May 16, 1996

by Sfx Broadcasting Inc -Cl A
May 24th, 1996




                                                                  May 16, 1996




SFX Broadcasting, Inc.
150 East 58th Street
New York, New York 10155

Attention:  Robert F.X. Sillerman

Dear Bob:

                  Based upon recent discussions between The Bank of New York
(the "Bank") and you concerning a $150 million proposed syndicated and secured
credit facility (the "Facility") to be extended to SFX Broadcasting, Inc. (the
"Borrower"), and relying upon the information which you have previously
provided to the Bank, the Bank is pleased to confirm its willingness to act as
agent for, and to extend, the Facility, subject to the conditions set forth in
this letter and the attached term sheet. The Facility will be in the form of a
revolving credit facility which converts to a five year term loan on September
30, 1998. Up to $20 million of the revolving credit facility shall be
available as a letter of credit subfacility prior to the conversion of the
revolving credit facility to a term loan. The Facility would be provided for
pursuant to a credit agreement which would contain terms, conditions of
lending, funding and yield protections, representations and warranties,
covenants, events of default and other provisions customary for a facility of
this size, type and purpose, including, without limitation, the terms and
conditions set forth on the term sheet attached hereto.

                  The Bank's willingness to act as agent for, and (to the
extent indicated above) to extend, the Facility is subject to (i) the
negotiation and execution of a credit agreement (as described above) and
related security and other documents that are satisfactory in form and
substance to the Bank and its counsel, and the other conditions to closing
outlined in the attached term sheet and (ii) any change in loan syndication or
financial or capital markets




    



SFX Broadcasting, Inc.                                                  - 2 -



conditions generally that, in the judgment of the Bank, would materially
impair syndication of the Facility.

                  By executing this letter, you agree that the Bank's
obligations pursuant to the Commitment Letter, dated April 9, 1996, shall be
terminated and you further agree to pay certain non-refundable fees to the
Bank relating to the Facility as follows: (i) an underwriting fee of $3
million, $200,000 of which shall be payable on the date of your acceptance of
this letter, and the balance of which shall be payable simultaneously with the
execution and delivery of definitive documentation for the Facility
("Closing"); (ii) a fee of 3/8% per annum (on the basis of a 360 day year for
the actual number of days elapsed) on the aggregate amount of the commitment
hereunder, accruing from the date of your acceptance of this letter and
payable quarterly thereafter and at the earlier of Closing or cancellation or
termination of the commitment hereunder; (iii) an administrative agency fee of
(A) $25,000 payable at Closing and (B) $100,000 on each anniversary of the
Closing thereafter; and (iv) a letter of credit issuance fee of 0.25% per
annum on the daily aggregate principal amount of the outstanding letters of
credit and payable quarterly in arrears to the Bank. The definitive loan
documentation for the Facility will set forth certain additional fees payable
to the Bank and lenders by you relating to the Facility as outlined in the
attached term sheet.

                  By executing this letter, you also agree to indemnify and
hold harmless the Bank in its capacity as agent, each of the participating
lenders (including the Bank) and each of their respective officers, directors
employees, affiliates, agents and controlling persons (each, an "Indemnified
Party") from and against any and all losses, claims, damages and liabilities
to which any such Indemnified Party may become subject arising out of or in
connection with any claim, litigation, investigation or proceeding relating to
this letter, the Facility (including the use of the proceeds thereof) or any
related transaction, whether or not any Indemnified Party is a party,
including all legal and other expenses incurred in connection with
investigating or defending any of the foregoing; provided that, the foregoing
indemnity will not, as to any Indemnified Party, apply to






    



SFX Broadcasting, Inc.                                                    - 3 -



losses, claims, damages, liabilities or related expenses to the extent arising
from the willful misconduct or gross negligence of such Indemnified Party.

                  You further (a) agree that you will not make any claim
against any Indemnified Party for any special indirect or consequential
damages in respect of any breach or wrongful conduct (whether the claim
therefore is based on contract, tort or duty imposed by law) in connection
with, arising out of or in any way related to the transactions contemplated
and the relationship established by this letter, or any act, omission or event
occurring in connection therewith, and (b) waive, release and agree not to sue
upon any such claim for any such damages, whether or not accrued and whether
or not known or suspected to exist in your favor.

                  You agree that this letter and the attached term sheet are
for your confidential use only and will not be disclosed by you or any of your
representatives, without our prior written consent, to any person other than
your accountants, attorneys and other advisors, and then only in connection
with the transactions contemplated hereby and only on a confidential basis,
except that, following your acceptance hereof, you may make such disclosures
of the terms and conditions hereof as you are required by law to make.

                  This letter and the provisions contained herein shall not be
assignable by you and may not be amended or any provision hereof waived or
modified except by a document in writing signed by you and the Bank.

                  You hereby knowingly, voluntarily and intentionally waive
any right you may have to a trial by jury in respect of any litigation arising
out of, under or in connection with this letter or the transactions
contemplated hereby.

