sold by any Participating
Broker-Dealer, for sale in any jurisdiction, and, if any such order is
issued, to use its reasonable best efforts to obtain the withdrawal of
any such order at the earliest possible moment.

(e) If a Shelf Registration is filed pursuant to Section 3
and if requested by the managing underwriter or underwriters (if any),
or the Holders of a majority of shares of the Registrable Preferred
Stock being sold in connection with an underwritten offering or any
Participating Broker-Dealer, (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the
managing underwriter or underwriters (if any), such Holders, any
Participating Broker-Dealer or counsel for any of them determine is
reasonably necessary to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment and (iii) supplement or make amendments to
such Registration Statement.

(f) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, furnish to each selling Holder of Registrable
Preferred Stock and to each such Participating Broker-Dealer who so
requests and to counsel and each managing underwriter, if any, at the
sole expense of the Company, one conformed copy of the Registration
Statement or

<PAGE>

Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all
documents incorporated or deemed to be incorporated therein by
reference and all exhibits.

(g) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, deliver to each selling Holder of Registrable
Preferred Stock, or each such Participating Broker-Dealer, as the case
may be, their respective counsel, and the underwriters, if any, at the
sole expense of the Company, as many copies of the Prospectus
(including each form of preliminary prospectus) and each amendment or
supplement thereto and any documents incorporated by reference therein
as such Persons may reasonably request; and, subject to the last
paragraph of this Section 5, the Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of
the selling Holders of Registrable Preferred Stock or each such
Participating Broker-Dealer, as the case may be, and the underwriters
or agents, if any, and dealers (if any), in connection with the
offering and sale of the Registrable Preferred Stock covered by, or
the sale by Participating Broker-Dealers of the Exchange Preferred
Stock pursuant to, such Prospectus and any amendment or supplement
thereto.

(h) Prior to any public offering of Registrable Preferred
Stock or any delivery of a Prospectus contained in the Exchange
Registration Statement by any Participating Broker-Dealer who seeks to
sell Exchange Preferred Stock during the Applicable Period, to use its
reasonable best efforts to register or qualify, and to cooperate with
the selling Holders of Registrable Preferred Stock or each such
Participating Broker-Dealer, as the case may be, the managing
underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Preferred
Stock for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder,
Participating Broker-Dealer, or the managing underwriter or
underwriters reasonably request; provided, however, that where
-------- -------
Exchange Preferred Stock held by Participating Broker-Dealers or
Registrable Preferred Stock is offered other than through an
underwritten offering, the Company agrees to cause the Company's
counsel to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section

<PAGE>

5(h); keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things
reasonably necessary or advisable to enable the disposition in such
jurisdictions of the Exchange Preferred Stock held by Participating
Broker-Dealers or the Registrable Preferred Stock covered by the
applicable Registration Statement; provided, however, that the Company
-------- -------
shall not be required to qualify as a foreign corporation or to
execute a general consent to service of process in any jurisdiction.

(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Preferred
Stock and the managing underwriter or underwriters, if any, to
facilitate the timely preparation and delivery of certificates
representing shares of Registrable Preferred Stock to be sold, which
certificates shall not bear any restrictive legends and shall be in a
form eligible for deposit with The Depository Trust Company; and
enable such shares of Registrable Preferred Stock to be in such
denominations and registered in such names as the managing underwriter
or underwriters, if any, or Holders may reasonably request.

(j) Use its reasonable best efforts to cause the
Registrable Preferred Stock covered by the Registration Statement to
be registered with or approved by such other governmental agencies or
authorities as may be necessary to enable the seller or sellers
thereof or the underwriter or underwriters, if any, to consummate the
disposition of such Registrable Preferred Stock, except as may be
required solely as a consequence of the nature of such selling
Holder's business, in which case the Company will cooperate in all
reasonable respects with the filing of such Registration Statement and
the granting of such approvals.

(k) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, upon the occurrence of any event contemplated by
paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable
prepare and (subject to Section 5(a) hereof) file with the SEC, at the
sole expense of the Company, a supplement or post-effective amendment
to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable

<PAGE>

Preferred Stock being sold thereunder or to the purchasers of the
Exchange Preferred Stock to whom such Prospectus will be delivered by
a Participating Broker-Dealer, any such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.

(l) Prior to the effective date of the first Registration
Statement relating to the Registrable Preferred Stock, (i) provide the
Transfer Agent with certificates for the Registrable Preferred Stock
in a form eligible for deposit with The Depository Trust Company and
(ii) provide a CUSIP number for the Registrable Preferred Stock.

(m) In connection with any underwritten offering of
Registrable Preferred Stock pursuant to a Shelf Registration, enter
into an underwriting agreement as is customary in underwritten
offerings of preferred stock similar to the Exchangeable Preferred
Stock and take all such other actions as are reasonably requested by
the managing underwriter or underwriters in order to expedite or
facilitate the registration or the disposition of such Registrable
Preferred Stock and, in such connection, (i) make such representations
and warranties to, and covenants with, the underwriters with respect
to the business of the Company and its subsidiaries (including any
acquired business, properties or entity, if applicable) and the
Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, as
are customarily made by issuers to underwriters in underwritten
offerings of preferred stock similar to the Exchangeable Preferred
Stock, and confirm the same in writing if and when requested;
(ii) obtain the written opinion of counsel to the Company and written
updates thereof in form, scope and substance reasonably satisfactory
to the managing underwriter or underwriters, addressed to the
underwriters covering the matters customarily covered in opinions
requested in underwritten offerings of preferred stock similar to the
Exchangeable Preferred Stock and such other matters as may be
reasonably requested by the managing underwriter or underwriters;
(iii) obtain "cold comfort" letters and updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the
Company (and, if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any business
acquired by the Company for which financial statements and financial
data are, or are required to be, included or incorporated by reference
in the Registration

<PAGE>

Statement), addressed to each of the underwriters, such letters to be
in customary form and covering matters of the type customarily covered
in "cold comfort" letters in connection with underwritten offerings of
preferred stock similar to the Exchangeable Preferred Stock and such
other matters as reasonably requested by the managing underwriter or
underwriters; and (iv) if an underwriting agreement is entered into,
the same shall contain indemnification provisions and procedures no
less favorable than those set forth in Section 7 hereof (or such other
provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of shares of Registrable Preferred Stock
covered by such Registration Statement and the managing underwriter or
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing
under such underwriting agreement, or as and to the extent required
thereunder.

(n) If (1) a Shelf Registration is filed pursuant to
Section 3 hereof, or (2) a Prospectus contained in an Exchange
Registration Statement filed pursuant to Section 2 hereof is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Preferred Stock during the
Applicable Period, make available for inspection by any selling Holder
of such Registrable Preferred Stock being sold, or each such
Participating Broker-Dealer, as the case may be, any underwriter
participating in any such disposition of Registrable Preferred Stock,
if any, and any attorney, accountant or other agent retained by any
such selling Holder or each such Participating Broker-Dealer, as the
case may be, or underwriter (collectively, the "Inspectors"), at the
----------
offices where normally kept, during reasonable business hours, all
financial and other records, pertinent corporate documents and
instruments of the Company and its subsidiaries (collectively, the
"Records") as shall be reasonably necessary to enable them to exercise
-------
any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Company and its subsidiaries to supply
all information reasonably requested by any such Inspector in
connection with such Registration Statement. Records that the Company
determines, in good faith, to be confidential and any Records that it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction,
(iii) disclosure of such information is, in the opinion of counsel for
any Inspector, necessary or advisable in connection with any action,
claim, suit or

<PAGE>

proceeding, directly or indirectly, involving or potentially involving
such Inspector and arising out of, based upon, relating to, or
involving this Agreement or any transactions contemplated hereby or
arising hereunder or (iv) the information in such Records has been
made generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will
be required to agree that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be used by
it as the basis for any market transactions in the securities of the
Company unless and until such information is generally available to
the public. Each selling Holder of such Registrable Preferred Stock
and each such Participating Broker-Dealer will be required to further
agree that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the
Company and allow the Company to undertake appropriate action to
prevent disclosure of the Records deemed confidential at the Company's
sole expense.

(o) Comply with all applicable rules and regulations of the
SEC and make generally available to its securityholders earning
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which Registrable Preferred Stock is sold to
underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.

(p) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of shares of Registrable Preferred Stock by
Holders to the Company (or to such other Person as directed by the
Company) in exchange for shares of Exchange Preferred Stock or Private
Exchange Preferred Stock, as the case may be, the Company shall mark,
or cause to be marked, on the certificates representing such shares of
Registrable Preferred Stock that such shares of Registrable Preferred
Stock are being cancelled in exchange for the Exchange Preferred Stock
or the Private Exchange Preferred Stock, as the case may be.

(q) Cooperate with each seller of Registrable Preferred
Stock covered by any Registration Statement and each underwriter, if
any, participating in the disposition of such

<PAGE>

Registrable Preferred Stock and their respective counsel in connection
with any filings required to be made with the National Association of
Securities Dealers, Inc. (the "NASD").
----
(r) Provide an indenture trustee for the Exchange Indenture
(as defined in the Purchase Agreement) and cause the Exchange
Indenture to be qualified under the TIA not later than the effective
date of the Exchange Offer or the first Registration Statement
relating to the Registrable Preferred Stock; and in connection
therewith, cooperate with the trustee under the Exchange Indenture and
the Holders of the Registrable Preferred Stock to effect such changes
to such indenture as may be required for such indenture to be so
qualified in accordance with the terms of the TIA; and execute, and
use its best efforts to cause such trustee to execute, all documents
as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable the Exchange
Indenture to be so qualified in a timely manner.

(s) Use its reasonable best efforts to cause the
Registrable Preferred Stock covered by a Registration Statement or the
Exchange Preferred Stock, as the case may be, to be rated with the
appropriate rating agencies, if so requested by the Holders of a
majority of shares of Registrable Preferred Stock covered by such
Registration Statement or the Exchange Preferred Stock, as the case
may be, or the managing underwriter or underwriters, if any.

(t) Use its best efforts to take all other steps necessary
or advisable to effect the registration of the Exchange Preferred
Stock and/or Registrable Preferred Stock covered by a Registration
Statement contemplated hereby.

The Company may require each seller of Registrable Preferred
Stock as to which any registration is being effected to furnish to the
Company such information regarding such seller and the distribution of
such Registrable Preferred Stock as the Company may, from time to
time, reasonably request. The Company may exclude from such
registration the Registrable Preferred Stock of any seller who
unreasonably fails to furnish such information within a reasonable
time after receiving such request. Each seller as to which any Shelf
Registration is being effected agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such seller not
materially misleading.

Each Holder of Registrable Preferred Stock and each

<PAGE>

Participating Broker-Dealer agrees by acquisition of such Registrable
Preferred Stock or Exchange Preferred Stock to be sold by such
Participating Broker-Dealer, as the case may be, that, upon actual
receipt of any notice from the Company of the happening of any event
of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or
5(c)(vi) hereof, such Holder will forthwith discontinue disposition of
such Registrable Preferred Stock covered by such Registration
Statement or Prospectus or Exchange Preferred Stock to be sold by such
Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k)
hereof, or until it is advised in writing (the "Advice") by the
------
Company that the use of the applicable Prospectus may be resumed, and
has received copies of any amendments or supplements thereto. In the
event the Company shall give any such notice, each of the
Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of
the giving of such notice to and including the date when each seller
of Registrable Preferred Stock covered by such Registration Statement
or Exchange Preferred Stock to be sold by such Participating
Broker-Dealer, as the case may be, shall have received (x) the copies
of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof or (y) the Advice.

6. Registration Expenses
---------------------
(a) All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the
Company whether or not the Exchange Offer or a Shelf Registration is
filed or becomes effective, including, without limitation, (i) all
registration and filing fees (including, without limitation, (A) fees
with respect to filings required to be made with the NASD in
connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection
with Blue Sky qualifications of the Registrable Preferred Stock or
Exchange Preferred Stock and determination of the eligibility of the
Registrable Preferred Stock or Exchange Preferred Stock for investment
under the laws of such jurisdictions (x) where the holders of
Registrable Preferred Stock are located, in the case of the Exchange
Preferred Stock, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Preferred Stock or Exchange Preferred Stock to be
sold by a Participating Broker-Dealer during the Applicable Period)),
(ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Preferred Stock or Exchange
Preferred Stock in a

<PAGE>

form eligible for deposit with The Depository Trust Company and of
printing prospectuses if the printing of prospectuses is requested by
the managing underwriter or underwriters, if any, by the Holders of a
majority of shares of the Registrable Preferred Stock included in any
Registration Statement or sold by any Participating Broker-Dealer as
the case may be, (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company and fees and
disbursements of special counsel for the sellers of Registrable
Preferred Stock (subject to the provisions of Section 6(b) hereof),
(v) fees and disbursements of all independent certified public
accountants referred to in Section 5(m)(iii) hereof (including,
without limitation, the expenses of any special audit and "cold
comfort" letters required by or incident to such performance),
(vi) rating agency fees, (vii) Securities Act liability insurance, if
the Company desires such insurance, (viii) fees and expenses of all
other Persons retained by the Company, (ix) internal expenses of the
Company (including, without limitation, all salaries and expenses of
officers and employees of the Company performing legal or accounting
duties), (x) the expense of any annual audit, (xi) the fees and
expenses incurred in connection with the listing of the securities to
be registered on any securities exchange, if applicable, and (xii) the
expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales
agreements, indentures and any other documents necessary in order to
comply with this Agreement.

(b) The Company shall reimburse the Holders of the
Registrable Preferred Stock being registered in a Shelf Registration
for the reasonable fees and disbursements, not to exceed $25,000, of
not more than one counsel (in addition to appropriate local counsel)
chosen by the Holders of a majority of shares of the Registrable
Preferred Stock to be included in such Registration Statement and
other out-of-pocket expenses of such Holders of Registrable Preferred
Stock incurred in connection with the registration and sale of the
Registrable Preferred Stock pursuant to the Exchange Offer.

7. Indemnification
---------------
(a) The Company agrees to indemnify and hold harmless each
Holder of Registrable Preferred Stock and each Participating
Broker-Dealer selling Exchange Preferred Stock during the Applicable
Period, the officers and directors of each such Person, and each
Person, if any, who controls any such Person within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act (each, a "Participant"), from and
-----------

<PAGE>

against any and all losses, claims, damages and liabilities
(including, without limitation, the reasonable legal fees and other
expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based
upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment
thereto) or Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by, arising out of or based upon any
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or liabilities are
caused by any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with information
relating to any Participant furnished to the Company in writing by
such Participant expressly for use therein; provided, however, that
-------- -------
the Company will not be liable if such untrue statement or omission or
alleged untrue statement or omission was contained or made in any
preliminary prospectus and corrected in the Prospectus or any
amendment or supplement thereto and the Prospectus does not contain
any other untrue statement or omission or alleged untrue statement or
omission of a material fact that was the subject matter of the related
proceeding and any such loss, liability, claim, damage or expense
suffered or incurred by the Participants resulted from any action,
claim or suit by any Person who purchased Registrable Preferred Stock
or Exchange Preferred Stock that is the subject thereof from such
Participant and it is established in the related proceeding that such
Participant failed to deliver or provide a copy of the Prospectus (as
amended or supplemented) to such Person with or prior to the
confirmation of the sale of such Registrable Preferred Stock or
Exchange Preferred Stock sold to such Person if required by applicable
law, unless such failure to deliver or provide a copy of the
Prospectus (as amended or supplemented) was a result of noncompliance
by the Company with Section 5 of this Agreement.

(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors and officers
who sign the Registration Statement and each Person who controls the
Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing
indemnity from the Company to each Participant, but only (i) with
reference to information relating to such Participant furnished to the
Company in writing by such Participant expressly for use in any

<PAGE>

Registration Statement or Prospectus, any amendment or supplement
thereto, or any preliminary prospectus or (ii) with respect to any
untrue statement or representation made by such Participant in writing
to the Company. The liability of any Participant under this paragraph
shall in no event exceed the proceeds received by such Participant
from sales of Registrable Preferred Stock or Exchange Preferred Stock
giving rise to such obligations.

(c) If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be
brought or asserted against any Person in respect of which indemnity
may be sought pursuant to either of the two preceding paragraphs, such
Person (the "Indemnified Person") shall promptly notify the Person
------------------
against whom such indemnity may be sought (the "Indemnifying Person")
-------------------
in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to
the Indemnified Person to represent the Indemnified Person and any
others the Indemnifying Person may reasonably designate in such
proceeding and shall pay the reasonable fees and expenses actually
incurred by such counsel related to such proceeding; provided,
--------
however, that the failure to so notify the Indemnifying Person shall
-------
not relieve it of any obligation or liability which it may have
hereunder or otherwise (unless and to the extent that it did not
otherwise learn of such action or claim and such omission results in
the forfeiture by the Indemnifying Person of substantial rights and
defenses). In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless
(i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed in writing to the contrary, (ii) the Indemnifying
Person has failed to retain counsel reasonably satisfactory to the
Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person
and the Indemnified Person and the Indemnified Person shall have been
advised by counsel that representation of both parties by the same
counsel would be inappropriate under applicable standards of
professional conduct due to differing interests between them. It is
understood that, unless there exists a conflict among Indemnified
Persons, the Indemnifying Person shall not, in connection with any one
such proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses shall be
reimbursed promptly as they are incurred. Any

<PAGE>

such separate firm for the Participants and such control Persons of
Participants shall be designated in writing by Participants who sold a
majority of shares of Registrable Preferred Stock and Exchange
Preferred Stock sold by all such Participants and any such separate
firm for the Company, its directors, its officers and such control
Persons of the Company shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any
proceeding effected without its prior written consent (which consent
shall not be unreasonably withheld or delayed), but if settled with
such consent or if there be a final non-appealable judgment for the
plaintiff for which the Indemnified Person is entitled to
indemnification pursuant to this Agreement, the Indemnifying Person
agrees to indemnify and hold harmless each Indemnified Person from and
against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for reasonable fees and expenses
actually incurred by counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable
for any settlement of any proceeding effected without its consent if
(i) such settlement is entered into more than 30 days after receipt by
such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person
in accordance with such request prior to the date of such settlement;
provided, however, that the Indemnifying Person shall not be liable
-------- -------
for any settlement effected without its consent pursuant to this
sentence if the Indemnifying Person is contesting, in good faith, the
request for reimbursement. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person effect any settlement
or compromise of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party, or
indemnity could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional written release
of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims
that are the subject matter of such proceeding and (B) does not
include any statement as to an admission of fault, culpability or
failure to act by or on behalf of any Indemnified Person.

(d) If the indemnification provided for in the first and
second paragraphs of this Section 7 is for any reason unavailable to,
or insufficient to hold harmless, an Indemnified Person in respect of
any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraphs, in lieu of
indemnifying such Indemnified Person

<PAGE>

thereunder and in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such
Indemnified Person as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect (i) the
relative benefits received by the Indemnifying Person or Persons on
the one hand and the Indemnified Person or Persons on the other from
the offering of the Exchangeable Preferred Stock or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative
fault of the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other in connection with the
statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof) as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company on the one hand or such Participant or such other
Indemnified Person, as the case may be, on the other, the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission, and any other equitable
considerations appropriate in the circumstances.

(e) The parties agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Participants were treated as one
--- ----
entity for such purpose) or by any other method of allocation that
does not take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or payable by an
Indemnified Person as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any
reasonable legal or other expenses actually incurred by such
Indemnified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall a Participant be required to contribute
any amount in excess of the amount by which proceeds received by such
Participant from sales of Registrable Preferred Stock or Exchange
Preferred Stock, as the case may be, exceeds the amount of any damages
that such Participant has otherwise been required to pay or has paid
by reason of such untrue or alleged untrue statement or omission or
alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to

<PAGE>

contribution from any Person who was not guilty of such fraudulent
misrepresentation.

(f) The indemnity and contribution agreements contained in
this Section 7 will be in addition to any liability which the
Indemnifying Persons may otherwise have to the Indemnified Persons
referred to above.

8. Rules 144 and 144A
------------------
The Company covenants that it will file the reports required
to be filed by it under the Securities Act and the Exchange Act and
the rules and regulations adopted by the SEC thereunder in a timely
manner in accordance with the requirements of the Securities Act and
the Exchange Act and, if at any time the Company is not required to
file such reports, it will, upon the request of any Holder of
Registrable Preferred Stock, make publicly available annual reports
and such information, documents and other reports of the type
specified in Sections 13 and 15(d) of the Exchange Act. The Company
further covenants for so long as any Registrable Preferred Stock
remains outstanding, to make available to any Holder or beneficial
owner of Registrable Preferred Stock in connection with any sale
thereof and any prospective purchaser of such Registrable Preferred
Stock from such Holder or beneficial owner, the information required
by Rule 144A(d)(4) under the Securities Act in order to permit resales
of such Registrable Preferred Stock pursuant to Rule 144A.

9. Underwritten Registrations
--------------------------
If any of the Registrable Preferred Stock covered by any
Shelf Registration is to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers that
will manage the offering will be selected by the Holders of a majority
of shares of such Registrable Preferred Stock included in such
offering and reasonably acceptable to the Company.

No Holder of Registrable Preferred Stock may participate in
any underwritten registration hereunder unless such Holder (a) agrees
to sell such Holder's Registrable Preferred Stock on the basis
provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms
of such underwriting arrangements.

<PAGE>

10. Registration of Transfers and Exchanges
---------------------------------------
(a) Transfer and Exchange of Certificated Shares. When
--------------------------------------------
shares of Exchangeable Preferred Stock or Private Exchange Preferred
Stock that are represented by definitive certificates ("Certificated
Shares") are presented to the Transfer Agent with a request:

(i) to register the transfer of the Certificated Shares;
or

(ii) to exchange such Certificated Shares for an equal
number of Certificated Shares,

the Holders hereby acknowledge that the Transfer Agent shall register
the transfer or make the exchange as requested if the requirements
under this Section 10(a) hereof for such transactions are met;
provided, however, that the Certificated Shares presented or
-------- -------
surrendered for registration of transfer or exchange:

(x) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Company and the Transfer Agent, duly executed by the
holder thereof or by his attorney, duly authorized
in writing; and

(y) in the case of Registrable Preferred Stock, such
shares of Exchangeable Preferred Stock or Private
Exchange Preferred Stock be accompanied by the
following additional information and documents, as
applicable:

(A) if such shares are being delivered to the
Transfer Agent by a Holder for registration in
the name of such Holder, without transfer, a
certification from such Holder to that effect
(in substantially the form of Exhibit A
---------
hereto); or

(B) if such shares are being transferred to a
qualified institutional buyer (as defined in
Rule 144A under the Securities Act, a "QIB") in
---
accordance with Rule 144A under the Securities
Act or pursuant to an exemption from
registration in accordance

<PAGE>

with Rule 144 or Regulation S under the
Securities Act, a certification to that effect
(in substantially the form of Exhibit A
---------
hereto); or

(C) if such shares are being transferred to an
institutional "accredited investor" within the
meaning of subparagraph (a)(1), (a)(2), (a)(3)
or (a)(7) of Rule 501 under the Securities Act,
delivery of a Certificate of Transfer in the
form of Exhibit B hereto and an opinion of
---------
counsel and/or other information satisfactory
to the Company to the effect that such transfer
is in compliance with the Securities Act; or

(D) if such shares are being transferred in
reliance on another exemption from the
registration requirements of the Securities
Act, a certification to that effect (in
substantially the form of Exhibit A hereto) and
---------
an opinion of counsel reasonably acceptable to
the Company to the effect that such transfer is
in compliance with the Securities Act.