                  This letter sets forth the entire understanding of the
parties as to the scope of the obligations of the parties hereto and
supersedes all prior agreements, representations and understandings, if any,
relating to the subject matter hereof.

                  This letter shall be governed by, and construed in
accordance with, the laws of the State of New York.






    



SFX Broadcasting, Inc.                                                    - 4 -



                  This letter shall automatically expire if not accepted by
you on or before 5:00 p.m. (New York City time) on May 17, 1996. Please
indicate your acceptance of this letter and your agreement to the terms hereof
by signing the enclosed copy of this letter and returning it to us. By so
doing, you agree that you (A) shall be bound by the terms hereof, (B) will
provide sufficient information, in form and substance acceptable to the Bank,
for the preparation of an information package describing the Borrower, its
subsidiaries and the Facility, (C) consent to the establishment by the Bank of
a syndicate of, and the distribution by the Bank of the aforesaid information
package and other information to, interested lenders, (D) will (and will cause
your management to) take an active role in the syndication process (including,
without limitation, attending bank meetings and making yourselves available to
answer questions during the syndication process), (E) will pay all fees and
expenses incurred by the Bank in connection with the syndication, negotiation
and preparation of the loan documentation relating to the Facility whether or
not the loan documentation is finalized or the syndication is completed and
(F) will fully cooperate with the Bank in connection with the transactions
contemplated hereby.

                  Even if accepted in accordance with the provisions of the
previous paragraph, this letter shall expire automatically, without further
act or condition and regardless of cause or circumstance, if loan
documentation satisfactory in form and substance to the Bank and its counsel
is not executed on or before September 30, 1996.

                                                      Very truly yours,

                                                      THE BANK OF NEW YORK


                                                      By:/s/ Joseph Matteo

                                                       Name: Joseph Matteo

                                                       Title: Vice President


Accepted and agreed:

SFX BROADCASTING, INC.


By:/s/ Robert F.X. Sillerman

Name:  Robert F.X. Sillerman

Title: Executive Chairman






    




                            SFX BROADCASTING, INC.

                   SUMMARY OF PROPOSED TERMS AND CONDITIONS


                                 May 16, 1996


BORROWER:           SFX Broadcasting, Inc.

GUARANTORS:         Each of the Borrower's present and future direct and
                    indirect subsidiaries.

GUARANTEE:          The Guarantors will provide a full and unconditional joint
                    and several guarantee of the Facility.

FACILITY:           $150 million senior secured revolving credit/term loan.
                    Prior to the Revolving Credit Conversion Date, up to $20.0
                    million of the Facility shall be available for the
                    issuance of standby letters of credit ("Letters of
                    Credit") to support the Borrower's obligations with
                    respect to deposit requirements associated with proposed
                    acquisitions and to support ordinary course working
                    capital needs. Each Lender in the Facility will purchase a
                    pro rata risk participation in each Letter of Credit
                    issued by the Letter of Credit Issuing Bank and the
                    commitment under the Facility shall be deemed utilized in
                    the amount of all outstanding Letters of Credit. No Letter
                    of Credit shall have an expiration date which extends
                    beyond one business day prior to the Revolving Credit
                    Conversion Date.

USE OF PROCEEDS:    To finance Permitted Acquisitions and the payment of cash
                    deposits in connection with proposed acquisitions, and to
                    provide availability for working capital and general
                    corporate purposes, including transaction expenses.

ARRANGING AND
ADMINISTRATIVE
AGENT:              The Bank of New York ("BNY" or the "Agent").






    



Summary of Proposed Terms and Conditions
May 16, 1996                                                             Page 2
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LETTER OF CREDIT
ISSUING BANK:       BNY.

LENDERS:            The Agent and a syndicate of financial institutions to be
                    arranged by the Agent.

DOCUMENTATION:      The Facility will be subject to the negotiation, execution
                    and delivery of a definitive credit agreement (including
                    schedules, exhibits and ancillary documentation) and
                    related security agreements and other support
                    documentation satisfactory to the Lenders. The definitive
                    credit agreement and related documentation will contain
                    such representations and warranties, funding and yield
                    protection provisions, conditions precedent, covenants and
                    events of default as are described herein and other
                    provisions appropriate for transactions of this type as
                    determined by the Lenders. The Lenders may, in their
                    discretion, structure such definitive documentation to
                    use, and amend and restate, certain existing credit and
                    security agreements between one or more of the Lenders and
                    the Borrower, with such modifications as are determined to
                    be appropriate for the transactions contemplated hereby.

FINAL MATURITY:     September 30, 2003

AVAILABILITY:       Up to the full amount of the Facility can be borrowed,
                    repaid and reborrowed at any time until September 30, 1998
                    (the "Revolving Credit Conversion Date"), at which time,
                    subject to there being no default or Event of Default, all
                    outstandings will convert to a term loan (the "Term
                    Loan").






    



Summary of Proposed Terms and Conditions
May 16, 1996                                                             Page 3
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TERM LOAN
AMORTIZATION:       The Term Loan will amortize in equal quarterly installments,
                    commencing December 31, 1998, with annual reductions equal
                    to the following percentages:

                                               Year           % Reduction
                                               ----           -----------
                                               1998               5%
                                               1999               15%
                                               2000               20%
                                               2001               20%
                                               2002               22%
                                               2003               18%


INTEREST RATE:      The Borrower may elect to borrow under the Facility
                    at either (i) the Alternate Base Rate ("ABR") or (ii) the
                    LIBOR Rate ("LIBOR"), in each case plus the Applicable
                    Margin.

ABR                 will be the higher of (i) BNY's Prime Rate and (ii) the
                    Federal Funds Rate plus 0.5%. LIBOR (adjusted for
                    reserves) will be available for one, two, three or six
                    month borrowings.








    



Summary of Proposed Terms and Conditions
  May 16, 1996                                                          Page 4
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APPLICABLE MARGINS: The Applicable Margins will be based upon the
                    Total Leverage Ratio, according to the following table:




=============================================================================
   Greater Than or           Less Than        ABR +            LIBOR +
      Equal to
- -----------------------------------------------------------------------------
        6.50x                                     1.500%             2.750%
- -----------------------------------------------------------------------------
        6.00x                  6.50%              1.375%             2.625%
- -----------------------------------------------------------------------------
        5.50x                  6.00x              1.250%             2.500%
- -----------------------------------------------------------------------------
        5.00x                  5.50x              1.125%             2.375%
- -----------------------------------------------------------------------------
        4.50x                  5.00x              0.750%             2.000%
- -----------------------------------------------------------------------------
        3.50x                  4.50x              0.500%             1.750%
- -----------------------------------------------------------------------------
                               3.50x              0.250%             1.500%
=============================================================================


APPLICABLE LETTER
OF CREDIT FEE:      The Borrower shall pay to the Agent for the respective
                    accounts of the Lenders a per annum Letter of Credit fee
                    equal to the Applicable Margin with respect to LIBOR
                    loans, on the daily principal amount of outstanding
                    Letters of Credit, payable quarterly in arrears, calculated
                    on the basis of the actual number of days elapsed over a
                    360-day year.

BORROWINGS:         Borrowings will be available upon three business days
                    written notice for LIBOR loans and one business day
                    written notice for ABR loans. Drawings for LIBOR loans to
                    be in amounts not less than $5 million and in multiples of
                    $1 million for drawings in excess thereof. Drawings for
                    ABR loans to be in amounts not less than $1 million and in
                    multiples of $100,000 for drawings in excess thereof.

INTEREST PAYMENTS:  Interest on ABR borrowings will be payable quarterly
                    in arrears and calculated on the basis of the actual
                    number of days elapsed over a 360 day year.






    



Summary of Proposed Terms and Conditions
      May 16, 1996                                                      Page 5
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                    Interest on LIBOR borrowings will be payable in arrears at
                    (i) the end of each applicable interest period and (ii) in
                    the case of a period longer than three months, every three
                    months. Interest on LIBOR borrowings will be calculated on
                    the basis of the actual number of days elapsed over a 360
                    day year.

DEFAULT RATE:       After maturity (by acceleration or otherwise) and during
                    the continuance (i) of any payment Event of Default or
                    (ii) for more than 30 days following any other Event of
                    Default, all Applicable Margins will increase by 2.00% per
                    annum.

COMMITMENT FEE:     0.50% per annum on the unused portion of the Facility
                    payable quarterly in arrears and at maturity, calculated
                    on the basis of the actual number of days elapsed over a
                    360 day year.

MANDATORY
PREPAYMENTS:   1. 100% of the net cash proceeds (after cash taxes)
                  received from (i) station sales or exchanges (reduced
                  by Reinvested Proceeds within the Reinvestment Period)
                  other than the Scheduled Asset Sales or (ii) other
                  dispositions (other than in the ordinary course of
                  business).

               2.   50% of Excess Cash Flow calculated for each fiscal l
                    year when the Total Leverage Ratio is greater than
                    4.50 to 1.00, beginning with the year ended December 31,
                    1998, and payable on March 31st of each succeeding fiscal
                    year.

               3.   The issuance of common equity in an amount in excess
                    of $100 million, measured on a cumulative basis,
                    shall be applied as follows: (i) 100% of such
                    proceeds shall be applied to prepay the Facility
                    until the Total Leverage Ratio is below 6.00 to 1.00,
                    and (ii) 50% of such proceeds shall be applied to
                    prepay the Facility until the Total Leverage Ratio is
                    below 5.00 to 1.00. When the Total Leverage Ratio is
                    below 5.00 to 1.00, no additional equity issuance
                    proceeds must be used to prepay the Facility.

               4.   100% of all insurance or condemnation recoveries in
                    excess of amounts used to replace or restore any
                    properties or which are not used to replace or
                    restore properties within one year after any
                    casualty; provided that the Borrower shall have





    



Summary of Proposed Terms and Conditions
May 16, 1996                                                             Page 6
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                         commenced the restoration or replacement process
                         (including the making of appropriate filings and
                         requests for approval) within 45 days after such
                         casualty and diligently pursues the same through
                         completion.