(b) Restrictions on Transfer of Certificated Shares for
---------------------------------------------------
a Beneficial Interest in Global Shares. Certificated Shares may not
--------------------------------------
be exchanged for a beneficial interest in one or more global
certificates representing all shares of Exchangeable Preferred Stock
or Private Exchange Preferred Stock held by the Depositary (the
"Global Certificates") except upon satisfaction of the requirements
set forth below. Upon receipt by the Transfer Agent of Certificated
Shares, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Transfer Agent, together with:

(A) certification, substantially in the form of
Exhibit A hereto, that such Certificated Shares
---------
are being transferred to a QIB in accordance
with Rule 144A under the Securities Act; and

(B) written instructions directing the Transfer
Agent to make, or to direct the Depositary to
make, an endorsement on the Global Certificate
to reflect an increase

<PAGE>

in the aggregate number of shares of
Exchangeable Preferred Stock or Private
Exchange Preferred Stock represented by the
Global Certificate,

then the Transfer Agent shall cancel the certificate representing such
Certificated Shares and cause, or direct the Depositary to cause, in
accordance with the standing instructions and procedures existing
between the Depositary and the Transfer Agent, the number of shares of
Exchangeable Preferred Stock or Private Exchange Preferred Stock
represented by the Global Certificates to be increased accordingly.
If no Global Certificate is then outstanding, the Company shall issue
and the Transfer Agent shall authenticate a new Global Certificate in
the appropriate amount.

(c) Transfer and Exchange of Global Certificates. The
--------------------------------------------
transfer and exchange of Global Certificates or beneficial interests
therein shall be effected through the Depositary, in accordance with
the procedures of the Depositary therefor.

(d) Transfer of a Beneficial Interest in a Global
---------------------------------------------
Certificate for Certificated Shares.
-----------------------------------
(i) Any person having a beneficial interest in a Global
Certificate may upon request exchange such
beneficial interest for Certificated Shares. Upon
receipt by the Transfer Agent of written
instructions or such other form of instructions as
is customary for the Depositary from the Depositary
or its nominee on behalf of any person having a
beneficial interest in a Global Certificate and upon
receipt by the Transfer Agent of a written order or
such other form of instructions as is customary for
the Depositary or the person designated by the
Depositary as having such a beneficial interest
containing registration instructions and, in the
case of any such transfer or exchange of Registrable
Preferred Stock, the following additional
information and documents:

(A) if such beneficial interest is being
transferred to the person designated by the
Depositary as being the beneficial owner, a
certification from such person to that effect
(in substantially the form of Exhibit A
---------
hereto); or

<PAGE>

(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to an
exemption from registration in accordance with
Rule 144 or Regulation S under the Securities
Act, a certification to that effect (in
substantially the form of Exhibit A hereto); or
---------
(C) if such beneficial interest is being
transferred to an institutional "accredited
investor" within the meaning of subparagraphs
(a)(1), (a)(2), (a)(3) or (a)(7) of Rule 501
under the Securities Act, delivery of a
Certificate of Transfer in the form of Exhibit
-------
B hereto and an opinion of counsel and/or other
-
information satisfactory to the Company to the
effect that such transfer is in compliance with
the Securities Act; or

(D) if such beneficial interest is being
transferred in reliance on another exemption
from the registration requirements of the
Securities Act, a certification to that effect
(in substantially the form of Exhibit A hereto)
---------
and an opinion of counsel from the transferee
or transferor reasonably acceptable to the
Company to the effect that such transfer is in
compliance with the Securities Act,

then the Transfer Agent will cause, in accordance with
the standing instructions and procedures existing between
the Depositary and the Transfer Agent, the aggregate
number of shares of Exchangeable Preferred Stock or
Private Exchange Preferred Stock represented by the
Global Certificates to be reduced and, following such
reduction, the Company will execute and, upon receipt of
an authentication order in the form of an Officers'
Certificate, the Transfer Agent will authenticate and
deliver to the transferee a certificate representing such
Certificated Shares.

(ii) Certificated Shares issued in exchange for a

<PAGE>

beneficial interest in a Global Certificate pursuant
to this Section 10(d) shall be registered in such
names and for such number of shares of Exchangeable
Preferred Stock or Private Exchange Preferred Stock
as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall
instruct the Transfer Agent in writing. The
Transfer Agent shall deliver such Certificated
Shares to the persons in whose names such shares of
Exchangeable Preferred Stock or Private Exchange
Preferred Stock are so registered.

(e) Restrictions on Transfer and Exchange of Global
-----------------------------------------------
Certificates. A Global Certificate may not be transferred as a whole
------------
except by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.

(f) Authentication of Certificated Shares in Absence of
------------------------------------------------ --
Depositary. If at any time:
----------
(i) the Depositary for the shares of Exchangeable
Preferred Stock or Private Exchange Preferred Stock
notifies the Company that the Depositary is
unwilling or unable to continue as Depositary for
the Global Certificates and a successor Depositary
for the Global Certificates is not appointed by the
Company within 90 days after delivery of such
notice; or

(ii) the Company, at its sole discretion, notifies the
Transfer Agent in writing that it elects to cause
the issuance of Certificated Shares,

then the Company will execute, and the Transfer Agent, upon receipt of
an Officers' Certificate requesting the authentication and delivery of
Certificated Shares, will authenticate and deliver certificates
representing Certificated Shares, in an aggregate number equal to the
aggregate number of certificates representing Certificated Shares
represented by the Global Certificates, in exchange for such Global
Certificates.

(g) Legends.
-------

<PAGE>

(i) Except as permitted by the following paragraph (ii),
each Global Certificate and each certificate
representing Certificated Shares shall bear a legend
substantially in the form attached hereto as
Exhibit C.

(ii) Upon the shares of Private Exchange Preferred Stock
ceasing to be Registrable Preferred Stock:

(A) in the case of any certificate that represents
Certificated Shares, the Transfer Agent shall
permit the holder thereof to exchange such
certificate for a certificate representing such
Certificated Shares that does not bear the
first paragraph of the legend referred to above
and rescind any related restriction on the
transfer; and

(B) any such shares represented by a Global
Certificate shall not be subject to the
provisions set forth in (i) above (such sales
or transfers being subject only to the
provisions of Section 10(c) hereof).

(h) Cancellation and/or Adjustment of a Global
------------------------------------------
Certificate. At such time as all beneficial interests in a Global
-----------
Certificate have either been exchanged for certificates representing
Certificated Shares, redeemed, repurchased or cancelled, such Global
Certificates shall be returned to or retained and cancelled by the
Transfer Agent. At any time prior to such cancellation, if any
beneficial interest in a Global Certificate is exchanged for
certificates representing Certificated Shares, redeemed, repurchased
or cancelled, the number of shares represented by such Global
Certificates shall be reduced and an endorsement shall be made on such
Global Certificates, by the Transfer Agent to reflect such reduction.

(i) Obligations with Respect to Transfers and Exchanges
---------------------------------------------------
of Certificated Shares.
----------------------
(i) To permit registrations of transfers and exchanges,
the Company shall execute, at the Transfer Agent's
request, and the Transfer Agent shall authenticate
certificates representing Certificated Shares and
Global Certificates.

<PAGE>

(ii) All certificates representing Certificated Shares
and Global Certificates issued upon any
registration, transfer or exchange of certificates
representing Certificated Shares or Global
Certificates shall be the valid obligations of the
Company, entitled to the same benefits as the shares
surrendered upon the registration of transfer or
exchange.

(iii) Prior to due presentment for registration of
transfer of any shares of Registrable Preferred
Stock, the Transfer Agent and the Company may deem
and treat the person in whose name any such shares
are registered as the absolute owner of such shares,
and neither the Transfer Agent nor the Company shall
be affected by notice to the contrary.

11. Miscellaneous
-------------
(a) No Inconsistent Agreements. The Company has not, as
--------------------------
of the date hereof, and the Company shall not, after the date of this
Agreement, enter into any agreement with respect to any of its
securities that is inconsistent with the rights granted to the Holders
of Registrable Preferred Stock in this Agreement or otherwise
conflicts with the provisions hereof. The Company has not entered and
will not enter into any agreement with respect to any of its
securities that will grant to any Person piggy-back registration
rights with respect to a Registration Statement.

(b) Adjustments Affecting Registrable Preferred Stock.
-------------------------------------------------
The Company shall not, directly or indirectly, take any action with
respect to the Registrable Preferred Stock as a class that would
adversely affect the ability of the Holders of Registrable Preferred
Stock to include such Registrable Preferred Stock in a registration
undertaken pursuant to this Agreement.

(c) Amendments and Waivers. The provisions of this
----------------------
Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given,
otherwise than with the prior written consent of (A) the Holders of
not less than a majority of shares of the then outstanding Registrable
Preferred Stock and (B) in circumstances that would adversely affect
the Participating Broker-Dealers, the Participating Broker-Dealers
holding not less than a majority of shares of the Exchange Preferred
Stock held by all Participating Broker-Dealers; provided, however,
-------- -------
that Section 7 and this

<PAGE>

Section 11(c) may not be amended, modified or supplemented without the
prior written consent of each Holder and each Participating
Broker-Dealer (including any person who was a Holder or Participating
Broker-Dealer of Registrable Preferred Stock or Exchange Preferred
Stock, as the case may be, disposed of pursuant to any Registration
Statement). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders of Registrable Preferred
Stock whose securities are being sold pursuant to a Registration
Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders of Registrable
Preferred Stock may be given by Holders of at least a majority of
shares of the Registrable Preferred Stock being sold by such Holders
pursuant to such Registration Statement; provided, however, that the
-------- -------
provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the
immediately preceding sentence.

(d) Notices. All notices and other communications
-------
provided for or permitted hereunder shall be made in writing by hand-
delivery, registered first-class mail, next-day air courier or
facsimile:

1. if to a Holder of the Registrable Preferred
Stock or any Participating Broker-Dealer, at the most current address
of such Holder or Participating Broker-Dealer, as the case may be, on
the stock books of the Company with a copy in like manner to the
Initial Purchasers as follows:

BT SECURITIES CORPORATION
CREDIT SUISSE FIRST BOSTON CORPORATION
GOLDMAN, SACHS & CO.
NATIONSBANC CAPITAL MARKETS, INC.
SMITH BARNEY INC.
c/o BT Securities Corporation
Bankers Trust Plaza
130 Liberty Street
New York, New York 10006
Facsimile No: (212) 250-7200
Attention: Corporate Finance
Department

with a copy to:

Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005

<PAGE>

Facsimile No: (212) 269-5420
Attention: William M. Hartnett, Esq.

2. if to the Initial Purchasers, at the addresses
specified in Section 11(d)(1);

3. if to the Company, at the addresses as follows:

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

with copies to:

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

All such notices and communications shall be deemed to
have been duly given: when delivered by hand, if personally
delivered; five business days after being deposited in the mail,
postage prepaid, if mailed; one business day after being timely
delivered to a next-day air courier; and when receipt is acknowledged
by the addressee, if sent by facsimile.

(e) Successors and Assigns. This Agreement shall inure
----------------------
to the benefit of and be binding upon the successors and assigns of
each of the parties hereto, including the Holders; provided, however,
-------- -------
that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such
successor or assign holds Registrable Preferred Stock.

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

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

<PAGE>

otherwise affect the meaning hereof.

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

(i) Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way
be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.

(j) Securities Held by the Company or Its Affiliates.
------------------------------------------------
Whenever the consent or approval of Holders of a specified percentage
of shares of Registrable Preferred Stock is required hereunder, shares
of Registrable Preferred Stock held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall
not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.

(k) Third Party Beneficiaries. Holders of Registrable
-------------------------
Preferred Stock and Participating Broker-Dealers are intended third
party beneficiaries of this Agreement and this Agreement may be
enforced by such Persons.

(l) Entire Agreement. This Agreement, together with
----------------
the Purchase Agreement and the Certificate of Designation, is intended
by the parties as a final and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and therein and any and all prior oral or written
agreements, representations, or warranties, contracts, understandings,
correspondence, conversations and memoranda between the Initial
Purchasers on the one hand and the Company on the other, or between or
among any agents, representatives, parents, subsidiaries, affiliates,
predecessors in interest or successors in interest with respect

<PAGE>

to the subject matter hereof and thereof are merged herein and
replaced hereby.

<PAGE>

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

CHANCELLOR RADIO BROADCASTING COMPANY

By: /s/ STEVEN DINETZ
----------------------------------
Name: Steven Dinetz
Title: President and Chief
Financial Officer

BT SECURITIES CORPORATION

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

CREDIT SUISSE FIRST BOSTON CORPORATION

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

GOLDMAN, SACHS & CO.

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

NATIONSBANC CAPITAL MARKETS, INC.

By: /s/ AUTHORIZED SIGNATORY OF
NATIONSBANC CAPITAL MARKETS, INC.
----------------------------------------

SMITH BARNEY INC.

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

<PAGE>

EXHIBIT A

CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF REGISTRABLE PREFERRED STOCK

Re: Shares of Exchangeable Preferred Stock
and/or Private Exchangeable Preferred Stock
(the "Shares") of Chancellor Radio Broadcasting
Company

This Certificate relates to ____ Shares held in* ___
book-entry or* _______ certificated form by ______ (the "Transferor").

The Transferor:*
__
--
/ / has requested the Transfer Agent by written order to
--
deliver in exchange for its beneficial interest in the Global
Certificate held by the Depositary one or more certificates in
definitive, registered form an aggregate number equal to its
beneficial interest in such Global Certificate (or the portion thereof
indicated above); or
__
--
/ / has requested the Transfer Agent by written order to
--
exchange or register the transfer of one or more certificates
representing Shares.

In connection with such request and in respect of each
such Share, the Transferor does hereby certify that Transferor is
familiar with the Registration Rights Agreement relating to the above
captioned Shares and the restrictions on transfers thereof as provided
in Section 10 of such Registration Rights Agreement, and that the
transfer of these Shares does not require registration under the
Securities Act of 1933, as amended (the "Securities Act") because*:
__
--
/ / Such Shares are being acquired for the Transferor's own
--
account, without transfer (in satisfaction of Section 10 (a)(y)(A) or
Section 10(d)(i)(A) of the Registration Rights Agreement).
__
--
/ / Such Shares are being transferred to a qualified
--
institutional buyer (as defined in Rule 144A under the Securities
Act), in reliance on Rule 144A or in accordance with Regulation S
under the Securities Act.

<PAGE>

__
--
/ / Such Shares are being transferred in accordance with Rule
--
144 under the Securities Act.
__
--
/ / Such Shares are being transferred in reliance on and in
--
compliance with an exemption from the registration requirements of the
Securities Act, other than Rule 144A or Rule 144 or Regulation S under
the Securities Act. An opinion of counsel to the effect that such
transfer does not require registration under the Securities Act
accompanies this Certificate.

______________________________
[INSERT NAME OF TRANSFEROR]

By: _________________________

Date: _____________
*Check applicable box.

<PAGE>

EXHIBIT B

Certificate of Transfer

Chancellor Radio Broadcasting Company
12655 Central Expressway
Suite 405
Dallas, Texas 75243

Ladies and Gentlemen:

In connection with our proposed purchase of shares of
Exchangeable Preferred Stock or Private Exchange Preferred Stock, each
par value $.01 per share (the "Securities"), of Chancellor Radio
Broadcasting Company (the "Company"), we confirm that:

1. We understand that the Securities have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") and, unless so registered, may not be sold except
as permitted in the following sentence. We agree on our own behalf
and on behalf of any investor account for which we are purchasing
Securities to offer, sell or otherwise transfer such Securities while
they are Registrable Preferred Stock within the meaning of the
Registration Rights Agreement to which this certificate is an exhibit
only (a) to the Company or any of its subsidiaries, (b) pursuant to a
registration statement which has been declared effective under the
Securities Act, (c) so long as the Securities are eligible for resale
pursuant to Rule 144A, under the Securities Act, to a person we
reasonably believe is a "qualified institutional buyer" under
Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is
being made in reliance on Rule 144A, (d) pursuant to offers and sales
that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of subparagraphs (a)(1), (2),
(3) or (7) of Rule 501 under the Securities Act that is purchasing for
his own account or for the account of such an institutional
"accredited investor," or (f) pursuant to any other available
exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that
the disposition of our property or the property of such investor
account or accounts be at all times within our or their control and
to compliance with any applicable state securities laws. The
foregoing restrictions on resale will not apply after the

<PAGE>

Securities are no longer Registrable Preferred Stock. We understand
that the Securities purchased by us will bear a legend to the
foregoing effect.

2. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) and we are acquiring the Securities for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act and we have
such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each
able to bear the economic risk of our or its investment for an
indefinite period.

3. We are acquiring the Securities purchased by us for
our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise
sole investment discretion.

4. You and your counsel are entitled to rely upon this
letter and you are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered
hereby.

Very truly yours,

---------------------------
(Name of Purchaser)

By:
------------------------
Date:
----------------------

<PAGE>

Upon transfer the Securities would be registered in the
name of the new beneficial owner as follows:

Name:______________________________

Address:___________________________

Taxpayer ID Number:________________

<PAGE>

EXHIBIT C

[LEGENDS]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501 (A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT
WILL NOT WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO
CHANCELLOR RADIO BROADCASTING COMPANY (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS HAD FURNISHED
ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRANSFER AGENT A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRANSFER AGENT), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH
PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRANSFER AGENT AND
THE COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER
IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT DATED AS OF JANUARY [ ], 1997

<PAGE>

AMONG THE COMPANY, BT SECURITIES CORPORATION, CREDIT SUISSE FIRST
BOSTON CORPORATION, GOLDMAN, SACHS & CO., NATIONSBANC CAPITAL MARKETS,
INC. AND SMITH BARNEY INC., A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY. NO TRANSFER, SALE, ASSIGNMENT, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS
OF SUCH REGISTRATION RIGHTS AGREEMENT.

[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
REGISTRATION RIGHTS AGREEMENT AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE REGISTRATION RIGHTS
AGREEMENT, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF
THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE REGISTRATION RIGHTS AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]<F1>

<F1> This paragraph is to be included only if the
certificate is in global form.

<PAGE>

Exhibit 4.3

<PAGE>

===============================================================
----------------------------------------------------------------

INDENTURE

Dated as of January 23, 1997

Among

CHANCELLOR RADIO BROADCASTING COMPANY, as Issuer,

and

U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee

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

$360,000,000

12% Subordinated Exchange Debentures due 2009

===============================================================
----------------------------------------------------------------

<PAGE>

CROSS-REFERENCE TABLE
[S] [C]

TIA Indenture
Section Section
------- ---------

310(a)(1) . . . . . . . . . . . . . . . . . 7.10
(a)(2) . . . . . . . . . . . . . . . . . . 7.10
(a)(3) . . . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . . . 7.08;
7.10(b)
7.08; . . . . . . . . . . . . . . . . . . 7.10;
. 11.02
(c) . . . . . . . . . . . . . . . . . . . . N.A.
311(a) . . . . . . . . . . . . . . . . . . 7.11
(b) . . . . . . . . . . . . . . . . . . . . 7.11
(c) . . . . . . . . . . . . . . . . . . . . N.A.
312(a) . . . . . . . . . . . . . . . . . . 2.05
(b) . . . . . . . . . . . . . . . . . . . . 11.03
(c) . . . . . . . . . . . . . . . . . . . . 11.03
313(a) . . . . . . . . . . . . . . . . . . 7.06
(b)(1) . . . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . . . 7.06
(c) . . . . . . . . . . . . . . . . . . . . 7.06;
11.02
(d) . . . . . . . . . . . . . . . . . . . . 7.06
314(a) . . . . . . . . . . . . . . . . . . 4.07;
4.09;
11.02
(b) . . . . . . . . . . . . . . . . . . . . N.A.
(c)(1) . . . . . . . . . . . . . . . . . . 11.04
(c)(2) . . . . . . . . . . . . . . . . . . 11.04
(c)(3) . . . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . . . . . N.A.
(e) . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . N.A
315(a) . . . . . . . . . . . . . . . . . . 7.01(b)
(b) . . . . . . . . . . . . . . . . . . . . 7.05; 11.02
(c) . . . . . . . . . . . . . . . . . . . . 7.01(a)
(d) . . . . . . . . . . . . . . . . . . . . 7.01(c)
(e) . . . . . . . . . . . . . . . . . . . . 6.11
316(a)(last sentence) . . . . . . . . . . . 2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . 6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . 6.04
(a)(2) . . . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . . . . . 6.07
317(a)(1) . . . . . . . . . . . . . . . . . 6.08
(a)(2) . . . . . . . . . . . . . . . . . . 6.09

<PAGE>

(b) . . . . . . . . . . . . . . . . . . . . 2.04
318(a) . . . . . . . . . . . . . . . . . . 11.01
(c) . . . . . . . . . . . . . . . . . . . . 11.01
______________________

N.A. means Not Applicable

NOTE: This Cross-Reference Table shall not, for any purpose, be
deemed to be a part of the Indenture.

<PAGE>

TABLE OF CONTENTS
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Page
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions . . . . . . . . . . 1
Section 1.02 Incorporation by Reference of TIA 19
Section 1.03 Rules of Construction . . . . . 20

ARTICLE TWO
THE SECURITIES

Section 2.01 Form and Dating . . . . . . . . 21
Section 2.02 Execution and Authentication . . 21
Section 2.03 Registrar and Paying Agent . . . 22
Section 2.04 Paying Agent To Hold Assets in
Trust . . . . . . . . . . . . 23
Section 2.05 Securityholder Lists . . . . . . 23
Section 2.06 Transfer and Exchange . . . . . 24
Section 2.07 Replacement Securities . . . . . 24
Section 2.08 Outstanding Securities . . . . . 25
Section 2.09 Treasury Securities . . . . . . 25
Section 2.10 Temporary Securities . . . . . . 26
Section 2.11 Cancellation . . . . . . . . . . 26
Section 2.12 Defaulted Interest . . . . . . . 26
Section 2.13 CUSIP Number . . . . . . . . . . 27
Section 2.14 Deposit of Moneys . . . . . . . 27

ARTICLE THREE
REDEMPTION

Section 3.01 Notices to Trustee . . . . . . . 27
Section 3.02 Selection of Securities To Be
Redeemed . . . . . . . . . . . 28
Section 3.03 Notice of Redemption . . . . . . 28
Section 3.04 Effect of Notice of Redemption . 29
Section 3.05 Deposit of Redemption Price . . 30
Section 3.06 Securities Redeemed in Part . . 30

ARTICLE FOUR
COVENANTS

Section 4.01 Payment of Securities . . . . . 30
Section 4.02 Maintenance of Office or Agency 31
Section 4.03 Limitation on Restricted Payments 31
Section 4.04 Corporate Existence . . . . . . 35
Section 4.05 Payment of Taxes and Other Claims 35

<PAGE>

Page
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Section 4.06 Maintenance of Properties and
Insurance . . . . . . . . . . 36
Section 4.07 Compliance Certificate; Notice of
Default . . . . . . . . . . . 36
Section 4.08 Compliance with Laws . . . . . . 37
Section 4.09 SEC Reports . . . . . . . . . . 38
Section 4.10 Waiver of Stay, Extension or Usury
Laws . . . . . . . . . . . . . 38
Section 4.11 Limitation on Transactions with
Affiliates . . . . . . . . . . 38
Section 4.12 Limitation on Incurrence of
Additional Indebtedness . . . 39
Section 4.13 Limitation on Dividend and Other
Payment Restrictions Affecting
Subsidiaries . . . . . . . . . 39
Section 4.14 Change of Control . . . . . . . 40
Section 4.15 Limitation on Asset Sales . . . 43
Section 4.16 Limitation on Preferred Stock of
Subsidiaries . . . . . . . . . 47
Section 4.17 Limitation on Asset Swaps . . . 47

ARTICLE FIVE
SUCCESSOR CORPORATION

Section 5.01 When Company May Merge, Etc. . . 48
Section 5.02 Successor Corporation Substituted 49

ARTICLE SIX
DEFAULT AND REMEDIES

Section 6.01 Events of Default . . . . . . . 50
Section 6.02 Acceleration . . . . . . . . . . 51
Section 6.03 Other Remedies . . . . . . . . . 52
Section 6.04 Waiver of Past Defaults . . . . 53
Section 6.05 Control by Majority . . . . . . 53
Section 6.06 Limitation on Suits . . . . . . 53
Section 6.07 Rights of Holders To Receive
Payment . . . . . . . . . . . 54
Section 6.08 Collection Suit by Trustee . . . 54
Section 6.09 Trustee May File Proofs of Claim 55
Section 6.10 Priorities . . . . . . . . . . . 55
Section 6.11 Undertaking for Costs . . . . . 56

ARTICLE SEVEN
TRUSTEE

Section 7.01 Duties of Trustee . . . . . . . 56

-ii-
<PAGE>

<PAGE>

Page
----

Section 7.02 Rights of Trustee . . . . . . . 58
Section 7.03 Individual Rights of Trustee . . 59
Section 7.04 Trustee's Disclaimer . . . . . . 59
Section 7.05 Notice of Default . . . . . . . 60
Section 7.06 Reports by Trustee to Holders . 60
Section 7.07 Compensation and Indemnity . . . 61
Section 7.08 Replacement of Trustee . . . . . 62
Section 7.09 Successor Trustee by Merger, Etc. 63
Section 7.10 Eligibility; Disqualification . 63
Section 7.11 Preferential Collection of Claims
Against the Company . . . . . 64

ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE

Section 8.01 Termination of the Company's
Obligations . . . . . . . . . 64
Section 8.02 Acknowledgment of Discharge by
Trustee . . . . . . . . . . . 67
Section 8.03 Application of Trust Money . . . 67
Section 8.04 Repayment to the Company . . . . 67
Section 8.05 Reinstatement . . . . . . . . . 68

ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS

Section 9.01 Without Consent of Holders . . . 68
Section 9.02 With Consent of Holders . . . . 69
Section 9.03 Compliance with TIA . . . . . . 70
Section 9.04 Revocation and Effect of Consents 70
Section 9.05 Notation on or Exchange of
Securities . . . . . . . . . . 71
Section 9.06 Trustee To Sign Amendments, Etc. 71

ARTICLE TEN
SUBORDINATION OF SECURITIES

Section 10.01 Securities Subordinated to Senior
Indebtedness . . . . . . . . . 72
Section 10.02 No Payment on Securities in Certain
Circumstances . . . . . . . . 73
Section 10.03 Payment Over of Proceeds upon
Dissolution, Etc. . . . . . . 75
Section 10.04 Payments May Be Paid Prior to
Dissolution . . . . . . . . . 77

-iii-
<PAGE>

<PAGE>

Page
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Section 10.05 Subrogation . . . . . . . . . . 77
Section 10.06 Obligations of the Company
Unconditional . . . . . . . . 78
Section 10.07 Notice to Trustee . . . . . . . 78
Section 10.08 Reliance on Judicial Order or Certificate
of Liquidating Agent . . . . . 79
Section 10.09 Trustee's Relation to Senior
Indebtedness . . . . . . . . . 79
Section 10.10 Subordination Rights Not Impaired by
Acts or Omissions of the Company or
Holders of Senior Indebtedness 80
Section 10.11 Securityholders Authorize Trustee To
Effectuate Subordination of
Securities . . . . . . . . . . 81
Section 10.12 This Article Ten Not To Prevent Events
of Default . . . . . . . . . . 81
Section 10.13 Trustee's Compensation Not
Prejudiced . . . . . . . . . . 81

ARTICLE ELEVEN
MISCELLANEOUS

Section 11.01 TIA Controls . . . . . . . . . . 81
Section 11.02 Notices . . . . . . . . . . . . 82
Section 11.03 Communications by Holders with Other
Holders . . . . . . . . . . . 83
Section 11.04 Certificate and Opinion as to Conditions
Precedent . . . . . . . . . . 83
Section 11.05 Statements Required in Certificate or
Opinion . . . . . . . . . . . 83
Section 11.06 Rules by Trustee, Paying Agent, Registrar 84
Section 11.07 Legal Holidays . . . . . . . . . 84
Section 11.08 Governing Law . . . . . . . . . 84
Section 11.09 No Adverse Interpretation of Other
Agreements . . . . . . . . . . 85
Section 11.10 No Recourse Against Others . . . 85
Section 11.11 Successors . . . . . . . . . . . 85
Section 11.12 Duplicate Originals . . . . . . 85
Section 11.13 Severability . . . . . . . . . . 85

Signatures . . . . . . . . . . . . . . . 86

Exhibit A - Form of Security . . . . . . . . . . A-1

Note: This Table of Contents shall not, for any purpose, be deemed
to be part of the Indenture.

-iv-
<PAGE>

<PAGE>

INDENTURE, dated as of January 23, 1997, between Chancellor
Radio Broadcasting Company, a Delaware corporation (the "Company"),
and U.S. Trust Company of Texas, N.A., a national banking association,
as trustee (the "Trustee").

Each party hereto agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the Holders of
the Company's 12% Subordinated Exchange Debentures due 2009 (the
"Securities"):

ARTICLE ONE

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01 Definitions.
-----------
"Acceleration Notice" has the meaning provided in Section
6.02.

"Acquired Indebtedness" means Indebtedness of a Person or
any of its Subsidiaries existing at the time such Person becomes a
Subsidiary of the Company or at the time it merges or consolidates
with the Company or any of its Subsidiaries or assumed in connection
with the acquisition of assets from such Person and not incurred by
such Person in connection with, or in anticipation or contemplation
of, such Person becoming a Subsidiary of the Company or such
acquisition, merger or consolidation.

"Acquired Preferred Stock" means Preferred Stock of any
Person at the time such Person becomes a Subsidiary of the Company or
at the time it merges or consolidates with the Company or any of its
Subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such acquisition, merger or
consolidation.

"Affiliate" means a Person who, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Company. The term "control" means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.

"Affiliate Transaction" has the meaning provided in
Section 4.11.

<PAGE>

"Agent" means any Registrar, Paying Agent or Co-Registrar.

"Asset Acquisition" means (i) an Investment by the Company
or any Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Subsidiary of the Company or shall be
consolidated or merged with the Company or any Subsidiary of the
Company or (ii) the acquisition by the Company or any Subsidiary of
the Company of assets of any Person comprising a division or line of
business of such Person.

"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into
in the ordinary course of business), assignment or other transfer for
value by the Company or any of its Subsidiaries (excluding any Sale
and Leaseback Transaction or any pledge of assets or stock by the
Company or any of its Subsidiaries) to any Person other than the
Company or a Wholly Owned Subsidiary of the Company of (i) any Capital
Stock of any Subsidiary of the Company or (ii) any other property or
assets of the Company or any Subsidiary of the Company other than in
the ordinary course of business; provided, however, that for purposes
-------- -------
of Section 4.15 hereof, Asset Sales shall not include (a) a
transaction or series of related transactions for which the Company or
its Subsidiaries receive aggregate consideration of less than
$500,000, (b) transactions permitted under Section 4.17 hereof or
(c) transactions permitted under Section 5.01 hereof.

"Asset Swap" means the execution of a definitive agreement,
subject only to approval of the Federal Communications Commission and
other customary closing conditions, that the Company in good faith
believes will be satisfied, for a substantially concurrent purchase
and sale, or exchange, of Productive Assets between the Company or any
of its Subsidiaries and another Person or group of affiliated Persons;
provided that any amendment to or waiver of any closing condition
which individually or in the aggregate is material to the Asset Swap
shall be deemed to be a new Asset Swap.

"Bankruptcy Law" means Title 11, United States Code or any
similar federal, state or foreign law for the relief of debtors.

"Blockage Period" shall have the meaning provided in Section
10.02.

"Board of Directors" means, with respect to any Person, the
board of directors (or any other equivalent governing body)

<PAGE>

of such Person or any committee of the board of directors of such
Person duly authorized, with respect to any particular matter, to
exercise the power of the board of directors of such Person.

"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.

"Business Day" means a day that is not a Legal Holiday.

"Capital Stock" means (i) with respect to any Person that is
a corporation, any and all shares, interests, participations or other
equivalents (however designated) of capital stock, including each
class of common stock and Preferred Stock of such Person and (ii) with
respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person.

"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease
to which such Person is a party that is required to be classified and
accounted for as a capital lease obligation under GAAP and, for
purposes of this definition, the amount of such obligation at any date
shall be the capitalized amount of such obligation at such date,
determined in accordance with GAAP.

"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States
Government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within
one year from the date of acquisition thereof; (ii) marketable direct
obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of acquisition thereof
and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Moody's
Investors Service, Inc.; (iii) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from Standard & Poor's
Corporation or at least P-1 from Moody's Investors Service, Inc.; (iv)
certificates of deposit or bankers' acceptances maturing within one
year from the date of acquisition thereof issued by any commercial
bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a
foreign bank having at the date of acquisition thereof combined
capital and surplus of not less than $200,000,000; (v) repurchase
obligations with a term of not more than seven days for underlying
securities of the types

<PAGE>

described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (iv) above; and (vi) investments in
money market funds which invest substantially all their assets in
securities of the types described in clauses (i) through (v) above.

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

"Change of Control Date" has the meaning provided in
Section 4.14.

"Change of Control Offer" has the meaning provided in
Section 4.14.

"Change of Control Payment Date" has the meaning provided in
Section 4.14.

"Change of Control Redemption" has the meaning specified in
the form of Security.

"Commodity Agreement" means any commodity futures contract,
commodity option or other similar agreement or arrangement entered
into by the Company or any of its Subsidiaries designed to protect the
Company or any of its Subsidiaries against fluctuations in the price
of commodities actually used in the ordinary course of business of the
Company and its Subsidiaries.

"Company" means the party named as such in this Indenture
until a successor replaces it pursuant to this Indenture and
thereafter means such successor and also includes for the purposes of
any provision contained herein and required by the TIA any other
obligor on the Securities.

<PAGE>

"Consolidated EBITDA" means, with respect to any Person, for
any period, the sum (without duplication) of (i) Consolidated Net
Income and (ii) to the extent Consolidated Net Income has been reduced
thereby, (A) all income taxes of such Person and its Subsidiaries paid
or accrued in accordance with GAAP for such period (other than income
taxes attributable to extraordinary or non-recurring gains or losses),
(B) Consolidated Interest Expense and (C) Consolidated Non-Cash
Charges, all as determined on a consolidated basis for such Person and
its Subsidiaries in conformity with GAAP.

"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the
interest expense of such Person and its Subsidiaries for such period
as determined on a consolidated basis in accordance with GAAP,
including, without limitation, (a) any amortization of debt discount,
(b) the net cost under Interest Swap Obligations (including any
amortization of discounts), (c) the interest portion of any deferred
payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance
financing or similar facilities, and (e) all accrued interest and
(ii) the interest component of Capitalized Lease Obligations paid or
accrued by such Person and its Subsidiaries during such period as
determined on a consolidated basis in accordance with GAAP.

"Consolidated Net Income" of any Person means, for any
period, the aggregate net income (or loss) of such Person and its
Subsidiaries for such period on a consolidated basis, determined in
accordance with GAAP; provided that there shall be excluded therefrom,
--------
without duplication, (a) gains and losses from Asset Sales (without
regard to the $500,000 limitation set forth in the definition thereof)
or abandonments or reserves relating thereto and the related tax
effects, (b) items classified as extraordinary or nonrecurring gains
and losses, and the related tax effects according to GAAP, (c) the net
income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Subsidiary of such
first referred to Person or is merged or consolidated with it or any
of its Subsidiaries, (d) the net income of any Subsidiary to the
extent that the declaration of dividends or similar distributions by
that Subsidiary of that income is restricted by contract, operation of
law or otherwise and (e) the net income of any Person, other than a
Subsidiary, except to the extent of the lesser of (x) dividends or
distributions paid to such first referred to Person or its Subsidiary
by such Person and (y) the net income of such Person (but in no event
less than zero), and the net loss of such Person shall be included
only to the extent

<PAGE>

of the aggregate Investment of the first referred to Person or a
consolidated Subsidiary of such Person.

"Consolidated Non-Cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and
other non-cash expenses of such Person and its Subsidiaries reducing
Consolidated Net Income of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP
(excluding any such charges constituting an extraordinary or
nonrecurring item).

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

"Credit Agreement" means the amended and restated Credit
Agreement to be dated on or about the Preferred Stock Issue Date among
Holdings, the Company, the lenders from time to time party thereto and
Bankers Trust Company as administrative agent, together with the
related documents thereto (including, without limitation, any
guarantee agreements and security documents), in each case, as such
agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including by way of adding
Subsidiaries of the Company as additional borrowers or guarantors
thereunder) all or any portion of the Indebtedness under such
agreement or any successor or replacement agreement and whether by the
same or any other agent, lender or group of lenders.

"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement
designed to protect the Company or any of its Subsidiaries against
fluctuation in currency values.

"Custodian" means any receiver, trustee, assignee,
liquidator, sequestrator or similar official under any Bankruptcy Law.

"Default" means an event or condition the occurrence of
which is, or with the lapse of time or the giving of notice or

<PAGE>

both would be, an Event of Default.

"Default Notice" shall have the meaning provided in Section
10.02.

"Designated Senior Indebtedness" means (i) Indebtedness
under or in respect of the Credit Agreement, the Existing Notes and
the Notes and (ii) any other Indebtedness constituting Senior
Indebtedness which, at the time of determination, has an aggregate
principal amount of at least $25,000,000 and is specifically
designated in the instrument evidencing such Senior Indebtedness as
"Designated Senior Indebtedness" by the Company.

"Discharged" has the meaning provided in Section 8.01.

"Disqualified Capital Stock" means any Capital Stock which,
by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of
any event, matures (excluding any maturity as the result of an
optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof (except, in each
case, upon the occurrence of a Change of Control), in whole or in
part, on or prior to the final maturity date of the Securities.

"Event of Default" has the meaning provided in Section 6.01.

"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC
thereunder.

"Exchangeable Preferred Stock" means the 12% Exchangeable
Preferred Stock, par value $.01 per share, or shares of Preferred
Stock issued in exchange therefor.

"Existing Notes" means $80.0 million aggregate principal
amount of 12 1/2% Senior Subordinated Notes due 2004 of the Company,
issued pursuant to an indenture (the "Existing Note Indenture"), dated
as of October 1, 1994, as the same may be modified or amended from
time to time and future refinancings thereof.

"Financial Monitoring and Oversight Agreements" means the
Financial Monitoring and Oversight Agreement among Hicks, Muse & Co.
Partners, L.P., the Company and Holdings as in effect on the Preferred
Stock Issue Date, and the Financial Advisory

<PAGE>

Agreement among HM2/Management Partners, L.P., the Company and
Holdings, as in effect on the Preferred Stock Issue Date.

"Funds" shall have the meaning provided in Section 8.01.

"GAAP" means generally accepted accounting principles as in
effect in the United States of America as of the Issue Date.

"Hicks Muse" means Hicks, Muse, Tate & Furst Incorporated, a
Delaware corporation.

"Holder" or "Securityholder" means the Person in whose name
a Security is registered on the Registrar's books.

"Holdings" means Chancellor Broadcasting Company, a Delaware
corporation, and its successors.

"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money,
(ii) evidenced by bonds, debentures, notes or other similar
instruments, (iii) constituting Capitalized Lease Obligations,
(iv) incurred or assumed as the deferred purchase price of property,
or pursuant to conditional sale obligations and title retention
agreements (but excluding trade accounts payable arising in the
ordinary course of business), (v) for the reimbursement of any obligor
on any letter of credit, banker's acceptance or similar credit
transaction, (vi) for Indebtedness of others guaranteed by such
Person, (vii) for Interest Swap Obligations, Commodity Agreements and
Currency Agreements and (viii) for Indebtedness of any other Person of
the type referred to in clauses (i) through (vii) which are secured by
any Lien on any property or asset of such first referred to Person,
the amount of such Indebtedness being deemed to be the lesser of the
value of such property or asset or the amount of the Indebtedness so
secured. The amount of Indebtedness of any Person at any date shall
be the outstanding principal amount of all unconditional obligations
described above, as such amount would be reflected on a balance sheet
prepared in accordance with GAAP, and the maximum liability at such
date of such Person for any contingent obligations described above.

"Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.

"Interest Payment Date" means the stated maturity of an

<PAGE>

installment of interest on the Securities.

"Interest Swap Obligations" means the obligations of any
Person under any interest rate protection agreement, interest rate
future, interest rate option, interest rate swap, interest rate cap or
other interest rate hedge or arrangement.

"Investment" means (i) any transfer or delivery of cash,
stock or other property of value in exchange for Indebtedness, stock
or other security or ownership interest in any Person by way of loan,
advance, capital contribution, guarantee or otherwise and (ii) an
investment deemed to have been made by the Company at the time any
entity which was a Subsidiary of the Company ceases to be such a
Subsidiary in an amount equal to the value of the loans and advances
made, and any remaining ownership interest in, such entity immediately
following such entity ceasing to be a Subsidiary of the Company. The
amount of any non-cash Investment shall be the fair market value of
such Investment, as determined conclusively in good faith by
management of the Company unless the fair market value of such
Investment exceeds $1,000,000, in which case the fair market value
shall be determined conclusively in good faith by the Board of
Directors of the Company at the time such Investment is made.

"Issue Date" means the date of original issuance of the
Securities.

"Legal Holiday" has the meaning provided in Section 11.07.

"Leverage Ratio" shall mean, as to any Person, the ratio of
(i) the sum of the aggregate outstanding amount of Indebtedness of
such Person and its Subsidiaries as of the date of calculation on a
consolidated basis in accordance with GAAP to (ii) the Consolidated
EBITDA of such Person for the four full fiscal quarters (the "Four
Quarter Period") ending on or prior to the date of determination.

<PAGE>

forma basis after giving effect to (i) the incurrence of the
Indebtedness of such Person and its Subsidiaries (and the application
of the proceeds therefrom) giving rise to the need to make such
calculation and any incurrence (and the application of the proceeds
therefrom) or repayment of other Indebtedness, other than the
incurrence or repayment of Indebtedness pursuant to working capital
facilities, at any time subsequent to the beginning of the Four
Quarter Period and on or prior to the date of determination, as if
such incurrence (and the application of the proceeds thereof) or the
repayment, as the case may be, occurred on the first day of the Four
Quarter Period and (ii) any Asset Sales or Asset Acquisitions
(including, without limitation, any Asset Acquisition giving rise to
the need to make such calculation as a result of such Person or one of
its Subsidiaries (including any Person who becomes a Subsidiary as a
result of such Asset Acquisition) incurring, assuming or otherwise
becoming liable for Indebtedness) at any time on or subsequent to the
first day of the Four Quarter Period and on or prior to the date of
determination, as if such Asset Sale or Asset Acquisition (including
the incurrence, assumption or liability for any such Indebtedness and
also including any Consolidated EBITDA associated with such Asset
Acquisition) occurred on the first day of the Four Quarter Period.
Furthermore, in calculating "Consolidated Interest Expense" for
purposes of the calculation of "Consolidated EBITDA," (i) interest on
Indebtedness determined on a fluctuating basis as of the date of
determination (including Indebtedness actually incurred on the date of
the transaction giving rise to the need to calculate the Leverage
Ratio) and which will continue to be so determined thereafter shall be
deemed to have accrued at a fixed rate per annum equal to the rate of
interest on such Indebtedness as in effect on the date of
determination and (ii) notwithstanding (i) above, interest determined
on a fluctuating basis, to the extent such interest is covered by
Interest Swap Obligations, shall be deemed to accrue at the rate per
annum resulting after giving effect to the operation of such
agreements.

"Lien" means any lien, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the
nature thereof and any agreement to give any security interest).

"Maturity Date" means January 15, 2009.