                         Mandatory prepayments on or prior to the Revolving
                         Credit Conversion Date will be applied to reduce the
                         commitment under the Facility. To the extent that the
                         outstandings under the Facility exceed the commitment
                         thereunder, such mandatory prepayments will be
                         applied to reduce the outstandings. Any mandatory
                         prepayments after the Revolving Credit Conversion
                         Date will be applied to the Term Loan in the inverse
                         order of maturity.

                         The Borrower shall pay any breakage costs associated
                         with the prepayment of a LIBOR borrowing.

VOLUNTARY
PREPAYMENTS
AND OPTIONAL
COMMITMENT
REDUCTIONS:         The Facility may be permanently reduced by the Borrower,
                    in whole or in part with three business days written
                    notice to the Agent. The amount of each voluntary
                    commitment reduction shall be in an amount not less than
                    $5 million.

                    Any voluntary prepayments after the Revolving Credit
                    Conversion Date will be applied to the Term Loan in the
                    inverse order of maturity.

                    ABR borrowings may be prepaid without penalty with one
                    business day written notice in an amount not less than $1
                    million and in multiples of $100,000 for amounts in excess
                    thereof. Any LIBOR borrowings may be prepaid with three
                    business days written notice in an amount not less than $5
                    million and in multiples of $1 million for amounts in
                    excess thereof.

                    The Borrower shall pay any breakage costs associated with
                    the prepayment of any LIBOR borrowing.

SECURITY:           1.   Pledge of all of the capital stock of the Borrower's
                         present and future direct and indirect subsidiaries,
                         including special






    



Summary of Proposed Terms and Conditions
May 16, 1996                                                             Page 7
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                         purpose license subsidiaries holding
                         FCC radio licenses. All intercompany
                         loans and advances will be evidenced
                         by intercompany notes that will be
                         pledged as security. All such
                         security shall constitute perfected
                         first priority liens subject only to
                         permitted liens.

                    2.   Pledge of all of the assets (now or hereafter
                         acquired) of the Borrower and its present and future
                         direct and indirect subsidiaries (other than those
                         that the Agent shall deem immaterial).

CONDITIONS
PRECEDENT
TO CLOSING:          Usual and customary for credit facilities of this size,
                     type and purpose including, without limitation:

                    1.   No material adverse change in the condition
                         (financial or otherwise), operations, business,
                         property, performance or prospects of the Borrower
                         and its subsidiaries taken as a whole since December
                         31, 1995.

                    2.   The Borrower shall deliver such financial statements
                         (including audited December 31, 1995 financial
                         statements), projections and other information as the
                         Agent shall require, all of which shall be in all
                         respects satisfactory to the Agent.

                    3.   The ownership and capital structure of the Borrower
                         and its subsidiaries shall be in all respects
                         satisfactory to the Agent.

                    4.   Satisfactory review of material agreements.

                    5.   Payment of all fees and expenses.

                    6.   Completion of the Recapitalization on terms and
                         conditions satisfactory to the Agent and the Lenders.

                    7.   There shall be no Existing Subordinated Notes
                         outstanding in an amount exceeding an amount
                         acceptable to the Agent and the Lenders.







    



Summary of Proposed Terms and Conditions
May 16, 1996                                                             Page 8
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                    8.   To the extent any of the Existing Subordinated Notes
                         remain outstanding after consummation of the Tender
                         Offer, the Lenders shall receive an opinion of
                         Borrower's counsel, in form and substance
                         satisfactory to the Agent and the Lenders, and such
                         other legal opinions, letters and other documentation
                         (including the amended indenture) as the Agent may
                         request, in form and substance satisfactory to the
                         Agent and the Lenders, related to the Existing
                         Subordinated Notes.

                    9.   Delivery of a solvency certificate from the chief
                         financial officer as to the Borrower and each
                         subsidiary of the Borrower.

                    10.  Delivery of such security agreements, mortgages,
                         financing statements and other security documentation
                         as may be necessary to effect the pledge referred to
                         under "Security" above.

                    11.  Delivery of satisfactory legal opinions from the
                         Borrower's counsel as to the enforceability of all
                         loan documentation, perfection and priority of liens,
                         FCC, tax and other regulatory matters, and such other
                         matters as may be reasonably requested by the
                         Lenders.

                    12.  Delivery of satisfactory legal opinions from the
                         Agent's counsel (including special FCC Counsel if
                         deemed necessary by the Agent).









    



Summary of Proposed Terms and Conditions
May 16, 1996                                                             Page 9
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CONDITIONS PRECEDENT
TO THE CLOSING OF
THE PERMITTED
ACQUISITIONS:       Usual and customary for credit facilities of this size, type
                    and purpose including, without limitation:

                    1.   The Lenders shall be satisfied in all material
                         respects with the terms of the Permitted Acquisition.