"Net Cash Proceeds" means, with respect to any Asset Sale,
the proceeds in the form of cash or Cash Equivalents (including
payments in respect of deferred payment obligations

<PAGE>

when received in the form of cash or Cash Equivalents) received by the
Company or any of its Subsidiaries from such Asset Sale net of
(i) reasonable out-of-pocket expenses and fees relating to such Asset
Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions, recording fees, title insurance
premiums, appraisers fees and costs reasonably incurred in preparation
of any asset or property for sale), (ii) taxes paid or reasonably
estimated to be payable (calculated based on the combined state,
federal and foreign statutory tax rates applicable to the Company or
the Subsidiary engaged in such Asset Sale) and (iii) repayment of
Indebtedness secured by assets subject to such Asset Sale; provided
--------
that if the instrument or agreement governing such Asset Sale
requires the transferor to maintain a portion of the purchase price in
escrow (whether as a reserve for adjustment of the purchase price or
otherwise) or to indemnify the transferee for specified liabilities in
a maximum specified amount, the portion of the cash or Cash
Equivalents that is actually placed in escrow or segregated and set
aside by the transferor for such indemnification obligation shall not
be deemed to be Net Cash Proceeds until the escrow terminates or the
transferor ceases to segregate and set aside such funds, in whole or
in part, and then only to the extent of the proceeds released from
escrow to the transferor or that are no longer segregated and set
aside by the transferor.

"Net Proceeds Offer" has the meaning provided in Section
4.15.

"Notes" means $200.0 million aggregate principal amount of 9
3/8% Senior Subordinated Notes due 2004 of the Company, issued
pursuant to an indenture (the "Note Indenture"), dated as of
February 14, 1996, as the same may be modified or amended from time to
time and future refinancings thereof.

"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities payable under the documentation governing, or
otherwise relating to, any Indebtedness.

"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Treasurer, the Controller,
or the Secretary of such Person, or any other officer designated by
the Board of Directors serving in a similar capacity.

<PAGE>

"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of such Person and
otherwise complying with the requirements of Sections 11.04 and 11.05,
as they relate to the making of an Officers' Certificate.

"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 11.04 and 11.05, as they relate to the giving
of an Opinion of Counsel.

"Paying Agent" has the meaning provided in Section 2.03,
except that, during the continuance of a Default or Event of Default
and for the purposes of Articles Three and Eight and Sections 4.14 and
4.15, the Paying Agent shall not be the Company or any Affiliate of
the Company.

"Permitted Indebtedness" means, without duplication,
(i) Indebtedness outstanding on the Issue Date, including, without
limitation, the Notes, the Existing Notes and the guarantees thereof;
(ii) Indebtedness of the Company incurred pursuant to the Credit
Agreement in an aggregate principal amount at any time outstanding not
to exceed the sum of the aggregate commitments pursuant to the Credit
Agreement as initially in effect reduced by the aggregate principal
amount permanently repaid with the proceeds of Asset Sales;
(iii) Indebtedness evidenced by or arising under the Securities and
the Indenture, including any Securities issued in accordance herewith
as payment of Interest on the Securities; (iv) Interest Swap
Obligations; provided that such Interest Swap Obligations are entered
--------
into to protect the Company from fluctuations in interest rates of its
Indebtedness; (v) additional Indebtedness of the Company or any of its
Subsidiaries not to exceed $10,000,000 in principal amount
outstanding at any time (which amount may, but need not, be incurred
under the Credit Agreement); (vi) Refinancing Indebtedness;
(vii) Indebtedness owed by the Company to any Wholly Owned Subsidiary
or by any Subsidiary to the Company or any Wholly Owned Subsidiary of
the Company; and (viii) guarantees by Subsidiaries of any Indebtedness
permitted to be incurred pursuant to this Indenture.

"Permitted Investments" means (i) Investments by the Company
or any Subsidiary to acquire the stock or assets of any Person (or
Indebtedness of such Person acquired in connection with a transaction
in which such Person becomes a Subsidiary of the Company) engaged in
the broadcast business or businesses reasonably related thereto;
provided that if any such Investment
--------

<PAGE>

or series of related Investments involves an Investment by the Company
in excess of $5,000,000, the Company is able, at the time of such
Investment and immediately after giving effect thereto, to incur at
least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.12 hereof, (ii) Investments
received by the Company or its Subsidiaries as consideration for a
sale of assets, including an Asset Sale effected in compliance with
Section 4.15 hereof, (iii) Investments by the Company or any Wholly
Owned Subsidiary of the Company in any Wholly Owned Subsidiary of the
Company (whether existing on the Issue Date or created thereafter) or
any Person that after such Investments, and as a result thereof,
becomes a Wholly Owned Subsidiary of the Company and Investments in
the Company by any Wholly Owned Subsidiary of the Company, (iv) cash
and Cash Equivalents, (v) Investments in securities of trade
creditors, wholesalers or customers received pursuant to any plan of
reorganization or similar arrangement and (vi) additional Investments
in an aggregate amount not to exceed $2,500,000 at any time
outstanding.

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

"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of
such Person with respect to dividends or redemptions or upon
liquidation.

"Preferred Stock Issue Date" means the date of original
issuance of the Exchangeable Preferred Stock.

"principal" of any Indebtedness (including the Securities)
means the principal amount of such Indebtedness plus the premium, if
any, on such Indebtedness.

"Proceeds Purchase Date" shall have the meaning provided in
Section 4.15.

"Productive Assets" means assets of a kind used or usable by
the Company and its Subsidiaries in broadcast business or businesses
reasonably related thereto, and specifically includes assets acquired
through Asset Acquisitions.

"pro forma" means, unless otherwise provided herein, with
respect to any calculation made or required to be made pursuant to the
terms of this Indenture, a calculation in

<PAGE>

accordance with Article 11 of Regulation S-X under the Securities Act.

"Public Equity Offering" means an underwritten public
offering of Capital Stock (other than Disqualified Capital Stock) of
the Company or Holdings, pursuant to an effective registration
statement filed with the Commission in accordance with the Securities
Act; provided, however, that, in the case of a Public Equity Offering
-------- -------
by Holdings, Holdings contributes to the capital of the Company net
cash proceeds in an amount sufficient to redeem the Securities and
Existing Notes called for redemption in accordance with the terms
thereof.

"Qualified Capital Stock" means any Capital Stock that is
not Disqualified Capital Stock.

"Redemption Date" means, with respect to any Securities, the
Maturity Date of such Security or the earlier date on which such
Security is to be redeemed by the Company pursuant to the terms of the
Securities.

"Redemption Price" shall have the meaning provided in
Section 3.03.

"Refinancing Indebtedness" means any refinancing by the
Company of Indebtedness of the Company or any of its Subsidiaries
incurred in accordance with Section 4.12 hereof (other than pursuant
to clause (iii) or (iv) of the definition of Permitted Indebtedness)
that does not (i) result in an increase in the aggregate principal
amount of Indebtedness (such principal amount to include, for purposes
of this definition, any premiums, penalties or accrued interest paid
with the proceeds of the Refinancing Indebtedness) of such Person or
(ii) create Indebtedness with (A) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the
Indebtedness being refinanced or (B) a final maturity earlier than the
final maturity of the Indebtedness being refinanced.

"Registrar" has the meaning provided in Section 2.03.

"Representative" means the indenture trustee or other
trustee, agent or representative in respect of any Designated Senior
Indebtedness; provided that if, and for so long as, any Designated
--------
Senior Indebtedness lacks such a representative, then the
Representative for such Designated Senior Indebtedness shall at all
times constitute the holders of a majority in outstanding principal
amount of such Designated Senior Indebtedness.

<PAGE>

"Restricted Payment" has the meaning provided in Section
4.03.

"Sale and Leaseback Transaction" means any direct or
indirect arrangement with any Person or to which any such Person is a
party, providing for the leasing to the Company or a Subsidiary of any
property, whether owned by the Company or any Subsidiary at the Issue
Date or later acquired, which has been or is to be sold or transferred
by the Company or such Subsidiary to such Person or to any other
Person from whom funds have been or are to be advanced by such Person
on the security of such property.

"SEC" means the Securities and Exchange Commission.

"Secondary Securities" has the meaning specified in the form
of the Security.

"Securities" means the Company's 12% Subordinated Exchange
Debentures due 2009, as amended or supplemented from time to time in
accordance with the terms hereof, that are issued pursuant to this
Indenture.

"Securities Act" means the Securities Act of 1933, as
amended, and the rules and regulations of the SEC promulgated
thereunder.

"Senior Exchange Debentures" means the 12 1/4% Subordinated
Exchange Debentures due 2008 for which the Senior Exchangeable
Preferred Stock are exchangeable.

"Senior Exchangeable Preferred Stock" means the Company's 12
1/4 % Senior Cumulative Exchangeable Preferred Stock, par value $.01
per share.

"Senior Indebtedness" means any Indebtedness of the Company
(including any interest accruing subsequent to the filing of a
petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim
under applicable law), whether outstanding on the Issue Date or
thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides
that such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing, "Senior
Indebtedness" shall also include the principal of, premium, if any,
interest (including any interest accruing subsequent to the

<PAGE>

filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other amounts owing in
respect of, and all monetary obligations of every nature under, (w)
the Credit Agreement, including, without limitation, obligations to
pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities, (x) all Interest Swap
Obligations, (y) the Notes and (z) the Existing Notes. Notwithstand-
ing the foregoing, Senior Indebtedness shall not include any of the
following amounts (whether or not constituting Indebtedness as defined
in this Indenture): (i) any Indebtedness of the Company to a
Subsidiary of the Company; (ii) Indebtedness and other amounts owing
to trade creditors incurred in connection with obtaining goods,
materials or services; (iii) Indebtedness represented by Disqualified
Capital Stock; (iv) any liability for federal, state, local or other
taxes owed or owing by the Company; and (v) the Senior Exchange
Debentures, which shall rank pari passu with the Securities.

"Significant Subsidiary" means for any Person each
Subsidiary of such Person which (i) for the most recent fiscal year of
such Person accounted for more than 5% of the consolidated net income
of such Person or (ii) as at the end of such fiscal year, was the
owner of more than 5% of the consolidated assets of such Person.

"Subsidiary," with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a
majority of the votes entitled to be cast in the election of directors
under ordinary circumstances shall at the time be owned, directly or
indirectly, by such Person or (ii) any other Person of which at least
a majority of the voting interest under ordinary circumstances is at
the time, directly or indirectly, owned by such Person.
Notwithstanding anything in this Indenture to the contrary, all
references to the Company and its consolidated Subsidiaries or to
financial information prepared on a consolidated basis in accordance
with GAAP shall be deemed to include the Company and its Subsidiaries
as to which financial statements are prepared on a combined basis in
accordance with GAAP and to financial information prepared on such a
combined basis. Notwithstanding anything in this Indenture to the
contrary, an Unrestricted Subsidiary shall not be deemed to be a
Subsidiary for purposes of this Indenture.

"Tax Sharing Agreement" means the Tax Sharing Agreement
between the Company and Holdings as in effect on the Preferred Stock
Issue Date.

<PAGE>

"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
sections 77aaa-77bbbb), as amended, as in effect on the date on which
this Indenture is qualified under the TIA, except as otherwise
provided in Section 9.03.

"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.

"Trust Officer" means any officer or assistant officer of
the Trustee assigned by the Trustee to administer its corporate trust
matters or, in the case of a successor trustee, an officer assigned to
the department, division or group performing the corporate trust work
of such successor.

"Unrestricted Subsidiary" means a Subsidiary of the Company
created after the Issue Date and so designated by a resolution adopted
by the Board of Directors of the Company, provided that (a) neither
the Company nor any of its other Subsidiaries (other than Unrestricted
Subsidiaries) (1) provides any credit support for any Indebtedness of
such Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness) or (2) is directly or indirectly liable
for any Indebtedness of such Subsidiary, (b) the creditors with
respect to Indebtedness for borrowed money of such Subsidiary, having
a principal amount in excess of $5,000,000, have agreed in writing
that they have no recourse, direct or indirect, to the Company or any
other Subsidiary of the Company (other than Unrestricted
Subsidiaries), including, without limitation, recourse with respect to
the payment of principal of or interest on any Indebtedness of such
Subsidiary and (c) at the time of designation of such Subsidiary such
Subsidiary has no property or assets (other than de minimis assets
-- -------
resulting from the initial capitalization of such Subsidiary). Any
such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by the filing with the Trustee of a certified
copy of the resolution of the Company's Board of Directors giving
effect to such designation and an Officers' Certificate certifying
that such designation complied with the foregoing conditions.

"U.S. Government Obligations" has the meaning provided in
Section 8.01.

"U.S. Legal Tender" means such coin or currency of the
United States of America as at the time of payment shall be legal
tender for the payment of public and private debts.

"Weighted Average Life to Maturity" means, when applied

<PAGE>

to any Indebtedness at any date, the number of years obtained by
dividing (a) the then outstanding aggregate principal amount of such
Indebtedness into (b) the total of the product obtained by multiplying
(i) the amount of each then remaining installment, sinking fund,
serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof, by (ii) the number of
years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.

"Wholly Owned Subsidiary" of any Person means any Subsidiary
of such Person of which all the outstanding voting securities (other
than directors' qualifying shares) or other voting interest which
normally have the right to vote in the election of directors or under
ordinary circumstances are owned by such Person or any Wholly Owned
Subsidiary of such Person.

SECTION 1.02 Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA,
such provision is incorporated by reference in, and made a part of,
this Indenture. The following TIA terms used in this Indenture have
the following meanings:

"Commission" means the SEC.

"indenture securities" means the Securities.

"indenture security holder" means a Holder or a
Securityholder.

"indenture to be qualified" means this Indenture.

"indenture trustee" or "institutional trustee" means the
Trustee.

"obligor" on the indenture securities means the Company or
any other obligor on the Securities.

All other TIA terms used in this Indenture that are defined
by the TIA, defined by TIA reference to another statute or defined by
SEC rule and not otherwise defined herein have the meanings assigned
to them therein.

<PAGE>

SECTION 1.03 Rules of Construction.
---------------------
Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the Preferred
Stock Issue Date;

(3) "or" is not exclusive;

(4) words in the singular include the plural, and words in the
plural include the singular; and

(5) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article,
Section or other subdivision.

ARTICLE TWO

THE SECURITIES

SECTION 2.01 Form and Dating.
---------------
The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto.
The Securities may have notations, legends or endorsements required by
law, stock exchange rule or usage. The Company shall approve the form
of the Securities and any notation, legend or endorsement thereon.
Each Security shall be dated the date of its authentication.

The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture
and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such
terms and provisions and to be bound thereby.

SECTION 2.02 Execution and Authentication.
----------------------------
Two Officers, or an Officer and an Assistant Secretary,
shall sign, or one Officer shall sign and one Officer or an Assistant
Secretary (each of whom shall, in each case, have been duly authorized
by all requisite corporate actions) shall attest to, the Securities
for the Company by manual or facsimile

<PAGE>

signature.

If an Officer, Secretary or Assistant Secretary whose
signature is on a Security was an Officer or Assistant Secretary at
the time of such execution but no longer holds that office or position
at the time the Trustee authenticates the Security, the Security shall
nevertheless be valid.

A Security shall not be valid until an authorized signatory
of the Trustee manually signs the certificate of authentication on the
Security. The signature shall be conclusive evidence that the
Security has been authenticated under this Indenture.

The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $360,000,000 upon receipt
of a written order of the Company in the form of an Officers'
Certificate. Such Officers' Certificate shall specify the amount of
Securities to be authenticated and the date on which the Securities
are to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $360,000,000 except as provided
in Section 2.07. Upon the written order of the Company in the form of
an Officers' Certificate, the Trustee shall authenticate Securities in
substitution of Securities originally issued to reflect any name
change of the Company.

The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless
otherwise provided in the appointment, an authenticating agent may
authenticate Securities whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same
rights as an Agent to deal with the Company and Affiliates of the
Company.

The Securities shall be issuable in fully registered form
only, without coupons, in denominations of $1,000 and any integral
multiple thereof; provided, however, that Securities may be issued in
-------- -------
denominations of less than $1,000 (but not less than $1.00) upon the
initial exchange of the Exchangeable Preferred Stock for the
Securities such that each holder of Exchangeable Preferred Stock shall
receive Securities in a principal amount equal to the full liquidation
preference of the Exchangeable Preferred Stock on the Issue Date (as
specified to the Trustee in the officers' certificate delivered
pursuant to this Section 2.02; provided, further, however, that
-------- ------- -------
Secondary Securities may be issued in denominations of less than
$1,000 (but not less than

<PAGE>

$1.00).

SECTION 2.03 Registrar and Paying Agent.
--------------------------
The Company shall maintain an office or agency (which shall
be located in the Borough of Manhattan in the City of New York, State
of New York), where (a) Securities may be presented or surrendered for
registration of transfer or for exchange ("Registrar"), (b) Securities
may be presented or surrendered for payment ("Paying Agent") and
(c) notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Registrar shall keep
a register of the Securities and of their transfer and exchange. The
Company, upon notice to the Trustee, may have one or more co-
Registrars and one or more additional paying agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any
additional paying agent. Neither the Company nor any Affiliate of the
Company may act as Paying Agent.

The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent.
The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.

The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a
successor has been appointed.

SECTION 2.04 Paying Agent To Hold Assets in Trust.
------------------------------------
The Company shall require each Paying Agent other than the
Trustee to agree in writing that each Paying Agent shall hold in trust
for the benefit of the Holders or the Trustee all assets held by the
Paying Agent for the payment of principal of, or interest on, the
Securities (whether such assets have been distributed to it by the
Company or any other obligor on the Securities), and shall notify the
Trustee of any default by the Company (or any other obligor on the
Securities) in making any such payment. The Company at any time may
require a Paying Agent to distribute all assets held by it to the
Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that

<PAGE>

shall have been delivered by the Company to the Paying Agent and the
completion of any accounting required to be made hereunder, the Paying
Agent shall have no further liability for such assets.

SECTION 2.05 Securityholder Lists.
--------------------
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the
names and addresses of the Holders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee five (5) Business
Days before each Interest Payment Date and at such other times as the
Trustee may request in writing a list as of the applicable Record Date
and in such form as the Trustee may reasonably require of the names
and addresses of the Holders, which list may be conclusively relied
upon by the Trustee.

SECTION 2.06 Transfer and Exchange.
---------------------
When Securities are presented to the Registrar or a co-
Registrar with a request to register the transfer of such Securities
or to exchange such Securities for an equal principal amount of
Securities of other authorized denominations, the Registrar or co-
Registrar shall register the transfer or make the exchange as
requested if its requirements for such transaction are met; provided,
--------
however, that the Securities surrendered for transfer or exchange
-------
shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Registrar or co-
Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee shall
authenticate Securities at the Registrar's or co-Registrar's request.
No service charge shall be made for any registration of transfer or
exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in
connection therewith. The Registrar or co-Registrar shall not be
required to register the transfer of or exchange of any Security
(i) during a period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Securities and ending
at the close of business on the day of such mailing and (ii) selected
for redemption in whole or in part pursuant to Article Three, except
the unredeemed portion of any Security being redeemed in part.

SECTION 2.07 Replacement Securities.
----------------------
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been

<PAGE>

lost, destroyed or wrongfully taken, the Company shall issue and the
Trustee shall authenticate a replacement Security if the Trustee's
requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity, sufficient
in the judgment of the Company and the Trustee, to protect the
Company, the Trustee or any Agent from any loss which any of them may
suffer if a Security is replaced. The Company may charge such Holder
for its reasonable, out-of-pocket expenses in replacing a Security,
including reasonable fees and expenses of counsel. Every replacement
Security shall constitute an additional obligation of the Company.

SECTION 2.08 Outstanding Securities.
----------------------
Securities outstanding at any time are all the Securities
that have been authenticated by the Trustee except those cancelled by
it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be
outstanding because the Company or any of its Affiliates holds the
Security.

If a Security is replaced pursuant to Section 2.07 (other
than a mutilated Security surrendered for replacement), it ceases to
be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Security is held by a bona fide purchaser. A
---- ----
mutilated Security ceases to be outstanding upon surrender of such
Security and replacement thereof pursuant to Section 2.07.

If on a Redemption Date or the Maturity Date the Paying
Agent holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the
Securities payable on that date and is not prohibited from paying such
money to the Holders thereof pursuant to the terms of this Indenture,
then on and after that date such Securities cease to be outstanding
and interest on them ceases to accrue.

SECTION 2.09 Treasury Securities.
-------------------
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver, consent
or notice, Securities owned by the Company or an Affiliate shall be
considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities
which the Trustee knows are so owned shall be so considered. The
Company shall notify the Trustee, in

<PAGE>

writing, when it or any of its Affiliates repurchases or otherwise
acquires Securities, of the aggregate principal amount of such
Securities so repurchased or otherwise acquired.

SECTION 2.10 Temporary Securities.
--------------------
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary
Securities upon receipt of a written order of the Company in the form
of an Officers' Certificate. The Officers' Certificate shall specify
the amount of temporary Securities to be authenticated and the date on
which the temporary Securities are to be authenticated. Temporary
Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall
prepare and execute, and the Trustee shall authenticate upon receipt
of a written order of the Company pursuant to Section 2.02, definitive
Securities in exchange for temporary Securities.

SECTION 2.11 Cancellation.
------------
The Company at any time may deliver Securities to the
Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for
transfer, exchange or payment. The Trustee, or at the direction of
the Trustee, the Registrar or the Paying Agent, and no one else, shall
cancel and, at the written direction of the Company, shall dispose of
all Securities surrendered for transfer, exchange, payment or
cancellation. Subject to Section 2.07, the Company may not issue new
Securities to replace Securities that the Company has paid or
delivered to the Trustee for cancellation. If the Company shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee
for cancellation pursuant to this Section 2.11.

SECTION 2.12 Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the extent
lawful) any interest payable on the defaulted interest to the Persons
who are Holders on a subsequent special record date, which date shall
be the fifteenth day next preceding the date fixed by the Company for
the payment of defaulted interest or the next succeeding Business Day
if such date is not a Business Day. At least 15 days before the
subsequent special record date, the

<PAGE>

Company shall mail to each Holder, with a copy to the Trustee, a
notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on
such defaulted interest, if any, to be paid.

SECTION 2.13 CUSIP Number.
------------
The Company in issuing the Securities may use a "CUSIP"
number, and if so, the Trustee shall use the CUSIP number in notices
of redemption or exchange as a convenience to Holders; provided that
--------
no representation is hereby deemed to be made by the Trustee as to the
correctness or accuracy of the CUSIP number printed in the notice or
on the Securities, and that reliance may be placed only on the other
identification numbers printed on the Securities.

SECTION 2.14 Deposit of Moneys.
-----------------
Prior to 11:00 a.m. New York City time on each Interest
Payment Date and Maturity Date, the Company shall have deposited with
the Paying Agent in immediately available funds money sufficient to
make cash payments, if any, due on such Interest Payment Date or
Maturity Date, as the case may be, in a timely manner which permits
the Paying Agent to remit payment to the Holders on such Interest
Payment Date or Maturity Date, as the case may be.

ARTICLE THREE

REDEMPTION

SECTION 3.01 Notices to Trustee.
------------------
If the Company elects to redeem Securities pursuant to
paragraph 6 of the Securities, it shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the principal
amount of the Securities to be redeemed and whether it wants the
Trustee to give notice of redemption to the Holders (at the Company's
expense) at least 60 days (unless a shorter notice shall be
satisfactory to the Trustee) but not more than 90 days before the
Redemption Date. Any such notice may be cancelled at any time prior
to notice of such redemption being mailed to any Holder and shall
thereby be void and of no effect.

<PAGE>

SECTION 3.02 Selection of Securities To Be Redeemed.
--------------------------------------
If fewer than all of the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed in compliance with
the requirements of the principal national securities exchange, if
any, on which the Securities being redeemed are listed, or, if the
Securities are not listed on a national securities exchange, on a pro
---
rata basis, by lot or in such other fair and reasonable manner chosen
----
at the discretion of the Trustee; provided, however, that a redemption
-------- -------
pursuant to the provisions of paragraph 6(b) of the Securities shall
be made on a pro rata basis.
--- ----
The Trustee shall make the selection from the Securities
outstanding and not previously called for redemption and shall
promptly notify the Company in writing of the Securities selected for
redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed. Securities
in denominations of $1,000 or less may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any
integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of
Securities called for redemption.

SECTION 3.03 Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a
Redemption Date, the Company shall mail or cause to be mailed a notice
of redemption by first class mail to each Holder whose Securities are
to be redeemed, with a copy to the Trustee. At the Company's request,
the Trustee shall give the notice of redemption in the Company's name
and at the Company's expense. Each notice for redemption shall
identify the Securities to be redeemed and shall state:

(1) the Redemption Date;

(2) the redemption price and the amount of accrued
interest, if any, to be paid (the "Redemption Price");

(3) the paragraph of the Securities pursuant to which the
Securities are being redeemed;

(4) the name and address of the Paying Agent;

(5) that Securities called for redemption must be

<PAGE>

surrendered to the Paying Agent to collect the Redemption Price;

(6) that, unless the Company defaults in making the
redemption payment, interest on Securities called for redemption
ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Securities is to receive
payment of the Redemption Price upon surrender to the Paying
Agent of the Securities redeemed;

(7) if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that,
after the Redemption Date, and upon surrender of such Security, a
new Security or Securities in the aggregate principal amount
equal to the unredeemed portion thereof will be issued; and

(8) if fewer than all the Securities are to be redeemed,
the identification of the particular Securities (or portion
thereof) to be redeemed, as well as the aggregate principal
amount of Securities to be redeemed and the aggregate principal
amount of Securities to be outstanding after such partial
redemption.

SECTION 3.04 Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with
Section 3.03, Securities called for redemption become due and payable
on the Redemption Date and at the Redemption Price. Upon surrender to
the Trustee or Paying Agent, such Securities called for redemption
shall be paid at the Redemption Price.

SECTION 3.05 Deposit of Redemption Price.
---------------------------
On or before the Redemption Date, the Company shall deposit
with the Paying Agent U.S. Legal Tender sufficient to pay the
Redemption Price of all Securities to be redeemed on that date. The
Paying Agent shall promptly return to the Company any U.S. Legal
Tender so deposited which is not required for that purpose, except
with respect to monies owed as obligations to the Trustee pursuant to
Article Seven.

If the Company complies with the preceding paragraph, then,
unless the Company defaults in the payment of such Redemption Price,
interest on the Securities to be redeemed will cease to accrue on and
after the applicable Redemption Date, whether or not such Securities
are presented for payment.

<PAGE>

SECTION 3.06 Securities Redeemed in Part.
---------------------------
Upon surrender of a Security that is to be redeemed in part,
the Trustee shall authenticate for the Holder a new Security or
Securities equal in principal amount to the unredeemed portion of the
Security surrendered.

ARTICLE FOUR

COVENANTS

SECTION 4.01 Payment of Securities.
---------------------
The Company shall pay the principal of and interest on the
Securities on the dates and in the manner provided in the Securities.
An installment of principal of or interest on the Securities shall be
considered paid on the date it is due if the Trustee or Paying Agent
holds on that date U.S. Legal Tender designated for and sufficient to
pay the installment or, if the interest is to be paid in Secondary
Securities, if the Trustee or the Paying Agent holds on that date duly
authenticated Secondary Securities in an aggregate principal amount
equal to such installment. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.

Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by
law, deduct or withhold income or other similar taxes imposed by the
United States of America from principal or interest payments
hereunder.

SECTION 4.02 Maintenance of Office or Agency.
-------------------------------
The Company shall maintain the office or agency required
under Section 2.03. The Company shall give prior notice to the
Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the
Trustee set forth in Section 11.02.

SECTION 4.03 Limitation on Restricted Payments.
---------------------------------
Neither the Company nor any of its Subsidiaries will,
directly or indirectly, (a) declare or pay any dividend or make any
distribution (other than dividends or distributions payable

<PAGE>

in Qualified Capital Stock of the Company) on shares of the Company's
Capital Stock, (b) purchase, redeem or otherwise acquire or retire for
value any Capital Stock of the Company or any warrants, rights or
options to acquire shares of any class of such Capital Stock, other
than the exchange of such Capital Stock or any warrants, rights or
options to acquire shares of any class of such Capital Stock for
Qualified Capital Stock or warrants, rights or options to acquire
Qualified Capital Stock, (c) make any principal payment on, purchase,
defease, redeem, prepay, decrease or otherwise acquire or retire for
value, prior to any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Indebtedness of the Company or its
Subsidiaries that is subordinate or junior in right of payment to the
Securities or (d) make any Investment (other than Permitted
Investments) (each of the foregoing prohibited actions set forth in
clauses (a), (b), (c) and (d) being referred to as a "Restricted
Payment"), if at the time of such Restricted Payment or immediately
after giving effect thereto, (i) a Default or an Event of Default has
occurred and is continuing, (ii) the Company is not able to incur at
least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.12 hereof, or (iii) the
aggregate amount of Restricted Payments made subsequent to the
Preferred Stock Issue Date (the amount expended for such purposes, if
other than in cash, being the fair market value of such property as
determined by the Board of Directors of the Company in good faith)
exceeds the sum of:

(A)(x) 100% of the aggregate Consolidated EBITDA of the
Company (or, in the event such Consolidated EBITDA shall be a
deficit, minus 100% of such deficit) accrued subsequent to the
Preferred Stock Issue Date to the most recent date for which
financial information is available to the Company, taken as one
accounting period; less

(y) 1.4 times Consolidated Interest Expense for the same
period; plus

(B) 100% of the aggregate net proceeds, including the fair
market value of property other than cash as determined by the
Board of Directors of the Company in good faith, received by the
Company from any Person (other than a Subsidiary of the Company)
from the issuance and sale on or after February 14, 1996 of
Qualified Capital Stock of the Company (excluding any net
proceeds from issuances and sales financed directly or indirectly
using funds borrowed from the Company or any Subsidiary of the
Company, until and to the extent such borrowing is repaid, but
including the proceeds from the issuance and sale of any
securities

<PAGE>

convertible into or exchangeable for Qualified Capital Stock to
the extent such securities are so converted or exchanged and
including any additional proceeds received by the Company upon
such conversion or exchange) plus

(C) without duplication of any amounts included in clause
(iii)(B) above, 100% of the aggregate net proceeds, including the
fair market value of property other than cash (valued as
provided in clause (iii)(B) above), received by the Company as a
capital contribution (excluding any net proceeds from a Public
Equity Offering by Holdings to the extent used to redeem the
Securities) plus

(D) $2,500,000.

Notwithstanding the foregoing, the provisions of this
Section 4.03 shall not prohibit:

(1) the payment of any dividend or the making of any
distribution within 60 days after the date of its declaration if
the dividend or distribution would have been permitted on the
date of declaration;

(2) the acquisition of Capital Stock or warrants, options
or other rights to acquire Capital Stock either (i) solely in
exchange for shares of Qualified Capital Stock or warrants,
options or other rights to acquire Qualified Capital Stock, or
(ii) through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock
or warrants, options or other rights to acquire Qualified Capital
Stock;

(3) the acquisition of Indebtedness of the Company that is
subordinate or junior in right of payment to the Securities,
either (i) solely in exchange for shares of Qualified Capital
Stock (or warrants, options or other rights to acquire Qualified
Capital Stock) or for Indebtedness of the Company which is
subordinate or junior in right of payment to the Securities, at
least to the extent that the Indebtedness being acquired is
subordinated to the Securities and has a Weighted Average Life to
Maturity no less than that of the Indebtedness being acquired or
(ii) through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a
Subsidiary of the Company) of shares of Qualified Capital Stock
(or warrants, options or other rights to acquire Qualified
Capital Stock) or Indebtedness of the Company

<PAGE>

which is subordinate or junior in right of payment to the
Securities, at least to the extent that the Indebtedness being
acquired is subordinated to the Securities and has a Weighted
Average Life to Maturity no less than that of the Indebtedness
being refinanced;

(4) payments by the Company to fund the operating expenses
of Holdings in an amount not to exceed $500,000 per annum;

(5) payments by the Company to Holdings to enable Holdings
to make payments pursuant to (a) the Financial Monitoring and
Oversight Agreements or (b) the Tax Sharing Agreement;

(6) payments by the Company to repurchase, or to enable
Holdings to repurchase, Capital Stock or other securities of
Holdings from employees of Holdings or the Company in an
aggregate amount not to exceed $5,000,000;

(7) payments to enable Holdings to redeem or repurchase
stock purchase or similar rights in an aggregate amount not to
exceed $500,000;

(8) payments, not to exceed $100,000 in the aggregate, to
enable Holdings to make cash payments to holders of its Capital
Stock in lieu of the issuance of fractional shares of its Capital
Stock; and

(9) payments made pursuant to any merger, consolidation or
sale of assets effected in accordance with Section 5.01 hereof;
provided, however, that no such payment may be made pursuant to
-------- -------
this clause (9) unless, after giving effect to such transaction
(and the incurrence of any Indebtedness in connection therewith
and the use of the proceeds thereof), the Company would be able
to incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to Section 4.12 hereof such that after
incurring that $1.00 of additional Indebtedness, the Leverage
Ratio would be less than 6.0 to 1;

provided, however, that in the case of clauses 5(a), (6), (7), (8) and
-------- -------
(9), no Default or Event of Default shall have occurred or be
continuing at the time of such payment or as a result thereof.

In determining the aggregate amount of Restricted Payments
made subsequent to the Preferred Stock Issue Date,

<PAGE>

amounts expended pursuant to clauses (1), (2), (3) (but only to the
extent that Indebtedness is acquired in exchange for, or with the net
proceeds from, the issuance of Qualified Capital Stock or warrants,
options or other rights to acquire Qualified Capital Stock), 5(a),
(6), (7), (8) and (9) shall be included in such calculation.

Prior to any Restricted Payment under the first paragraph of
this Section 4.03, the Company shall deliver to the Trustee an
Officers' Certificate setting forth the computation by which the
amount available for Restricted Payments pursuant to such paragraph
was determined. The Trustee shall have no duty or responsibility to
determine the accuracy or correctness of this computation and shall be
fully protected in relying on such Officers' Certificate.

SECTION 4.04 Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, the Company
shall do or cause to be done all things reasonably necessary to
preserve and keep in full force and effect its corporate or other
existence and the corporate or other existence of each of its
Significant Subsidiaries in accordance with the respective
organizational documents of each such Significant Subsidiary and the
material rights (charter and statutory) and franchises of the Company
and each such Significant Subsidiary; provided, however, that the
-------- -------
Company shall not be required to preserve, with respect to itself, any
material right or franchise and, with respect to any of its
Significant Subsidiaries, any such existence, material right or
franchise, if the Board of Directors of the Company or such
Significant Subsidiary, as the case may be, shall determine that the
preservation thereof is no longer reasonably necessary or desirable in
the conduct of the business of the Company or any such Significant
Subsidiary.

SECTION 4.05 Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material
taxes, assessments and governmental charges (including withholding
taxes and any penalties, interest and additions to taxes) levied or
imposed upon it or any of its Subsidiaries or properties of it or any
of its Subsidiaries and (ii) all material lawful claims for labor,
materials, supplies and services that, if unpaid, might by law become
a Lien upon the property of it or any of its Subsidiaries; provided,
--------
however, that there shall not be required to be paid or discharged
-------
any such tax, assessment or charge, the amount, applicability or
validity of which is being

<PAGE>

contested in good faith by appropriate proceedings and for which
adequate provision has been made or where the failure to effect such
payment or discharge is not adverse in any material respect to the
Holders.

SECTION 4.06 Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall, and shall cause each of its
Subsidiaries to, maintain its material properties in normal condition
(subject to ordinary wear and tear) and make all reasonably necessary
repairs, renewals or replacements thereto as in the judgment of the
Company may be reasonably necessary to the conduct of the business of
the Company and its Subsidiaries; provided, however, that nothing in
-------- -------
this Section 4.06 shall prevent the Company or any of its Subsidiaries
from discontinuing the operation and maintenance of any of its
properties, if such properties are, in the reasonable and good faith
judgment of the Board of Directors of the Company or the Subsidiary,
as the case may be, no longer reasonably necessary in the conduct of
their respective businesses.

(b) The Company shall provide or cause to be provided, for
itself and each of its Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the
reasonable, good faith opinion of the Company, are reasonably adequate
and appropriate for the conduct of the business of the Company and
such Subsidiaries.

SECTION 4.07 Compliance Certificate; Notice of Default.
-----------------------------------------
(c) The Company shall deliver to the Trustee, within 120
days after the end of the Company's fiscal year, an Officers'
Certificate (signed by the principal executive officer, principal
financial officer or principal accounting officer) stating that a
review of its activities and the activities of its Subsidiaries during
the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether it has kept,
observed, performed and fulfilled its obligations under this Indenture
and further stating, as to each such Officer signing such certificate,
that to the best of his knowledge the Company during such preceding
fiscal year has kept, observed, performed and fulfilled each and every
such obligation and no Default or Event of Default occurred during
such year and at the date of such certificate there is no Default or
Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate
shall describe the Default or Event of Default and its status with
particularity. The Officers' Certificate shall also notify

<PAGE>

the Trustee should the Company elect to change the manner in which it
fixes its fiscal year end.

(d) The copy of the annual report on Form 10-K of the
Company as filed with the SEC or the annual financial statements
delivered to the Trustee pursuant to Section 4.09 shall be accompanied
by a written report of the Company's independent accountants that in
conducting their audit of the financial statements which are a part of
such annual report or such annual financial statements nothing has
come to their attention that would lead them to believe that the
Company has violated any provisions of Article Four, Five or Six
insofar as they relate to accounting matters or, if any such violation
has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any
such violation.

(e) (i) If any Default or Event of Default has occurred and
is continuing or (ii) if any Holder seeks to exercise any remedy
hereunder with respect to a claimed Default under this Indenture or
the Securities, the Company shall deliver to the Trustee by registered
or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers'
Certificate specifying such event, notice or other action within five
Business Days of its becoming aware of such occurrence.

SECTION 4.08 Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions of the United States of America,
all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency
and instrumentality of the foregoing, in respect of the conduct of
their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial
condition or results of operations of the Company and its Subsidiaries
taken as a whole.

SECTION 4.09 SEC Reports.
-----------
The Company shall file with the Trustee and provide to the
Securityholders, within 15 days after it files them with the SEC,
copies of the annual reports and of the information, documents, and
other reports (or copies of such portions of any

<PAGE>

of the foregoing as the SEC may by rules and regulations prescribe)
which the Company files with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. In the event that the Company is no longer
required to furnish such reports to its securityholders pursuant to
the Exchange Act, the Company will cause its consolidated financial
statements, comparable to those which would have been required to
appear in annual or quarterly reports, to be delivered to the Holders
of the Securities. The Company shall also comply with the other
provisions of TIA section 314(a).

SECTION 4.10 Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or
forgive the Company from paying all or any portion of the principal of
or interest on the Securities as contemplated herein, wherever
enacted, now or at any time hereafter in force, or which may affect
the obligations or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company hereby expressly waives
all benefit or advantage of any such law, and covenants that it will
not hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.

SECTION 4.11 Limitations on Transactions with Affiliates.
-------------------------------------------
Neither the Company nor any of its Subsidiaries will,
directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange
of any property or the rendering of any service) with or for the
benefit of any of its Affiliates (other than transactions between the
Company and a Wholly Owned Subsidiary of the Company or among Wholly
Owned Subsidiaries of the Company) (an "Affiliate Transaction"), other
than Affiliate Transactions on terms that are no less favorable than
those that might reasonably have been obtained in a comparable
transaction on an arm's-length basis from a Person that is not an
Affiliate; provided, however, that for a transaction or series of
-------- -------
related transactions involving value of $1,000,000 or more, such
determination shall be made in good faith by a majority of the members
of the Board of Directors of the Company and by a majority of the
disinterested members of the Board of Directors of the Company, if
any; provided, further, that for a transaction or series of related
-------- -------
transactions involving value of $5,000,000

<PAGE>

or more, the Board of Directors of the Company has received an opinion
from a nationally recognized investment banking firm that such
Affiliate Transaction is fair, from a financial point of view, to the
Company or such Subsidiary. The foregoing restrictions will not apply
to reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder, or to any obligations of
the Company under the Financial Monitoring and Oversight Agreements,
the Tax Sharing Agreement or any employment agreement with any officer
of the Company (provided that each amendment of any of the foregoing
agreements shall be subject to the limitations of this Section 4.11),
as well as reasonable and customary investment banking, financial
advisory, commercial banking and similar fees and expenses paid to BT
Securities Corporation and its Affiliates.

SECTION 4.12 Limitation on Incurrence of Additional
Indebtedness.
--------------------------------------
Neither the Company nor any of its Subsidiaries will,
directly or indirectly, create, incur, assume, guarantee, acquire or
become liable for, contingently or otherwise, (collectively "incur")
any Indebtedness other than Permitted Indebtedness. Notwithstanding
the foregoing limitations, the Company or any Subsidiary may incur
Indebtedness if on the date of the incurrence of such Indebtedness,
after giving effect to the incurrence of such Indebtedness and the
receipt and application of the proceeds thereof, the Company's
Leverage Ratio is less than 7.0 to 1.

SECTION 4.13 Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.
----------------------------------------
Neither the Company nor any of its Subsidiaries will,
directly or indirectly, create or otherwise cause or permit to exist
or become effective any encumbrance or restriction on the ability of
any Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock; (b) make loans or advances or pay any Indebtedness
or other obligation owed to the Company or any of its Subsidiaries; or
(c) transfer any of its property or assets to the Company, except for
such encumbrances or restrictions existing under or by reason of:
(1) applicable law, (2) this Indenture, (3) customary non-assignment
provisions of any lease governing a leasehold interest of the Company
or any Subsidiary, (4) any instrument governing Acquired Indebtedness,
which encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, (5) agree

<PAGE>

ments existing on the Issue Date (including the Credit Agreement) as
such agreements are from time to time in effect; provided, however,
-------- -------
that any amendments or modifications of such agreements which affect
the encumbrances or restrictions of the types subject to this
Section 4.13 shall not result in such encumbrances or restrictions
being less favorable to the Company in any material respect, as
determined in good faith by the Board of Directors of the Company,
than the provisions as in effect before giving effect to the
respective amendment or modification, (6) an agreement effecting a
refinancing, replacement or substitution of Indebtedness issued,
assumed or incurred pursuant to an agreement referred to in
clause (2), (4) or (5) above or any other agreement evidencing
Indebtedness permitted under this Indenture; provided, however, that
-------- -------
the provisions relating to such encumbrance or restriction contained
in any such refinancing, replacement or substitution agreement or any
such other agreement are not less favorable to the Company in any
material respect as determined in good faith by the Board of Directors
of the Company than the provisions relating to such encumbrance or
restriction contained in agreements referred to in such clause (2),
(4) or (5), or (7) restrictions on the transfer of assets subject to
any Lien imposed by the holder of such Lien.

SECTION 4.14 Change of Control.
-----------------
(a) In the event of a Change of Control, the Company shall
be obligated to make an offer to repurchase all outstanding Securities
pursuant to the offer described in paragraph (b) below (the "Change of
Control Offer"), at a purchase price equal to 101% of the principal
amount thereof plus accrued interest, if any, to the date of
repurchase. Prior to the mailing of the notice referred to below, but
in any event within 30 days following the date on which a Change of
Control occurs, the Company covenants to (i) repay in full all
Indebtedness under the Credit Agreement (and terminate all commitments
thereunder), the Existing Notes, the Notes and any other Indebtedness
that would prohibit the Change of Control Offer or offer to repay in
full all such Indebtedness (and terminate all such commitments) and to
repay the Indebtedness owed to (and terminate the commitments of) each
lender which has accepted such offer or (ii) obtain the requisite
consents under the Credit Agreement, the Existing Indenture, the Note
Indenture and any agreement governing such other Indebtedness to
permit the repurchase of the Securities as provided below. The
Company shall first comply with the covenant in the preceding sentence
before it shall be required to repurchase Securities pursuant to the
provisions described in this Section 4.14; provided that the Company's
--------
failure to comply

<PAGE>

with such covenant shall constitute an Event of Default under Section
6.01(3).

(b) Within 30 days following the date upon which a Change
of Control occurs (the "Change of Control Date"), the Company shall
send, by first class mail, a notice to each Holder of Securities, with
a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender
Securities pursuant to the Change of Control Offer. Such notice shall
state:

(1) that the Change of Control Offer is being made pursuant
to this Section 4.14 and that all Securities validly tendered
and not withdrawn will be accepted for payment;

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

(3) that any Security not tendered will continue to accrue
interest;

(4) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;

(5) that Holders electing to have a Security purchased
pursuant to a Change of Control Offer will be required to
surrender the Security, properly endorsed for transfer together
with such customary documents as the Company reasonably may
request, to the Paying Agent at the address specified in the
notice prior to the close of business on the Business Day prior
to the Change of Control Payment Date;

(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than five
Business Days prior to the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Securities
the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Security
purchased;

<PAGE>

(7) that Holders whose Securities are purchased only in
part will be issued new Securities in a principal amount equal to
the unpurchased portion of the Securities surrendered; and

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

(c) On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Securities or portions thereof
(in integral multiples of $1,000) validly tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the purchase price of all Securities so
tendered and (iii) deliver to the Trustee Securities so accepted
together with an Officers' Certificate stating the Securities or
portions thereof being purchased by the Company. The Paying Agent
shall promptly mail to the Holders of Securities so accepted payment
in an amount equal to the purchase price out of the funds deposited
with the Paying Agent in accordance with the preceding sentence. The
Trustee shall promptly authenticate and mail to such Holders new
Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Upon the payment of the purchase price for
the Securities accepted for purchase, the Trustee shall return the
Securities purchased to the Company for cancellation. Any amounts
remaining after the purchase of Securities pursuant to a Change of
Control Offer shall be returned by the Trustee to the Company.