                    2.   FCC and SEC issues regarding the Permitted
                         Acquisition reviewed and resolved to the satisfaction
                         of the Lenders and their counsel.

                    3.   Simultaneously with the closing of the Permitted
                         Acquisition, delivery of such additional security
                         documents as may be necessary to effect the pledge of
                         all assets acquired in the Permitted Acquisition.

                    4.   The purchase and sale agreement or the plan of
                         merger, as the case may be, shall be in a form
                         satisfactory to the Agent and Lenders and shall not
                         be subject to any modifications without the prior
                         approval of the Agent and the Lenders.

CONDITIONS PRECEDENT
TO ALL LOANS AND
LETTERS OF CREDIT
ISSUANCES:          Usual and customary for credit facilities of this size,
                    type and purpose including, without limitation:

                    1.   All representations and warranties in the credit
                         agreement and in any other loan documents are true
                         and correct as though made on and as of such date
                         (including, without limitation, no material adverse
                         change in the condition (financial or otherwise),
                         operations, business, property, performance or
                         prospects of the Borrower and its subsidiaries taken
                         as a whole since December 31, 1995).

                    2.   No default or Event of Default exists or would result
                         from the requested loans.








    



Summary of Proposed Terms and Conditions
May 16, 1996                                                           Page 10
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REPRESENTATIONS
AND WARRANTIES:          Usual and customary for credit facilities of this
                         size, type and purpose, including as to the solvency
                         of the Borrower and  each of its subsidiaries.

COVENANTS:               Usual and customary for credit facilities of this
                         size, type and purpose, including, without limitation:

                    1.   Delivery of unaudited monthly financial reports,
                         unaudited consolidated and consolidating quarterly,
                         and audited consolidated and consolidating annual
                         financial statements within 30, 45 and 90 days,
                         respectively, after the end of the periods to which
                         they relate.

                    2.   Maintenance of all material licenses, authorizations
                         and permits, including FCC licenses.

                    3.   Line of business - limited to radio broadcasting for
                         the Borrower and all its subsidiaries, provided that
                         the license subsidiaries shall own the FCC licenses.

                    4.   Prohibition on additional indebtedness (including
                         capital lease obligations, guarantees and contingent
                         obligations) provided, however (i) a basket for other
                         indebtedness of the Borrower (which shall exclude
                         indebtedness of the Borrower and its subsidiaries
                         existing on the effective date of the Facility) in an
                         amount up to $10 million; and (ii) certain existing
                         contingent obligations, will each be permitted.

                    5.   Limitations on liens (except customary permitted
                         liens incurred in the ordinary course of business).

                    6.   Capital expenditures in each year shall not exceed
                         $7.5 million in 1996 and $4.5 million in each year
                         thereafter, provided, however, that any unused
                         portions may be carried forward for one year.

                    7.   Operating lease obligations with respect to any one
                         year shall not exceed $8 million.







    



Summary of Proposed Terms and Conditions
May 16, 1996                                                            Page 11
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                    8.   The aggregate amount of all issued and undrawn
                         Letters of Credit, outstanding cash deposits or
                         option fee payments made by the Borrower, issued for
                         the account of the Borrower or made by the Borrower
                         and its subsidiaries, as the case may be, in
                         connection with proposed acquisitions, shall not
                         exceed $15 million (the "Acquisition Deposit Cap").

                    9.   Prohibition on mergers, consolidations, and
                         acquisitions, provided, however, that so long as no
                         default or Event of Default would exist before and
                         after giving effect thereto, the Permitted
                         Acquisitions will each be allowed.

                    10.  Prohibition on asset sales, provided, however, that
                         so long as no default or Event of Default would exist
                         before and after giving effect thereto, the Borrower
                         may: (i) complete the Scheduled Assets Sales, (ii)
                         sell MMR station KOLL-FM in Little Rock, Arkansas,
                         (iii) sell MMR stations WRXR-FM and WKBG-FM in
                         Augusta, Georgia and (iv) sell other assets provided
                         that: (1) the BCF attributable to all radio broadcast
                         stations sold and/or exchanged during the one-year
                         period ending on the date of the proposed sale shall
                         not exceed 15% of the BCF of the Borrower; (2) the
                         BCF attributable to all radio broadcast stations sold
                         and/or exchanged during the life of the Facility,
                         after giving effect to the proposed sale shall not
                         exceed 25% of the BCF of the Borrower; (3) fair value
                         is received, and (4) at least 75% of the
                         consideration to be received is in the form of cash.

                    11.  Prohibition on asset exchanges, provided, however,
                         that so long as no default or Event of Default would
                         exist before and after giving effect thereto, the
                         Borrower may: (i) exchange KRLD-AM and the Texas
                         State Networks in Dallas, Texas for KKRW-FM in
                         Houston, Texas and (ii) exchange other assets
                         provided that: (A) (1) the BCF attributable to all
                         radio broadcast stations sold and/or exchanged during
                         the one-year period ending on the date of the
                         proposed exchange shall not exceed 15% of the BCF of
                         the Borrower; (2) the BCF attributable to all radio
                         broadcast stations sold and/or exchanged during the
                         life of the Facility, after giving effect to the
                         proposed exchange, shall not exceed 25% of the BCF







    



Summary of Proposed Terms and Conditions
May 16, 1996                                                           Page 12
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                         of the Borrower and (3) fair value is received and
                         (B) the assets received pursuant to such exchanges
                         are Permitted Acquisitions.