(d) The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of the Securities pursuant
to a Change of Control Offer. To the extent the provisions of any
such rule conflict with the provisions of this Indenture relating to a
Change of Control Offer, the Company shall comply with the provisions
of such rule and be deemed not to have breached its obligations
relating to such Change of Control Offer by virtue thereof.

(e) Paragraphs (a)-(d) of this Section 4.14
notwithstanding, the Company shall not be required to make a Change of
Control Offer if, instead, the Company elects to effect a Change of
Control Redemption in compliance with Article 3 hereof.

<PAGE>

SECTION 4.15 Limitation on Asset Sales.
-------------------------
(a) Neither the Company nor any of its Subsidiaries will
consummate an Asset Sale unless (i) the Company or the applicable
Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value of the assets
sold or otherwise disposed of (as determined in good faith by
management of the Company or, if such Asset Sale involves
consideration in excess of $2,500,000, by the Board of Directors of
the Company, as evidenced by a board resolution), (ii) at least 75% of
the consideration received by the Company or the Subsidiary, as the
case may be, from such Asset Sale is cash or Cash Equivalents (other
than in the case where the Company is exchanging all or substantially
all the assets of one or more broadcast businesses operated by the
Company (including by way of the transfer of the capital stock) for
all or substantially all the assets (including by way of the transfer
of the capital stock) constituting one or more broadcast businesses
operated by another Person, in which event the foregoing requirement
with respect to the receipt of cash or Cash Equivalents shall not
apply) and is received at the time of such disposition and (iii) upon
the consummation of an Asset Sale, the Company applies or causes such
Subsidiary to apply, such Net Cash Proceeds within 180 days of receipt
thereof, either (A) to repay the principal of any Senior Indebtedness
(and, to the extent such Senior Indebtedness relates to principal
under a revolving credit or similar facility, to obtain a
corresponding reduction in the commitments thereunder), (B) to
reinvest, or to be contractually committed to reinvest pursuant to a
binding agreement, in Productive Assets and, in the latter case, to
have so reinvested within 360 days of the date of receipt of such Net
Cash Proceeds, or (C) to purchase Securities tendered to the Company
for purchase at a price equal to 100% of the principal amount thereof,
plus accrued interest thereon to the date of purchase, pursuant to an
offer to purchase made by the Company as set forth below (a "Net
Proceeds Offer"); provided, however, that, prior to making any such
-------- -------
Net Proceeds Offer the Company may, to the extent required pursuant to
the Note Indenture and the Existing Indenture, in each case, as in
effect on the Issue Date, offer to use such Net Cash Proceeds to
repurchase and use all or a portion of such Net Cash Proceeds to
repurchase Notes and/or Existing Notes and any other Senior Debt of
the Company incurred after the Issue Date containing a provision
similar to this Section 4.15, in which event the Company shall be
required to use only the Net Cash Proceeds remaining after such other
repurchases to make the Net Proceeds Offer contemplated by this
Section 4.15; provided, further, that if at any time any non-cash
-------- -------
consideration received by the Company or any Subsidiary of the
Company, as the case may

<PAGE>

be, in connection with any Asset Sale is converted into or sold or
otherwise disposed of for cash, then such conversion or disposition
shall be deemed to constitute an Asset Sale hereunder and the Net Cash
Proceeds thereof shall be applied in accordance with clause (iii)
above; provided, further, that the Company may defer making a Net
-------- -------
Proceeds Offer until the aggregate Net Cash Proceeds from Asset Sales
(taking into account any Net Cash Proceeds used to repurchase Notes or
Existing Notes or other Senior Indebtedness pursuant to the second
immediately preceeding proviso) to be applied equals or exceeds
$5,000,000. In the event of a transaction effected in accordance with
Section 5.01 which involves less than all of the property or assets of
the Company, only property or assets not included in such transaction
shall be deemed to have been transferred in an Asset Sale.

(b) Subject to the deferral right set forth in the final
proviso of paragraph (a), each notice of a Net Proceeds Offer pursuant
to this Section 4.15 shall be mailed, by first class mail, by the
Company to Holders of the Securities as shown on the applicable
register of Holders of the Securities not more than 180 days after the
relevant Asset Sale or, in the event the Company or a Subsidiary has
entered into a binding agreement as provided in (B) above, within 180
days following the termination of such agreement but in no event later
than 360 days after the relevant Asset Sale, with a copy to the
Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Securities pursuant to the
Net Proceeds Offer and shall state the following terms:

(1) that the Net Proceeds Offer is being made pursuant to
Section 4.15 and that Holders of Securities may elect to tender
their Securities in denominations of less than $1,000 or other
Securities, in whole or in part, in integral multiples of $1,000
and that all Securities validly tendered will be accepted for
payment; provided, however, that if the aggregate principal
-------- -------
amount of Securities tendered in a Net Proceeds Offer plus
accrued interest at the expiration of such offer exceeds the
aggregate amount of the Net Proceeds Offer, the Company shall
select the Securities to be purchased on a pro rata basis (based
upon the principal amount tendered); provided, further, that the
-------- -------
Company may first select Securities in denominations of less than
$1,000 prior to making the pro rata selection referred to in the
preceeding proviso;

(2) the purchase price (including the amount of accrued
interest) and the purchase date (which shall be no earlier than
30 days nor later than 45 days from the date

<PAGE>

such notice is mailed, other than as may be required by law) (the
"Proceeds Purchase Date");

(3) that any Security not tendered will continue to accrue
interest;

(4) that, unless the Company defaults in making payment
therefor, any Security accepted for payment pursuant to the Net
Proceeds Offer shall cease to accrue interest after the Proceeds
Purchase Date;

(5) that Holders electing to have a Security purchased
pursuant to a Net Proceeds Offer will be required to surrender
the Security, properly endorsed for transfer together with such
other customary documents as the Company reasonably may request,
to the Paying Agent at the address specified in the notice prior
to the close of business on the Business Day prior to the
Proceeds Purchase Date;

(6) that Holders will be entitled to withdraw their
election if the Paying Agent receives, not later than five
Business Days prior to the Proceeds Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Securities the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased;

(7) that Holders whose Securities are purchased only in
part will be issued new Securities in a principal amount equal to
the unpurchased portion of the Securities surrendered; and

(8) the circumstances and relevant facts regarding such Net
Proceeds Offer.

(c) On or before the Proceeds Purchase Date, the Company
shall (i) accept for payment Securities or portions thereof validly
tendered pursuant to the Net Proceeds Offer, (ii) deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the purchase price of
all Securities so tendered and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate stating
the Securities or portions thereof being purchased by the Company.
The Paying Agent shall promptly mail to the Holders of Securities so
accepted payment in an amount equal to the purchase price out of funds
deposited with the Paying Agent in accordance with the preceding
sentence. The Trustee shall promptly authenticate and mail to such
Holders new

<PAGE>

Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Upon payment of the purchase price for the
Securities accepted for purchase, the Trustee shall return the
Securities purchased to the Company for cancellation. Any Securities
not so accepted shall be promptly mailed by the Company to the Holder
thereof.

(d) If the aggregate principal amount of Securities validly
tendered pursuant to any Net Proceeds Offer is less than the amount of
Net Cash Proceeds subject to such Net Proceeds Offer, the Company may
use any remaining portion of such Net Cash Proceeds not required to
fund the repurchase of tendered Securities for purposes otherwise
permitted by this Indenture. Upon the consummation of any Net
Proceeds Offer, the amount of Net Cash Proceeds subject to any future
Net Proceeds Offer from the Asset Sales giving rise to such Net Cash
Proceeds shall be deemed to be zero.

(e) The Company will comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with their purchase of Securities pursuant to
a Net Proceeds Offer. To the extent the provisions of any such rule
conflict with the provisions of this Indenture relating to a Net
Proceeds Offer, the Company shall comply with the provisions of such
rule and be deemed not to have breached its obligations relating to
such Net Proceeds Offer by virtue thereof.

SECTION 4.16 Limitation on Preferred Stock of
Subsidiaries.
--------------------------------
The Company will not permit any of its Subsidiaries to issue
any Preferred Stock (other than to the Company or to a Wholly Owned
Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly Owned Subsidiary of the Company) to own any such
Preferred Stock (other than Acquired Preferred Stock; provided that
--------
at the time the issuer of such Acquired Preferred Stock becomes a
Subsidiary of the Company or merges with the Company or any of its
Subsidiaries, and after giving effect to such transaction, the Company
shall be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.12 hereof).

<PAGE>

SECTION 4.17 Limitation on Asset Swaps.
-------------------------
Neither the Company nor any of its Subsidiaries shall engage
in any Asset Swaps, unless: (i) at the time of entering into the
agreement to swap assets and immediately after giving effect to the
proposed Asset Swap, no Default or Event of Default shall have
occurred and be continuing or would occur as a consequence thereof;
(ii) the Company would, after giving pro forma effect to the proposed
Asset Swap, have been permitted to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.12 hereof; (iii) the respective fair market values of the
assets being purchased and sold by the Company or any of its
Subsidiaries (as determined in good faith by the management of the
Company or, if such Asset Swap includes consideration in excess of
$2,500,000 by the Board of Directors, as evidenced by a Board
Resolution delivered to the Trustee) are substantially the same at the
time of entering into the agreement to swap assets; and (iv) at the
time of the consummation of the proposed Asset Swap, the percentage of
any decline in the fair market value (determined as aforesaid) of the
asset or assets being acquired by the Company and its Subsidiaries
shall not be significantly greater than the percentage of any decline
in the fair market value (determined as aforesaid) of the assets being
disposed of by the Company, calculated from the time the agreement to
swap assets was entered into.

ARTICLE FIVE

SUCCESSOR CORPORATION

SECTION 5.01 When Company May Merge, Etc.
---------------------------
(a) The Company shall not, in a single transaction or
through a series of related transactions, consolidate with or merge
with or into, or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its assets to, another Person
or adopt a plan of liquidation, unless:

(1) either (A) the Company shall be the survivor of such
merger or consolidation or (B) the surviving or transferee Person
is a corporation, partnership or trust organized and existing
under the laws of the United States, any State thereof or the
District of Columbia and such surviving or transferee Person
shall expressly assume by supplemental indenture all the
obligations of the Company under the Securities and this
Indenture;

<PAGE>

(2) immediately after giving effect to such transaction and
the use of the proceeds therefrom (on a pro forma basis,
including any Indebtedness incurred or anticipated to be incurred
in connection with such transaction), the Company or the
surviving or transferee Person is able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.12;

(3) immediately after giving effect to such transaction
(including any Indebtedness incurred or anticipated to be
incurred in connection with the transaction) no Default or Event
of Default shall have occurred and be continuing; and

(4) the Company has delivered to the Trustee an Officers'
Certificate and Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this Indenture,
that the surviving or transferee Person agrees by supplemental
indenture to be bound hereby, and that all conditions precedent
in this Indenture relating to such transaction have been
satisfied.

(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all of the properties
and assets of one or more Subsidiaries, the Capital Stock of which
constitutes all or substantially all of the properties and assets of
the Company, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.

SECTION 5.02 Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any transfer of assets
in accordance with Section 5.01, the successor Person formed by such
consolidation or into which the Company is merged or to which such
transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the
Company herein. When a successor corporation assumes all of the
obligations of the Company hereunder and under the Securities and
agrees to be bound hereby and thereby, the predecessor shall be
released from such obligations.

<PAGE>

ARTICLE SIX

DEFAULT AND REMEDIES

SECTION 6.01 Events of Default.
-----------------
An "Event of Default" occurs if:

(1) the Company defaults in the payment of interest on the
Securities when the same becomes due and payable and the Default
continues for a period of 30 days (whether or not such payment
shall be prohibited by Article Ten); or

(2) the Company defaults in the payment of the principal of
any Securities when the same becomes due and payable, at
maturity, upon redemption or otherwise (whether or not such
payment shall be prohibited by Article Ten); or

(3) the Company fails to observe or perform any other
covenant or agreement contained in the Securities or this
Indenture and the Default continues for a period of 30 days after
written notice thereof specifying such Default has been given to
the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount of the outstanding Securities; or

(4) there shall be a failure to pay at the final stated
maturity (giving effect to any extensions thereof) the principal
amount of any Indebtedness of the Company or any Subsidiary of
the Company, or the acceleration of the final stated maturity
(giving effect to any extensions thereof) of any such
Indebtedness, if the aggregate principal amount of such
Indebtedness, together with the aggregate principal amount of any
other such Indebtedness in default for failure to pay principal
at the final stated maturity (giving effect to any extensions
thereof) or which has been accelerated, aggregates $5,000,000 or
more at any time, in each case after a 10-day period during which
such default shall not have been cured or such acceleration
rescinded; or

(5) one or more judgments in an aggregate amount in excess
of $5,000,000 (which are not covered by insurance as to which the
insurer has not disclaimed coverage) shall have been rendered
against the Company or any of its Significant Subsidiaries and
such judgments remain undischarged or unstayed for a period of 60
days after such judgment or judgments become final and
non-appealable; or

<PAGE>

(6) the Company or any Significant Subsidiary (A) commences
a voluntary case or proceeding under any Bankruptcy Law with
respect to itself, (B) consents to the entry of a judgment,
decree or order for relief against it in an involuntary case or
proceeding under any Bankruptcy Law, (C) consents to the
appointment of a Custodian of it or for substantially all of its
property, (D) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it or (E) makes a
general assignment for the benefit of its creditors; or

(7) a court of competent jurisdiction enters a judgment,
decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under
any Bankruptcy Law, which shall (A) approve as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition in respect of the Company or any Significant
Subsidiary, (B) appoint a Custodian of the Company or any
Significant Subsidiary or for substantially all of its property
or (C) order the winding-up or liquidation of its affairs; and
such judgment, decree or order shall remain unstayed and in
effect for a period of 60 consecutive days.

SECTION 6.02 Acceleration.
------------
If an Event of Default (other than an Event of Default
specified in Section 6.01(6) or (7) with respect to the Company)
occurs and is continuing and has not been waived pursuant to
Section 6.04, the Trustee may, by notice to the Company, or the
Holders of at least 25% in aggregate principal amount of the
Securities then outstanding may, by written notice to the Company and
the Trustee, and the Trustee shall, upon the request of such Holders,
declare the aggregate principal amount of the Securities outstanding,
together with accrued but unpaid interest, if any, on all Securities
to be due and payable by notice in writing to the Company and the
Trustee specifying the respective Event of Default and that it is a
"notice of acceleration" (the "Acceleration Notice"), and the same
(i) shall become immediately due and payable or (ii) if there are any
amounts outstanding under the Credit Agreement, shall become due and
payable upon the first to occur of an acceleration under the Credit
Agreement or 5 Business Days after receipt by the Company and the
Representative under the Credit Agreement of such Acceleration Notice
(unless all Events of Default specified in such Acceleration Notice
have been cured or waived). If an Event of Default specified in
Section 6.01(6) or (7) with respect to the Company occurs and is
continuing with respect to the Company, all unpaid principal and

<PAGE>

accrued interest on the Securities then outstanding shall ipso facto
---- -----
become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholder. The
Holders of a majority in principal amount of the Securities then
outstanding (by notice to the Trustee) may rescind and cancel a
declaration of acceleration and its consequences if (i) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) all existing Events of Default have been cured or
waived, except non-payment of the principal or interest on the
Securities which have become due solely by such declaration of
acceleration, (iii) to the extent the payment of such interest is
lawful, interest (at the same rate as specified in the Securities) on
overdue installments of interest and overdue payments of principal,
which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver
of a Default or Event of Default of the type described in Sections
6.01(6) and (7), the Trustee shall have received an Officers'
Certificate and an Opinion of Counsel that such Default or Event of
Default has been cured or waived and the Trustee shall be entitled to
conclusively rely upon such Officer's Certificate and Opinion of
Counsel. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.

SECTION 6.03 Other Remedies.
--------------
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on the Securities or
to enforce the performance of any provision of the Securities or this
Indenture.

The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder
in exercising any right or remedy accruing upon an Event of Default
shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent
permitted by law.

SECTION 6.04 Waiver of Past Defaults.
-----------------------
Subject to Sections 6.07 and 9.02, the Holders of a majority
in principal amount of the outstanding Securities by

<PAGE>

notice to the Trustee may waive an existing Default or Event of
Default and its consequences, except a Default in the payment of
principal of or interest on any Security as specified in clauses (1)
and (2) of Section 6.01.

SECTION 6.05 Control by Majority.
-------------------
The Holders of a majority in principal amount of the
outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it, including, without
limitation, any remedies provided for in Section 6.03. Subject to
Section 7.01, however, the Trustee may, in its discretion, refuse to
follow any direction that conflicts with any law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of
another Securityholder, or that may involve the Trustee in personal
liability; provided that the Trustee may take any other action deemed
--------
proper by the Trustee, in its discretion, which is not inconsistent
with such direction.

SECTION 6.06 Limitation on Suits.
-------------------
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:

(1) the Holder gives to the Trustee notice of a continuing
Event of Default;

(2) Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to
pursue the remedy;

(3) such Holders offer to the Trustee reasonably
satisfactory to the Trustee indemnity or security against any
loss, liability or expense to be incurred in compliance with such
request;

(4) the Trustee does not comply with the request within 45
days after receipt of the request and the offer of satisfactory
indemnity or security; and

(5) during such 45-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the
Trustee a direction which, in the opinion of the Trustee, is
inconsistent with the request.

<PAGE>

A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority
over such other Securityholder.

SECTION 6.07 Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and interest on
a Security, on or after the respective due dates expressed in such
Security, or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected
without the consent of such Holder.

SECTION 6.08 Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal or interest
specified in clause (1) or (2) of Section 6.01 occurs and is
continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company or any other obligor
on the Securities for the whole amount of principal and accrued
interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest
on overdue installments of interest at the rate set forth in the
Securities and such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel.

SECTION 6.09 Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, taxes, disbursements and advances of the
Trustee, its agents and counsel) and the Securityholders allowed in
any judicial proceedings relating to the Company or any other obligor
upon the Securities, any of their respective creditors or any of their
respective property, and shall be entitled and empowered to collect
and receive any monies or other property payable or deliverable on any
such claims and to distribute the same, and any Custodian in any such
judicial proceedings is hereby authorized by each Securityholder to
make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, taxes, disbursements and advances
of the Trustee, its agents and counsel, and any

<PAGE>

other amounts due the Trustee under Section 7.07. The Company's
payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan
of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.

SECTION 6.10 Priorities.
----------
If the Trustee collects any money pursuant to this Article
Six, it shall pay out the money in the following order:

First: to the Trustee for amounts due under Sections 6.09
and 7.07;

Second: if the Holders are forced to proceed against the
Company directly without the Trustee, to Holders for their
collection costs;

Third: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due
and payable on the Securities for principal and interest,
respectively; and

Fourth: to the Company or any other obligor on the
Securities, as their interests may appear, or as a court of
competent jurisdiction may direct.

The Trustee, upon prior notice to the Company, may fix a
record date and payment date for any payment to Securityholders
pursuant to this Section 6.10.

SECTION 6.11 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken
or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys' fees, against any
party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This
Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder

<PAGE>

pursuant to Section 6.07, or a suit by a Holder or Holders of more
than 10% in principal amount of the outstanding Securities.

ARTICLE SEVEN

TRUSTEE

SECTION 7.01 Duties of Trustee.
-----------------
(a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and
skill in its exercise thereof as a prudent Person would exercise or
use under the circumstances in the conduct of its own affairs.

(b) Except during the continuance of a Default or an Event
of Default:

(1) The Trustee need perform only those duties as are
specifically set forth in this Indenture or the TIA and no
duties, covenants, responsibilities or obligations shall be
implied in this Indenture that are adverse to the Trustee.

(2) In the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
(including Officers' Certificates) or opinions (including
Opinions of Counsel) furnished to the Trustee and conforming to
the requirements of this Indenture. However, as to any
certificates or opinions which are required by any provision of
this Indenture to be delivered or provided to the Trustee, the
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this
Indenture.

(c) Notwithstanding anything to the contrary herein
contained, the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01.

(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is

<PAGE>

proved that the Trustee was negligent in ascertaining the
pertinent facts.

(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 6.02, 6.04 or
6.05.

(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.

(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (d)
of this Section 7.01.

(f) The Trustee shall not be liable for interest on any
money or assets received by it except as the Trustee may agree with
the Company. Assets held in trust by the Trustee need not be
segregated from other assets except to the extent required by law.

(g) In the absence of bad faith, negligence or wilful
misconduct on the part of the Trustee, the Trustee shall not be
responsible for the application of any money by any Paying Agent other
than the Trustee.

SECTION 7.02 Rights of Trustee.
-----------------
Subject to Section 7.01:

(a) The Trustee may rely and shall be fully protected in
acting or refraining from acting upon any document believed by it
to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter
stated in the document.

(b) Before the Trustee acts or refrains from acting, it may
consult with counsel and may require an Officers' Certificate or
an Opinion of Counsel, which shall conform to Sections 11.04 and
11.05. The Trustee shall not be liable for and shall be fully
protected in respect of any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion
of Counsel.

<PAGE>

(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of
any agent or attorney appointed with due care.

(d) The Trustee shall not be liable for any action that it
takes or omits to take in good faith which it reasonably believes
to be authorized or within its rights or powers.

(e) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate (including any Officers' Certificate), statement,
instrument, opinion (including any Opinion of Counsel), notice,
request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled, upon
reasonable notice to the Company, to examine the books, records,
and premises of the Company, personally or by agent or attorney.

(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Holders of the
Securities pursuant to the provisions of this Indenture, unless
such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred by it in compliance with such request,
order or direction.

(g) The Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete
authorization and protection from liability with respect to any
action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.

SECTION 7.03 Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with
the Company, any Subsidiary or Unrestricted Subsidiary, or their
respective Affiliates, with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights. However,
the Trustee must comply with Sections 7.10 and

<PAGE>

7.11.

SECTION 7.04 Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities, and it shall not be
accountable for the Company's use of the proceeds from the Securities,
and it shall not be responsible for any statement of the Company in
this Indenture or the Securities other than the Trustee's certificate
of authentication.