                         Prior to any acquisition, merger, sale or exchange
                         permitted under either Items 9, 10 or 11 above, whose
                         value equals or exceeds $15 million, the Borrower
                         must provide the Lenders with: (i) pro forma
                         projections for the duration of the Facility; (ii) a
                         certificate stating that the Borrower is in
                         compliance with all covenants on a pro forma basis
                         after inclusion of the proposed transaction; and
                         (iii) a certificate stating that immediately before
                         and after giving effect to the proposed transaction
                         all representations and warranties shall be true and
                         correct and no default or Event of Default shall
                         exist.

                    12.  Prohibition on dividends, repurchases of capital
                         stock, or any other form of distribution of cash or
                         other assets, including payments to affiliates other
                         than those approved by the Required Lenders
                         (collectively called "Restricted Payments"),
                         provided, however, that so long as no default or
                         Event of Default would exist before and after giving
                         effect thereto, Restricted Payments will be permitted
                         with respect to: (i) cash dividends equal to 6% per
                         annum of the redemption price for the Borrower's
                         Dallas Preferred Stock; (ii) any cash dividends
                         payable on the Borrower's New Preferred Stock; (iii)
                         redemptions of the Borrower's Dallas Preferred Stock
                         pursuant to the exercise of the put rights maintained
                         by the holder of such shares; (iv) scheduled
                         redemptions of the Borrower's Redeemable Series B
                         Preferred Stock; (v) the exercise by R. Steven Hicks
                         of the put option he holds with respect to his shares
                         of the Borrower's Class A Common Stock and (vi) up to
                         $25 million in repurchases of the Borrower's stock
                         (other than any stock specified in clauses (iii) and
                         (iv) above), provided that the Total Leverage Ratio
                         is less than or equal to 4.5x before and after giving
                         effect thereto.

                    13.  Limitations on partnerships, joint ventures, LMAs,
                         JSAs, other than: (i) LMAs and JSAs in existence at
                         closing and







    



Summary of Proposed Terms and Conditions
May 16, 1996                                                            Page 13
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                         (ii) LMAs and JSAs entered into in connection with
                         the Permitted Acquisitions.

                    14.  Prohibition on the redemption of any portion of the
                         New Notes until all amounts outstanding under the
                         Facility are repaid in full, provided, however, the
                         redemption of the Borrower's Existing Subordinated
                         Notes at call or maturity will be permitted should
                         there be no default or Event of Default before and
                         after giving effect thereto.

FINANCIAL
COVENANTS:        1.    Total Leverage Ratio - the ratio shall not at any time
- ---------               exceed:

                        Period                                          Ratio
                        ------                                          -----
                        Closing to 12/30/96                             7.00x
                        12/31/96-6/29/97                                6.75x
                        6/30/97-6/29/98                                 6.50x
                        6/30/98-6/29/99                                 6.00x
                        6/30/99-6/29/00                                 5.50x
                        6/30/00-12/30/00                                5.00x
                        12/31/00 and thereafter                         4.75x

                        Notwithstanding the foregoing, as a
                        condition precedent to the funding
                        of a Permitted Acquisition, the
                        Total Leverage Ratio of the Borrower
                        shall not exceed the lesser of: (i)
                        6.75 to 1.0 and (ii) the applicable
                        Total Leverage Ratio covenant.

                    2.   Senior Leverage Ratio - the ratio shall not at any
                         time exceed:

                        Period                                          Ratio

                        Closing to 12/30/96                             2.50x
                        12/31/96-6/29/98                                2.25x
                        6/30/98 and thereafter                          2.00x

                    3.   OCF/Pro Forma Interest Expense - the ratio shall not
                         at any fiscal quarter end be less than:







    



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                          Period                              Ratio
                          ------                              -----
                          Closing-12/31/97                    1.25x
                          1/1/98-12/31/98                     1.50x
                          1/1/99-12/31/00                     1.75x
                          1/1/01 and thereafter               2.00x

                    4.   OCF/Pro Forma Debt Service - the ratio shall not at
                         any fiscal quarter end be less than 1.10x.

                    5.   OCF/Fixed Charges - the ratio shall not at any fiscal
                         quarter end be less than 1.05x.

                    6.   Maximum market concentration shall not exceed 25% of
                         BCF.

EVENTS OF DEFAULT:  Usual and customary for credit facilities of
                    this size, type and purpose, including, without
                    limitation, payment, misrepresentation, covenant,
                    bankruptcy, ERISA, judgments, Change of Control and cross
                    defaults.

COST AND YIELD

PROTECTION:         Standard provisions for illegality, inability to
                    determine, indemnification for break funding and increased
                    costs or reduced return including those arising from
                    reserve requirements, taxes and capital adequacy.

REQUIRED LENDERS:   60%.

ASSIGNMENTS AND
PARTICIPATIONS:     Each Lender may assign all or any part of its loans and
                    commitments under the Facility, provided that (i) in the
                    case of a partial assignment, each such assignment shall
                    be in a minimum amount equal to $5 million and (ii) any
                    assignment shall require the written consent of the Agent
                    (which will not be unreasonably withheld). Each Lender may
                    (i) sell participations in all or a portion of its
                    interest in loans and commitments under the Facility or
                    (ii) assign all or a portion of its loans and commitments
                    under the Facility to a Federal Reserve Bank without the
                    consent of the Agent.






    



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EXPENSES AND
INDEMNIFICATION:    The Borrower will pay the Agent's legal and other
                    reasonable out-of-pocket expenses incurred in connection
                    with the negotiation, preparation and execution of the
                    legal documentation of the Facility and the establishment
                    of the syndicate, regardless of whether the transaction is
                    consummated. Documentation shall contain expense and
                    indemnification provisions for the benefit of the Agent
                    and the Lenders customary for transactions of this type.


GOVERNING LAW:      The law of the State of New York.

WAIVER OF
JURY TRIAL AND
CONSENT TO NEW

YORK JURISDICTION:  Required.






    



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                                  DEFINITIONS


BROADCAST
CASH FLOW
("BCF"):            OCF plus all corporate expenses.

CHANGE OF
CONTROL:            Shall mean any of: (i) a "change of control", as such term
                    is defined in the indenture to the Borrower's Existing
                    Subordinated Notes; (ii) a "change of control", as such
                    term is defined in the indenture to the Borrower's New
                    Notes; (iii) the failure of Robert F.X. Sillerman
                    ("Sillerman"), any affiliate of Sillerman or, together
                    with any executor, heir or successor appointed to take
                    control of Sillerman's affairs in the event of his death,
                    disability or incapacity, to own directly or indirectly,
                    in the aggregate, of record and beneficially, more than
                    35% of the voting power of all issued and outstanding
                    capital stock of the Borrower; (iv) such changes in the
                    ownership of the Borrower or any of its subsidiaries that
                    would require the consent of the FCC; or (v) the failure
                    of Sillerman to remain employed by the Borrower in his
                    present capacity.

DALLAS
PREFERRED
STOCK:              Shares of preferred capital stock of the Borrower
                    constituting a portion of the purchase price paid in
                    connection with the acquisition of station KTCK-AM in
                    Dallas, Texas.

DEBT SERVICE:       For the most recently completed four fiscal
                    quarters, the sum of: (i) Interest Expense; (ii) the
                    scheduled principal amortization of Total Funded Debt;
                    (iii) the scheduled redemption of Redeemable Series B
                    Preferred Stock; and (iv) obligations due during such
                    period as a result of the exercise of any put or call
                    rights with respect to the Dallas Preferred Stock.

EXCESS CASH FLOW:   Operating Cash Flow (before any adjustments to
                    reflect acquisitions, sales and exchanges during such
                    period) for each fiscal year of the Borrower less the sum
                    of the following during






    



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                    such fiscal year: (i) Fixed Charges and (ii) voluntary
                    prepayments of the Term Loan.

EXISTING
SUBORDINATED
NOTES:              The Borrower's outstanding 11.375% senior subordinated
                    notes due October 1, 2000.

FIXED CHARGES:      For the most recently completed four fiscal
                    quarters for the Borrower and its subsidiaries on a
                    consolidated basis, the sum of the following paid during
                    such fiscal period: (i) Debt Service; (ii) cash income
                    taxes paid; (iii) capital expenditures; (iv) all dividends
                    paid with respect to the Dallas Preferred Stock and (v)
                    any dividends paid with respect to the New Preferred
                    Stock.

INTEREST EXPENSE:   The sum of: (i) all interest expense and commitment fees
                    incurred with respect to Total Funded Debt.

LIBERTY
ACQUISITION:        The acquisition of all of the shares of capital stock of
                    Liberty Broadcasting, Incorporated.

MMR ACQUISITION:    The acquisition of all the shares of capital stock of
                    Multi-Market Radio, Inc. ("MMR").

NEW NOTES:          The $440 million principal amount of unsecured senior
                    subordinated notes issued by the Borrower in May 1996.

NEW PREFERRED
STOCK:              The $120 million or more of cumulative convertible
                    exchangeable preferred stock issued by the Borrower in May
                    1996.

OPERATING
CASH FLOW ("OCF"):  For the most recently completed four fiscal quarters,
                    (i) broadcast revenues (exclusive of reciprocal
                    revenues) minus (ii) expenses (excluding depreciation,
                    amortization, reciprocal expenses, interest expense,
                    income tax expense and the $5 million provision for the
                    Texas Rangers Contract), plus (iii) non-recurring expense






    



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                    items (including the amount of operating losses associated
                    with the Texas Rangers Contract) or non-cash expense items
                    mutually agreed upon by the Borrower and the Required
                    Lenders; less (iv) the amount of any cash payments related
                    to non-cash charges (exclusive of those associated with
                    the Texas Rangers Contract) that were added back in
                    determining OCF pursuant to (iii) above in any prior
                    period.