SECTION 7.05 Notice of Default.
-----------------
If a Default or an Event of Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the uncured Default or Event of Default
within 60 days after such Default or Event of Default occurs. Except
in the case of a Default or an Event of Default in payment of
principal of, or interest on, any Security, including an accelerated
payment and the failure to make payment on the Change of Control
Payment Date pursuant to a Change of Control Offer or on the Proceeds
Purchase Date pursuant to a Net Proceeds Offer and, except in the case
of a failure to comply with Article Five, the Trustee may withhold the
notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors
and/or Trust Officers in good faith determines that withholding the
notice is in the interest of the Security holders. The Trustee shall
not be deemed to have knowledge of a Default or Event of Default other
than (i) any Event of Default occurring pursuant to Section 6.01(1),
6.01(2) or 4.01; or (ii) any Default or Event of Default of which a
Trust Officer shall have received written notification or obtained
actual knowledge.

SECTION 7.06 Reports by Trustee to Holders.
-----------------------------
Within 60 days after each May 15 of each year beginning with
May 15, 1997, the Trustee shall, to the extent that any of the events
described in TIA section 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Securityholder a brief report
dated as of such date that complies with TIA section 313(a). The
Trustee also shall comply with TIA sections 313(b) and 313(c).

A copy of each report at the time of its mailing to
Securityholders shall be mailed to the Company and filed with the SEC
and each stock exchange, if any, on which the Securities are listed.

<PAGE>

The Company shall promptly notify the Trustee if the
Securities become listed on any stock exchange and the Trustee shall
comply with TIA section 313(d).

SECTION 7.07 Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time such
compensation as may be agreed upon by the Company and the Trustee.
The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by it in
connection with the performance of its duties and the discharge of its
obligations under this Indenture. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents and counsel.

The Company shall indemnify the Trustee and its agents,
employees, officers, stockholders and directors for, and hold them
harmless against, any loss, liability or expense incurred by them
except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part, arising out of or in
connection with the acceptance or administration of this trust
including the reasonable costs and expenses of defending themselves
against any claim or liability in connection with the exercise or
performance of any of their rights, powers or duties hereunder. The
Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense.
The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel; provided that the
--------
Company will not be required to pay such fees and expenses if it
assumes the Trustee's defense and there is no conflict of interest
between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for
any settlement made without its written consent. The Company need not
reimburse any expense or indemnify against any loss or liability to
the extent incurred by the Trustee through its negligence, bad faith
or willful misconduct.

To secure the Company's payment obligations in this
Section 7.07, the Trustee shall have a lien prior to the Securities on
all assets or money held or collected by the Trustee, in its capacity
as Trustee, except assets or money held in trust to pay principal of
or interest on particular Securities.

<PAGE>

When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01(6) or (7) occurs, such
expenses and the compensation for such services shall be paid to the
extent allowed under any Bankruptcy Law.

SECTION 7.08 Replacement of Trustee.
----------------------
The Trustee may resign by so notifying the Company. The
Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Company and the
Trustee and may appoint a successor trustee. The Company may remove
the Trustee if:

(1) the Trustee fails to comply with Section 7.10;

(2) the Trustee is adjudged bankrupt or insolvent;

(3) a receiver or other public officer takes charge of the
Trustee or its property; or

(4) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason, the Company shall notify each
Holder of such event and shall promptly appoint a successor Trustee.
Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the
Company.

A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Promptly
after that, the retiring Trustee shall transfer all property held by
it as Trustee to the successor Trustee, subject to the lien provided
in Section 7.07, the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each
Securityholder.

If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in principal
amount of the outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

<PAGE>

If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.

Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.

SECTION 7.09 Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust business
to, another corporation, the resulting, surviving or transferee
corporation without any further act shall, if such resulting,
surviving or transferee corporation is otherwise eligible hereunder,
be the successor Trustee; provided that such corporation shall be
--------
otherwise qualified and eligible under this Article Seven.

SECTION 7.10 Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirement of TIA sections 310(a)(1) and 310(a)(2). The Trustee (or
in the case of a corporation included in a bank holding company system,
the related bank holding company) shall have a combined capital and
surplus of at least $200,000,000 as set forth in its most recent
published annual report of condition. In addition, if the Trustee is
a corporation included in a bank holding company system, the Trustee,
independently of such bank holding company, shall meet the capital
requirements of TIA section 310(a)(2). The Trustee shall comply with
TIA section 310(b); provided, however, that there shall be excluded
from the -------- -------
operation of TIA section 310(b)(1) any indenture or indentures under
which other securities, or certificates of interest or participation
in other securities, of the Company are outstanding, if the require-
ments for such exclusion set forth in TIA section 310(b)(1) are met.
The provisions of TIA section 310 shall apply to the Company and any
other obligor of the Securities.

SECTION 7.11 Preferential Collection of
Claims Against the Company
--------------------------
The Trustee shall comply with TIA section 311(a), excluding
any creditor relationship listed in TIA section 311(b). A Trustee
who has resigned or been removed shall be subject to TIA section
311(a) to the extent indicated therein. The provisions of TIA section
311 shall apply to the Company and any other obligor of the Securities.

<PAGE>

ARTICLE EIGHT

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01 Termination of the Company's Obligations.
----------------------------------------
This Indenture shall cease to be of further effect and the
obligations of the Company under the Securities and this Indenture
shall terminate (except that the obligations under Sections 7.07, 8.04
and 8.05 shall survive the effect of this Article Eight) when all
outstanding Securities theretofore authenticated and issued have been
delivered to the Trustee for cancellation and the Company has paid all
sums payable by it hereunder.

In addition, at the Company's option, either (a) the Company
shall be deemed to have been Discharged from any and all obligations
with respect to the Securities (except for certain obligations of the
Company to register the transfer or exchange of such Securities,
replace stolen, lost or mutilated Securities, maintain paying agencies
and hold moneys for payment in trust) after the applicable conditions
set forth below have been satisfied or (b) the Company shall cease to
be under any obligation to comply with any term, provision or
condition set forth in Article Four (except that the Company's
obligations under Sections 4.01 and 4.02 shall survive) and Section
5.01 after the applicable conditions set forth below have been
satisfied:

(1) The Company shall have deposited or caused to be
deposited irrevocably with the Trustee as trust funds in trust,
specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of the Securities U.S. Legal Tender or
U.S. Government Obligations or a combination thereof which,
through the payment of interest thereon and principal in respect
thereof in accordance with their terms, will be sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay all the principal of and
interest on the Securities on the dates such installments of
interest or principal are due in accordance with the terms of
such Securities, as well as the Trustee's fees and expenses;
provided that no deposits made pursuant to this Section 8.01(1)
--------
shall cause the Trustee to have a conflicting interest as defined
in and for purposes of the TIA; provided, further, that from and
after the time of deposit, the Funds deposited shall not be

<PAGE>

subject to the rights of holders of Senior Indebtedness pursuant
to the provisions of Article Ten; and provided, further, that, as
-------- -------
confirmed by an Opinion of Counsel, no such deposit shall result
in the Company, the Trustee or the trust becoming or being
deemed to be an "investment company" under the Investment Company
Act of 1940;

(2) The Company shall have delivered to the Trustee an
Opinion of Counsel or a private letter ruling issued to the
Company by the IRS to the effect that the Holders of the
Securities will not recognize income, gain or loss for federal
income tax purposes as a result of the deposit and related
defeasance and will be subject to federal income tax on the same
amount and in the same manner and at the same times as would have
been the case if such option had not been exercised and, in the
case of an Opinion of Counsel furnished in connection with a
Discharge pursuant to the foregoing, accompanied by a private
letter ruling issued to the Company by the IRS to such effect;

(3) No Event of Default or Default with respect to the
Securities shall have occurred and be continuing on the date of
such deposit after giving effect to such deposit;

(4) The Company shall have delivered to the Trustee an
Opinion of Counsel, subject to certain qualifications, to the
effect that (i) the Funds will not be subject to any rights of
any other holders of Indebtedness of the Company, and (ii) the
Funds so deposited will not be subject to avoidance under
applicable Bankruptcy Law;

(5) The Company shall have paid or duly provided for
payment of all amounts then due to the Trustee pursuant to
Section 7.07;

(6) No such deposit will result in a Default under this
Indenture or a breach or violation of, or constitute a default
under, any other instrument or agreement (including, without
limitation, the Credit Agreement, the Note Indenture and the
Existing Indenture) to which the Company or any of its
Subsidiaries is a party or by which it or its property is bound;
and

(7) An Officers' Certificate and an Opinion of Counsel to
the effect that all conditions precedent to the defeasance have
been complied with.

<PAGE>

Notwithstanding the foregoing, the Opinion of Counsel
required by subparagraph 2 above need not be delivered if all
Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, (ii) will become due and payable on
the Maturity Date within one year, or (iii) are to be called for
redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.

"Discharged" means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by, and
obligations under, the Securities and to have satisfied all the
obligations under this Indenture relating to the Securities (and the
Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same upon compliance by the Company with
the provisions of this Section), except (i) the rights of the Holders
of Securities to receive, from the trust fund described in clause (1)
above, payment of the principal of and the interest on such Securities
when such payments are due, (ii) the Company's obligations with
respect to the Securities under Sections 2.03 through 2.07, 7.07 and
7.08 and (iii) the rights, powers, trusts, duties and immunities of
the Trustee hereunder.

"Funds" means the aggregate amount of U.S. Legal Tender
and/or U.S. Government Obligations deposited with the Trustee pursuant
to this Article Eight.

"U.S. Government Obligations" means direct obligations of,
and obligations guaranteed by, the United States of America for the
payment of which the full faith and credit of the United States of
America is pledged.

SECTION 8.02 Acknowledgment of Discharge by Trustee.
--------------------------------------
Subject to Section 8.05, after (i) the conditions of Section
8.01, have been satisfied and (ii) the Company has delivered to the
Trustee an Opinion of Counsel, stating that all conditions precedent
referred to in clause (i) above relating to the satisfaction and
discharge of this Indenture have been complied with, the Trustee upon
written request of the Company shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for
those surviving obligations specified in this Article Eight.S

<PAGE>

SECTION 8.03 Application of Trust Money.
--------------------------
The Trustee shall hold in trust Funds deposited with it
pursuant to Section 8.01. It shall apply the Funds through the Paying
Agent and in accordance with this Indenture to the payment of
principal and accrued and unpaid interest on the Securities.

SECTION 8.04 Repayment to the Company.
------------------------
The Trustee and the Paying Agent shall promptly pay to the
Company any Funds held by them for the payment of principal or
interest that remains unclaimed for one year; provided, however, that
-------- -------
the Trustee or such Paying Agent may, at the expense of the Company,
cause to be published once in a newspaper of general circulation in
the City of New York or mailed to each Holder, notice that such Funds
remain unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication or mailing,
any unclaimed balance of such Funds then remaining will be repaid to
the Company. After payment to the Company, Holders entitled to the
Funds must look to the Company for payment as general creditors unless
an applicable abandoned property law designates another Person and all
liability of the Trustee and Paying Agent with respect to such Funds
shall cease.

SECTION 8.05 Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any Funds
by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01
until such time as the Trustee or Paying Agent is permitted to apply
all such Funds in accordance with Section 8.01; provided, however,
-------- -------
that if the Company has made any payment of interest on or principal
of any Securities because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such
Securities to receive such payment from Funds held by the Trustee or
Paying Agent.

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

SECTION 9.01 Without Consent of Holders.
--------------------------

<PAGE>

The Company, when authorized by a Board Resolution, and the
Trustee, together, may amend or supplement this Indenture or the
Securities without notice to or consent of any Securityholder:

(1) to cure any ambiguity, defect or inconsistency;
provided that such amendment or supplement does not adversely
--------
affect the rights of any Holder in any material respect;

(2) to comply with Article Five;

(3) to provide for uncertificated Securities in addition to
or in place of certificated Securities; or

(4) to make any other change that does not adversely affect
in any material respect the rights of any Securityholders
hereunder;

provided that the Company has delivered to the Trustee an Opinion of
--------
Counsel and an Officers' Certificate, each stating that such amendment
or supplement complies with the provisions of this Section 9.01.

SECTION 9.02 With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, when authorized by a
Board Resolution, and the Trustee, together, with the written consent
of the Holder or Holders of at least a majority in principal amount of
the outstanding Securities may amend or supplement this Indenture or
the Securities, without notice to any other Securityholders. Subject
to Sections 6.04 and 6.07, the Holder or Holders of a majority in
aggregate principal amount of the outstanding Securities may waive
compliance by the Company with any provision of this Indenture or the
Securities without notice to any other Securityholder. No amendment,
supplement or waiver, including a waiver pursuant to Section 6.04,
shall, directly or indirectly, without the consent of each Holder of
each Security affected thereby:

(1) reduce the amount of Securities whose Holders must
consent to an amendment;

(2) reduce the rate of or change the time for payment of
interest (including any extension of the date on which payment of
interest must be made in cash), including defaulted interest, on
any Securities;

<PAGE>

(3) reduce the principal of or change the fixed maturity of
any Securities, or change the date on which any Securities may be
subject to redemption or repurchase, or reduce the redemption or
repurchase price therefor;

(4) make any Securities payable in money other than that
stated in the Securities;

(5) make any change in provisions of this Indenture
protecting the right of each Holder of a Security to receive
payment of principal of and interest on such Security on or after
the due date thereof or to bring suit to enforce such payment or
permitting Holders of a majority in principal amount of
Securities to waive Defaults or Events of Default; or

(6) after the Company's obligation to purchase the
Securities arises under Section 4.14 or 4.15, amend, modify or
change the obligation of the Company to consummate a Change of
Control Offer or a Net Proceeds Offer or waive any default in the
performance thereof or modify any of the provisions or
definitions with respect to any such offers.

It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.

After an amendment, supplement or waiver under this Section
9.02 becomes effective (as provided in Section 9.04), the Company
shall mail to the Holders affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Company to
mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.

SECTION 9.03 Compliance with TIA.
-------------------
Every amendment, waiver or supplement of this Indenture or
the Securities shall comply with the TIA as then in effect.

SECTION 9.04 Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective,
a consent to it by a Holder is a continuing consent by the Holder and
every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on

<PAGE>

any Security. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to his Security or portion
of his Security by notice to the Trustee or the Company received
before the date on which the Trustee receives an Officers' Certificate
certifying that the Holders of the requisite principal amount of
Securities have consented (and not theretofore revoked such consent)
to the amendment, supplement or waiver (at which time such amendment,
supplement or waiver shall become effective).

The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver, which record date shall be at
least 30 days prior to the first solicitation of such consent. If a
record date is fixed, then notwithstanding the last sentence of the
immediately preceding paragraph, those Persons who were Holders at
such record date (or their duly designated proxies), and only those
Persons, shall be entitled to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 120
days after such record date.

After an amendment, supplement or waiver becomes effective,
it shall bind every Securityholder, unless it makes a change described
in any of clauses (1) through (6) of Section 9.02, in which case, the
amendment, supplement or waiver shall bind only each Holder of a
Security who has consented to it and every subsequent Holder of a
Security or portion of a Security that evidences the same debt as the
consenting Holder's Security; provided that any such waiver shall not
--------
impair or affect the right of any Holder to receive payment of
principal of and interest on a Security, on or after the respective
due dates expressed in such Security, or to bring suit for the
enforcement of any such payment on or after such respective dates
without the consent of such Holder.

SECTION 9.05 Notation on or Exchange of Securities.
-------------------------------------
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to
deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms.

<PAGE>

SECTION 9.06 Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or
waiver authorized pursuant to and adopted in accordance with this
Article Nine; provided that the Trustee may, but shall not be
--------
obligated to, execute any such amendment, supplement or waiver which
affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be
fully protected in relying upon, an Opinion of Counsel and an
Officers' Certificate each stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article
Nine is authorized or permitted by this Indenture. Such Opinion of
Counsel shall not be an expense of the Trustee.

ARTICLE TEN

SUBORDINATION OF SECURITIES

SECTION 10.01 Securities Subordinated to Senior Indebtedness.
----------------------------------------------
The Company covenants and agrees and the Trustee and each
Holder of the Securities, by its acceptance thereof, likewise
covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article Ten; and the Trustee and each Person
holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that the payment of
all Obligations on the Securities (except for the payment of fees and
expenses of the Trustee and any indemnity under Section 7.07) by the
Company shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in
full in cash or Cash Equivalents (or such payment shall be duly
provided for to the satisfaction of the holders of the Senior
Indebtedness) of all Obligations on the Senior Indebtedness; that the
subordination is for the benefit of, and shall be enforceable directly
by, the holders of Senior Indebtedness, and that each holder of Senior
Indebtedness whether now outstanding or hereafter created, incurred,
assumed or guaranteed shall be deemed to have acquired Senior
Indebtedness in reliance upon the covenants and provisions contained
in this Indenture and the Securities.

SECTION 10.02 No Payment on Securities in Certain
Circumstances.
-----------------------------------
(a) If any default occurs and is continuing in the

<PAGE>

payment when due, whether at maturity, upon any redemption, by
declaration or otherwise, of any principal of, interest on or any
other amounts owing with respect to any Senior Indebtedness, no
payment of any kind or character (except (i) in Qualified Capital
Stock issued by the Company to pay interest on the Securities or
issued in exchange for the Securities, (ii) in securities
substantially identical to the Securities issued by the Company in
payment of interest accrued thereon or (iii) in securities issued by
the Company which are subordinated to the Senior Indebtedness at least
to the same extent as the Securities and having a Weighted Average
Life to Maturity at least equal to the remaining Weighted Average Life
to Maturity of the Securities (the issuance of such subordinated
securities to be consented to by the holders of at least a majority of
the outstanding amount of Senior Indebtedness consisting of each class
of Designated Senior Indebtedness then outstanding, which subordinated
securities shall be issued in exchange for outstanding Securities or
to pay interest accrued on outstanding Securities)) shall be made by
the Company or any other Person on behalf of the Company with respect
to any Obligations on the Securities or to acquire any of the
Securities for cash or property or otherwise. In addition, if any
other event of default occurs and is continuing (or if such an event
of default would occur upon any payment with respect to the Securities
or would arise upon the passage of time as a result of such payment)
with respect to any Designated Senior Indebtedness (as such event of
default is defined in the instrument creating or evidencing such
Designated Senior Indebtedness) and such event of default permits the
holders of such Designated Senior Indebtedness then outstanding to
accelerate the maturity thereof and if the Representative for the
respective issue of Designated Senior Indebtedness gives written
notice of the event of default to the Company and the Trustee (a
"Default Notice"), then, unless and until all events of default have
been cured or waived or have ceased to exist or the Company and the
Trustee receive notice from the Representative for the respective
issue of Designated Senior Indebtedness terminating the Blockage
Period (as defined below), during the 180 days after the delivery of
such Default Notice (the "Blockage Period"), neither the Company nor
any other Person on behalf of the Company shall make any payment of
any kind or character (except (i) in Qualified Capital Stock issued by
the Company to pay interest on the Securities or issued in exchange
for the Securities, (ii) in securities substantially identical to the
Securities issued by the Company in payment of interest accrued
thereon or (iii) in securities issued by the Company which are
subordinated to the Senior Indebtedness at least to the same extent as
the Securities and having a Weighted Average Life to Maturity at least
equal to the remaining Weighted Average Life to Maturity of the
Securities

<PAGE>

(the issuance of such subordinated securities to be consented to by
the holders of at least a majority of the outstanding amount of Senior
Indebtedness consisting of each class of Designated Senior
Indebtedness then outstanding, which subordinated securities shall be
issued in exchange for outstanding Securities or to pay interest
accrued on outstanding Securities)) with respect to any Obligations on
the Securities or to acquire any of the Securities for cash or
property or otherwise. Notwithstanding anything herein to the
contrary, in no event will a Blockage Period extend beyond 180 days
from the date the payment on the Securities was due and only one such
Blockage Period may be commenced within any 360 consecutive days. For
all purposes of this Section 10.02(a), no event of default which
existed or was continuing on the date of the commencement of any
Blockage Period with respect to the Designated Senior Indebtedness
initiating such Blockage Period shall be, or be made, the basis for
the commencement of a second Blockage Period by the Representative of
such Designated Senior Indebtedness, whether or not within a period of
360 consecutive days, unless such event of default shall have been
cured or waived for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of any
financial covenants for a period commencing after the date of
commencement of such Blockage Period that, in either case, would give
rise to an event of default pursuant to any provision under which an
event of default previously existed or was continuing shall constitute
a new event of default for this purpose).

(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such
payment is prohibited by Section 10.02(a), such payment shall be held
in trust for the benefit of, and shall be paid over or delivered to,
the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amount of Senior Indebtedness held by such
holders) or their respective Representatives, as their respective
interests may appear. The Trustee shall be entitled to rely on
information regarding amounts then due and owing on the Senior
Indebtedness, if any, received from the holders of Senior Indebtedness
(or their Representatives) or, if such information is not received
from such holders or their Representatives, from the Company and only
amounts included in the information provided to the Trustee shall be
paid to the holders of Senior Indebtedness.

Nothing contained in this Article Ten shall limit the right
of the Trustee or the Holders of Securities to take any action to
accelerate the maturity of the Securities pursuant to Section 6.02 or
to pursue any rights or remedies hereunder;

<PAGE>

provided that all Senior Indebtedness thereafter due or declared to be
--------
due shall first be paid in full in cash or Cash Equivalents before the
Holders are entitled to receive any payment with respect to
Obligations on the Securities.

SECTION 10.03 Payment Over of Proceeds upon Dissolution, Etc.
----------------------------------------------
(c) Upon any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or
securities, to creditors upon any liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors
or marshalling of assets of the Company or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding
relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior
Indebtedness shall first be paid in full in cash or Cash Equivalents,
or such payment duly provided for to the satisfaction of the holders
of the Senior Indebtedness, before any payment or distribution of any
kind or character is made on account of any Obligations on the
Securities, or for the acquisition of any of the Securities for cash
or property or otherwise. Upon any such dissolution, winding-up,
liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to which the
Holders of the Securities or the Trustee under this Indenture would be
entitled (other than any payments of fees and expenses of the Trustee
and any indemnity made under Section 7.07), except for the provisions
hereof, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders of the Securities or by the
Trustee under this Indenture if received by them, directly to the
holders of Senior Indebtedness (pro rata to such holders on the basis
of the respective amounts of Senior Indebtedness held by such holders)
or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, for
application to the payment of Senior Indebtedness remaining unpaid
until all such Senior Indebtedness has been paid in full in cash or
Cash Equivalents after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of Senior
Indebtedness.

(d) To the extent any payment of Senior Indebtedness
(whether by or on behalf of the Company, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential, set aside or required to be

<PAGE>

paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such
payment is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person, the
Senior Indebtedness or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such
payment had not occurred.