                    OCF will be adjusted to reflect acquisitions and
                    dispositions during such period. BCF from radio
                    broadcasting stations managed and operated by the Borrower
                    pursuant to LMAs, time brokerage agreements and JSAs which
                    is to be included in the calculation of BCF shall not
                    exceed 10% of BCF from stations owned by the Borrower
                    which are not subject to LMAs, time brokage agreements or
                    JSAs.

                    Pro forma adjustments related to station operating
                    expenses mutually agreed upon by the Borrower and the
                    Required Lenders will be included in the calculation of
                    OCF.

PERMITTED
ACQUISITIONS:       Shall mean any of the following: (i) the MMR Acquisition;
                    (ii) WHSL-FM in Greensboro, NC; (iii) acquisitions in
                    Principal Markets; (iv) acquisitions in Top 75 markets
                    made when the Total Leverage Ratio is less than 5.50 to
                    1.00 before and after giving effect thereto; and (v) all
                    other acquisitions approved by the Required Lenders.

PRINCIPAL
MARKET:             A market in which the Borrower owns two or more FM radio
                    stations.

PRISM
ACQUISITION:        The acquisition of the assets of Prism Radio Partners,
                    L.P.






    



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PRO FORMA
DEBT SERVICE:       The sum of: (i) Pro Forma Interest Expense; (ii) the
                    scheduled current maturities of Total Funded Debt;
                    (iii) the scheduled redemption of Redeemable Series B
                    Preferred Stock; and (iv) obligations due as a result of
                    the exercise of any put or call rights with respect to the
                    Dallas Preferred Stock (but in no event more than $2
                    million), each measured for the four fiscal quarters
                    immediately succeeding the date of determination.

PRO FORMA
INTERES EXPENSE:    Interest Expense calculated for the four fiscal
                    quarters following the calculation quarter, giving effect
                    to the Total Funded Debt outstanding and the rates in
                    effect as of the date of determination and the
                    amortization scheduled during such period.

RECAPITALIZATION:   Shall refer to all of the following taken together: (i)
                    the Tender Offer; (ii) the issuance of the New Notes and
                    New Preferred Stock; (iii) the Liberty Acquisition; (iv)
                    the Prism Acquisition; (v) the acquisition of WTRG-FM and
                    WRDU-FM in Raleigh, NC; (vi) the acquisition of WTCK-AM,
                    WMFR-AM and WMAG-FM in Greensboro, NC; (vii) the
                    acquisition of WJDX-FM, WSTZ-FM and WZRX-AM in Jackson,
                    MS; and (viii) the acquisition of WROQ-FM in Greenville,
                    SC.

REINVESTED
PROCEEDS:           Net cash proceeds (after cash taxes) from station sales or
                    exchanges which are used to acquire additional radio
                    stations through a merger, acquisition or exchange in
                    accordance with the covenants during the Reinvestment
                    Period.

REINVESTMENT
PERIOD:             Nine months from the date that proceeds from a station
                    sale or exchange are received by the Borrower.

SCHEDULED
ASSET SALES:        Shall mean the sale of any of the following: (i)
                    stations WXVR- FM, WXTR-FM and WQSI-AM in Washington, DC
                    acquired in connection with the Liberty Acquisition; (ii)
                    stations WVEZ-FM, WWKY-AM and WTFX-FM in Louisville,
                    Kentucky acquired in






    



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                    connection with the Prism Acquisition; and (iii) station
                    KTCK-AM in Dallas, Texas.

SENIOR
FUNDED DEBT:        Total Funded Debt less the sum of: (i) the amount
                    outstanding under the Existing Subordinated Notes and (ii)
                    the amount outstanding under the New Notes.

SENIOR
LEVERAGE RATIO:     The ratio of: (i) Senior Funded Debt less cash and
                    cash equivalents in excess of $5 million to (ii) OCF.


TENDER OFFER:       The repurchase of up to all of the Company's Existing
                    Subordinated Notes.

TOTAL
FUNDED DEBT:        Shall include all outstandings under the Facility and any
                    other borrowed money and similar type indebtedness
                    (including capital lease obligations) of the Borrower and
                    its subsidiaries, on a consolidated basis.

TOTAL
LEVERAGE RATIO:     The ratio of: (i) Total Funded Debt less cash and cash
                    equivalents in excess of $5 million to (ii) OCF. Pro
                    forma adjustments to the Total Leverage Ratio mutually
                    agreed upon by the Borrower and the Required Lenders may
                    be made with respect to the Scheduled Asset Sales
                    (exclusive of the Washington, DC station sales) should
                    they take place following the closing of the MMR
                    Acquisition.