(e) In the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, shall be received
by any Holder when such payment or distribution is prohibited by
Section 10.03(a), such payment or distribution shall be held in trust
for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis
of the respective amount of Senior Indebtedness held by such holders)
or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, for
application to the payment of Senior Indebtedness remaining unpaid
until all such Senior Indebtedness has been paid in full in cash or
Cash Equivalents, after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such
Senior Indebtedness.

(f) The consolidation of the Company with, or the merger of
the Company with or into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of all
or substantially all of its assets, to another corporation upon the
terms and conditions provided in Article Five and as long as permitted
under the terms of the Senior Indebtedness shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the
purposes of this Section if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, assume the
Company's obligations hereunder in accordance with Article Five.

SECTION 10.04 Payments May Be Paid Prior to Dissolution.
-----------------------------------------
Nothing contained in this Article Ten or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions
described in Sections 10.02 and 10.03, from making payments at any
time for the purpose of making payments of principal of and interest
on the Securities, or from depositing with the Trustee any moneys for
such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment

<PAGE>

would be prohibited by Section 10.02 or 10.03, the application by the
Trustee of any moneys deposited with it for the purpose of making such
payments of principal of, and interest on, the Securities to the
Holders entitled thereto unless at least one Business Day prior to the
date upon which such payment would otherwise become due and payable,
the Trustee shall have received the written notice provided for in
Section 10.02(a) or in Section 10.07. The Company shall give prompt
written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company.

SECTION 10.05 Subrogation.
-----------
Subject to the payment in full in cash or Cash Equivalents
of all Senior Indebtedness, the Holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to
receive payments or distributions of cash, property or securities of
the Company applicable to the Senior Indebtedness until the Securities
shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company or by or on behalf of the
Holders by virtue of this Article Ten which otherwise would have been
made to the Holders shall, as between the Company and the Holders of
the Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness, it being understood that the
provisions of this Article Ten are and are intended solely for the
purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.

SECTION 10.06 Obligations of the Company Unconditional.
----------------------------------------
Nothing contained in this Article Ten or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of and any interest on the Securities as
and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of
the Holders of the Securities and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Holder of any Security or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any,
in respect of cash, property or securities of the

<PAGE>

Company received upon the exercise of any such remedy.

SECTION 10.07 Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee
of any fact known to the Company which would prohibit the making of
any payment to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Ten. Regardless of anything to the
contrary contained in this Article Ten or elsewhere in this Indenture,
the Trustee shall not be charged with knowledge of the existence of
any default or event of default with respect to any Senior
Indebtedness or of any other facts which would prohibit the making of
any payment to or by the Trustee unless and until the Trust Officer of
the Trustee shall have received notice in writing from the Company, or
from a holder of Senior Indebtedness or a Representative therefor,
and, prior to the receipt of any such written notice, the Trustee
shall be entitled to assume (in the absence of actual knowledge to the
contrary) that no such facts exist.

In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article Ten, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amounts of Senior Indebtedness held by such Person,
the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of
such Person under this Article Ten, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such
payment.

SECTION 10.08 Reliance on Judicial Order or Certificate of
Liquidating Agent.
--------------------------------------------
Upon any payment or distribution of assets of the Company
referred to in this Article Ten, the Trustee, subject to the
provisions of Article Seven hereof, and the Holders of the Securities
shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding-
up, liquidation or reorganization proceedings are pending, or upon a
certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Securities, for the
purpose of ascertaining the Persons entitled to participate in such
distribution, the

<PAGE>

holders of the Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or
to this Article Ten.

SECTION 10.09 Trustee's Relation to Senior Indebtedness.
-----------------------------------------
The Trustee and any agent of the Company or the Trustee
shall be entitled to all the rights set forth in this Article Ten with
respect to any Senior Indebtedness which may at any time be held by it
in its individual or any other capacity to the same extent as any
other holder of Senior Indebtedness and nothing in this Indenture
shall deprive the Trustee or any such agent of any of its rights as
such holder.

With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its duties,
covenants, responsibilities and obligations as are specifically set
forth in this Article Ten, and no implied duties, covenants,
responsibilities or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness.

Whenever a distribution is to be made or a notice given to
holders or owners of Senior Indebtedness, the distribution may be made
and the notice may be given to their Representative, if any.

SECTION 10.10 Subordination Rights Not Impaired by
Acts or Omissions of the Company or
Holders of Senior Indebtedness.
------------------------------------
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company
with the terms of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with.

Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee,
without incurring responsibility to the Trustee or the Holders of the
Securities and without impairing or releasing the subordination
provided in this Article Ten or the

<PAGE>

obligations hereunder of the Holders of the Securities to the holders
of the Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, Senior Indebtedness, or otherwise amend
or supplement in any manner Senior Indebtedness, or any instrument
evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the
payment or collection of Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other
Person.

SECTION 10.11 Securityholders Authorize Trustee To
Effectuate Subordination of Securities.
--------------------------------------
Each Holder of Securities by its acceptance of such Security
authorizes and expressly directs the Trustee on such Holder's behalf
to take such action as may be necessary or appropriate to effectuate,
as between the holders of Senior Indebtedness and the Holders of
Securities, the subordination provided in this Article Ten, and
appoints the Trustee such Holder's attorney-in-fact to act for and on
behalf of each such Holder of Securities for such purposes, including,
in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of the Company, the filing of a
claim for the unpaid balance of its Securities and accrued interest in
the form required in those proceedings.

SECTION 10.12 This Article Ten Not To Prevent Events of
Default.
-----------------------------------------
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article
Ten will not be construed as preventing the occurrence of an Event of
Default.

SECTION 10.13 Trustee's Compensation Not Prejudiced.
-------------------------------------
Nothing in this Article Ten will apply to amounts due to the
Trustee pursuant to other sections in this Indenture.

<PAGE>

ARTICLE ELEVEN

MISCELLANEOUS

SECTION 11.01 TIA Controls.
------------
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in
this Indenture by the TIA, the required provision shall control.

SECTION 11.02 Notices.
-------
Any notices or other communications required or permitted
hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:

if to the Company:

12655 North Central Expressway
Dallas, TX 75243
Attention: Chief Financial Officer

with a copy to:

Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attention: Jeremy W. Dickens

if to the Trustee:

U.S. Trust Company of Texas, N.A.
2001 Ross Avenue
Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Department

The Company and the Trustee by written notice to each other
may designate additional or different addresses for notices. Any
notice or communication to the Company or the Trustee shall be deemed
to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is
acknowledged, if faxed; and five (5)

<PAGE>

calendar days after mailing if sent by registered or certified mail,
postage prepaid (except that a notice of change of address shall not
be deemed to have been given until actually received by the
addressee).

Any notice or communication mailed to a Securityholder shall
be mailed to him by first class mail or other equivalent means at his
address as it appears on the registration books of the Registrar and
shall be sufficiently given to him if so mailed within the time
prescribed.

Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency
with respect to other Securityholders. If a notice or communication
is mailed in the manner provided above, it is duly given, whether or
not the addressee receives it.

SECTION 11.03 Communications by Holders with Other Holders.
--------------------------------------------
Securityholders may communicate pursuant to TIA section
312(b) with other Securityholders with respect to their rights under
this Indenture or the Securities. The Company, the Trustee, the
Registrar and any other Person shall have the protection of TIA
section 312(c).

SECTION 11.04 Certificate and Opinion as to Conditions
Precedent.
----------------------------------------
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall
furnish to the Trustee:

(1) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of the
signers, all conditions precedent to be performed by the Company,
if any, provided for in this Indenture relating to the proposed
action have been complied with; and

(2) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent to be performed by
the Company, if any, provided for in this Indenture relating to
the proposed action have been complied with.

SECTION 11.05 Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture,

<PAGE>

other than the Officers' Certificate required by Section 4.07, shall
include:

(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;

(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;

(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary
to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and

(4) a statement as to whether or not, in the opinion of
each such Person, such condition or covenant has been complied
with.

SECTION 11.06 Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of
Securityholders. The Paying Agent or Registrar may make reasonable
rules for its functions.

SECTION 11.07 Legal Holidays.
--------------
A "Legal Holiday" used with respect to a particular place of
payment is a Saturday, a Sunday or a day on which banking institutions
in New York, New York, Dallas, Texas or at such place of payment are
not required to be open. If a payment date is a Legal Holiday at such
place, payment may be made at such place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the
intervening period.

SECTION 11.08 Governing Law.
-------------
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS
APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

SECTION 11.09 No Adverse Interpretation of Other Agreements.
---------------------------------------------
This Indenture may not be used to interpret another

<PAGE>

indenture, loan or debt agreement of the Company or any of its
Subsidiaries. Any such indenture, loan or debt agreement may not be
used to interpret this Indenture.

SECTION 11.10 No Recourse Against Others.
--------------------------
A past, present or future director, officer, employee,
stockholder or incorporator, as such, of the Company shall not have
any liability for any obligations of the Company under the Securities
or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creations. Each Securityholder by
accepting a Security waives and releases all such liability. Such
waiver and release are part of the consideration for the issuance of
the Securities.

SECTION 11.11 Successors.
----------
All agreements of the Company in this Indenture and the
Securities shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.

SECTION 11.12 Duplicate Originals.
-------------------
All parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together shall
represent the same agreement.

SECTION 11.13 Severability.
------------
In case any one or more of the provisions in this Indenture
or in the Securities shall be held invalid, illegal or unenforceable,
in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired
thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.

<PAGE>

SIGNATURES

IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to
be hereunto affixed and attested, all as of the date first written
above.

CHANCELLOR RADIO BROADCASTING
COMPANY

By: /s/ STEVEN DINETZ
------------------------------------
Name: Steven Dinetz
Title: President

U.S. TRUST COMPANY OF
TEXAS, N.A., as Trustee

By: /s/ BILL BARBER
------------------------------------
Name: Bill Barber
Title: Vice President

<PAGE>

EXHIBIT A
---------

CHANCELLOR RADIO BROADCASTING COMPANY

12% Subordinated Exchangeable Debentures due 2009

No. $

CHANCELLOR RADIO BROADCASTING COMPANY, a Delaware
corporation (the "Company"), for value received, promises to pay to
or registered assigns, the principal sum of
Dollars, on January 15, 2009.

Interest Payment Dates: January 15 and July 15

Record Dates: January 1 and July 1

Reference is made to the further provisions of this Security
contained herein, which will for all purposes have the same effect as
if set forth at this place.

IN WITNESS WHEREOF, the Company has caused this Security to
be signed manually or by facsimile by its duly authorized officers.

CHANCELLOR RADIO BROADCASTING
COMPANY

By:
---------------------------------------------
-
Name: Steven Dinetz
Title: President and Chief
Executive Officer

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

<PAGE>

A-

Trustee's Certificate of Authentication

This is one of the 12% Subordinated Exchange Debentures due
2009 referred to in the within-mentioned Indenture.

Dated:

U.S. TRUST COMPANY OF
TEXAS, N.A., as Trustee

By:
-------------------------------------
Authorized Signatory

<PAGE>

A-

(REVERSE OF SECURITY)

12% Subordinated Exchange Debentures due 2009

1. Interest. CHANCELLOR RADIO BROADCASTING COMPANY, a
--------
Delaware corporation (the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
Interest on the Securities will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from
______________.<F1> The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing
.<F2> Interest will be computed on the basis of a
360-day year of twelve 30-day months.

Notwithstanding anything herein to the contrary, on each
Interest Payment Date through and including January 15, 2002, the
entire amount of the interest payment on the Securities may be paid,
at the option of the Company, in additional Securities ("Secondary
Securities") (valued at 100% of the principal amount thereof). The
Company may, at its option, pay cash in lieu of issuing any Secondary
Security to the extent the principal amount such Secondary Security is
not an integral multiple of $1,000. The Company shall notify the
Trustee of the Company's election to pay interest in Secondary
Securities not less than 10 days prior to the Record Date for an
Interest Payment Date. On each such Interest Payment Date, the
Trustee shall authenticate Secondary Securities for original issuance
to each holder of Securities on the preceding Record Date, as shown on
the Security Register, in the amount required to pay such interest.
For purposes of determining the principal amount of Secondary
Securities to be issued in payment of interest, the Company shall be
entitled to aggregate as to each holder the principal amount of all
Securities and Secondary Securities held of record by such holder.

The Company shall pay interest on overdue principal and on
overdue installments of interest from time to time on demand at the
rate borne by the Securities to the extent lawful.

2. Method of Payment. The Company shall pay interest on
-----------------
the Securities (except defaulted interest) to the Persons who

<F1> Insert Issue Date.

<F2> Insert first Interest Payment Date following the Issue
Date.

<PAGE>

A-

are the registered Holders at the close of business on the Record Date
immediately preceding the Interest Payment Date even if the Securities
are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company shall pay principal
and interest (to the extent not paid in Secondary Securities) in money
of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in
such U.S. Legal Tender. The Company may deliver any such interest
payment (including any interest payment made in Secondary Securities)
to the Paying Agent or to a Holder at the Holder's registered address.

3. Paying Agent and Registrar. Initially, U.S. Trust
--------------------------
Company of Texas, N.A. (the "Trustee") will act as Paying Agent and
Registrar. The Company may change any Paying Agent, Registrar or co-
Registrar without notice to the Holders. The Company or any of its
Subsidiaries may, subject to certain exceptions, act as Registrar or
co-Registrar.

4. Indenture and Guarantees. The Company issued the
------------------------
Securities under an Indenture, dated as of January 23, 1997 (the
"Indenture"), between the Company and the Trustee. This Security is
one of a duly authorized issue of Securities of the Company designated
as its 12% Subordinated Exchange Debentures due 2009 (the
"Securities"), limited (except as otherwise provided in the Indenture)
in aggregate principal amount to $360,000,000, which may be issued
under the Indenture. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939 (15 U.S.C. sections 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding
anything to the contrary herein, the Securities are subject to all
such terms, and Holders of Securities are referred to the Indenture
and the TIA for a statement of them. The Securities are general
unsecured obligations of the Company.

5. Subordination. The Securities are subordinated in
-------------
right of payment, in the manner and to the extent set forth in the
Indenture, to the prior payment in full in cash or Cash Equivalents of
all Senior Indebtedness, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. To
the extent and in the manner provided in the Indenture, Senior
Indebtedness must be paid before any payment may be made to any Holder
of this Security. Each Holder by his acceptance hereof agrees to be
bound by such provisions

<PAGE>

A-

and authorizes and expressly directs the Trustee, on his behalf, to
take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee
his attorney-in-fact for such purposes.

6. Optional Redemption. (a) The Securities will be
-------------------
redeemable, at the Company's option, in whole at any time or in part
from time to time, on and after January 15, 2002, at the following
redemption prices (expressed as percentages of the principal amount)
if redeemed during the twelve-month period commencing on January 15 of
the year set forth below, plus, in each case, accrued interest thereon
to the date of redemption:

<S> <C>
YEAR PERCENTAGE
---- ----------

2002 . . . . . . . . . . . 106.00%
2003 . . . . . . . . . . . 104.80%
2004 . . . . . . . . . . . 103.60%
2005 . . . . . . . . . . . 102.40%
2006 . . . . . . . . . . . 101.20%
2007 and thereafter . . . . 100.00%

</TABLE>

(b) In addition, on or prior to January 15, 2000, the
Company may, at its option, use the net cash proceeds of one or more
Public Equity Offerings to redeem the Securities, in part, at a
redemption price of 112% of the principal amount thereof plus accrued
interest thereon to the date of redemption; provided, however, that
-------- -------
after any such redemption the aggregate principal amount of the
Securities outstanding must equal at least $150,000,000.

(c) In addition, prior to January 15, 1999, upon the
occurrence of a Change of Control, the Company will have the option to
redeem the Securities in whole but not in part (a "Change of Control
Redemption") at a redemption price equal to 112% of the principal
amount thereof (the "Change of Control the Redemption Price"),
together with accrued interest thereon to date of redemption. In
order to effect a Change of Control Redemption, the Company must send
a notice to each Holder within 30 days following the date the Change
of Control occurred, stating that the Company is effecting a Change of
Control Redemption in lieu of a Change of Control Offer.

7. Notice of Redemption. Notice of redemption will be
--------------------
mailed at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Securities to be redeemed at such
Holder's registered address. In order to effect a redemption with the
proceeds of a Public Equity Offering, the

<PAGE>

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Company shall send the redemption notice not later than 60 days after
the consummation of such Public Equity Offering. Securities in
denominations larger than $1,000 may be redeemed in part.

8. Change of Control Offer. In the event of a Change of
-----------------------
Control, upon the satisfaction of the conditions set forth in the
Indenture, the Company shall be required to offer to repurchase all of
the then outstanding Securities pursuant to a Change of Control Offer
at a purchase price equal to 101% of the principal amount thereof plus
accrued interest, if any, to the date of repurchase. Holders of
Securities which are the subject of such an offer to repurchase shall
receive an offer to repurchase and may elect to have such Securities
repurchased in accordance with the provisions of the Indenture
pursuant to and in accordance with the terms of the Indenture.

9. Limitation on Disposition of Assets. Under certain
-----------------------------------
circumstances the Company is required to apply the net proceeds from
Asset Sales to offer to repurchase Securities at a price equal to 100%
of the aggregate principal amount thereof, plus accrued interest to
the date of repurchase.

10. Denominations; Transfer; Exchange. The Securities are
---------------------------------
in registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000; provided, however, that Secondary
-------- -------
Securities and Securities issued in exchange for the Senior
Exchangeable Preferred Stock may be issued in denominations of less
than $1,000 (but not less than $1.00). A Holder shall register the
transfer of or exchange Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain
transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not
register the transfer of or exchange any Securities during a period
beginning 15 days before the mailing of a redemption notice for any
Securities or portions thereof selected for redemption.

11. Persons Deemed Owners. The registered Holder of a
---------------------
Security shall be treated as the owner of it for all purposes.

12. Unclaimed Money. If money for the payment of principal
---------------
or interest remains unclaimed for one year, the Trustee and the Paying
Agent will pay the money back to the Company. After that, all
liability of the Trustee and such Paying Agent with respect to such
money shall cease.

<PAGE>

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13. Discharge Prior to Redemption or Maturity. If the
-----------------------------------------
Company at any time deposits with the Trustee U.S. Legal Tender or
U.S. Government Obligations sufficient to pay the principal of and
interest on the Securities to redemption or maturity and complies with
the other provisions of the Indenture relating thereto, the Company
will be discharged from certain provisions of the Indenture and the
Securities (including certain covenants, but excluding its obligation
to pay the principal of and interest on the Securities).

14. Amendment; Supplement; Waiver. Subject to certain
-----------------------------
exceptions, the Indenture or the Securities may be amended or
supplemented with the written consent of the Holders of at least a
majority in aggregate principal amount of the Securities then
outstanding, and any existing Default or Event of Default or
noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of
the Securities then outstanding. Without notice to or consent of any
Holder, the parties thereto may amend or supplement the Indenture or
the Securities to, among other things, cure any ambiguity, defect or
inconsistency, provide for uncertificated Securities in addition to or
in place of certificated Securities, or comply with Article Five of
the Indenture or make any other change that does not adversely affect
in any material respect the rights of any Holder of a Security.

15. Restrictive Covenants. The Indenture imposes certain
---------------------
limitations on the ability of the Company and its Subsidiaries to,
among other things, incur additional Indebtedness, make payments in
respect of its Capital Stock or certain Indebtedness, engage in
certain Asset Swaps, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Subsidiaries and
merge or consolidate with any other Person, sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject
to a number of important qualifications and exceptions. The Company
must annually report to the Trustee on compliance with such
limitations.

16. Successors. When a successor assumes, in accordance
----------
with the Indenture, all the obligations of its predecessor under the
Securities and the Indenture, the predecessor will be released from
those obligations.

17. Defaults and Remedies. If an Event of Default occurs
---------------------
and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of Securities then outstanding

<PAGE>

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may declare all the Securities to be due and payable in the manner,
at the time and with the effect provided in the Indenture. Holders of
Securities may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee is not obligated to enforce
the Indenture or the Securities unless it has been offered indemnity
or security reasonably satisfactory to it. The Indenture permits,
subject to certain limitations therein provided, Holders of a majority
in aggregate principal amount of the Securities then outstanding to
direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of Securities notice of any continuing
Default or Event of Default (except a Default in payment of principal
or interest) if it determines in good faith that withholding notice is
in their interest.

18. Trustee Dealings with Company. The Trustee under the
-----------------------------
Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with the
Company, its Subsidiaries, Unrestricted Subsidiaries or their
respective Affiliates as if it were not the Trustee.

19. No Recourse Against Others. No past, present or future
--------------------------
stockholder, director, officer, employee or incorporator, as such, of
the Company shall have any liability for any obligation of the Company
under the Securities or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each
Holder of a Security by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration
for the issuance of the Securities.

20. Authentication. This Security shall not be valid until
--------------
the Trustee or authenticating agent manually signs the certificate of
authentication on this Security.

21. Governing Law. The laws of the State of New York shall
-------------
govern this Security and the Indenture, without regard to principles
of conflict of laws.

22. Abbreviations and Defined Terms. Customary
-------------------------------
abbreviations may be used in the name of a Holder of a Security or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants
by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).

23. CUSIP Numbers. Pursuant to a recommendation
-------------
promulgated by the Committee on Uniform Security Identification

<PAGE>

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Procedures, the Company has caused CUSIP numbers to be printed on the
Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed
on the Securities and reliance may be placed only on the other
identification numbers printed hereon.

24. Indenture. Each Holder, by accepting a Security,
---------
agrees to be bound by all of the terms and provisions of the
Indenture, as the same may be amended from time to time. Capitalized
terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture.

The Company will furnish to any Holder of a Security upon
written request and without charge a copy of the Indenture, which has
the text of this Security in larger type. Requests may be made to:
CHANCELLOR RADIO BROADCASTING COMPANY, 12655 N. Central Expressway,
Suite 405, Dallas, Texas 75243.

<PAGE>

A-

[FORM OF ASSIGNMENT]

I or we assign to

PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER
________________________________

_______________________________________________________________
(please print or type name and address)

_______________________________________________________________

_______________________________________________________________
the within Security and all rights thereunder, hereby irrevocably
constituting and appointing

_______________________________________________________________
attorney to transfer the Security on the books of the Company with
full power of substitution in the premises.

Dated:___________________ _________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Security in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.

Signature Guarantee: _________________________________

<PAGE>

Exhibit No. 99.1

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

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

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

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

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

<PAGE>

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

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

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

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

<PAGE>